Ladies and gentlemen, thank you for standing by, and welcome to JOYY Inc.'s second quarter 2021 earnings call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, there will be a question and answer session. I'd now like to hand the conference over to your host today, Jane Xie, the company's Senior Manager of Investor Relations. Please go ahead, Jane.
Thank you, operator. Hello, everyone. Welcome to JOYY's second quarter 2021 earnings conference call. Joining us today are Mr. David Xueling Li, Chairman and CEO of JOYY, Ms. Ting Li, our COO, and Mr. Alex Liu, the General Manager of Finance. For today's call, management will first provide a review of the quarter, and then we will conduct a Q&A session. The second quarter 2021 financial results and webcasts of this conference call are available at ir.joyy.com. A replay of this call will also be available on our website in a few hours. Before we continue, I refer you to our safe harbor statement in our earnings press release, which applies to this call as well, as we will make forward-looking statements. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in US dollar.
I will now turn the call over to our Chairman and CEO, Mr. David Xueling Li. Please go ahead, sir.
Hello, everyone. Welcome to our second quarter 2021 earnings call. We maintained our growth momentum in the second quarter despite the negative impact from local holidays in certain regions. During the second quarter of 2021, we grew our total revenues by 39.7% year-over-year to $662 million, while BIGO's revenue increased by 38.4% year-over-year to $598 million. Notably, this quarter, on a non-GAAP basis, we almost achieved breakeven at a group level for the first time after we deconsolidated YY Live as BIGO's non-GAAP net margin continued to improve to 3.3% from 1.6% quarter-over-quarter, and its non-GAAP net profit increased to $19 million. Before we go into the detailed development of our product, we would like to share with you the latest progress in the further enhancement of our localized content offerings.
As discussed on last quarter's call, we view our content ecosystem as one of our strategic cores that determine the long-term competitiveness of our products. During the quarter, we have made great strides on expanding our product content variety and enlarging our premium content library. Based on our thorough insights into local users' content preferences, we partner with gaming entertainment companies and local talent agencies and brought in a multitude of high-quality streamers and content creators in categories such as gaming, variety shows, music, lifestyles, and many others. In the entertainment content category, partnering with local entertainment agencies and celebrities, we achieved meaningful progress in further expanding our premium content and assembling top local talents in the music and variety show category.
In the U.S., BIGO LIVE hosted the BIGO IDOL talent competition in May with an all-star lineup of judges such as Tamar Braxton, Chris Turner, and DJ Wreckx, attracting over 300,000 unique views. In Turkey, our platform attracted the king of pop music, Serhat, and the iconic new generation singer, Ramy Djanny, to become star streamers on BIGO LIVE. In Thailand, Mai, one of our Thai country music streamers on BIGO LIVE, participated in Bonus Karaoke, a top music variety show, and debuted to great fanfare. To provide a stage of other country music singers to showcase their talents, BIGO LIVE's team in Thailand launched a country music competition, bringing celebrity advisors and professional judges in collaboration with a renowned local talent agency. After test running our gaming streaming channel on BIGO LIVE and officially launched our own esports activities called BIGO FUN in the Middle East region in 2020.
We have organized a variety of events, including video creation, challenges, and contents covering multiple hit games. In the second quarter, we partnered with a number of gaming companies and further enriched the gaming content on our platform to better suit our users' enthusiastic demands. In June, we reached a strategic cooperation agreement with King of Avalon: Dragon Warfare, a mobile strategy multiplayer role-playing game. We launched in France and Germany a series of medieval-themed online gaming events, during which virtual treasure chests were released randomly to the audience without tuning into the live streaming channel while local top gaming live streamers played games and interacted with their local fans. In Indonesia, BIGO LIVE became the exclusive partner of the Free Fire tournament and the live stream playoffs among 137 teams, bringing an immersive esports experience to the local audience.
In addition to our continued expansion of content categories, we have pursued seamless integration of content with the rich and diverse local culture. As mentioned previously, our mission is to cultivate an inclusive and global community where everyone can be heard and seen. Diversity and inclusiveness manifest not only in the number of regions in which we operate or the variety of content categories we have made available, but also in the degree at which we have integrated our content with local culture, user behavior, and social elements. For example, during Ramadan, BIGO LIVE launched the Good To Be Good campaign in Indonesia. The campaign motivated local youths to express their creativity by showcasing Ramadan's unique culture and customs through music or stand-up comedy shows, thus winning endorsements from Indonesia's Ministry of Tourism and other government agencies.
As content creators served as the foundation of our success in creating and maintaining a vibrant and engaging content community, we have implemented extensive programs to identify, develop, and motivate talent creators. In the past quarter, in addition to hosting local culture-themed competitions and talent challengers to better identify talented content creators, Likee also worked with external partners to help creators improve their public exposure, expand their social influence, and pursue content creation as a lifelong career. For example, in the second quarter, Likee hosted the third season of the Likee Star Idol talent show in Indonesia. In collaboration with a local entertainment company, Likee selected five top participants to form a pop girl group called DREAMGIRLS, which debuted soundcheck, and a music video garnered playback on more than 116 Indonesia radio stations, attracting a slew of offers for touring content and commercial advertising.
That was Likee's pilot project to test drive its ability to identify, develop, and motivate professional content creators. Going forward, Likee will launch more supporting programs to direct more user traffic to creators, help creators monetize their content, and thus creating a friendly, engaging, and dynamic content community. With a combination of more diverse, high-quality content from an increasing number of talented content creators, we believe that we will be able to build a richer and more lively content ecosystem, and further expand our platform's user base. Now, let me share with you the quarterly updates of our core product lines. For BIGO LIVE, despite the negative impacts from local holidays in certain regions, its overall MAU grew by 0.3% year-over-year to 29.5 million, while its MAU outside of India increased by 27.8% year-over-year, thanks to its progress in localizing its content ecosystem.
Meanwhile, its playing user increased by 10.7% year-over-year, contributing to a year-over-year revenue growth of 31.8%. Geographically, BIGO LIVE maintained its well-diversified growth. Developing countries continued to outperform, as its regional revenue grew by 47.6% year-over-year. In particular, revenues from Europe grew by 104.6%. The revenues from Eastern Pacific region grew by 52.5%. Revenues from Southeast Asia and other emerging countries grew by 31.7%. Through product upgrades, BIGO LIVE continued to improve its user live streaming experience, as evidenced by the 1.6% sequential increase in average duration of live streaming sessions this quarter. By optimizing its content recommendation algorithm, BIGO LIVE improved the average viewer time spent among its new user by 4.4% sequentially. Furthermore, by introducing more gaming contents, BIGO LIVE improved its overall user engagement during the quarter, and prolonged its average viewer time spent in gaming streaming sessions by 40.9% sequentially. Next, about Likee.
As mentioned in last quarter's call, because we prioritize our long-term growth, we have placed a greater emphasis on the health and sustainability of our ecosystem and growth model. That's why we have adjusted Likee's marketing strategy, and focused our investment on content and social ecosystem since the first quarter. As a result of our marketing strategy adjustment, combined with Indian government bans since the third quarter of last year, Likee's MAU contracted by 38.6% year-over-year to 92.3 million. MAU outside of India increased modestly by 6.8% year-over-year. Despite the temporary user base fluctuation, Likee's total revenues in the quarter continued to increase by 136.7% year-over-year, mainly driven by strengths in developed countries and the Middle East. Revenue from developed countries increased by 106.3%, and revenues from the Middle East multiplied by four times year-over-year.
Product-wise, Likee upgraded its subtitle function based on TTS technology to provide automated subtitle and dubbing, but also updated features which enable the video upload up to 3 minutes and post-production recording, thus providing more efficient content production tools to content creators, especially those in the informative content category. Furthermore, Likee updated its user traffic allocation and content distribution mechanism to drive more traffic to creators' private domains. As a result, creators' private traffic increased by 25%, strengthening the social connection between creators and their followers. To motivate users and creators to participate in live streaming, YY Live made multiple updates to its fan engagement features and achieved a 7.7 times increase in the daily number of users joining fans group, which in turn motivated creators to host more streaming sessions.
By updating social interaction features, YY Live improved its user experience in live streaming sessions and achieved a 22.3% sequential increase in its average duration of streaming sessions, as well as a 30.9% increase in its average streaming time per user in multi-user chat rooms. About Hago. Due to marketing strategy adjustments and the Indian government bans since the third quarter of last year, Hago's MAU fell by 62.9% year-over-year to 11.8 million in the second quarter. MAU outside of India increased by 25.5% year-over-year. Hago continued to make meaningful progress in its user interactivity and product commercialization. Its revenue grew by 54.3% year-over-year, and its non-GAAP operation loss narrowed further on the sequential basis. In the second quarter, Hago launched its version 4.0 product to better satisfy users' needs for interest-based social entertainment.
In this version, the feature channel enable user to engage with friends and community members, and freely communicate with one another in the form of real-time text, voice, video, and interactive games. Users can also publish posts in their virtual family, thus fulfilling their real-time, as well as non-real-time social desires. As a result, the penetration rates of Hago's featured channel increased by 7.4%, and its 30-day user retention rates increased by 5.5% sequentially. During the quarter, Hago launched in Party Game, a number of popular games, which feature multi-user audio chatting and gaming functions, as well as upgrades of user experience in real-time interactive games. As a result, the penetration rate of Party Game increased by 10.7%, and the average user time spent increased by 30% sequentially.
To conclude, despite the negative impact from local holidays in certain regions, we maintained the growth trajectory of our global business and achieved significant progress in further enriching our localized content offerings. With the enhancement of our product monetization, improvement in our operation leverage, and execution of more prudent marketing strategy, we almost reached breakeven on a non-GAAP basis at the group level for the first time after we deconsolidated YY Live. Despite the recent volatility in the macro environment and the increasing uncertainty due to COVID-19, we remain committed to our long-term vision and corporate mission. We will continue to deploy our resources to areas that can sharpen our competitive edge, including further optimization of our localized content and social ecosystems, as well as enhancement our research and development abilities, so that we can create greater value for our shareholders.
With that, I will now turn the call to Alex Liu, General Manager of Finance, for a more detailed explanation of our quarterly financial results.
Thanks, David. Hello, everyone. As JOYY Finance General Manager, I will talk about the financial results. Since a majority of our revenues and expenses are now denominated in USD, starting from January 1st, 2021, we have changed our reporting currency from RMB to US dollar to better illustrate our operational results. Please note that the financial information and the non-GAAP financial information disclosed in our second quarter earnings press release is presented on a continuing operating basis, unless otherwise specifically stated. Starting from the second quarter of 2020, the company deconsolidated HUYA and accounts for our investment in HUYA as an equity-measured investment, and applied the equity-measured accounting 1 quarter in arrears to enable us to provide financial disclosures independent of the reporting schedule of HUYA.
As the sale of LIVE was substantially completed on February 8, 2021, with certain customary matters to be completed in the near future. The historical financial results of LIVE are reflected in the company's consolidated financial statements as discontinued operations accordingly, starting from the fourth quarter of 2020. During the second quarter of 2021, despite the negative impact from local holidays in certain regions, we maintained our strong growth momentum and delivered robust financial results. Our total net revenues for the second quarter increased by 39.7% year-over-year to $661.7 million from $473.5 million in the same period of 2020. Primarily attributable to BIGO's continued paying users growth and enhanced monetization capabilities. In particular, our live streaming revenues for the second quarter increased by 79.7% year-over-year to $629.6 million, driven by live streaming revenues growth from BIGO.
Other revenues in the second quarter increased by 40.3% to $32.1 million. Cost of revenues for the second quarter increased by 32.2% year-over-year to $458.3 million. Revenue sharing fees and content costs increased to $289.1 million in the second quarter from $198.2 million in the same period of 2020, which was in line with the increase in live streaming revenues. Bandwidth cost decreased to $27.5 million from $32.7 million in the same period of 2020, primarily due to the company's improved efficiency and the reduction of bandwidth usage for India users after the India government ban of Chinese apps in late June 2020, partially offset by the continued user base expansion outside India. Gross profit increased by 60.4% year-over-year to $203.4 million.
Gross margin in the second quarter of 2021 improved to 30.7% from 26.8% in the same period of 2020. Operating expenses for the second quarter increased to $340 million from $247.6 million in the same period of 2020. Among the operating expenses, general and administrative expenses increased to $101.1 million in the period from $51.5 million in the same period of 2020, primarily due to the impairment loss arising mainly from an investment made in the prior years. Our GAAP operating loss for the second quarter was $101.1 million from $119.9 million in the same period of 2020. Operating loss margin for the second quarter was narrowed to 15.3% compared to 25.3% in the same period of 2020, primarily due to the increase of operating income of BIGO.
Our non-GAAP operating loss for the second quarter, which excludes share-based compensation expenses, amortization of intangible assets from business acquisitions, as well as impairment of goodwill and investment and gain on disposal of subsidiary and business, decreased by 80.3% to $30 million, compared to $65.7 million in the same period of 2020. Non-GAAP operating loss margin for the second quarter was narrowed to 2% from 13.9% in the prior year period. GAAP net loss from continuing operations attributable to controlling interest of JOYY in the second quarter of 2021 was $109.3 million, compared to $28.5 million in the same period of 2020. Mainly due to the impairment loss arising mainly from our investment made in the prior years. Net loss margin was 16.5% in the second quarter of 2021, compared to 6% in the corresponding period of 2020.
Non-GAAP net loss from continuing operations attributable to controlling interest of JOYY was $0.5 million in the second quarter, compared to $50.5 million in the same period of 2020. Non-GAAP net loss margin was significantly narrowed to 0.1% in the second quarter of 2021, from 10.7% in the same period of 2020. This means that we have almost achieved breakeven at group level for the first time since we consolidated HUYA Live. Notably, BIGO has achieved a positive non-GAAP net income for the second quarter of $19.4 million, with non-GAAP net margin improved to 3.3% from negative 3.8% in the prior year period. Diluted net loss per ADS in the second quarter of 2021 was $1.43, compared to $0.39 in the same period of 2020. Non-GAAP diluted net loss per ADS was narrowed to $0.01 from $0.63 in the same period of 2020.
In addition, in accordance with our quarterly business plan approved on August 11, 2020, and on November 16th, we will be distributing a dividend of $0.51 per ADS for the second quarter of 2021. This is expected to be paid on September 29, 2021, to shareholders of record as of the close of business on September 10, 2021. We would like to provide an update to our execution of the share repurchase program announced on May 2020, under which the company may repurchase up to $300 million of its shares till August 2021. As of June 13th, 2021, the company has repurchased approximately $296.8 million of its shares. We will continue to invest in business development initiatives to further expand our global market reach, cultivate our highly engaged user community, and enhance our high-quality content offerings.
We will also actively explore other ways to maximize shareholder value. Beginning in the second quarter, we have anticipated some negative impact on users' online social entertainment activities from the gradual lift of pandemic-related lockdowns in certain countries. We expect our net revenues for the third quarter to be between $608 million and $635 million, representing a year-over-year increase between 13.7%-18.7% on a constant currency basis. Excluding the revenue contribution from HUYA and YY Live in the same period of last year. We currently have limited visibility surrounding the COVID-19 epidemic's long-term impacts and geopolitical uncertainties on our business and the markets in which we operate. Therefore, this forecast only reflects our current and preliminary views on the market and operational conditions, which are subject to change. That concludes our prepared remarks. Operator, we would now like to open up the call to questions. Thanks.
Thank you. We will now begin the question and answer session. Our first question comes from Thomas Chong at Jefferies. Please go ahead.
早上好，谢谢管理层接受我的提问。我有两个问题，第一个问题是想多看一下我们Q3的收入的指引，还有就是我们下半年margin的趋势。第二个问题是关于BIGO LIVE那边的。管理层可以分享一下从付费率跟ARPU那边的趋势，还有不同的市场的直播收入的表现。Thanks management for taking my questions. I have two questions. The first one is about the Q3 revenue guidance as well as the margin outlook in the second half. And my second question is about BIGO LIVE.
Can management comments about the paying ratio, the ARPU trend, as well as the live streaming revenue performance across different countries? Thank you.
谢谢Thomas的问题。我先回答一下。第一个问题关于Q3的guidance。是这样，就陆续从二季度末开始，部分国家开始解除疫情期间的封禁政策，对用户线上的娱乐活动有一定的负面影响。这个负面的影响包括用户线上娱乐活动时间的减少、用户付费积极性下降等。目前疫情的短期影响尚未清晰，因此我们保守估计Q3集团的营收同比增长13.7%到18.7%，主要因为BIGO LIVE的付费率、ARPU的短期波动所导致。我们在进一步明确该影响以后，给各位做进一步的更新。从全年来讲，我们预期BIGO还将保持较高的一个增速。
This is Alex. I will answer your question. Regarding Q3 guidance, starting from the end of the second quarter, some countries are gradually lifting lockdown bans during the pandemic. We have anticipated some negative impact on users' social entertainment activities online, which may reduce time spent on online entertainment and therefore affect some users' paying behavior, et cetera. We have limited visibility into the precise impact of the lockdown removals. We have provided a relatively conservative estimation for our Q3 revenue, which implies a year-over-year growth of 13.7%-18.7% at group level, mainly due to short-term fluctuation of BIGO LIVE paying ratio and ARPU. We will provide further updates once we have better visibility. In terms of revenue growth for the whole year, we do expect BIGO segment to remain a decent growth.
Thomas，对于第二个问题，关于区域的这个情况，以及BIGO LIVE的一些指标的情况。是这样，就集团二季度的营收的增长，主要是由发达国家和东南亚地区驱动。因为中东地区有节假日的一个原因，增速是缓于其他区域。目前发达国家、中东、东南亚等区域的营收贡献都比较平均，继续呈分散化的一个分布状态。单看BIGO LIVE的话，MAU、付费率和ARPU的增长共同驱动了二季度营收的增长。长期来看，由于以欧美、东太平洋地区为主的发达国家和中东的用户有较好的付费能力和付费习惯，我们看好发达国家和中东市场的潜力。同时，由于东南亚等发展中国家有巨大的用户基数，我们也在持续加大对这些地区的本地运营和内容生态的投入。随着我们不断培育用户的付费习惯，我们相信这些地区的变现潜力也是巨大的。谢谢。
The revenue distribution across different regions, the group's revenue growth in the second quarter was mainly driven by developed countries and Southeast Asia region. The Middle East region underperformed, mainly due to the Ramadan season. In terms of revenue distribution, our revenue is well diversified across the above-mentioned regions. For BIGO LIVE in the second quarter, the MAU growth, paying ratio, and ARPU expansion together drive the growth of revenue. In terms of future trends, in the long run, we are positive about the potential of developed countries, including U.S., Europe, and Eastern Pacific regions, as well as the Middle East, considering that users in these regions have better paying capability and also better payment habits. We are also expanding our localized operation and content efforts in Southeast Asia and also other developing countries.
Considering the huge user base and also that as we continue to cultivate users' behavior and habits in these regions, we believe that the monetization potential of these regions is also promising.
Thank you.
Our next question comes from Alex Poon at Morgan Stanley. Please go ahead.
早上好，谢谢管理层接受我的提问。我第一个问题想问一下，在BIGO LIVE产品和内容的升级方面，比如说最近我看到BIGO LIVE里面有一些小游戏，包括Ludo和我们在游戏直播方面也有很多的布局在不同的地区。然后也想追问一下这个带货电商，在内容和产品上，除了娱乐直播方面，我们在其他地方的布局整体现在是什么情况？这是第一个问题。第二个问题是关于我们的现金和百度现在交易的进展，现在有没有一些更新？然后我们收到钱之后，现金大概是有五六十亿的美金。所以我们有什么计划去用这一笔钱？我们的回购在现在这个阶段三个亿的美金已经用完了，我们有没有考虑会再做进一步的回购？谢谢。My first question is related to BIGO LIVE new product and content strategies.
Recently we have noted increasing penetration into game segments and also some casual games like Ludo, also want to get an update around e-commerce strategy. My second question is related to the use of cash and the status of the Baidu transaction. We have almost used up the share buyback program of $300 million. Do we have plans to initiate new buyback program and the use of cash on other purposes? If you can share. Thank you very much.
谢谢你，我来回答一下这个问题，我是李学凌。我们在运营中发现有部分的区域，比如说欧洲、中东、南美区域的用户，对游戏的内容本身十分感兴趣。所以在过去几个季度，我们在这些区域是逐渐增加了游戏品类的内容。因为全球的手游的市场用户规模巨大，而BIGO LIVE本身的内容生态和丰富的社交互动方式和手游也非常互补。从长期来讲，游戏直播会是我们多样化生态内容里面的重要的一部分，我们会继续跟手游公司加大力度合作，经营和打造活跃的游戏内容社区。然后像Ludo小游戏这方面，这是BIGO LIVE平台内用户建立关系链、多样化互动的一个尝试，让用户在BIGO LIVE里面除了看直播以外，也能够通过小游戏结识朋友。目前游戏直播和Ludo小游戏对BIGO LIVE用户活跃度有一定的正面影响，但是还得等待持续的观察。对营收的变现的贡献目前也是比较小的。另外一个，讲现金的问题，我想第一个就是说，其实大家可以看到我们在二季度完成了$1亿的股票的回购。目前还在继续执行的每个季度的分红计划。因为我们有些交易其实是没有完全结束的。所以其他的现金我是觉得目前还有一些不确定性，所以我们还是希望等到我们所有的现金都已经收到我们的账号里以后，我们再针对这些现金的处理再出新的政策。
This is David. In terms of the new contents related to game live streaming and Ludo games, because throughout our operation, we found that users in certain regions, especially in Europe, Middle East, and South America, are very interested in gaming content. Therefore, in the past few quarters, we have gradually introduced more gaming content in these regions. As the global mobile game market has a very huge user base, that BIGO LIVE diverse content offerings and social interactivity fits mobile games naturally. In the long run, we believe that gaming contents will be an important part of our diverse content offerings. We will continue to partner with leading mobile game companies to create active and lively gaming content community.
The Ludo game, this is a small attempt by us to encourage users to establish connections and interact with other users, enabling users to engage in social interactions, not only through live streaming, but also by playing casual games. We have seen positive impacts on BIGO LIVE user activity and engagement level from these newly introduced gaming contents and the Ludo games, but we might need longer time to draw any conclusions. The revenue contributions on gaming and Ludo games is still relatively small. Cash usage, I believe that you could see from our earnings release that in the 2nd quarter, we have repurchased around $100 million of our shares, and we are still executing our quarterly dividend payout program.
As for the remaining cash, as the sale of Huohuo Live has been substantially completed, but still with some customary matters during progress. We would love to wait till the full completion of the deal to determine the remaining cash usage, then we would be able to give you a clearer update. Thank you.
谢谢。
Our next question comes from Yiwen Zhang at China Renaissance. Please go ahead.
郭毅强，早上好，谢谢接受我的提问。我这边也有两个问题想请教一下。第一个就想追问一下咱们内容建设，因为call上也说了很多，是一个本地化的内容生态的建设，想请公司分享一下这个对咱们获客、项活跃留存的一些帮助，包括这个对咱们和竞争对手差异化的竞争的一个帮助。然后第二个问题是关于变现那边，就想追问一下，除了直播以外的一些其他变现进展，比如像广告。Thank you for taking my question, I have two.
The first thing regarding the content ecosystem. You mentioned a few times during the prepared remarks. Can you share more color in terms of how the localized content could help user acquisition, engagement, and also the retention, and how that could help differentiate us from the peers? Secondly, on the monetization, can you talk about the progress on non-live streaming monetization for example, the advertisement. Thank you.
好，谢谢你的问题。我觉得Likee目前的重点，我们还是把它放回了产品和内容生态，尤其是激励作者和社区的培养这方面。这是我们从一季度其实就开始做出的改变。然后我们实际上还是看到了非常多不错的改变，包括留存率，包括用户的使用的频率、时长都有一些正向的改变。然后未来我觉得我们还会推出更多有利于创作者职业化发展的这些机制，比如说在创作者的筛选、培育、流量分配等方面，都会向着一些优秀的创作者倾斜，并且使得创作者在未来的自身的变现方面也有更大的发挥的空间。但是这跟广告相比，内容生态的耕耘是非常慢的一个过程，需要很长的时间的积累。对平台来讲，和用户体验来讲，都是循序渐进的体验。所以我们的这个策略基本上还是在调整中，然后要改变用户的习惯和培养出社区，需要一个缓慢前进的过程。至于广告收入的方面，我们目前的这个产品主要变现方式有直播的收入，广告收入，还有一些会员的这种订阅服务的收入。目前直播收入的比重还是相对比较大的，直播收入的比重有达到95%。其他收入的季度同比增长其实是达到了40.3%，环比增长是10%。但是目前其他收入对贡献的百分比还是比较小的。我们正在稳步地推进其他的变现方案，然后下半年会逐步地上线一些变现工具，加深用户和创作者的连接，帮助一些创作者提供变现工具，因此可以想办法扩大付费人群和收入规模。
This is David. I will answer your question. At this stage, the priority of Likee is still about content development, especially the motivation and cultivation of content creators and the development of the content creation community. This quarter, we have taken the first step. We've already seen positive impact on user retention rate, user time spent, and frequency of user on our platform. In the coming second half of the year, we will continue to launch more programs to better identify, cultivate creators, and also bring more conducive updates regarding traffic allocation and provide diversified monetization tools for creators, especially talented and those who have outperformed. That we'll be able to enable creators to play a greater role on our platform. What we love to say is that compared with advertising, the cultivation of content ecosystem does not happen overnight.
The improvement of content offerings and user experience is a gradual process. With you in the progress of adjusting advertising, we believe that there will be time spent to gradually change the users using experience. We believe that it will have a positive impact on the health and sustainability of the product. Regarding diversify monetization, currently speaking, our revenue stream mainly includes live streaming, advertising, and membership subscription. As of today, live streaming is still our biggest revenue stream, contributing around 95% of our revenue. Other revenues, although growing at 40% year-over-year and close to 11% quarter-over-quarter this quarter, in terms of the size, it's still relatively small.
We're gradually progressing diversified monetization plans. We'll launch some new monetization features in the second half, which we believe will be beneficial to the content creators as it will better connect the fans and content creators and cultivate users' paying habits, and therefore driving the further growth of our revenue. Thank you.
[Foreign language], thank you.
Our next question comes from Li Zheng at Bank of America. Please go ahead.
Hi，管理层，早上好，谢谢接受我的提问。我有两个小问题，第一个是想请教一下海外的整个监管的大环境的变化，因为国内这边现在属于监管的变化比较多，所以不知道海外有没有什么可以跟我们分享的。第二个是想追问一下，我们从上个季度就开始的整个营销的方案的一个调整，从买用户，可能更多的是投社区这一块，就想听一下，我们整个现金流、运营都没有什么问题，然后为什么不选择内容跟用户一起投资呢？尤其是我们有一些可能国内出海的competitor，现在海外既是投资还是蛮aggressive的，不知道管理层会不会对短期一些竞争的变化，会觉得对我们整个用户会有一些冲击，尤其是鉴于我们在sales and marketing方面也做出了这个调整。我自己翻译一下，谢谢。Thanks management for taking my question.
Two questions here. Can you give us more color on our regulatory environment in different overseas markets and any concern like data privacy, content or the tipping behavior? I want to follow up on the sales and marketing adjustments since last quarter, since we have a good cash position and monetization remain good, while our competitor are actually investing in overseas. I want to know your thoughts, do you have any concern on the user growth from the dynamic competition change? Thank you.
好，我大概回答一下这个。第一个就是说，如果不算YY Live的话，我们现有的绝大部分的业务都是在海外市场了。所以中国目前主要是研发团队在中国。我们在海外市场方面，我们可以看到去年以来，我们在这个欧洲、中太平洋、中东，还有新兴国家等多个市场全面开花，我们的营收在各个区域都是非常均衡的，在单一区域的风险大大降低了。我觉得另外一个是自公司设立以来，我们觉得不管在哪一个市场运营，我们都要想办法遵循当地的法律法规，遵循各个国家政府的政策和监管要求。然后我们会根据形势发展，灵活地调整用户的运营策略，将各个国家的地缘政治风险降到最低。
This is David. Regarding your first question about regulation. After the sale of YY Live, which has been substantially completed with certain customary matters to be completed, the majority of our business is located in non-PRC regions, but we do have R&D team located in China as there are lots of experienced talents here. As for our global overseas market, as you can see, since 2020, as we penetrate into multiple markets such as Europe, Eastern Pacific region, the Middle East, and other emerging countries, our revenue is actually well distributed across different regions. The risk of any single region has been greatly reduced. What we love to emphasize is that since the incorporation of JOYY, we have been strictly complying with local policy and laws, no matter in which countries we operate our business in.
We will continue to execute our global strategy, reduce geopolitical risk to any particular region through further diversifying our revenue across multiple regions.
对。另外一个你问到的Likee投放策略的调整的这个问题，我觉得是这样的，其实互联网产品有一个特色，我们早期实际上是依靠投放获取足够大的市场规模，在市场规模到达一定规模以后，通过市场的优势地位取得其他的竞争优势。比如说有更多的内容创作者，有更多的广告主，其他的优势反过来再会加强我们用户规模的优势，我觉得这是一个基本的投放的逻辑。但是这个逻辑目前在短视频的这个领域，我认为对我们来讲是不适当的。因为第一个就是说，我们的竞争对手在短视频的这个领域，其实投下的资金的规模是远超我们的能力的。比如说大家从市场上估算的话，其实我们的最主要竞争对手，他们应该在一年内投放的规模应该是几十亿美金，甚至到100亿美金这样的规模。那么在这样的一个竞争环境下，如果我们比如说投个几亿美元，甚至是10亿美元一年的投放费用，基本上我不认为能够起到任何的战略意义的作用。所以我觉得如果是在这样的一个前提下，不如比较务实地回来，先把自己的业务做成一个健康的、持续循环的盈利的业务。一旦我们的短视频业务进入一个健康的持续盈利状态，我相信我们在这个市场上就永远不会消失。所以我们会在更长时间的维度下思考竞争力的问题。我们相信随着时间的推移，还会发现更多的改变竞争格局的机会。
Regarding your second question, we understand that previously for any internet product, the usual logic of expansion is that at the early stage, product might choose to excessively invest in advertising to grab a relatively sizable user base. Therefore, it could actually leverage on the advantage in terms of its user base to gain other competitive advantages in terms of attracting more creators, attracting more advertising vendors. In the third stage, via all of these advantage lead to further user base expansion. That is the common logic of internet products. We don't see that applicable for short-form video, and it's not applicable to JOYY. What we can see is that our main competitor right now is actually investing in dollar amount ways more than what we can afford.
From what we know is that one of our key competitors has been investing $billions or even $tens of billions into user acquisition. In such circumstances, if we invest $couple hundred million or $1 billion into user acquisition, it will not actually make any difference. I think that like you like to be more practical and take a relatively more balanced growth strategy whereby we love to ensure the health and sustainability of the product, therefore we will be more able to obtain an established position from a longer term perspective. We believe that we still have opportunity to change or to obtain competitive advantage in the longer term. Thank you.
谢谢雪玲给我们的分享，非常有用。Very helpful, thank you.
谢谢。
Our next question comes from Tian Hou at TH Capital. Please go ahead.
Hi, David。我quickly问两个小问题。一个是咱们在中国做直播已经很久了，也算是最早的一个，很有经验了。那我们现在国外做直播，它和我们原来在中国做直播有哪些是不同的地方？这是第一个问题。第二个就是这个业务发展也有一段时间了，那么现在看我们的利润率现在还是一个负的，就是在未来的时候，我就不知道我们对毛利润率和净利润率的一个走势有什么样的一个预期。就这两个问题，谢谢。
[Foreign language] YY has been doing live streaming for a long time. It was the first one in China. What in your mind, what's the difference between doing live streaming in China and overseas? That's number 1. Number 2, we have been doing overseas live streaming for a while, and what's the management outlook in terms of the growth margin and net margin going forward? Thank you.
您问的BIGO LIVE和YY Live国外运营和国内运营直播的差别，我觉得其实差别确实挺多的，因为在各个国家、各个地域、各个文化，因为在中国类似于你只要运营一个地域，一种文化差不多就能够全部覆盖了，但是在国外是完全不一样的。所以其实我们在全世界有30多个国家是有local办公室的。所以我们都是有当地的运营团队，根据当地的文化、当地的法律、政府要求进行调整。还有当地的艺人也是需要当地的运营团队去维护的。所以这是一个很大的不同。另外一个我觉得不同的是，在中国，实际上你所有的获客渠道的公司其实都做直播了。等于是说所有人都在做直播，所以你比较难以买到直播的用户或者直播的流量。但是在国外，因为主要的两个推广渠道是Google和Facebook，这两家公司其实都不做直播的业务。所以反过来来讲，直播的业务有一个非常大的公共流量的规模一直在这里。所以主要是你利用好这个规模，然后做好自己的用户留存、用户体验，你是可以有一个比较稳定的持续获客通道的。
对于第二个利润趋势的问题，我来回答一下。其实大家能看到我们二季度的利润是在稳步提升的，其实主要原因有三个：一是我们多产品线多样化的变现，营收的规模是不断增加的；其次是整体的运营效率不断的提升，我们的带宽成本、支付渠道成本的占比也是持续下降的。第三就是刚刚提到的Likee的广告投放费用的减少。今年下半年的话，我们认为经营效率还是会持续地稳步地提升。虽然增加了游戏直播的内容，但综合的内容成本率不会显著地增加，会保持相对的稳定。总体上来看的话，BIGO将进入持续盈利的一个阶段。全年整体来看的话，我们认为BIGO将实现微幅的盈利。从中长期的角度来看的话，考虑到BIGO LIVE产品线单独的经营利润一直保持在20%左右，随着其他产品线逐步实现正的循环，我们认为整体的利润率将逐步稳健地增加。谢谢。
First, regarding difference of operating live streaming business in PRC and let's say, other areas of the world. There are quite significant differences. First of all, if you operate in global markets, because there are so many different regions, so many different culture, you're actually operating multi-language, multicultural markets, while if you operate in China, there is only one single market. That's why, for BIGO LIVE, currently we have operating capabilities and teams in over 30 regions. Our local team operates based on very thorough understanding of local culture, law regulation, and the maintenance and the development of local content and content creators are also maintained by these localized operational teams. Secondly, I believe that there is another difference in terms of user acquisition channels. In China, actually every user acquisition channel, all of these companies are doing live streaming themselves.
For live streaming platforms, it's actually very difficult to obtain additional user and to continuously expand their user base. As for the overseas market, the main user acquisition channel and advertising platform is Google and Facebook, and they themselves do not actually heavily rely on live streaming as a business. The public pool of user traffic is available, and the source of user traffic channel is also more abundant for global live streaming business. Regarding margin trend, what we would love to say is that we've seen improvement of our net margin non-GAAP wise in the second quarter, mainly due to 3 factors. The first is continued revenue expansion with diversified monetization progress of multiple product lines. Second, improved operating leverage, lower bandwidth cost and payment channel cost. Third, as mentioned, the decrease in Likee's advertising cost.
For the second half of this year, we believe that we will continue to improve operating efficiency. Although gaming content has been introduced into BIGO LIVE, we do not foresee content cost margin to be increased significantly and will likely remain relatively stable in the future. For marketing activities, as more marketing activities will roll out in the second half of the year, sales and marketing expense will be higher, but sales and marketing expense margin will likely to be slightly lower than the first half. In conclusion, we believe that BIGO segment will enter into a new era of sustained profitability, and from the full year perspective, we believe that BIGO segment will achieve a positive non-GAAP net margin for the full year.
From a longer perspective, considering that the standalone operating profit of BIGO LIVE has remained around 20% and other products are gradually moving towards breakeven, we believe that the overall profit margin will be gradually increased. Thank you. That's the end of our call, and we look forward to speaking with everyone next quarter.
Thank you, management. This does conclude today's conference call. Thank you all for joining. You may now disconnect.