Earnings Call: Q1 2019

May 29, 2019

Earnings release

Welcome to YY's Incorporated First Quarter 2019 Earnings Call. At this time, all participants are in a listen only mode. After the management's prepared remarks, we will have a question and answer session. Please note this event is being recorded. I'd now like to hand the conference over to your speaker host today, Mr. Matthew Zhao, IR Director of YY. Thank you, sir. Please go ahead. Thank you, operator. Good morning and good evening, everyone. Welcome to YY's Q1 of 2019 earnings conference call. Joining us today are Mr. David Shilling Li, Chairman and CEO of YY Mr. Bing Jin, CFO of YY and Ms. Ting Li, COO of YY. For today's call, management will first provide a review of the quarter and then we will conduct a Q and A session. The Q1 of 2019 financial results and webcast of this conference call are available at ir. Yy.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 we will make forward looking statements. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in renminbi. I will now turn the call over to our Chairman and CEO, Mr. David Sheng Li. Please go ahead, sir. Thank you, Matthew. Hello, everyone. Welcome to our earnings conference call for the Q1. Before we start to discuss this quarter's performance, I should mention as some of you may have already noticed that I've been recently appointed as the CEO of YY by our Board. After almost 2 years as the company's acting CEO, I'm very excited and honored to lead the new YY Group which consists of our YY, Huya and V Go Business. After the completion of the Bigo acquisition, YY has become a global social media platform with over 400,000,000 in global video and live streaming average mobile MAUs in the Q1 of 2019. Among these MAUs, more than 75% came from markets outside of China, which demonstrates the progress that we have achieved in our globalization strategy so far. Additionally, the composition of our user base is very diverse. Of our over 400,000,000 average MAUs, 192,400,000 come from our short form video and live streaming services. This large proportion of users has enabled us to strengthen our leadership in both short form video and live streaming sectors around the world. In addition, 211,800,000 MAUs came from IMO, a global video communication application. Going forward, with a global strategy and focus on AI technology, we are confident in our ability to bring YY Group into a new stage to solidify our position at a global video based social media platform. We started 2019 with a strong first quarter results. Upon completion of the acquisition of Bigo on March 4, 2019, we began to consolidate its financials. Our total revenues increased by 47.1% year over year to RMB4.78 billion during the quarter. Excluding the consolidation of Bigo's financials, our top line results still outperformed the high end of our previous guidance range. Revenue from our live streaming business grew by 47.9% year over year to RMB4.49 billion. Revenue from our game live streaming subsidiary Huya increased by 93.4% year over year to RMB1.63 3 These strong growth numbers were a result of our commitment to the following: 1st, rigorously expanding our global operations 2nd, continually enriching and upgrading our content offerings and 3, consistently improving our technology capabilities, especially our AI know how. First, I would like to highlight YY's global expansion strategy and our progress to date. As mentioned earlier, YY's user base is very global and diverse including users from segments in live streaming, short form videos, video messaging and our other products and service offerings. Out of our over 400,000,000 average mobile MAUs in the Q1 of 2019, 211,800,000 were from IMO. IMO has developed a large user community mainly in the Middle East and South Asian markets by offering high quality video communication tools and services. Additionally, IMO's community is highly engaged and attracted to video content. IMO's video communication services were used over 65,000,000 times per day on average and each user's daily average usage time for video communication was about 40 minutes in the Q1 of 2019. IMO's core competitiveness comes from its ability to fulfill the video communication needs of users in a variety of scenarios including home, entertainment and business. Moving forward, we plan to further develop IMO into a more powerful super app by providing increasingly diverse content, functions and services to our users. Recently, we started to embed a short form video feed and video moments into IMO that allow users to access high quality content. Going forward, we will consider embedding live streaming and other types of content into IMO as well. In addition, the users of IMO's video conferencing services also have significant monetization potential. In the Q1 of 2019, on average, over 200,000 video conferences featuring 3 or more participants are initiated on IMO every day. This level of usage represents significant future monetization opportunities for IMO. In fact, it puts IMO on equal footing with the major business oriented video conferencing service providers on the market today. Generally, as we continue to cultivate synergies between our different business units, we will create more diverse social media content and best in class user experience for our global user community. Excuse me, this is the operator. I do apologize. We've got some problem with the speaker line. You will be on mute or I mean, you'll be on a busy cold while fixing this concern. Thank you so much. Hello, operator? Hello, operator? Hi. You are now back online. Thank you. Please go ahead. Okay. Yes, we are back to the conference. Thank you. In addition, our overseas short form video and live streaming user base also continued to expand rapidly in the Q1 as the average MAU for Weibo short form video and live streaming services increased by 160.6% year over year to RMB78.7 million. This increase was primarily driven by user growth from Like. Originally, Like was a short form video editing platform that allow users to add special effects into their original video works. In the second half of last year, Live has developed into a leading global short form video social platform. We believe that we are still at the early stage of the competition in the global short form video market, which has tremendous growth opportunities. Currently, the majority of short form video content in the market whether generated by user called UGC or professionally called PGC is mostly in entertainment or lifestyle category. So we also realized that short form video is an efficient way to help people acquire knowledge in the future. In fact, a variety of knowledge, skill sets and lifestyle tips can be taught and learn from short form video This reflects the tremendous commercial and social value of short form video. Recently, Like started a program to support high quality talented PUGC or We media performance to further enrich the content offering. Moreover, through the efforts of industry leading AI experts and algorithm specialists, Bigo has further enhanced user stickiness and viewing experience. In addition, our overseas live streaming business VIGO Live maintained healthy user growth and further improved its monetization system cemented our global leadership in the Q1. Bigo Life has accumulated extensive monetization experience in its live streaming offering through years of successful operation in the international markets. This operational experience will set like apart from the competition by enabling it to monetize through live streaming offerings. Since it is able to give content providers economic results and returns, it also encourages them to provide better quality content. Therefore, we are well positioned to capture higher global market share by leveraging our valuable content and vibrant social media ecosystem. Another progress on the globalization front is Hago, YY's casual game oriented social network platform which also maintained its rapid growth trajectory. During the Q1 of 2019, Hago continued adding more casual games to its portfolio. As a result, it maintained a very high level of user engagement as the daily time spent on HAGO per user exceeded 1 hour in the Q1. In addition, we also introduced voice chat rooms with virtual gifting features on Hago. These chat rooms and their features enable users to interact with each other while enjoying casual games. We believe these features will serve as a solid foundation for HAGO to develop its monetization capabilities. HAGO also consistently ranked as one of the top applications on Google Play in Indonesia and Vietnam. According to Sensor Tower, HAGO ranked among top 10 by downloads in the social networking apps worldwide in the Q1 of 2019. Secondly, we continue to introduce innovative features and high quality professional user generated content. For example, we started a new show by combining live streaming with a social detection game which allowed users to watch 6 hosts play the game live while utilizing a series of interactive features to support their favorite hosts. Regarding our high quality PUGC, we introduced a reaction show featuring our top host Modern Brothers. The show attracted over 450,000 viewers who joined the live show room and watched Modern Brothers live streaming their own TV reality shows. We believe that these types of innovations will continue to expand and strengthen the loyalty of our live streaming community going forward. Thirdly, we have made solid progress towards enhancing our technology through the application and integration of artificial intelligence. For content recommendation, we improved the efficiency of our AI powered content distribution engine. Through this improvement, we have created an optimal experience for our users by ensuring that they find their most desired content faster and easier than ever before. For host recommendation, we upgraded our existing machine learning models which previously ranked host based on the estimated click through rates only. By utilizing our deep neural network technology, we built recommendation algorithms that can simultaneously estimate and quantify metrics such as host click through rates, average user time spent and conversion rates. As we improve the accuracy and effectiveness of our recommendations, our new users on average spend 25% longer on our platform in the Q1 compared to the previous quarter. In summary, we continue to execute our global expansion strategy firmly, which help us to achieve strong growth in the Q1. We also maintain our focus on innovating our live streaming content offerings and helping our hosts to grow their audiences. Looking forward, we remain committed to strengthening our market leadership both domestically and internationally. As we continue to invest in our content offering and AI technology innovations, we believe we can further enhance user engagement and monetization going forward. That concludes David's prepared remarks. Now as YY's CFO, I'll talk about the financial results. We continue to deliver solid financial and operating metrics during the Q1 of 2019. Our total net revenues for the Q1 increased by 47.1 percent year over year to RMB4.78 billion. Specifically our live streaming revenues for the Q1 increased by 47.9 percent year over year to RMB4.49 billion accounting for 93.8% of our total net revenues this quarter. Even excluding the effects of the consolidation of Bigo, we exceeded the high end of our previous guidance range by over 5% due to the strong financial performance for both YY and Huya segments. In the Q1, mobile contributed 69.6 percent of our live streaming revenues while mobile live streaming MAUs of YY Live plus Hago increased by 65.6 percent to 59,800,000 as compared to the same quarter in 2018. Live streaming paying users of YY increased by 17.1% to 4,100,000 in the Q1 of 2019. Cost of revenues for the Q1 increased by 56.8% year over year to RMB3.16 billion. Revenue sharing fees and content costs paid to the performance, skills and content providers increased to RMB2.52 billion in the Q1 reflecting the growth of live streaming revenues of YY, HUYA and Bigo. In addition, bandwidth cost for the Q1 increased to RMB297.4 million primarily reflecting continued overseas user base expansion. Gross profit for the Q1 increased by 31.4% year over year to RMB1.62 billion. Gross margin was 33.9% compared to 38% in the prior year period primarily due to the increase in revenue sharing fees and content costs. The decrease in gross margin was also attributable to the impact caused by the relatively low gross margin of the Huya segment as its contribution to our net revenues increased significantly year over year. Operating expenses for the Q1 were RMB1.2 billion compared to RMB649.1 million in the prior year period, primarily due to our increased efforts in sales and marketing activities as we continue to expand in overseas markets as well as the increase in staff related expense for AI research and development personnel. Sales and marketing expenses for the Q1 were RMB534.2 million or 11.2 percent of total revenue compared to RMB235.7 million or 7.3 percent of total revenue in the prior year period. Our R and D expenses for the Q1 of 2019 were RMB404.7 million or 8.5 percent of total revenues compared to RMB249.5 million or 7.7 percent of total revenues in the prior year period. G and A expenses were RMB276.4 million or 5.8 percent of total revenues in the Q1 of 2019 compared to RMB164 1,000,000 or 5% of total revenues in the prior year period. Our GAAP operating income for the Q1 was RMB473.6 million compared to RMB 596.4 million in the prior year period. Operating margin for the Q1 was 9.9 compared to 18.4% in the prior year period, primarily due to the decrease in gross margin and the increase in sales marketing expenses, which is partially related to the acquisition and consolidation of Bigo. Our non GAAP operating income for the Q1 which excludes share based compensation expenses, impairments of goodwill and investments, amortization of intangible assets from business acquisitions as well as gain on deconsolidation and disposal of our subsidiary was RMB717.3 million compared to RMB727.3 million in the prior year period. GAAP net income attributable to the controlling interest of YY for the Q1 was RMB3.1 billion compared to RMB963.5 million in the prior period mainly due to the measurement gain of YY's previously held interest in Bigo amounted to about RMB2.7 billion which was included as part of the gain on fair value change of investments. Non GAAP net income attributable to controlling interest of YY was RMB600 and 53.5 million compared to RMB730 1,000,000 in the prior year period. Non GAAP net margin in the Q1 of 2019 was 13.7% compared to 22.5% in the prior period. Diluted net income per ADS in the Q1 of 2019 was RMB44.55 compared to RMB6.86 in the prior period. Non GAAP diluted net income per ADS was RMB9.32 compared to RMB10.96 in the prior year period. Looking forward to the Q2 of 2019, we expect our net revenues to be between RMB6 1,000,000,000 and RMB6.2 billion representing a year over year increase of 59% to 64.3%. This forecast reflects our current and preliminary views on the market and operational risk conditions which are subject to change. That concludes our prepared remarks. Operator, we would now like to open the call to questions. Thank you much. Ladies and gentlemen, we will now begin the question and answer session. And our first question comes from the line of Daniel Chen from JPMorgan. Daniel, your line is now open. I will translate myself. Congratulations on a very solid quarter. So my question is on the AI. So we now have about 400,000,000 of global user base, which is huge. And there's a lot of user data globally. So how are we going to utilize this data for our global products in the next few years? Thank you. This is David. Of our major strategies for the corporation among 2 of their strategy, which is 1 globalization actually AI technology. So starting from 2018, actually we have applied a lot of effort to apply AI technology into the daily operations for the company. Firstly, we actually use AI technology into the content management. So that part not only including short form video, but also including live streaming as well as mini games and etcetera. So we're actually using the AI technology to better match of the users when they play games from our HAGO platform also watch live streaming content in our YY live or other live streaming platforms. So, in conclusion, the content management definitely will in the AI technology to apply into that. Then the second part is the base capabilities related to the AI technology. For example, like facial recognition, audio recognition and etcetera. For that part of purpose, not only it's better to manage the content, but we also had some of the requirement from the content censorship as well as content management. So we're actually using the AI technology to better sensor as well as manage our content in all. And in the next 1 to 2 years, we think and we truly believe the major battlefield for the AI technology improvement will be focused on the short form video content management. Because for the short form content, most of them is quite fragmented coming from the different kind of topics. If we can use the better AI technology to provide users a better experience in the 1 to 2 years time period with United theme or United topic, which is a life related content. So definitely that will be further improve the stickiness for our short form video content. So, as I mentioned in the future, definitely the short form video will be one part. We will put on more focus in terms of the improve of the AI capability. And the second part is worth to mention is in terms of our AI focused personnel. For the whole YY growth this year, we actually have accumulated and attracted more than 230 of the engineers and AI experts, which is focused on the algorithm as well as AI capabilities. So in terms of the scale of the AI teams, we're actually one of the biggest one within of the China Internet Companies. So, in the future, we will further leverage those talent capabilities to continue improve our algorithm capability. There is one correction is our AI team's total people is 320, not 230. Thank you. Thank you so much. And our next question comes from the line of Eileen Deng from Deutsche Bank. Eileen, your line is now open. Thank you very much management for taking my question and congratulations on the strong quarter. My question is really is mainly on the Q2 guidance. Can management give us a breakdown of how much is from Bigo and YY Life? And the second question is more on Bigo operating metrics. Can we have more color on key metrics such as paying users and ARPU? And also for the both key products, live and like, what is the outlook for the full year revenue growth and margin outlook and also the monetization plan? Thank you very much. Yes. Annie, thank you. Let me address those questions. So the first question regarding the breakdown of the second quarter guidance, we provide guidance RMB6 1,000,000,000 to RMB6.2 billion. That includes both YY, Huya and Bigo. Now for YY's number, I think you can refer to the Bloomberg consensus. And I think Huya also last week, they have announced their result and also their guidance, so you can refer that. Then you deduct post Wan Huya from the guidance that will give you the number for Bigo, right? That's a breakdown. For Bigo's operating mattress, they have different product obviously. The main monetization comes from Bigo Live. In terms of the paying ratio for Bigo Live is still relatively lower compared with YY Life in China because a lot of market are still in the early stage. In terms of ARPU actually is very high because a lot of the donors, they are from Middle East and obviously Middle East very high purchasing power. So the ARPU in Middle East is very high. But the ARPU in other emerging markets such as Southeast Asia and other parts of the world tend to be low. So we do think there will be a lot of room for growth for both paying ratio and ARPU. For the revenue and margin, as we told the investors that last year, Bigo generated close to US500 $1,000,000 revenue. This year, we're still seeing very high growth rates. For the margin, we also mentioned previous that last year Bigo was loss making. This year, I think Bigo will continue to be loss making. But be careful that Bigo Life is already making handsome money. So Bigo Life has handsome margin. But like as David mentioned that still in the early stage of short form video market, there will continue to be more content upgrade and sales marketing and branding effects. So the key focus for Lite is to grow user base. That's why we'll continue to spend money. That's why the margin for Lite itself will be negative. Another big component for Bigo part is called IMO, which we haven't publicly discussed that before. But right now, we disclosed the IMO user number to be over 211,000,000 MAU. And then we'll continue to add more features including short form video and live streaming to enable better user experience for video conference and video communication. For monetization, we also gradually ramp up the monetization in the IMO business including both the advertising and also going forward the live streaming. But we do foresee that in short term we'll continue to invest in terms of content and in terms of sales and marketing. So I think putting all these together for Bigo Business, it will be loss making still this year. But we do have a clear path to profitability, which we can go further detail later. But on a high level, I want to mention that this year's focus for YY as a group is to grow the user base. As you all see that we have over 400,000,000 MAU. That put us into one of the world's leading social media platform. So we hopefully will reaccelerate our user growth and drive a much better exciting story. Thank you very much. Thank you so much. Once again, ladies and gentlemen, please ask And our next question comes from the line of Ashley Zhu from CLSA. Ashley, you may now ask your question. I'll translate myself. So I have two questions. One is on YY Life. We see that Q1 shows a better result than expected. So want to have management guidance for the full year on YY Life. And what's Hago's monetization progress? Do we have any target for the full year as well? And second question is on recent credit rating drop by S&P. It's reported that the drop is on company's request. Just want to check the background of this. Thanks. I'll address those. Question regarding the full year prospect for YY Live core business. As you see that the Q1, our revenue on YY Live grows more than 10%. That is better than we expect because I think there are several reasons. One is due to our operation expertise, we do have a better edge compared with some of the competitors, particularly in the Q1, the government tend to very stringent in terms of content screening. So that affects some of the smaller players, but it actually benefits the big platform like YY because we have been very stringent in the content screening and monitoring. So the ecosystem, the expertise really helped. Secondly, after Chinese New Year, Spring Festival, we do see a very healthy returning pattern for the users and host. So we continue to benefit from that, I would say, recover of the user demographic and host demographic. So looking ahead for the rest of the year, we do think that the similar pattern will continue. So that's the full year kind of a prospect. Secondly, you asked about the dropping of the rating. I think there are several reasons. One is, we have a public credit rating from S and P since 20 15. So we maintain a regular and dialogue with the rating agencies. But given we don't have an immediate plan for fixed income product or bond offering in near term, so we don't think there's an emergent need for continuing a public credit rating. That's the first reason. Secondly, our business has been growing very fast. Particularly recently, we acquired Bigo. And then in terms of this in context of this fast growing business, constantly updating agencies can take a very meaningful share of management time resource. So as such, we believe that it's more efficient to withdraw our credit rating at this point, so that we can focus effort on our business to optimize the resource. So that's the key reason. Thanks. Thank you so much. And our next question comes from the line of Natalie Wu from CICC. Natalie, your line is now open. So we have a question on IMO, which actually has a huge data user base already. So first question is the growth of the user. And second, management has mentioned to include short video and live broadcasting feature. Wondering how should we think about the optimal positioning of this product, whether it's more like utility app or independent app? And how should we think about the future one position model for 5 minutes? Thank you for your question. This is David. So IMO at the beginning, it actually has very simple functionality, which is focused on the video call, especially targeted into the Android phones. So, you can think actually IMO is kind of the fixed time into the Android phones. So because of the app has very simple and very simple functionality, So actually it has been accumulated very significant user base because between of the Android phones as well as between Apple phone and Android phones, the people were using IMO to having the video pause to each other. So that's a major reason IMO has accumulated a large user base. And now what our monitoring is IMO's user base has entered to a more stabilized of the phrase. So, the next step we will focus on the that also actually provide us a lot of opportunities to continue bringing more different kind of services as well as content into IMO's products to enable IMO continue evolving into a super app. So, another thing is worth to mention is within app, actually the user speaking was very high. Per user spend over 40 minutes in IMO every day. So, that also provide us a lot of opportunity to expand into all the different kind of content as well as the services in the future. From the higher end, we truly believe through IMO, we actually help the YY Group to complete of the user closed loop because based on the we actually already had the large short form video platform, which is like provide a huge amount of the short form video content on a daily basis. But through IMO platform, we actually can have the better distribution of the video moment as well as other functionalities embedded into IMO to better distribute of the short form video content into IMO as well as other external of the social media platforms. Then after the users has been accumulated a lot of popularity, it also will encourage the users back to our platform such as live to generate more content. So that will complete our users' loop within our platform. And also another thing is worth to mention is if you look at the IMO's currently daily active users, actually more than 30% has already converted into the short form video of the users. And in the future, we truly believe this ratio will continue to improve, which means within IMO, There has more and more users continue using more short form video content. So, in the future, connect all the things together, we will make YY Group is very unique of the video players, which is quite different compared with other video players within the market. Because through of the live, it will be helping us generate a huge amount of content, then through IMO to help us distributing of those kind of short form video content. Then we can use live streaming to better monetize those kind of short form video content. So that will make YY is quite different of the players compared with mainstream of the video players in the market such as YouTube. So, in conclusion, IMO will play a very important role in our future, the overall growth video strategy. Thank you. Okay. Thanks. That's very helpful. And your next question comes from the line of Hillman Chan from Citigroup. Please ask your question. Thank you for taking my questions. So my first question is on the overseas strategy for Bigo. Could management share more on the localization and marketing strategy going forward? And also on the bottlenecks or challenges that we face so far in some of these overseas market? And regarding IMO Super App strategy, could management share more on the new features to be introduced in second half this year? Thank you. Distribution Thank you for your question. This is Daley. So firstly, I think your first question is more related to the Bigo Live business. So for Bigo Live business, which is our leading live streaming platform in overseas, we truly believe going forward our major goal is to focus on to build up global users community as well as users relationship into the 1 by 1 different temporary regions. Because based on our in the past decades of experience in China, we actually had a deep understanding in terms of the live streaming content as well as the live streaming ecosystem. So going forward, we will continue to leverage of those kind of experience into the overseas expansion. Another thing is worth to mention is what we monitor is the live streaming content is not only popular within of the developing countries, but also is very popular within of the developed world. For example, our revenue contribution coming from American Plus European has been increased into 14% onefour of the total revenues in the Q1 of this year. The total overall Tier 1 countries revenue contribution has been reached to 20%. So that's also demonstrating in the Tier 1 or the developed world, we also had a strong demand for the live streaming content from the user base. So going forward, in conclusion for Bigo Live, we'll continue to focus on live streaming expansion from global wide. Your second question relates to IMO. So the IMOs nature is still we truly believe we still focus on the social communication as well as social relationships. And in the future, as I mentioned before, so the IMOs major role still how we can better distribute our short form video content through of the IMOs platform. We actually gave the different kind of growth for our different kind of product. For example, like Live, which is a short form video platform going forward continue to focus on producing and consume of the short form video content. By contrast, IMO will be more focused on the distributing of the short form video content. So going forward, we think one of the key focus for better develop of the social relations based IMO, we will continue to focus on the development of the group functionalities. So, the group will starting from the people size around 3 to 5 people, then extend to a dozen, then even into over 100 or even 1000. So we will try to build up a better relationship within those kinds of different interest based growth and we can better distribute our short form video content within those kind of growth. So that is our thinking in terms of IMO's future strategy. Thank you. This is Wei Lin, Bin Zhang, Matthew. Thank you so much. And our last question comes from the line of Chen Hao from PH Capital. Chen, your line is now open. So going abroad is a great thing because the users are really haven't started to adapt to what we have already so familiar with in China. However, those countries are much smaller than in China. So the marketing effort has to be country by country, different than when you were doing that in China, one advertisement can be seen or accessed by millions and millions of youngsters in China. So in that case, the marketing effort must be difficult than when you were in China. So how do you envision the marketing experts going abroad? And also how your margin is going to be throughout the year? Thank you. This is David. Let me answer your first question. So, in terms of our sales and marketing expenses in the overseas market, firstly, as you may notice, so in terms of the sales and marketing directly related to the brand promotions, it actually is quite low as a percentage of total sales. We only have some of the branding campaigns in the major countries with large populations. For most of the smaller countries, we actually major using the performance based advertisement as a major channel to promote our product. And another thing was to mention is currently we're actually also using AI technologies to monitor and manage the overall performance from the performance of advertisement platforms. And going forward, as our AI technology continue to become more mature and comprehensive, we truly believe that can deliver our better ROI through of the AI managed of the performance based product promotions. Thank you. And also I want to add 2 additional points. One is in some of the foreign markets actually ROI for advertisement can be better than in China because in China you have a lot of advertising agencies. So each of them take a cut on the total budget. But in foreign market, they're basically Google Play and Facebook. So it's relatively transparent. And obviously, as David mentioned, we will use AI to closely monitor the ROI. That's the first thing. Secondly, you asked about the margin profile for Bigo. As I mentioned before, Bigo has different business units. Bigo Life definitely is making a profit. Like will be a key area for sales and marketing because we do see likes user base doubled in the last half year and we see even more great opportunities. So we need to make sure that when we spread the content globally, we need to make sure that more and more audience are aware of this product. Now for IMO, even though it has over 211,000,000 MAU, it actually doesn't do a lot of sales marketing. It has very little sales marketing spending before. The users basically come organically, as David mentioned, because IMO provides very seamless video communication tool and environment. Going forward, as we implant more content, we might also do some of the sales marketing and branding for IMO as well. So those are the 2 spending area for Bigo. So in total Bigo will still be loss making, but I think we're very encouraged by the future prospect of this business. Thanks. Thank you. Thank you. Thank you so much. I would now like to hand the conference back to the management team for the closing remarks. Thank you, operator. Thank you all for joining us today. That closed our call today. We're looking forward to speaking with you in the coming quarters. Thank you. Thank you. Thank you. And that does conclude our conference for today. Thank you for participating. You may all now disconnect.