Hello, ladies and gentlemen. Thank you for standing by for LIZHI Inc.'s Second Quarter 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. Today's conference call is being recorded. I'll now turn the call over to your host, Effy Kang, Head of Capital Markets for the company. Please go ahead.
Thank you very much. Hello, everyone, and welcome to LIZHI Inc.'s Second Quarter 2023 Earnings Conference Call. We released our financial and operating results via Newswire services earlier today, and they are available online. Participants on today's call will include our founder and CEO, Mr. Marco Lai, our COO, Mr. Zelong Li, and our acting CFO, Ms. Chengfang Lu. Mr. Li and Ms. Lu will begin with prepared remarks. As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on the IR section of our website at ir.lizhi.fm. Before we continue, please note that today's discussions will contain forward-looking statements made under the Safe Harbor Provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements typically contain words such as may, will, expect, target, estimate, intent, believe, potential, continue, or other similar expressions.
Forward-looking statements involve inherent risks and uncertainties. The accuracy of these statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, many of which factors are beyond our control. The company, its affiliates, advisors, representatives, and underwriters do not undertake any obligation to update this forward-looking information, except as required under the applicable law. Please also note that LIZHI's earnings press release and this conference call include discussions of unaudited GAAP financial measures, as well as unaudited non-GAAP financial measures. Please refer to LIZHI's earnings press release for reconciliation of unaudited non-GAAP measures to unaudited GAAP measures. I will now turn the call over to our COO, Mr. Zelong Li. Please go ahead.
Hello, everyone. Thank you for joining LIZHI Inc.'s second quarter 2023 earnings conference call. Hello, everyone. Thank you for joining LIZHI Inc.'s second quarter 2023 earnings conference call. In the second quarter of 2023, we remain committed to executing our online audio-centric globalization strategy. By seizing advancing core technologies, optimizing product features, and elevating user experience, we are actively fostering a thriving business ecosystem. Despite macro challenges in the second quarter, the company's revenue increased by 15% year-over-year to CNY 593 million. Our total average mobile MAUs amounted to 45.6 million, and our average monthly paying users totaled 433,700 . We also achieved a net income of CNY 11.6 million. Now, let me go over our business developments during the second quarter.
With respect to the audio entertainment business, we effectively enliven the atmosphere across the community by further implementing refined operational management and introducing more diversified themed activities. For example, our LIZHI mid-year voice gala activities strengthen the connections and interactions between our content creators and users. We also launched an array of themed activities, such as our New Year Podcast Week, featuring a special season with National College Examination, which encouraged quality content creators to actively participate in our programs. Many popular content creators, including Beijing Talk, A Xie FM, and Yi Le Radio, were featured on our live streaming sessions, gladly sharing their personal stories and thoughts to inspire young minds. We diversified our content matrix with offerings that better suited young users' diverse tastes and preferences, delighting our users with enriched audio-based interaction experience.
Going forward, we will continue to roll out innovative product functions and additional activity formats to closely connect our content creators and users, fostering more immersive audio entertainment experiences and promoting a virtuous cycle across our vibrant community and ecosystem. Furthermore, we will continue exploring innovative product features, enriching our product matrix, and providing our users with highly differentiated product experiences.
在创作者生态的方面，我们继续优化创作者管理体系，面向各类内容创作者制定了差异化、定制化的扶持方案，促进创作者在平台内的的发展。例如，在第二季度，我们推出了夏日造浪营主播成长计划，着眼于内容创作者的差异化成长需求，以定制化运营管理体系，帮助内容创作者实现了自我的提升。同时呢，我们也开启了新生代入新企划，面向优质新兴内容创作者，打造新，新秀官方频道，助力优质内容的挖掘和推荐，帮助新兴内容创作者吸引更多的用户关注，加速他们的成长。通过打造创作者管理体系，我们希望能持续吸引和培养更多有才华的内容创作者，从而进一步丰富我们的内容供应。
For our content creator ecosystem, we continue to upgrade our creator management system and supported a wide array of content creators with differentiated, customized development solutions, helping them grow and flourish on our platform. For example, in the second quarter, we focused on our content creators' diverse growth needs with our newly launched Summer Success Program for streamer development, and providing meaningful support to enhance their capabilities and skill sets through our refined operational management system. We also involved the young generation in content. We set up a Rising Star official channel in support of our outstanding emerging content creators, and worked with them to conceive inspirational ideas for high-quality content creation, helping our rising stars attract more users and grow faster. By improving our creator management system, we hope to continuously attract and cultivate more talented content creators, further enriching the content offerings across our platform.
在全球化业务方面，我们通过核心技术，持续推动产品的创新，加速产品多样化功能的升级迭代，推动了国际业务的发展。自今年第一季度，我们在全球化声音社交产品TIYA中上线了My AI Friend聊天机器人以来，我们通过多样化的产品功能持续丰富了用户的体验。今年5月份，基于平台丰富的虚拟角色资源库，我们推出了10余款多元化的预设虚拟AI角色，例如有音乐人DJ Bass、游戏顾问Alex等，以满足了用户多样化的兴趣爱好，实现更智能的线上虚拟社交体验。用户还可以通过自定义AI专属好友，创建个性化的虚拟伙伴，预设虚拟AI的角色，体验独特的虚拟线上社交。并且，我们也在用户自定义AI好友功能中增加了动态头像的功能，使自定义AI好友能在对话中展现更加丰富的表情反馈，进一步增强了互动性。基于AI，基于集团在AI语音技术中的持续创新，目前我们已经面向所有用户开放了自定义AI好友的语音聊天功能，使AI好友在不同的社交情境中的回应会更加自然，实现更有效的感情传递。那接下来，我们将继续通过多产品创新来加速全球化业务的市市场局，进一步促进产品的本地化发展，为海外的业务拓展和商业化打下良好的基础。
Regarding our global business, we continue to empower product innovation through core technologies, accelerating the upgrade and iteration of our diversified product functions, and further propelling the development of our global business. Last quarter, we launched the chatbot, My AI Friend, in TIYA, our global audio-based social networking product. Since then, we have consistently enriched the user experience with various new product functions. In May this year, we leveraged our large pool of avatars to launch over 10 virtual AI preset companions, spanning characters such as musician DJ Bass and game consultant Alex. These new companions cater to TIYA users' diverse needs and interests, enabling a smarter and more engaging virtual online social experience. Users can also create and customize their own exclusive AI friends through presets to enjoy unique virtual online social experiences.
In July, we launched the new expressive animated avatar feature for users to customize the AI friends , which enables users to add more realistic micro gestures and facial expressions to their AI friends , further enhancing interactions across the platform. Thanks to our consistent innovation in voice AI technologies, all our users can now access our customized AI friends voice chat function. This feature empowers AI friends to speak and move more naturally to accommodate extensive social networking scenarios, establishing a deeper emotional connection between users and their AI companions. Going forward, we will further advance our global positioning through constant product innovation and push forward with product localization, strengthening the foundation of our global business expansion and commercialization efforts. In the meantime, we continue to build our capabilities in core technologies, including AI and audio processing and transmission, empowering business developments through technological innovation.
On the product front, we further optimized and integrated relevant product functions and launched some more diverse innovative features based on AIGC and voice AI technologies, laying a solid foundation for our product's commercial application. For operations, we comprehensively applied our self-developed technologies, effectively reducing technical costs and improving operational efficiency. As we move forward, we will continue enhancing research and development in the AI field, exploring applicable AI technology scenarios, and making the most of our advantages in voice-based technologies, ultimately amazing our users with incredible next-generation social networking experiences. Looking ahead, despite macro challenges, we will go all out to elevate our product competitiveness through innovative products, optimize the ecosystem, and refine operations.
Moreover, we will continue to adopt and more deeply integrate AIGC and voice AI technologies, AI chatbots, and AI assistants across our business, continuously empowering business development through technological innovation and further advancing our global expansion. Thank you, all. With that, I will now turn the call over to our acting CFO, Ms. Chengfang Lu, who will discuss our financial results in more detail.
Thank you, Zelong, and hi, everyone. We maintained year-over-year revenue growth in the second quarter of 2023, while focusing on building a sustainable and innovation-driven ecosystem. Moving forward, we will continue strengthening core technologies to spur ongoing product development and promote global business expansion over the long term. Now, I'd like to provide a brief overview of our financial results for the second quarter of 2023. In the second quarter, our total net revenues were CNY 592.9 million, representing an increase of 15% year-over-year, as we continue to diversify our audio entertainment product metrics.
Cost of revenues were CNY 400.4 million in the second quarter of 2023, representing an increase of 23% year-over-year, mainly attributable to increased remuneration fees to our content creators, increased salary and welfare benefits related to increased average salary, and increased payment handling costs, partially offset by a decline in other miscellaneous costs. Gross profit was CNY 174.4 million in the second quarter of 2023, compared with CNY 175.6 million in the same period of last year. Non-GAAP gross profit was CNY 175.6 million in the second quarter of this year, compared with CNY 176.8 million in the same period of last year.
Gross margin in the second quarter of 2023 was 29%, compared with 34% in the same period of last year. Non-GAAP gross margin in the second quarter of this year was 30%, compared with 34% in the same period of last year. Operating expenses were CNY 166.6 million in the second quarter of 2023, compared with CNY 161.6 million in the same period of last year.
Research and development expenses were CNY 75.2 million in the second quarter of this year, compared with CNY 70.3 million in the same period of last year, primarily due to increased pay and welfare benefits related to the increase in the number of our R&D staff and increased rent expenses, partially offset by decreased share-based compensation expenses and expenses related to research and development services provided by third party. Selling and marketing expenses were CNY 67.5 million in the second quarter of 2023, compared with CNY 60.8 million in the same period of last year. Primarily attributable to increased branding and marketing expenses and increased salary and welfare benefits related to the increase in the number of our sales and marketing staff. We will monitor our advertising and promotion expenses and adjust accordingly based on market conditions.
General and administrative expenses were CNY 23.9 million in the second quarter of 2023, compared with CNY 30.6 million in the same period of last year, mainly driven by a decreased provision for litigation contingencies, professional service fees, share-based compensation expenses, and other miscellaneous expenses, partially offset by increased salary and welfare benefits related to the increased average salary. Operating income was CNY 7.68 million in the second quarter of 2023, compared with CNY 14.1 million in the same period of last year. Non-GAAP operating income was CNY 13.6 million in the second quarter of 2023, compared with CNY 21.2 million in the same period of last year.
Net income was CNY 11.6 million in the second quarter of this year, compared with CNY 18.9 million in the same period of last year. Non-GAAP net income was CNY 17.3 million in the second quarter of 2023, compared with CNY 26 million in the same period of last year. Basic and diluted EPS were CNY 0.25 and CNY 0.24, respectively, in the second quarter of 2023, compared with CNY 0.37 and CNY 0.36, respectively, in the same period of last year. Non-GAAP basic and diluted net income per ADS were about CNY 0.30 in the second quarter of 2023, compared with CNY 0.50 in the same period of last year.
As of June 30, 2023, we had a cash and cash equivalent, short-term investment, and restricted cash of CNY 697.1 million. Okay, this concludes all of our prepared remarks today. Now, I would like to turn the call to Effy for the closing remarks.
Thank you once again for joining us today. If you have further questions, please feel free to contact LIZHI investor relations through the contact information provided on our website, ir.lizhi.fm, or the Piacente Group Investor Relations. Thank you.
Thank you. That concludes the conference call. You may now disconnect your line.