Hello, ladies and gentlemen. Thank you for standing by for the LIZHI Inc.'s first quarter 2022 earnings conference call. At this time, all participants are in a listen only mode. After management's remarks, there will be a question and answer session. Today's conference call is being recorded. I will 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 first quarter 2022 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, and the call will conclude with a Q&A session. As a reminder, this conference is being recorded. In addition, our earnings highlights presentation and 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 US Private Securities Litigation Reform Act of 1995.
These statements typically contain words such as may, will, expect, target, estimate, intend, 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's affiliates, advisors, representatives and underwriters do not undertake any obligation to update these 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 a 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, and thank you for joining our first quarter 2022 earnings conference call. After becoming profitable for the first time on a GAAP basis in the fourth quarter of 2021, we continued to optimize our organizational structure and technology platform in the first quarter of 2022, which boosted our operating efficiency and contributed to stable operating results. Notably, our first quarter revenue rose 4.4% year-over-year to RMB 517 million. Our gross margin increased by 700 basis points year-over-year to 32%. We have achieved a profit on a GAAP basis for the second consecutive quarter, with net income surging 84% quarter-over-quarter to RMB 16.42 million.
In the first quarter, we remained focused on building a competitive audio-centric ecosystem, improving product functionality, elevating overall user experience, and actively exploring overseas markets to implement our globalization strategy.
Meanwhile, we continue to reinforce our in-house suite of technology to empower product innovation and business development. In terms of operational data, total average mobile MAUs amounted to 51.5 million, and average mobile MAUs of our audio entertainment business increased by 11% year-over-year to 9.14 million. Thanks to the continuous optimization of our operational strategy, average monthly paying users maintained year-over-year growth in the first quarter to reach 482,000. Next, I will share more color on the development of different business segments.
在音频娱乐业务方面，我们继续深化音频社区生态的建设，聚焦核心品类和音频娱乐板块，专注提升音频娱乐业务的用户增长以及商业化表现。2022年第一季度，我们音频娱乐端的用户渗透率已从去年同期的13.8%提升至17.7%。同时，我们也持续围绕各类热门的话题和节假日主题，针对性地推出系列的运营活动。通过多样化的运营策略，激励内容创作者，提升创作者的参与度，并吸引更多用户加入实时音频互动，进一步释放音频娱乐业务的商业化潜力。
With respect to audio entertainment, we continue to enhance the competitiveness of our audio-centric ecosystem by focusing on core content categories and the audio entertainment business to drive user growth and commercialization performance. In the first quarter of 2022, the user penetration rate of our audio entertainment business expanded from 13.8% in the same period last year to 17.7%. Furthermore, we continue to launch a series of operational campaigns featuring various trending topics and holiday themes. With our diversified operational strategy, more content creators were encouraged and motivated to engage in content creation, which in turn attracted more users to join real-time audio interactions, further unleashing the commercialization potential of our audio entertainment business.
此外，我们不断丰富和优化产品形态以及互动娱乐的形式，助力业务模式的创新，拓展优质内容的商业化。在三月份，荔枝与潮玩品牌Koliliko达成合作，将Koliliko旗下品牌IP的形象植入到平台内音频娱乐端互动功能中，开创了品牌IP线互动场景，为用户提供多元化的线上娱乐体验，深受站内年轻用户的喜好，有效促进了平台主播与用户间的紧密互动。未来呢，荔枝也将与更多品牌IP合作，继续探索多样化的线上互动娱乐场景，充分利用双方的优势实现共赢。
In addition, we have been consistently enriching and optimizing our product features and entertainment interaction formats to facilitate business model innovation and expand the commercialization of high-quality content. In March, LIZHI started collaborating with the designer toy brand Koliliko to integrate Koliliko's brand IP image into an array of interactive functions in the audio entertainment section of the LIZHI app, creating online interactive scenarios for the brand IP and providing users with a diversified online entertainment experience. The collaboration has gained traction among the LIZHI app's younger generation of users and has effectively boosted close interactions between content creators and the users on the platform. Going forward, LIZHI expects to collaborate with more brand IPs to further diversify usage scenarios for online interactive entertainment, leveraging the strengths of both parties to maximize mutual benefits.
在全球化拓展方面，我们进一步优化了全球化社交产品TIYA的产品功能。自推出实时互动群空间以来，我们基于对用户需求的洞察，聚焦升级实时互动空间内的交互功能，并提升产品通用性和易用性，为用户提供更加便捷的线上连接与社交互动方式。我们根据用户的多元化偏好，持续丰富群空间的玩法。通过升级关系链的获取、简化邀请路径等产品策略，优化产品的邀请机制，提升了好友间的社交效率。并利用自然技术和AI能力，从推荐端优化了用户体验，实现实时互动群的一键直达，吸引更多活跃用户加入了群空间，加强了实时互动的氛围。此外，我们也相继在TIYA上推出了更多创新的功能，包括加入语音变声器等，支持用户自主切换不同类别的声音，使实时互动更加有趣和生动。
Turning to our global expansion. We continue to refine the features and functions of our global social product TIYA. Since launching TIYA's real-time interactive group space, we have improved the product versatility and usability by upgrading the group space interactive functions based on our insights into user demands, making online connections and social engagement easier for our users. We also continue to enrich the features of the group space in line with our users' diversified preferences through product strategies such as upgrading the acquisition of friends' connections, and simplifying invitation pathways. We optimized the product invitation mechanism and boosted social efficiency among users.
Notably, building on our in-house suite of technologies and AI capacity, we elevated user experience by improving the recommendation feature, giving users direct access to the interactive group with just one click, so that we can attract more active users to join the group space and promote real-time interaction and connectivity. Furthermore, we unveiled more innovative functions on TIYA, including a voice changer that allows users to alter their voice using various vocal tones and effects, making real-time interactions more fun and lively.
得益于产品功能的优化迭代和互动玩法的丰富创新，TIYA的用户参与度和活跃水平也得到进一步的提升。在这一季度，人均每日使用时长同比增长42%，人均每日发消息数量同比增长57%。截止三月底，用户好友关系链的对数较去年同期增长3.87倍。此外，群组内互动功能的持续优化，也有效地提升了群的渗透率以及用户的参与度。在三月份，群渗透率同比增长2.57倍，活跃群数同比增长3.77倍。新用户的群渗透率持续提升至接近70%。新用户自主建群的比例也实现了大幅的提升。在未来，我们将继续基于用户体验去丰富TIYA的产品功能，推出更多创新功能以及互动的玩法，精准支持用户在多种场景下的线上社交需求，打造适用性更强、通用性更广、更简便易用的全球化社交产品。
The optimization and iteration of product features and the enriched interactive functions have further boosted TIYA's user engagement and user activeness. In the first quarter, the average daily time spent on the app per user increased by 42% year-over-year, and the number of daily messages sent per user rose 57% year-over-year. As of the end of March, the number of pairs of friends connections grew 3.87 times compared with the same period last year. In addition, the continuous optimization of in-group interactive functions also effectively drove the group penetration rate and user engagement. In March, the group penetration rate grew 257% year-over-year, while the number of active groups grew 3.77 times compared with the same period last year.
The group penetration rate of new users continued to rise, reaching almost 70%, along with a significant expansion in the percentage of new users who are setting up groups on their own initiative. Looking ahead, we will continue to enrich TIYA's product features based on user experience, and launch more innovative functions and interactive features to meet users online social needs in a more diversified range of scenarios. Building a global social product with wider applicability, versatility, and usability.
除了在产品业务端的持续推进，本季度我们也在不断推动核心技术的发展，进一步加强自研技术对业务增长的支持。其中，我们通过持续搭建和完善产品技术的通用平台，实现了更强的产品复用性，提升了产品的开发效率。并通过加强智能投放系统的应用，优化产品投放和推广策略，有效提升了整体的运营效率。此外，我们也通过深入夯实核心技术的基础，提升了多项关键技术指标。例如自研IM实时语音通讯平台VoderX和实时音视频流技术平台DOREME为我们的产品提供了多方面的技术支持，包括支持语音相关定制化功能的落地，提供实时互动的流畅体验。未来，我们计划继续加大资源技术的覆盖率，预计在第二季度我们能够实现VoderX在荔枝上的100%应用。在降低相关技术成本的同时，支持更多定制化创新功能的开发，增强产品的开发优势。
Alongside our substantial progress in product improvement. During the first quarter, we also continue to advance the development of our core technologies, reinforcing our in-house technologies contribution into business growth. For example, by building and improving our versatile product technology platform, we enhance the both product reusability and product development efficiency. Also by strengthening our smart advertising system and optimizing our marketing campaigns and promotional strategies, we effectively boosted our overall operating efficiency. Furthermore, we improved the various key technical metrics by solidifying our core technology foundation. Our in-house instant voice messaging platform, VoderX, and real-time audio and video streaming technology platform, DOREME, provide our products with technological support on multiple fronts, including enabling the implementation of customized voice-related functions, while also offering a seamless real-time interactive experience. Going forward, we plan to continue expanding the coverage of our in-house technology.
We expect to achieve 100% application of VoderX on TIYA in the second quarter, which will lower our technology costs while also supporting the development of more innovative and customized functions and enhancing our product differentiation advantages.
领先的自研技术和产品的优化创新，也为荔枝多终端的战略布局提供了有力的支撑。今年三月份，我们的车载音频产品正式加入了小米车机快应用的平台，并成功上线了智能电动汽车零跑汽车的车载系统，将精选优质的播客内容及沉浸式音频体验带给更广泛的用户群体。未来我们将继续布局车载音频领域，希望为更多合作车企的用户们提供高质量、多样化、个性化的车载音频体验。
Our leading in-house suite of technologies and product optimization and innovation also bolster the strategic multi-device product roadmap. In March, our in-car audio product was integrated into the vehicle operating system of Leapmotor, a technology-oriented smart EV automaker through the in-car Xiaomi Quick App platform, bringing selected premium podcast content and immersive audio experiences to a broader user base. Looking ahead, we will continue to deepen our presence in the in-car audio market, hoping to provide more users with high quality, wide-ranging and customized in-car audio experiences.
总体而言，荔枝在第一季度的业绩表现为全年的发展奠定了坚实的基础。接下来，我们将延续有效的精细化运营策略，继续致力于商业化潜力的挖掘，同时动态调整资源配置，提升运营效率。在国际化市场中，我们也将充分利用核心技术优势和本地化运营策略，探索不同的市场，挖掘新的业务增长机会，提升海外用户的规模，并扩大商业化空间，为集团的整体发展带来更多的增量。我们对荔枝的长期发展充满了信心，并将持续致力于为用户和股东创造更多的价值。
In summary, our performance in the first quarter laid a solid foundation for our full year development. Going forward, we will maintain our effective, refined operational strategies and remain committed to tapping into more commercialization potential while adjusting resource allocation dynamically to boost operational efficiency. On the international market front, we will fully leverage our core technology advantages and localize the operational strategies to explore different markets, discover new business growth opportunities, expand our overseas user base, and boost commercialization, bringing additional upside to the LIZHI group's overall development. We are fully confident in LIZHI's long-term development and will continue to dedicate ourselves to creating greater value for our users and shareholders.
谢谢大家！下面请我们的代理CFO。 由陆晨芳女士为我们介绍财务的业绩。
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. Thank you, Zelong. Hello, everyone. Our first quarter results demonstrate our growth trajectory, driven by the continuous improvements in our operating efficiency. In the first quarter, our gross margin grew to 32%, up 700 basis points year-over-year. More encouraging, we achieved net income of CNY 16.4 million this quarter, representing an 84% sequential increase. Going forward, we will carry on building a more competitive audio ecosystem, pursuing diversified commercialization avenues, and advancing our technology capabilities. We are confident that those endeavors will strengthen our core competencies and empower us to create greater values for our users and shareholders. Now, I'm providing a brief overview of our financial results for the first quarter of 2022.
In the first quarter, our total net revenues were CNY 516.7 million, representing an increase of 4% year-over-year, primarily driven by the increase in the number of paying users and an average amount of the spending on our audio entertainment products, partially offset by the decreased advertising revenues, which was mainly due to the increase in the number of advertising projects. Cost of revenue was CNY 348.6 million in the first quarter of this year, representing a decrease of 6% year-over-year, primarily due to the adjustment in the revenue sharing policies, resulting in the decrease in the revenue sharing fees. Gross profit was CNY 168.1 million in the first quarter of 2022, representing an increase of 34% year-over-year.
Gross margin. Non-GAAP gross profit was RMB 170.7 million in the first quarter of 2022, representing an increase of 34% year-over-year. Our gross margin for the first quarter of this year increased to 32% from 25% in the first quarter of 2021. Non-GAAP gross margin for the first quarter of this year grew to 33% from 26% in the first quarter of 2021. Operating expenses decreased by 22% year-over-year to RMB 153.5 million in the first quarter of this year. Research and development expenses were RMB 71.1 million in the first quarter of 2022, representing a year-over-year increase of 25%. The increase was primarily due to the higher salary and welfare benefits expenses and rental expenses.
Selling and marketing expenses were RMB 60 million in the first quarter of 2022, representing a decrease of 50% year-over-year, primarily attributable to the decrease in the promotion and marketing expenses, and partially offset by the increased salary and welfare benefits. General and administrative expenses were RMB 22.4 million in the first quarter of this year, representing a year-over-year increase of 14%. The increase was mainly due to increased salary and welfare benefit expenses and rental expenses. Our operating income was RMB 14.6 million in the first quarter of 2022, compared to a loss of RMB 72.2 million in the first quarter of 2021. non-GAAP operating income was RMB 23.4 million in the first quarter of this year, compared to a loss of RMB 64 million in the first quarter of 2021.
non-GAAP income was RMB 16.4 million in the first quarter of 2022, compared to net loss of RMB 17 million in the first quarter of last year. non-GAAP net income was RMB 25.2 million, compared to non-GAAP net loss of RMB 61.8 million in the first quarter of last year. Basic and diluted net income per ADS were RMB 0.32 in the first quarter of 2022, compared to basic and diluted net loss per ADS of RMB 1.5 in the first quarter of 2021. Our non-GAAP basic and diluted net income per ADS were RMB 0.49 in the first quarter of 2022, compared to non-GAAP basic and diluted net loss of RMB 1.33 in the first quarter of last year.
As of March 31, 2022, we had cash and cash equivalents, short-term investments, and restricted cash of RMB 514.5 million. Okay, this concludes all our prepared remarks today, and we will now open the call to questions. Operator, please go ahead.
Thank you. If you have a question at this time, please press star then one on your touch tone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. For the sake of clarity and order, please ask one question at a time. Management will respond, and then feel free to ask a follow-up question. Our first question comes from the line of Vicky Wei with Citi. Your line is open. Please go ahead.
管理层早上好。谢谢接受我的提问。我有两个小问题。第一就是管理层如何看待我们直播打赏的规定？
就是最近监管的规定，这对我们音频直播行业和荔枝有什么影响？我的第二个小问题是，在我们互联网行业成本优化的趋势下，我们应如何看待荔枝海外投资和国内市场之间的平衡？我自己翻译一下。
Thanks to management for taking my question. So what does management think of the live streaming regulations on tipping? How does that impact audio live streaming sector and LIZHI? My second question is internet cost optimization trend in China internet sector. How should we think of the balance of LIZHI between investment in overseas and domestic markets? Thank you.
好，谢谢Vicky的问题，我来回答这两个问题。我是Marco。首先就是怎么看这个直播打赏的规定。最近呢，就相关的监管机构针对网络直播打赏提出了更加明确的规定。在我看来呢，这个规定是非常好的，就是等于靴子落地了，就是非常清晰，这个是对音频直播这个行业的长期发展是有利的，包括也会去促进更加规范的一些运营的机制，加强对未成年人的这些网络保护等等。这些规则清晰了，其实对长期来说，会更好一点。
Vicky. I'll translate for Marco. Yeah. Vicky's questions were answered by Marco, and I will translate for him. For the first question, recently competent authorities have further clarified regulatory guidelines on the tipping regarding live streaming. We think the rules were very clear and we believe are beneficial to the long-term development of the audio live streaming sector, including promoting a standardized operational mechanism and strengthening the protection of minors. That will deliver long-term benefits.
针对其中的一些细则，我们在产品和运营的层面一直都有相应的优化和调整来满足这个相关的要求，所以我们还是准备了蛮久的。比如说我们在很早之前就推出了青少年的模式，包括推出了专属的节目的内容来针对青少年。那在音频娱乐方面呢，我们对直播的主播也进行相关的身份验证，同时也建立了相关的风控的模型和非常完善的处理的机制。其实，我们已经做了比较好的准备。
For some specific rules, we have optimized and adjusted products and operations to meet compliance requirements and it takes us time to be prepared. We have launched a special mode for minor users earlier, including setting up the inclusive content pool for the minors. For audio entertainment, we have also carried out identity verification steps for our hosts and established the risk control and processing mechanism. Overall, we are very well prepared.
整体来看，在新规定出台之前，我们已经在产品和运营这些方面做出了积极的调整。针对其中的一些细则，我们也将对相关的机制进行趋势性的一些完善。同时，动态监控政策的变化，我们会积极地去优化和调整产品和运营的策略，为用户更好地去服务。
Generally, before the introduction of the new regulatory requirements, we have already made positive adjustments to the products and operations, and we will continue to improve our mechanisms according to the detailed requirements. We will dynamically monitor changes in the regulatory framework and actively optimize and adjust the product and operational strategies to better serve our users.
第二个问题就是关于怎么来做到海外投资和国内市场的balance。那么在今年的第一季度，我们已经是连续第二次在GAAP的层面取得了盈利，净利润达到了1,642万，环比增长是44.84%。目前我们的国内的业务已经能够实现盈利了，并且能够为整个集团的海外业务的发展提供支持。未来呢，我们也将进一步去提升这些成熟业务的运营的效率，提高盈利的能力。
The second question is about the balance between the investment in overseas markets and domestic markets. In the first quarter of this year, we have achieved profitability on a GAAP basis for the second consecutive quarter with a net profit of RMB 16.42 million, representing a quarter-over-quarter increase of 84%. So far, our domestic business is already profitable and providing support to the group's overseas business. Going forward, we will further improve the operational efficiency of our business and increase the profitability.
对于海外业务的整体投入，我们是非常慎重的，我们会根据产品的发展阶段做动态的调整。在获客方面，长远来看，海外业务的用户增长的策略还是以自然增长为主。我们也希望通过产品和运营的优化，加强产品的网络效应，吸引更多的用户来使用，实现用户的有机的增长。
We are prudent according to the global business development and investment. We will make dynamic adjustments according to the development of the product. In terms of customer acquisition strategy, from a long-term perspective, our user growth strategy for overseas business mainly focuses on organic growth. We hope to strengthen the network effect of the product through the optimization of products and operational strategies, and attract more users and achieve organic growth.
这些方面我们也会根据产品不同的发展阶段和我们的目标市场的情况来动态调整市场费用的投入。在研发方面呢，我们一直都在积累和提升核心的自研的技术，这些策略能够使我们在提供定制化的产品技术支持的同时，对我们降低规模化扩张的成本也是非常有帮助。
On the other hand, we will also fine-tune marketing investments based on our product development stages and target market conditions. As to research and development, we have been accumulating and elevating our core in-house technologies, which may enable us to reduce the cost of business expansion on scale, while providing customer-customized product technology support.
在海外的业务，我们也不只是投入，就是说在未来我们在海外的业务也会进行商业化，会为我们带来更多样化的收入的来源。总体来说，我们会继续通过对业务不同发展阶段的评估，动态来调整资源的配置，对这个海外业务的投入规模、时间点和这个策略会进行非常谨慎、严格的把控，实现运营效率的最大化，同时也进一步地提升整体的盈利能力，实现我们的业务的稳健发展。
For global expansion, it's not only about investment, but also the commercialization opportunities. We are expecting that commercialization of our overseas business may bring diversified revenue streams in the long term. In short, we will continue to adjust the allocation of resources through the evaluation of different development stages of the business, and strictly manage the investment scale and timing and strategy to maximize operational efficiency and further improve overall business performance and profitability and achieve a safe, steady development.
Thank you. Thank you, Vicky.
Thank you.
Thank you.
Thank you. Again, if you would like to ask a question at this time, please press star then one. Our next question comes from the line of Carol with Southwest Securities. Your line is open. Please go ahead.
管理层好，感谢接受我的提问。我这边想请教一个关于出海的问题，因为看到TIYA有着一个不错的运营数据的表现，然后想了解的是咱们设立新加坡总部，是不是也基于出海产品表现不错这样一个大的背景去加大了海外业务的布局的力度，那有没有更多的背景可以跟我们介绍一下的，以及设立那个海外总部之后，咱们的海外业务的这个具体的布局规划是怎么样的？
Thank you management for taking my questions. My first question is about overseas business planning after the establishment of Singapore headquarters. Thank you.
对于海外业务，我们目前的重心还是通过社交产品TIYA来扩展美国的本地市场，以用户体验为核心，就是通过一些创新性的产品功能和产品的形态去满足用户的社交需求，以此来促进用户规模的比较有机的增长。此外，我们也在积极探索和扩展一些新的市场，逐步丰富我们的产品的矩阵，利用我们在音频娱乐行业的成功的一些经验。尝试新的商业化的机会，也是我们会尝试的。
For overseas business, our current focus is to expand the U.S. market through social product here with user experience as the core to meet users' social demands through innovative product functions and features and to promote organic user growth. Furthermore, we are also actively exploring and expanding new markets to launch a richer product matrix. We use the successful experience of audio entertainment business and explore new commercialization opportunities.
新加坡总部的设立是帮助我们引入更多核心的人才，来支持我们全球化战略的发展，推动业务的创新。在新加坡之外，其实我们也在多个国家地区搭建了本地化的运营团队，正在通过持续的本地化的运营来支持产品的不断的优化和创新，来满足世界各地的本地用户的多样化的需求。
The establishment of the Singapore headquarters has helped us to attract more talents to support the development of our globalization strategy, and it drives the business innovation. In addition, we have built local operational teams in various countries and regions except Singapore. We are continuously supporting product optimization and innovation through localized operations to meet the diverse needs of local users as well as the global users.
在未来，海外业务的发展也会为集团长期的营收追加增加这个增量。整体而言，我们对海外业务的长期发展是充满信心的，会坚定去实施我们全球化的战略，实现业务的可持续的发展。
Going forward, our overseas business is poised to provide an upside to the group's long-term revenue growth. Overall, we are confident in the long-term development of overseas business, and we will firmly implement the globalization strategy to achieve a sustainable business development.
关于出海战略和新加坡总部的回答就这些。Thank you。
好，我想再接着这个。
Please go ahead.
我想接着这个出海战略再追问一个关于出海业务的问题。因为看到中国的互联网企业，它也是很多在做出海或者是冲海外的业务，策略其实也是很多用垂直化的产品去打一些不同的市场。那么海外其实本身也有一些比较成熟的产品，那么我想了解的是TIYA它的这个产品的切入点，或者说真正的TIYA市场主要是哪些？TIYA的这些产品，它相对于海外的，比如说像Discord或者是国内一些海外产品，它有哪些差异化的地方？
I follow up a question about overseas business. I'd like to know the differentiation of TIYA compared with competitive products.
好的，从产品差异化的角度来讲，我们肯定全球化的战略侧重点在于线上的社交产品的扩展，也重点在于语音这一块，适用于打造非常简单易用的一些语音社交的工具，增强实时互动的有效性，来满足全球的年轻人多元化的一些社交的需求。我们产品的核心差异化在于我们产品创新和我们一些自研技术的赋能。通过持续性的产品的优化的升级，我们引入了很多创新的互动的功能，使得这个实时的互动是更加富有情感。
From the perspective of product differentiation, our globalization strategy currently focuses on the expansion of online social products with the core of audio centric, and is committed to creating simple and easy to use audio social tools, enhancing the effectiveness of real-time interaction, and meeting the diverse social needs of younger generation users. The core differentiation lies in product innovation and in-house technology empowerment. Through the continuous product optimization and upgrading, we have enriched the interactive functions to make real-time interaction more fun and lively.
其实我们最大的差异化，我觉得是在我们自研的技术这方面，因为市面上很多产品，包括是美国的产品，使用的都是第三方提供的技术，这样的话会导致他们很多是同质化的一些服务。我们是通过自研的我们的IM的即时语音通信平台VoderX，还有我们实施的音视频流的技术平台DOREME，这两个平台，我们为海外业务的产品的优化和用户的体验，提供了非常个性化的技术的支持，使得我们在产品这边，也有很多的个性化的拓展空间，包括利用智能技术推出个性化的工具，增强了交互体验，线上的高质量的实时的互动，提升产品的差异化的表现。
I think the most important differentiation of our product is about in-house technology. We see there are many other products, they are using the technology support from third parties and third agencies, which makes the product more homogeneous. We have brought more customized technological support for the product optimization and user experience through our in-house developed instant voice messaging platform like VoderX and the real-time audio and video streaming technology platform DOREME, so that we have more room to grow customized product features, including the personalized voice tools and enhance the interactive experience, stable and premium real-time interaction to ultimately achieve the differentiated product performance.
当然，我们在产品方面是非常注重用户互动的有效性，通过简化邀请的路径，优化邀请的机制，升级关系链的获取等等，让这个线上的社交呢变得更加简单、直接、高效，满足用户很多没有被满足的一些社交的需求，为用户带来呢全新的线上社交的体验。就像前面提到的，我们也是在计划在商业模式里面呢，有更多新的创新和尝试，推出一些差异化于变现的模式，为集团呢整体带来更加多元化的收入的来源。
We also prioritize the effectiveness of the user interaction. By simplifying the invitation pathways, optimizing the invitation mechanism, and upgrading the acquisition of friends connections, we hope to make online social networking more simple, direct and efficient, and meet the unmet social needs of users while bringing them a new online social experience. As mentioned earlier, we also expect to have diversified innovations and attempt in the business model and commercialization models to bring more diversified income sources to the group.
Thank you.
好的，谢谢。我最后一个问题是关于那个毛利率的。因为看到现在音频直播它的这个分成比例还是比较高，想了解的是毛利率何时以及会如何去进行改善。如果我们讲到毛利率未来有个爬坡的话，它的节奏大概会是怎样的。
My third question is about gross profit margin. When and how will we improve the revenue sharing cost of audio entertainment? Thank you.
毛利率，如果是早期也参加我们电话会议的朋友可能会看到，我们其实在早期就讲到了我们毛利率提升的这个努力。其实在我们过去的一两年，我们的整个毛利率的提升水平还是非常好。对于整体毛利率的水平呢，我们一直都致力于在成本结构的优化，看到了非常积极的进展。在过去连续多个季度吧，我们都实现了毛利率的稳步的提升。今年第一季度的毛利率呢增长到32%，比去年的同期是提升了700个基点。那对于收入成本而言呢，目前主要是来自对内容创作者的分成和激励的成本。Q1的收入分成占比，比较去年呢，就是同期也下降了700个基点，这主要是由于我们对激励政策的动态调整和分成的剔入导致的分成成本的一些优化。
In the previous calls and earnings calls, we've been talking about how we have improved the gross margin, and we have been always working on optimizing the cost structure and have seen positive outcomes of achieving a steady increase in the gross margin over the past several consecutive quarters. The gross margin in the first quarter of this year increased to 32%, with a 700 basis points increase from the same period last year. As for the cost of revenue, the main components are the revenue sharing fees to our content creators and the cost of incentive fees. The revenue sharing ratio in the first quarter was decreased by 700 basis points from the same period last year, which was primarily due to our timely adjustment of incentive policies and optimization of the revenue sharing mechanisms.
对中长期来讲，我们计划主要通过两个方面进一步降低收入成本的比率，促进毛利率的提升。一方面，我们计划继续在音频娱乐业务里面，对补贴政策进行动态的调整。通过有效的目标的设定、多样化的扶持的政策，在调整分成比例的同时，也兼顾对创作者的激励。另外，我们也将通过非常多样化的运营活动，提升中长尾内容创作者的参与度，优化整体分成的结构，来提升毛利率的提升。
In the mid to long term, we plan to further reduce the cost of revenue ratio in two aspects to improve our overall gross margin. First, we plan to continue to implement a dynamic adjustment strategy for incentive policies in the audio entertainment business. Through effective target setting and diverse supportive policies, we will keep motivating our content creators while also optimizing the revenue sharing ratio. Along with that, we aim to improve the engagement of mid to long tail content creators through diversified operational activities and optimize the cost structure to achieve higher gross margin.
另一方面，我们也计划通过新的市场和孵化新的产品来实现变现模式的创新，包括我们会引入一些毛利率比较高的收入来源来提升我们整体的毛利率。整体而言，我们有信心在中长期，会进一步优化成本和费用的比率，提升运营效率和我们整体盈利的能力。谢谢。
In addition, we also plan to realize the innovation of the monetization models through entering new markets and incubating new products, including the introduction of revenue streams with higher growth margin to improve the overall performance. In summary, we are confident that we are able to further optimize our cost structure in the mid to long term and improve the operational efficiency and overall profitability. Thank you. That concludes Marco's answers.
Thank you.
Thank you.
Thank you. As there are no further questions, I'd like to now turn the call back over to the company for any 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 at ir.lizhi.fm or The Piacente Group Investor Relations. Thank you.
This concludes the conference call. You may now disconnect your lines. Thank you.