JOYY, Inc. Sponsored ADR Class A Aktie

Ladies and gentlemen, thank you for standing by, and welcome to JOYY Inc.'s Second Quarter 2026 Earnings Call. [Operator Instructions]

I'd now like to hand the conference over to your host today, [ Sinyuan Liu ], the company's Head of Investor Relations. Please go ahead, [ Sinyuan ].

Thank you, operator. Hello, everyone. Welcome to JOYY's Second Quarter 2026 Earnings Conference Call. Joining us today are Ms. Ting Li, Chairperson and CEO of JOYY; and Mr. Alex Liu, Vice President of Finance.

For today's call, management will provide a review of this quarter, followed by a Q&A session. The financial results and webcast of this conference call are available on our IR website, ir.joyy.com. Please note that today's call contains forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. For detailed discussions of these risks and uncertainties, please refer to our latest annual report on Form 20-F and other documents filed with the SEC.

Please also note that JOYY's earnings press release and this conference call include disclosures of GAAP and non-GAAP financial measures. A reconciliation of these non-GAAP measures to GAAP measures is included in today's earnings press release. All figures referenced on today's call are in U.S. dollars, unless otherwise noted.

I will now turn the call over to our Chairperson and CEO, Ms. Ting Li. Please go ahead.

Hello, everyone. I'm Li Ting. Thank you for joining us. Building on a strong first quarter, we delivered another solid result in Q2, recording accelerated revenue growth and notably improvement in operating profit. Our social entertainment, BIGO Ads and Shopline business all advanced in tandem, while our globally diversified ecosystem continued to unlock growth momentum, propelling our long-term value to its next level.

In the second quarter, we generated total revenue of $591 million, up 16.3% year-on-year and 6.3% Q-o-Q. Social entertainment revenue was $423 million, up 7.4% year-on-year and 5.6% Q-o-Q. BIGO Ads, including both first-party and third-party businesses generated $134 million in revenue, up 33.1% year-on-year. With our third party, BIGO Audience Network sustained strong growth of 74.1% year-on-year.

Shopline revenue reached $34 million with year-on-year growth further accelerating to 28.6%. Non-live streaming revenue surpassed 31.8% of total revenue for the quarter. Non-GAAP operating profit reached $49 million, up 28.2% year-on-year and non-GAAP EBITDA reached $57 million, up 18.1% year-over-year. Operating cash flow for the quarter was $65 million as of [indiscernible] 2026, we held $3.06 billion in net cash.

Since the start of this year, we have accelerated our capital returns. Year-to-date through August 21, 2026, we repurchased accumulative $215 million in shares and paid $142 million in debt for total return of [ $359 million ] in shareholders. Meaningful shareholders' returns remain a key part of our strategy as we continue to execute on the $1.5 billion shareholders return program running through the end of 2028, which our Board [indiscernible] this May.

At this midyear mark, I would like to take a few minutes to share our perspective on our overall strategy. Today, JOYY is steadily evolving into a multi-engine global technology company. In the first half of this year, the core social entertainment business maintained a steady recovery with all flagship products returning to solid growth and profitability continuing to improve. This further validates the effectiveness of the judgments we have made to our content ecosystem, user experience and localized operations over the past several quarters. At the same time, our second growth curve comprising ad tech and smart commerce stained a strong performance, making an increasingly greater contribution to the group.

Looking ahead, we remain committed to building a global technology ecosystem driven by AI. By leveraging the synergies of social entertainment, programmatics, advertising and omnichannel e-commerce, we are fueling our growth flywheel and building the core competitiveness that will define our future.

First, social entertainment remains an important strategic cornerstone for the group. We will continue to strengthen the growth momentum and profitability of our core products while accelerating the build-out of our social product portfolio. These initiatives are expected to further reinforce the recovery trend and growth resilience of our core business, providing a stable foundation for profitability, cash flow generation. At the same time, we are cultivating our ad tech and smart commerce businesses to boost the overall revenue expansion. We will prioritize enhancing the stand-alone competitiveness of each business. expanding our customer base and business footprint and further expanding our data, technology and product capabilities.

Looking ahead to 2028, as this business continues to scale, we currently expect non-live streaming segment to contribute close to half of the group's total revenue and operating profit. We see this as a testament to the strength of our multi-engine growth strategy and the validation of our long-term strategic approach. AI is a critical foundational technology supporting our long-term strategy across all of our businesses. We continue to leverage AI to drive measurable product enhancements and efficiency gains across a range of scenarios, including our streamer ecosystem, content distribution, payment experience, advertising vertical models and Shopline merchant operations. We are also applying AI to enhance our data analysis, decision-making and execution capabilities.

By turning proven experience and workflow into replicable AI capabilities, we can accelerate knowledge sharing and scale best practices further improving overall operating efficiency. In addition to our long-term business development, shareholder returns remain a persistent strategic priority. Our strong cash position and robust operating cash flow provide a solid foundation for ongoing business investment and shareholder returns. We expect to continue actively advancing our share repurchase and dividend program as the company grows over the long term. We remain committed to validating the strategic path through solid operating results, driving great market recognition of our long-term value.

Next, I will walk through our Q2 results and share our outlook for the future. In Q2, social entertainment revenue grew 7.4% year-on-year and 5.6% Q-o-Q. Within this segment, live streaming revenue grew 7.3% year-over-year and 5.9% Q-o-Q. Core live streaming paying users grew 3.9% year-on-year and 1.7% Q-o-Q. On the traffic side, our global average mobile MAUs reached $277 million, up 5.5% year-on-year, supported by strong user engagement and organic growth. Our instant messaging product increased its contribution towards total MAUs to 82%.

Bigo Live, our flagship product, recorded stronger sequential growth in Q2. This momentum was driven by ongoing enhancements to our streamer incentive and growth mechanism, a richer content ecosystem and AI-powered improvements to content distribution and payment experiences alongside localized of reading campaigns. Together, these efforts effectively drove user engagement and greater willingness to pay. In Q2, Bigo Live's average daily active streamers increased 4.4% Q-o-Q, while newly signed streamers going live increased 5.4% Q-o-Q as we further enhance our streamer Recruitment, innovation and investment mechanism the supply of high-quality content on our platform should continue to expand.

In content distribution, we continue to develop and refine our AI-driven content understanding capabilities. In particular, our focus is on improving onboarding content for users and [indiscernible] users' consumption. By identifying and distribution high-quality content across regions, we can better match content with users' interest and improve their consumption experiences. To improve payment experience, we have been expanding our AI-generated content and interactive virtual gifts. In May, this gift accounted for 34.3% of total virtual gift consumption, further validating the value of AI enriching our content supply and enhancing users' interactive experience. At the same time, our new voice continued to drive solid growth.

In Q2, revenue from these new products increased more than 400% year-on-year and 39% Q-o-Q, gradually becoming a meaningful complement to our social entertainment growth. Our current Q3 guidance projects moderate single-digit year-on-year growth for social entertainment revenue. In the second half, we will continue to strengthen localized operations, enrich content supply and further optimize user and payment experiences. As core live streaming paying users expand steadily and our new voice product portfolio contribute to further incremental growth. We expect stronger momentum for our social entertainment business. Based on current trends, we are confident that our social entertainment business will achieve full year revenue growth in 2026 and such a steady growth trajectory beyond.

In Q2, BIGO Ads generated $134 million in revenue, up 53.1% year-on-year and 7.1% Q-o-Q. Notably, our third-party business, the BIGO Audience Network continued its strong momentum, delivering 74.1% year-on-year growth and 9.3% Q-o-Q growth, accelerating traffic expansion, a more diversified advertiser mix, omnichannel positioning and significant algorithm efficiency gains are all strengthening the flywheel effect.

On the supply side, BIGO Ads developer ecosystem and global traffic coverage continued to expand. Our SDK traffic maintained a steady increase of 37.7% year-on-year in Q2. On the demand side, our strategic presence across multiple verticals, combined with AI-driven algorithm integration, growing traffic scale and regional market expansion drove strong advertiser demand. As a result, performance advertising demand across multiple channels, including web and [indiscernible] delivered standout result, Web-based demand primarily from lead generation and e-commerce grew 91.7% year-on-year and 14.4% Q-o-Q.

In Q2, we continued to expand our advertiser base in several verticals such as base based in e-commerce, further enriching our advertiser mix as we approach the peak season in the second half, we are making early preparation in Q3 and remain optimistic about the growth prospects of web-based demand. Meanwhile, [indiscernible] spending recorded 70.3% year-on-year growth.

On the algorithm side, continued investments in algorithm and engineering infrastructure platform algorithm capability and cost efficiency and converting into positive circle that will drive the next stage of BIGO Ads development. As we activate our customer feedback data and refine our multichannel attribution capabilities, our user and targeting capabilities are improving. Building on this, we continue to integrate our vertical-specific models and strengthen our platform algorithm capabilities. We are focusing on traffic and budget matching, traffic building and post campaign optimization.

Together, these efforts are improving the matching efficiency between budget and traffic. We and overall magnetic vision efficiency. At the same time, we are advancing upgrades to our algorithm and engineering system and continuously optimizing compute scheduling and several costs, which allow us to managing infrastructure costs more efficiently even as request when values build.

As we build our 3-layer system of vertical algorithm, platform algorithm capabilities and engineering in structure, the data accumulated from a growing customer and traffic base will feed back into model optimization efforts. We expect this will drive value further across delivery performance, advertiser budget and traffic monetization efficiency and provide strong technological momentum for the next stage of scale growth in our advertising business.

Looking ahead, we will continue to deepen our focus on key verticals such as lead generation, e-commerce and gaming. We aim to further bolster our differentiated competitive advantage by expanding customer scale and density, enuring more regional remarks and improving our algorithm and product capabilities. Based on our progress to date, we remain confident in our established long-term target for the third-party advertising business. We are continuing to scale. We expect a steady structure improvement in profitability as the ad tech business gradually becomes an integral driver of group's revenue and profit growth.

Turning to Shopline. In Q2, Shop generated revenue of $34 million, up 28.6% year-on-year and 12.5% Q-o-Q. With revenue growth building up from Q1, business from cross-border merchants strong [indiscernible] growth of 73.5% year-on-year, driving the acceleration in offshore revenue. Last quarter, we reported Shopline as a stand-alone segment for the first time and defined it as AI [indiscernible] one omnichannel commerce infrastructure, which we offer merchant is not simple a build to but a full open, connectable and extensible omnichannel retail operating system.

I would like to take this opportunity to share how AI is bringing new changes to the e-commerce industry and to Shopline. AI is fundamentally reshaping and the way consumers discover products, compare options and complete purchase new traffic and transaction entry points emerge, commercial scenarios were becoming more diverse and fragmented. Against this backdrop, merchants need a unified, open and connectable e-commerce infrastructure more than ever on that linked product, transaction and customer relationships across different channels. As commercial entry point diverge and diversify merchant demand for the unified operating system growth, making Shopline's value as an omnichannel commerce infrastructure even more pronounced.

In the first half, for Shopline, merchant page views from AI channels grew nearly 15-fold year-over-year and order volumes grew over 35-fold year-over-year. It's gradually becoming a common e-commerce scenario for customers, consumers to discover products through AI entry point and complete transactions directly in merchant stores. Shopline has expanded its integrations with multiple leading AI agents, including ChatGPT, Cloud and Curpsorisis. This enables merchants to capture the traffic and transaction from the new entry points while converting orders, customer relationships and operating data across channels into lasting asset for merchants, drawing on more complete operational data accumulated on Shopline, AI can better process and interpret a merchant's actual operating conditions and use that understanding to improve operations and decision-making efficiency.

In addition, Shopline's Copilot, which allows merchants to manage their online storms more efficiently using natural language has entered internal testing. Our goal is not only to leverage AI to unlock new traffic entry points for merchants, but also to gradually integrate AI across the entire merchant operating journey, helping merchants connect with consumers, manage operations and drive growth more efficiency in an increasingly fragmented business environment.

Our revenue is powered by 2 engines. On one hand, high retention subscription services provide a stable revenue foundation. On the other value-added services such as payments and marketing allow us to participate more deeply in merchants GMV growth as merchants reach consumers through more channels, driving continued growth in order volumes and GMV, Shopline's revenue will expand accordingly.

In Q2, value-added services maintained rapid growth and continued to increase their share of revenue. Because value-added services like payments technically carry lower gross margin and subscription services. This revenue mix shift to the modest sequential pullback in gross margin from Q1. What matters more to us is that value-added services can still on our exciting merchant base on platform capabilities without a proportion of increase in scale and R&D investment.

As a result, their ongoing growth is expected to deliver stronger operating leverage, delivering driving steady improvement in Shopline's operating profit and margin. As merchant base and GMV continue to increase, we expect value-added services to make a great contribution to Shopline revenue and profit expansion in the future, further align our long-term growth with merchant [indiscernible]. Our current Q3 guidance implies top line revenue growth rate in the [ mid-20s ] year-on-year as revenue and gross profit continue to increase and operating efficiency growth improves. Shopline remains firmly on track along its established path in profitability.

Moving on to the share buybacks. In Q2, we repurchased a total of 108 million in shares through August 21 of this year. We have repurchased a cumulative total of 216 million, maintaining an accelerated buyback pace. Given our strong operating momentum and the long-term prospects, we believe our current share price does not yet fully reflect the company's intrinsic value.

Going forward, we will continue to actively advance our share buyback program while balancing business investment and long-term investment as our social entertainment and advertising businesses grow in scale and profit contribution. We will continue to work with our Board to further refine our shareholders' return framework, allowing shareholders to more fully benefit from the company's operating results.

In closing, our Q2 results validate our multi-engine growth strategy. The value of our strategic positioning and ecosystem is only beginning to unlock. Looking ahead, as each of our 3 business segments become stronger and more competitive, we expect greater synergies across the group, driving our long-term value creation to its next phase.

With that, I will now hand the call over to Alex Liu, our Vice President and Finance, to walk through our financial results in detail.

Thanks, Mr. Hello, everyone. In the second quarter of 2026, we recorded total net revenues of $591 million, securing a year-over-year growth of 16.3% and quarter-over-quarter growth of 6.3%. Our non-GAAP EBITDA for the quarter was $57 million up 18.1% year-over-year and 24.4% quarter-on-quarter. Our operating cash flow was $65 million, and we ended the quarter with roughly $3.06 billion in net cash.

As previously communicated, we accelerated our share buybacks since the start of 2026. As of August '21, we have bought back 128 million worth of our shares and the up to 600 million share repurchase program authorized in May, bringing total share repurchase to [ $216 ] million year-to-date.

I will now dive deeper into our detailed financial performance. Social entertainment revenues were $423 million for the second quarter, up 7.4% year-over-year and 5.6% quarter-over-quarter. In particular, live streaming revenue growth accelerated to 7.3% year-over-year and 5.9% quarter-over-quarter, further confirming the recovery momentum of our cloud business. Cloud live streaming paying users increased by 3.9% year-over-year, while app returned to positive growth, up 2.4% year-over-year. Live streaming revenues from developed countries continued to deliver strong growth, increasing by 11.8% year-over-year.

BIGO Ads revenues increased by 53.1% year-over-year and 7.1% quarter-over-quarter to $134 million. In particular, our third-party advertising business, BIGO Audience Network delivered another exceptional results, recording 74.1% year-over-year and 9.3% sequential growth. On the traffic front, SDK network and ad request increased by 37.7% year-over-year in the second quarter. We continue to optimize our to improve ad campaign performance and drive advertiser spending. Our multi-vertical strategy also helped us capture broader market opportunities. Web-based demand increased by 91.7% year-over-year while mobile-based demand remained strong with [ RA ] spending up [ 70.6% ] year-over-year. We remain firmly committed to our 3-year strategic goal for BIGO Audience Network of $1 billion in revenue. As the business continues to scale, we are confident in its ongoing profitability with room to further improve its economics over the medium term.

Shopline generated revenue of $34 million with growth accelerating to 28.6% year-over-year and [ 2.5% ] quarter-over-quarter. Revenue from cross-border merchants increased by 33.5% year-over-year, while its revenue contribution rose by 7.2 percentage points compared with Q2 last year, making it an increasingly important driver of Shopline's overall growth.

[indiscernible]. Gross profit was $202 million in the quarter, up 8.8% year-over-year and 6.5% quarter-on-quarter with gross margin remaining sequentially flat at 34.1%. Entertainment gross margin was up quarter-over-quarter as we continued to improve user engagement and monetization. BIGO Ads gross margin was down quarter-over-quarter due to a shift in revenue mix, reflecting a higher contribution from lower-margin third-party advertising revenues.

Shopline's gross margin was also down quarter-over-quarter, primarily driven by a higher contribution from lower-margin value-added service, particularly payments and marketing. While the service carry lower gross margin than subscription revenues, they typically require less incremental sales and R&D investment to scale. We therefore believe this mix shift will benefit Shopline's operating leverage and long-term profitability.

Our operating expenses for the quarter were $188 million, up 4.7% year-over-year and 2.6% quarter-over-quarter. Sales and marketing expenses were higher year-over-year, consistent with the revenue increase. G&A expenses were also higher year-over-year, primarily due to increased share-based compensation expenses. R&D expenses were lower year-over-year as we remain prudent and disciplined in our total spending through enhanced resource sharing and operational synergy across different business units while strategically allocating incremental shares of our R&D resources towards BIGO Ads.

Our non-GAAP operating income for the quarter was $49 million, up 28.2% year-over-year and 29.4% quarter-over-quarter. Non-GAAP net income attributable to controlling interest of JOYY in the quarter was $63 million, representing a non-GAAP net margin of 10.7%. Our non-GAAP net income was lower year-over-year due to a higher FX loss of [ $40 million ] as the U.S. dollar weakened. Excluding the impact of FX losses, our non-GAAP net income would have been $77 million, broadly in line with the prior year.

For the second quarter of 2026, we booked net cash inflows from operating activities of $65 million. Our balance sheet remains healthy with a strong net cash position of $3.06 billion as of June 30, 2026.

Now moving to capital allocation. Shareholder returns continued to be an important component of our capital allocation strategy. As of August 21, 2026, we have returned [ $359 million ] to our shareholders through dividends and share repurchase this year, already exceeding the total amount returned to shareholders for the full year of 2025. We believe we remain substantially undervalued and we will continue to actively execute our share repurchase program.

Turning now to our business outlook. Driven by continued growth momentum across our Social Entertainment, BIGO Ads and Shopline business. We expect our total net revenues for the third quarter of 2026 to be between $602 million and $622 million, implying year-over-year revenue growth of 11.4% to 15.2%. For the full year of 2026, we remain confident in delivering solid revenue growth across the group.

On the profitability front, backed by a better-than-expected operational performance in the first half of the year and enhanced operating leverage from improved efficiency across our business segments. We now expect the group's full year 2026 non-GAAP operating income to grow around 20% year-over-year, up from our previous expectations of teens level growth.

To summarize, we delivered a strong set of results in the second quarter with all 3 business segments delivering encouraging growth and operating profitability continue to improve. Looking ahead, we remain confident in our growth outlook and will stay focused on improving operating efficiency, sustaining profitability growth and creating long-term value for our shareholders.

That concludes our prepared remarks. Operator, we would now like to open up the call to questions.

Your first question comes from Xueqing Zhang with CICC.

[Interpreted] Congratulations on the strong quarter. My question about live streaming business. We see live streaming revenue returned to both year-on-year and quarter-on-quarter growth in the second quarter. Could management elaborate on the sustainability of this recovery and share your view on the longer-term outlook for the live streaming business?

[Interpreted] In the second quarter, our live streaming business grew 5.9% sequentially with year-on-year growth further accelerating to 7.3% driven by growth in both paying users and ARPU.

On the operations side, in Q2, we continue to optimize across multiple areas, including streamer incentive mechanism, content ecosystem development and AI-driven improvements across content distribution, user content consumption and payment experience. This AI-driven enhancements to the user experience further drove sustained improvements in paying conversion rates. Therefore, our core live streaming paying users grew 3.9% year-over-year.

From a regional perspective, this recovery continued to be driven by revenue growth in developed markets. The Middle East market also delivered solid sequential growth, driven by our new voice product portfolio. Our current third quarter guidance projects moderate single-digit year-over-year growth for social entertainment revenue. As core live streaming paying users continue to grow steadily and the new voice product portfolio contributes further incremental gains, we expect the growth momentum of our social entertainment business to continue strengthening. Based on current trends, we are confident that our social entertainment business will achieve full year revenue growth in 2026, while maintaining steady business momentum.

The next question comes from Daniel Chen with JPMorgan.

[Interpreted] So I will translate myself. So we actually see that the second quarter advertising revenue -- the advertising business is growing very strong. So how should we look at the outlook for the third-party advertising in the second half of this year in terms of the growth rate and also the margin profile?

[Interpreted] Thank you, Daniel, for your question. I will take your questions. In the second quarter, our third-party advertising business sustained its strong growth momentum with revenue increasing 74.1% year-over-year and 9.3% quarter-over-quarter, exceeding our previous expectations. Growth in traffic and advertiser budgets, together with continued improvements in our advertising algorithms, further strengthened our business flywheel.

On the traffic side, we continue to deepen our partnerships with Mediation platforms such as MAX and LevelPlay, further expanding our global reach while maintaining steady growth in SDK traffic. On the demand side, our strategic presence across multi-verticals continue to drive strong advertiser demand, leveraging our established capabilities across lead generation, web e-commerce and in-app advertising. Our second quarter web-based demand grew 91.7% year-over-year, while [ IA ] spending grew 70.6% year-over-year. At the same time, we continue to expand our advertiser base in subverticals across lead generation and other key verticals, further enriching our advertiser mix.

On the platform side, as traffic and budgets expand rapidly, we are continuously iterating on our algorithms and data capabilities, driving more vertical-specific optimizations and enhancing our bidding and delivery strategies. At the same time, we are advancing AI-driven upgrades to our algorithm and engineering systems, optimizing compute scheduling to manage infrastructure costs efficiently, even as request volumes grow rapidly. Based on current business trends, we are highly confident that our third-party advertising business will continue to deliver strong growth.

Turning to profitability. Our third-party advertising business is during a rapid expansion phase, requiring continued investment in research and development, sales capabilities and infrastructure this year. That said, this business has healthy unit economics, giving us confidence that we can remain profitable while steadily improve margins over the medium term as we scale.

The next question comes from Thomas Chong with Jefferies.

[Interpreted] Congratulations on a very strong set of results. My question is about the full year outlook. Can management comment about the 2026 revenue and profit guidance across different business segments?

[Interpreted] Thank you for your questions. Looking ahead to the third quarter of 2026, our current guidance implies 11.4% to 15.2% year-over-year growth for our total revenue. By business segment, for Social Entertainment, we expect the third quarter revenue to deliver moderate single-digit year-over-year growth. BIGO Ads will continue to deliver strong double-digit year-over-year growth in Q3.

For Shopline, we expect it to remain more than 25% year-over-year growth. For the full year 2026, we expect Social Entertainment to deliver steady year-over-year growth. For BIGO Ads, with continued traffic expansion, deepening multiple vertical advertiser base and ongoing algorithm optimization, we expect strong mid-double-digit year-over-year growth for the full year. For Shopline, supported by maturing product capabilities, accelerating cross-border merchant penetration and new market expansion, we expect its year-over-year growth to further accelerate, exceeding 20% year-over-year growth for the full year 2026.

With all these 3 segments on an upward trajectory, we are confident in the solid revenue growth for 2026.

Regarding operating profit, looking at the third quarter, we expect our non-GAAP operating profit to continue its year-over-year growth trend, while operating expenses are expected to rise slightly quarter-over-quarter due to the seasonality of certain cost items. For the full year 2026, regarding Social Entertainment, as live streaming returns to steady growth, overall live streaming operating profit will maintain modest year-over-year growth. As we mentioned earlier, with continued SKU expansion, BIGO Ads midterm profitability is also expected to steadily enhance. For Shopline, with relatively fixed operating expenses, the growth of revenue and gross profit will continue to drive narrowing of its operating losses.

In summary, based on the better-than-expected overall operating performance in the first half of the year as well as the operating leverage brought about by improved operating efficiency across businesses. We expect our full year non-GAAP operating profit to achieve around 20% year-over-year growth in 2026. We guided up our guidance.

On net profit, I would like to add on a little bit regarding the foreign exchange loss items. Due to the continued weakening of the U.S. dollar, we recorded significant unrealized foreign exchange losses in the first half, and we expect a similar trend in the third quarter. However, these are nonoperational mark-to-market fluctuations and are unrelated to our underlying operating performance. Conversely, a strengthening U.S. dollar would also result in unrealized foreign exchange gains.

Your next question comes from Brian Gong with Citi.

[Interpreted] I have a question on Shopline. We target to achieve profit breakeven for Shopline in 2028 management give us an update on the latest development and the growth drivers for Shopline? And what would be the profit breakeven road map for the business?

[Interpreted] Thank you, Brian, for your question. As we discussed earlier, AI is creating new growth opportunities for both the e-commerce industry and Shopline. As the new traffic and transaction entry points continue to emerge, e-commerce landscape is becoming increasingly diverse and fragmented, driving stronger demand for a unified operating system from merchants. This trend will further underscore Shopline's value as an omnichannel commerce infrastructure. We remain firmly confident in the long-term prospects of this market. Our business model is closely aligned with the success of the merchants.

Subscription fees provide us with a stable and recurring revenue base, while value-added services such as payments and marketing services enable us to participate more directly in the growth of the merchant transactions and GMV. As merchants expand across more channels and scale their businesses on Shopline, they tend to adopt more of our services, making the platform increasingly valuable to them. As a result, our growth is driven not only by new merchant acquisition, but also by the continued growth of existing merchants and the increasing penetration of our services.

We have already seen this dynamic play out in our cross-border business. In the second quarter, revenue from cross-border merchants, mainly led by brand customers, grew 73.5% year-over-year, helping drive a further acceleration in Shopline's overall revenue growth. On the road map to breakeven, our R&D expense, which has been our primary OpEx for Shopline, has largely stabilized. Continued growth in revenue and gross profit is driving operating leverage, resulting in significant narrowing of Shopline's losses. With gross profit continuing to grow and operating expenses remaining relatively stable, we are confident that Shopline will further narrow its losses in 2026 and reach operating breakeven by 2028.

Your next question comes from [indiscernible] Fong with UBS.

[Interpreted] I'll translate myself. My question is on shareholder return. The company has a 3-year USD 1.5 billion shareholder return program with ample net cash at present. I observed that management has accelerated buyback in 2Q and quarter-to-date. What will be the pace of future buybacks ahead? And how does the group balance growth-oriented investments versus cash return to shareholders?

[Interpreted] As I just mentioned, since the beginning of the year to August 21, we have already bought back USD 216 million of our shares in total. Even under the new share buyback program authorized this May, as of August 21, we have bought back USD 128 million of our shares. There is no inherent trade-off between investing for growth and returning capital to shareholders. We are backed by a strong net cash balance and robust cash-generating capabilities.

Firstly, we held a net cash position of USD 3.06 billion on our balance sheet at the end of the second quarter. Secondly, all the 3 of our business segments have embarked on well-defined growth trajectory, which will drive continuous improvement in underlying business fundamentals and cash flow contribution. Therefore, our shareholder return framework is built on an exceptionally solid and resilient foundation. We believe that the current share price still does not fully reflect the long-term growth potential of our 3 businesses, and our active share buybacks demonstrates the confidence from the senior management team in the company's longer-term value and prospects. Going forward, we will continue to actively return capital to shareholders. As our operating profit continues to grow, we believe shareholders can look forward to greater returns in the long run. Thank you.

There are no further questions at this time. I'll now hand back to the company for closing remarks.

Thank you. Yes, thank you for all of the questions. So we may conclude the call today. Yes, if you have any further questions, please feel free to reach out to the IR team. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

Ladies and gentlemen, thank you for standing by, and welcome to JOYY Inc.'s First Quarter 2026 Earnings Call. [Operator Instructions]

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 First Quarter 2026 Earnings Conference Call. Joining us today are Ms. Ting Li, Chairperson and CEO of JOYY; and Mr. Alex Liu, the Vice President 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 financial results and webcast 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 would like to remind you that we may make forward-looking statements, including, but not only limited to the future development of our products and businesses, the expected future financial performance of the company, our share repurchases and other future events, which are inherently subject to risks and uncertainties that may cause actual results to differ from our current expectations. For detailed discussions of these uncertainties please refer to our latest annual report on Form 20-F and other documents filed with the SEC.

We will also discuss certain non-GAAP financial measures. They are included as additional clarifying items to aid investors in further understanding the company's performance and the impact of these items in advance had on the financial results. The non-GAAP financial measures provided above should not be considered as a substitute for or superior to the measures of the financial performance prepared in accordance with GAAP. You may find a reconciliation of the differences between GAAP and non-GAAP financial measures in our earnings release. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in U.S. dollars.

I will now turn the call over to our Chairperson and CEO, Ms. Ting Li. Please go ahead.

Hello, everyone. I'm Li Ting. Thank you for joining us today. I apologize but I have a cough and cold recently, and my [indiscernible] is quite weak. For efficiency of this meeting. I'm going to have our IR Jane read through the prepared remarks for me. I'll be back to take your questions during the Q&A. Thank you for the understanding.

Thank you. As we enter 2026, our social entertainment business has returned to year-over-year growth, while our second growth curve, ad tech and smart commerce is progressing with strong momentum. Our globally diversifying ecosystem is taking shape with social entertainment, advertising and smart comes fostering one another in the self-reinforcing strategic flywheel. This flywheel is propelling joy into its next phase of growth.

Let me begin with an overview of our Q1 results. Total revenues reached $556 million up 12.4% year-over-year, marking our strongest year-over-year growth rate in recent years. Social entertainment revenue was $400 million, up 3.2% year-over-year. BIGO Ads contributed $125 million, up 55.6% year-over-year, among which our third-party legal Audience Network delivered 78.8% year-over-year growth. Shopline revenue reached $31 million, up 16.1% year-over-year.

Q1 non-GAAP operating profit and EBITDA reached $38 million and $46 million, up 22.5% and 13.2% year-over-year, respectively. Operating cash flow for the quarter was $46 million. As of March 31, 2026, we held at $3.18 billion in net cash. Our strong cash generation continues to support meaningful shareholder returns. Since the start of 2026, we have accelerated our buyback program through May 22, 2026, we have repurchased a cumulative $88 million in shares and paid $69 million in dividends for a total return of $157 million to shareholders. In light of our solid operational performance and robust balance sheet, the Board has just approved an updated shareholder return program totaling $1.5 billion under which we could repurchase up to $600 million worth of our shares and distribute approximately $900 million in dividends over the next 3 years.

This underscores our strong confidence in the long-term potential of business and demonstrates our continued commitment to delivering sustainable value to our shareholders and enabling shareholders to benefit from our operational improvements. This quarter marked the first quarter, we are reporting results under our new 3-segment Structure, [indiscernible] Entertainment, BIGO Ads and Shopline. I'd like to take this opportunity to reaffirm our long-term strategic vision.

We are building a global technology ecosystem driven by AI. This ecosystem is designed to unlock compelling returns from our data assets through the deintegration of social entertainment, programmatic advertising and omnichannel e-commerce creating a self-reinforcing growth drive wheel. Social entertainment is our foundational business, providing the user base, data assets and cash flow that support the broader ecosystem by building a highly engaged global user community, we have accumulated a valuable first-party data asset and a scaled global traffic pool, supported by established technology infrastructure and localized operational networks across key markets. Social entertainment underpins our cash flow generation and serve as the long-term anchor of the group.

BIGO Ads accelerates our flywheel, strengthening our data and algo advantages through advanced predictive models and algo optimization, to convert traffic into measurable scalable advertiser ROI. Each iteration further enriches our data assets and deepen our algo mode, building a positive advantage. Shopline is the engine of our one-stop omnichannel e-commerce offering and provides merchants with open connectable infrastructure that puts data ownership back in their hands. This control empowers them to maximize business performance across the full customer life cycle. AI is the backbone of this [indiscernible] system, seamlessly connecting our social data assets, algo and e-commerce capabilities. Together, these 3 pillars form a closed loop system that deepens our economic moat and drives long-term value creation for JOYY.

Now let me walk through our Q1 performance and share our outlook on the future. In Q1, social entertainment revenue returned to year-over-year growth of 3.2%, with Live Streaming revenue up 2.4% year-over-year. Cool Live Streaming paying users grew 5.9% year-over-year. On the traffic side, global average mobile MAUs reached [ $2.776 ] million, up 6.1% year-over-year and 1.5% Q-o-Q. Driven by high user stickiness and fully organic growth, traffic from [indiscernible] messenger increased by 3.1% Q-on-Q. For our flagship products, we improved our streamer incentive structure, launched targeted support programs for high-quality content categories and integrated new AI capabilities. These initiatives drove ongoing gains in both content engagement and payment conversion. Streamer activity improved sequentially despite seasonal impacts. Number of active streamers increased 1.5% Q-o-Q and average effect of streaming hours per streamer rose 1.4% Q-o-Q.

We have now fully rolled out our AI smart tools for streamers across key markets, meaningfully improving interaction efficiency. As of April, AI generated interactive virtual gift accounted for 34% of total virtual gift consumption on Bigo Live. Our new product lineup continued to gain traction with revenue up over 500% year-over-year and 45% Q-o-Q, setting new monthly revenue records. Our current Q2 guidance implies low to mid-single-digit year-over-year growth for social entertainment revenue. Building on this momentum, we are confident that our Social Entertainment business will achieve full year revenue growth in the '26 and sustain this positive trajectory going forward.

Moving to BIGO Ads. In Q1, BIGO Ads generated $125 million in advertising revenue of 55.6% year-over-year our third-party business, the BIGO Audience Network delivered 78.8% year-over-year despite the seasonal softness of Q1. Broader traffic coverage multi-vertical advertiser expansion and ongoing algo optimization fueled this momentum. On the supply side, SDK traffic maintained strong growth up 109% year-over-year and 7% Q-o-Q in Q1. On the demand side, our strategic presence across multiple verticals, including lead generation, e-commerce and IAA drove an enrichment of our advertising mix and enhanced ecosystem density. This multi-vertical approach, not only accelerated data accumulation and [ algotration ] but also strengthen our traffic bidding capabilities. Notably, web-based demand primarily from lead-gen and e-commerce advertisers grew 90% year-over-year and delivered positive sequential growth. Incremental spend from both new and existing advertisers fully offset the typical seasonal softness of Q1.

IAA spending sustained 97% year-over-year growth. Geographically, we prioritize high-value developed markets. North America remains our largest market for BIGO Ads, while Western Europe delivered notable momentum with revenue up 27% Q-on-Q. On the algo side, we're steadily and prudently scaling our computing infrastructure and strengthening our R&D talent base. By integrating data feedback from advertisers across channels and leveraging the dual growth of traffic scale and advertiser density, we have built a rich behavioral data layer. This enables multidimensional precise user profiling and real-time model iteration, which in turn improves app delivery efficiency. The fact that we are seeing positive feedback across multiple verticals, validates the generalization capabilities of our model framework. As our data scale accelerates and the vertical-specific models mature, we expect our algo flywheel will increasingly serve as the primary engine of our revenue growth going forward.

We reiterate our strategic commitment to reaching $1 billion in [indiscernible] Audience Network revenue by 2028. [indiscernible] third-party advertising business continues to scale, we expect a steady structural improvement in profitability.

Turning to Shopline. This is the first quarter we're reporting Shopline as a standalone segment. The decision to do so now reflects our belief that Shopline has reached a critical mass in terms of its importance to the group and that Shopline will become an increasingly meaningful contributor to our growth going forward. As Global Commerce enters the omnichannel era, merchants increasingly desire [indiscernible] and full funnel data ownership. We have built Shopline as AI-native one-stop omnichannel e-commerce infrastructure. What we offer merchants is not simply a storefront building tool and a fully open connectable retail operating system. Through deep integration of payments, logistics and marketing modules we empower merchants across every stage of their journey from store setup and transactions to fulfillment and full life cycle customer retention. Globally, very few vendors are capable of delivering this kind of web-level closed loop solution.

We are also accelerating the integration of a suite of AI [ Howard ] capabilities. The tools will drive Shoplines ongoing evolution from an enablement tool to an AI-driven commerce engine represent a fundamental shift in how merchants operate, AI-powered traffic allocation and automate the decision-making will unlock new growth opportunities and new levels of position across omnichannel retail. On monetization, beyond high-retention subscription fees, we generate revenue through transaction-based value-added services and payment and marketing. These reflect the fundamental distinction from traditional sea-based software tools. This monetization model deeply aligns with merchants full life cycle growth will fuel Shopline's ongoing accelerating performance.

Q1 is traditionally a slow season for e-commerce, yet Shopline delivered solid results. Revenue was $31 million, up 16.1% year-over-year, with gross margin expanding further to 51.5%. Revenue growth from cross-border merchants remained robust, sustaining over 60% year-over-year growth. Our Q2 guidance implies Shoplines revenue growth accelerating to above 25% year-over-year in Q2. This meaningful progress marks Shopline transition from incubation to a phase of scaled growth. Propelled by accelerated revenue and gross profit growth, Shopline is on a clear and visible path to achieve breakeven by 2028. Additionally, as BIGO Ads marks make steady progress in the DTC e-commerce vertical and moves past its cold-stack pace, we anticipate increasingly tangible synergies between these 2 businesses going forward. This marks a crucial long-term strategic objective of JOYY, and we are committed to solid execution to unlock this untapped potential.

Finally, in summary, our strategic layout and the unlocking of our ecosystem's value remain in their early stages. Looking ahead, we expect our 3 business segments to generate stronger structural synergy further deepening our competitive moat and driving JOYY's long-term value to its next level.

With that, I will now hand the call over to Alex Liu our Vice President of Finance, to walk through our financial results in detail.

Thanks, Ms. Ting Li and Jane. Hello, everyone. Beginning this quarter, the reporting social entertainment, BIGO Ads and Shopline as standalone segments. This reflects a strategic inflection point BIGO Ads and Shopline have evolved from incubating projects into scalable growth engines.

Now let's turn to financial overview of the quarter. In the first quarter of 2026, we recorded total net revenues of $555.7 million, securing a year-over-year growth of 12.4%, our strongest year-over-year growth rate in the same year. Our non-GAAP EBITDA for the quarter was $45.7 million, our operating cash flow was $46 million in quarter 1 and the end date the quarter with roughly $3.18 billion in cash. As previously communicated, we accelerated share buyback [indiscernible] in 2026. Buying back $87.9 million was above shares as of May 22. [indiscernible] solid operational performance and robust balance we have just announced an updated shareholder retained program, totaling $1.5 billion and which we could repurchase up to $600 million worth of our shares and distribute up to $900 million in dividends over the next 3 years. We repeated a 67% expenses from the previous program showing our strong confidence in the company's long-term prospects. I will now dive deeper into our detailed financial performance.

Social Entertainment revenues were [ $400.4 million ] for the first quarter, delivering a first year-over-year recovery of 3.2% year-over-year. In particular, [indiscernible] revenues retained to 2.4% year-over-year growth. This not inflecting point and a result of the strategic adjustments we executed over the past several quarters. [indiscernible] streaming in users increased by 5.9% year-over-year while lasting revenues from divested countries increased by 11.2% year-over-year. BIGO Ads continued to deliver exceptional growth with its revenue up by 55.6% year-over-year to $124.8 million.

In particular, our third-party edge revenue Bigo Audience Network delivers outstanding results recording 38.8% revenue growth year-over-year. On the traffic front, SDK network and request was up by 109% year-over-year and 7% quarter-on-quarter in quarter 1. Our multi industry strategy has helped us capture broadened market opportunities. Web-based demand was up by 90% year-over-year Mobile-based demand continued to be strong with IAA spending up by 97% year-over-year. We are right on track to achieve our 3-year strategic goal for Bigo Audience Network. This is maintaining high velocity growth and reaching 3-year revenue milestone of $1 billion.

While we are prudently investing in the expensive for our R&D and sales capabilities as well as our network and computing infrastructure, all these network economics remain healthy. We are confident that as we scale, we will remain profitable and potentially further enhance all these network economics in their midterm. Supplying kick-off Bigo quarter, generating revenue of $30.5 million delivering a 16.1% year-over-year revenue growth. Cost order merchant revenue was up by 66% with its revenue contribution, up by 8% compared to quarter 1 last year. We expect crop order merchant revenue to maintain a high velocity growth going forward. while leasing revenue contribution from this merchant segment will lead to gradual accelerating of Shopline's overall revenue growth.

Group's gross profit was $189.3 million in the quarter, with a gross margin of 34.1%. BIGO Ads gross margin was down quarter-over-quarter due to a [indiscernible] revenue mix, which saw an increased contribution from our lower-margin network and revenues. Shopline's gross margin was up by 6.8 percentage points year-over-year to [ 61.5% ] primarily due to growth in high-margin subscription revenues as well as including gross margin for its value-added service revenues. Our group's operating expenses for the quarter were $183.4 million. [indiscernible] marketing expenses were higher year-over-year, consistent with revenue increase. G&A expenses were also higher year-over-year, primarily due to increased share-based compensation expenses.

Our group's non-GAAP operating income for the quarter was $38 million. Non-GAAP net income attributable to controlling interest of JOYY in the quarter was $55.9 million. The group's non-GAAP net income margin was 10.1% in the quarter. Our non-GAAP net income was lower due to higher FX loss of $13.6 million due to the weakening U.S. dollar. Excluding the impact of FX losses, our non-GAAP net income was $69.5 million, up by 8.7% year-over-year. For the first quarter of 2026, we booked net cash inflows from operating activities of $46 million. Our balance sheet remains healthy with a strong net cash position of $3.18 billion as of March 31, 2026. As of May 22, we have returned 156.8 million to our shareholders through dividends and share buyback. Our accelerated share buybacks in the past quarters and the newly introduced 3-year shareholder return program reaffirms our previous statement.

Shareholder return has been and will continue to be an important component of our capital allocation strategy. We will remain focused on delivering strong results, actively executing or new programs and enable our shareholders to benefit from our operational improvements.

Turning now to our business outlook again. At the group level, we expect our net revenues for the second quarter of 2026 to be between $562 million and [ $589 ] million. This implies a 10.7% to 14.4% year-over-year growth for the group's revenue with [indiscernible] sustaining positive growth year-over-year BIGO Ads delivery made double-digit growth while supply growth accelerating in the second quarter.

To sum up, in Q1 2026, not a pivotal milestone for JOYY. We have delivered our strongest year-over-year revenue growth in recent years. Realigned our reporting structure to match our strategic priorities and accelerated our commitment to capital returns through enhanced buybacks. Looking ahead, we are extremely excited about the tremendous synergy potential and the [indiscernible] momentum that our business segments, [indiscernible] in medium to long term.

That concludes our prepared remarks. Amir, we would now like to open up the call to questions.

[Operator Instructions] Your first question comes from Thomas Chong with Jefferies.

[Interpreted] My first question is that this is the first time the company disclosed its performance in 3 business segments namely Social Entertainment, BIGO Ads and Shopline. So for Social Entertainment, live streaming revenue achieved a positive year-on-year growth in Q1. Can management further elaborate whether this is sustainable recovery?

And my second question is about our full year outlook. Can management comment about our 2026 revenue and profit guidance for each business line this year? Thank you.

[Interpreted] Thank you, Thomas. This is Li Ting. I will answer your question. So for the first question, first of all, in Q1, as expected, our Social Entertainment revenue was up by 3.2% year-over-year. With Live Streaming revenue up 2.4% year-over-year, returning to positive year-over-year growth trajectory. While we have been executing a series of structural [indiscernible] since the second half of 2024, particularly with our streamer incentive mechanisms. And these, we believe, have continued to strengthen our live streaming ecosystem. Despite Q1 typically being a low season for streamer activity, we still achieved a sequential increase in the number of access streamers and also the average effect of streaming hours per streamer notably the music streamers, which is one of our key quality content genres also saw a meaningful uptick in streamer participation.

Building on the improved content supply and streamer engagement, we continue to refine our user segmentation and also upgrade our tiered paying user benefit on systems combined with AI-driven optimization on content distribution and auto payment experience. These efforts drove further improvement in paying conversion with core Live Streaming paying users growing nearly 6% year-over-year. Our new product lineup also continued to gain traction in Q1 with revenue up over 500% setting new monthly records and contributing incremental revenue to social entertainment.

Looking ahead, our current Q2 guidance implies a low to mid-single-digit year-over-year growth for Social Entertainment revenue, which represent an acceleration from Q1. Building on this momentum, we are confident that Live Streaming revenue and also Social Entertainment revenue will achieve steady positive growth in 2026.

[Interpreted] This is Alex. I will take your second question. So for Q2, our current guidance implies a 10.7% to 14.4% year-over-year growth for our group revenue. By segment, we expect soda entertainment to deliver low to mid-single-digit year-over-year growth. BIGO Ads mid-double-digit year-over-year growth and Shoplines revenue growth to accelerate to about 25% year-over-year.

For the full year of '26, we expect Social Entertainment to deliver steady year-over-year growth rate. For BIGO Ads with continued traffic expansion, deepening multi-vertical advertising coverage and ongoing algo optimization, we expect a strong mid-double-digit year-over-year growth for the full year. For Shopline, with accelerating cross-border merchant penetration and also new market expansion, we expected to sustain double-digit revenue growth. With all segments -- all 3 segments now entering into an upward trajectory. We are confident that the group will deliver positive solid revenue growth for the full year of 2026.

Turning to operating profit. For Q2, we expect sequential improvement in the group operating profit in line with our Q-o-Q revenue growth across all segments. For the full year, on Social Entertainment side, with Live Streaming revenue back to growth, we expect Live streaming profit to remain stable or grow modestly. For BIGO Ads, our audience network is rapidly scaling and we will need to continue to invest in R&D, sales and also our network infrastructure. But given the healthy economics of the audience network at this stage, we are confident that as we scale will remain profitable, and we expect to see further improvement in its economics over the medium term. For Shopline with this operating expenses relatively fixed on revenue and gross profit growth will drive continued narrowing of its operating losses.

Overall speaking, we expect the group's non-GAAP operating profit and EBITDA to continue the improving trend that we achieved in '25, delivering a steady teens year-over-year growth in 2026. At the net profit level, I do want to provide some additional context on FX fluctuations due to the continued weakening of the U.S. dollar against RMB, we recorded significant unrealized losses in Q1, and we expect similar impact from FX in Q2. However, we'd like to remind you that these are nonoperational mark-to-market fluctuations so when the dollar strengthens, they will be reversed.

Our next question, please.

Your next question comes from Cici Cheng with CLSA.

[Foreign Language]

Thank you, Cici. This is Li Ting. I will take your questions. In Q1, BIGO Ads delivered 55.6% year-over-year growth with third-party Bigo Audience Network growing by 78.8% year-over-year and also delivering a modest positive sequential growth. The overall performance was ahead of our expectations, and I would attribute it to the following key drivers.

First of all, our multi-vertical strategy is definitely delivering great results, leveraging our established capabilities and lead generation direct-to-customer e-commerce and also IAA, our web-based demand grew by 90% year-over-year in Q1 and delivered positive sequential growth despite Q1 being a slow season. IAA [indiscernible] by 97%, and this was the primary reason that we were able to deliver better-than-expected results in -- during Q1. Secondly, continuous upgrade of our algo capabilities. We have been driving broader cross-channel data feedback from advertisers combined with AI-powered labeling and richer user behavioral data, which significantly enhance our user profiling and ad delivery efficiency on platform. We've also completed a framework upgrade to our core predictive model with specialized optimizations across Lead-gen, IAA and e-commerce verticals.

As data accumulates and algoritrate, we are seeing sustained improvements in monetization efficiency with higher advertiser retention and also growing average spend per advertiser forming a self-reinforcing effect. Going forward, we will continue to optimize and iterate our algo models. They positive results that we have already achieved across multiple verticals have validated that the generalization capability of our model framework as data continue to accumulate at an accelerating pace and vertical-specific models continue to mature, the Algo flywheel is gaining momentum and we expect it to increasingly serve as the primary engine for our advertiser revenue growth in the following stage, particularly in the second half and also even beyond.

Regarding a question on mediation partnerships on traffic side, we are actively advancing integrations with industry-leading mediation platforms. One of our partnership has already entered beta testing phase and we expect to complete our official integration within 2026. Once live, it will enable advertisers to reach a broader pool of high-quality traffic globally, further expanding our static coverage and depth and breadth and injecting new momentum into the flying wheel we have very strong confidence in sustaining rapid growth for Bigo Audience Network.

Thank you. Next question, please.

Your next question comes from Rafael Chen with BOCI Research.

[Interpreted] Thanks, management for the opportunity to ask questions. Noticing that supply related first -- noticing that Shopline [indiscernible] first a long disclosure. Could management elaborate more insights on the latest business updates in the past great even the profitability?

[Interpreted] Thank you, Rafael, for your question. This is Li Ting. Yes, this is the first quarter that we are reporting Shopline as a standalone segment, as we mentioned in our prepared remarks, we have positioned Shopline as an AI-native one-stop omnichannel commerce infrastructure.

What we are building is not a simple store fund building tool but rather than open and connectable extensible retail operating system that deeply integrates payments, logistics and marketing modules, allowing merchants to manage everything from store setup and transactions fulfillment and full life cycle customer retention on one single platform. Globally speaking, very few vendors are capable of delivering this kind of OS level closed-loop solution.

In terms of revenue model, we have built a differentiated monetization framework anchored by high stickiness, subscription fees and accelerated by high-growth value-added services. On one hand, a stable subscription revenue serves as the foundational entry point, building a robust merchant base and generating recurring revenue. And on the other hand, through deeply penetrating the transaction and monetizes GMV to rapidly growing value-added services, including payment and also marketing. This monetization model, which is deeply aligned with the full life cycle growth of merchants will serve as the primary engine driving the continuous growth in Shopline's financial performance.

When we look at Shopline merchant base. We currently serve major -- 2 major categories, local merchants and also cost for the merchants. Revenues from cross-border merchants predominantly key accounts, the larger brands have maintained high velocity growth since last year. Our R&D spend, which has been our primary OpEx has largely stabilized, and the improvement in revenue and gross profit is generating operating leverage and Shopline losses are narrowing meaningfully. Looking ahead, we see a clear and achievable path for supine to reach breakeven by 2028, and we are fully committed to delivering on that. Thank you.

Maybe one last question, please.

The next question comes from Xueqing Zhang with CICC.

[Interpreted] My question about shareholder returns. The company announced a new 3-year shareholder return plan of USD 1.5 billion this quarter, including $600 million in share buyback and $900 million in dividends. As comanagement share the thinking to handle significant increase in shareholder returns? Thank you.

[Interpreted] Thank you, Xueqing for the question. This is Alex. We are very pleased to announce this quarter our new 3-year shareholder return plan totaling $1.5 billion covering fiscal years 2026 through 2028. This replaces our previous program totaling $900 million, representing a roughly 67% expansion in our total commitment. Specifically, the new plan comprises 2 components annual dividend of $300 million per year. That would be up by 50% from our previous $200 million per year. And our annual share buyback, the share repurchase authorization per year, the annualized buyback quota would be $200 million, and that would be nearly doubling the average quota of $100 million under the previous plan. There were several key considerations behind our decision.

First of all, all 3 business segments are now on a clear growth trajectory, providing a very, very solid foundation for a higher level of shareholder returns. At the same time, our strong net cash position as of the end of Q1, we still have around $3.2 billion of net cash on hand. This gives us the full financial capacity to execute on this commitment and we do believe that the current share price fell materially on their values -- our long-term potential. And our commitment to increasing buyback is a very direct expression of the management's strong conviction in the future of the company.

Looking ahead over the next 3 years, we are fully committed to executing this plan and enabling our shareholders to benefit from improving operations.

That was the last question. And thank you so much for joining us today. We look forward to speaking with everyone next quarter. Thank you.

Thank you. This conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

Ladies and gentlemen, thank you for standing by, and welcome to JOYY Inc.'s Fourth Quarter and Full Year 2025 Earnings Call. [Operator Instructions]

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 Fourth Quarter and Full Year 2025 Earnings Conference Call. Joining us today are Ms. Ting Li, Chairperson and CEO of JOYY; and Mr. Alex Liu, the Vice President 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 financial results and webcast 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 would like to remind you that we may make forward-looking statements, including, but not limited to, the future development of our products and businesses, the expected future financial performance of the company, our share repurchases and other future events, which are inherently subject to risks and uncertainties that may cause actual results to differ from our current expectations. For a detailed discussions of the risks uncertainties please refer to our latest annual report on Form 20-F and other documents filed with the SEC.

We will also discuss certain non-GAAP financial measures. They are included as additional clarifying items to aid investors in further understanding the company's performance and the impact that these items and events had on the financial results. The non-GAAP financial measures provided above should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. You may find a reconciliation of differences between GAAP and non-GAAP financial measures in our earnings release. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in U.S. dollars.

I will now turn the call over to our share person and CEO, Ms. Ting Li. Please go ahead.

Hello, everyone. I'm Li Ting. Thank you for joining us today. In 2025, our group revenue and social entertainment business regained growth momentum since Q2, and we saw meaningful progress in our segment growth curve of ad tech and other emerging areas. Together, these results are sharing our clear strategic framework as a global technology company with multiple growth engines.

Let me start with an overview of our results. In Q4, live streaming maintained a sequential recovery trend where our advertising platform saw accelerated top line growth. Meanwhile, net operating profit and cash flow remained robust.

In the fourth quarter, total revenue reached $581.9 million, up 7.7% Q-o-Q and 5.9% year-over-year, representing our further positive year-on-year growth since the second half of 2024.

Live streaming revenue was $394.4 million, up 1.5% Q-o-Q, marking 3 consecutive quarters of sequential growth.

BIGO Ads, including both first and third-party ADS generated $128.1 million in revenue, up 61.5% year-on-year with third-party Audience Network revenue growth accelerating to 8.5% year-on-year. Overall, non-live streaming business contributed 32.2% of total group revenue.

Non-GAAP operating profit stood at $40.8 million, and operating cash flow totaled $115 million.

For the full year, total revenue was $2.12 billion. Live streaming contributed $1.53 million while BIGO Ads contributed $398.5 million, a 38.5% year-on-year. In particular, BIGO Ads third-party ad revenue Audience Network delivered 56.3% year-on-year growth.

Non-live streaming businesses represented 28% of total revenue, an increase of 7.9 percentage points compared with 2024.

In 2025, non-GAAP operating income and non-GAAP EBITDA were $150.8 million and $189.8 million, up 10.8% and 10.9% year-on-year, respectively.

As of December 31, we held $3.26 billion in net cash. Our strong operating cash flow and balance sheet continue to support [indiscernible] shareholder returns.

In 2025, we returned $332 million through share repurchases and dividend.

We've improved business visibility and ongoing operational optimization. We are confident we will continue to deliver solid performance. In light of our strong performance and continued double-digit non-GAAP operational profitability improvements in 2025, the Board has approved additional cash dividend of approximately USD 20 million, representing approximately 10% of the total cash dividend declared for the year of 2025. On top of company's regular quarter dividend schedule, this demonstrates our ongoing commitment to drive operational improvement and enhance shareholder returns.

Next, let me share our strategic forecast and outlook. We are currently evaluating refinements to our segment reported structure, and we are considering to report our results under 3 major business segments: social entertainment, ad tech and e-commerce [indiscernible] beginning since the fourth quarter of 2026. The new structure will make it easy to see and understand the progress we make within each business.

Our social entertainment business remains the cornerstone of our profitability and cash flow. Meanwhile, BIGO Ads and Shopline are building our next stage of growth with improving mid- to long-term economics and expanding cost potential. Together, this business position JOYY for a return to sustainable and profitable growth. From a long-term perspective, their combined strengths and synergies will serve as the [indiscernible] engine through which we can eventually penetrate addressable market beyond what would be possible for each business individually. We believe 2026 will be a landmark year for JOYY, marking the [indiscernible] beginning of our renewed growth journey and defining step toward becoming a global diversified multi-engine technology company.

Now let's turn to our operating update. In Q4, our core social entertainment business achieved its third consecutive quarter of sequential recovery.

Global social MAU reached 272.1 million, up 2.2% quarter-over-quarter. Traffic from our instant message increased for [ 4.5% ] Q-o-Q, driven by high user stickiness and user organic growth both average user time spent and retention improved year-on-year.

On the revenue side, group live streaming revenue rose to $394.4 million, up 1.5% Q-o-Q. The [ video ] market recorded a strong report revenue client base, 3.4% Q-o-Q. BIGO's total paying user rose 1.5% Q-o-Q.

Okay. On our current flagship products, we further enhanced our streamer incentive structure and integrated AI-driven features across critical stage of the user journey, boosting both engagement and payment efficiency. For example, by integrating LLM architecture and incorporating multi-modal information into our recommendation sector. We improved our ability to understand both live streaming content and user interest. The optimized recommendation precision and distribution efficiency led to a 5.6% Q-o-Q increase in Bigo Live's, average viewing time per user in Q4. Furthermore, user adoption of AI-generated vertical gifts continued to grow. As of January 2026 the consumption of AI interactive gifts on Bigo Live has surpassed 30% of total vertical gift consumption.

We are making solid progress on our new product lineup, leveraging our established capability and product development, content, payments infrastructure and local operations. We are expecting new product incubation and growth.

In Q4, revenue from new products increased 37.9% Q-o-Q, [indiscernible] new monthly record.

In 2026, we expect continued recovery. The paying users are approved for our flagship product, driven by ongoing operational refinement. Meanwhile, we anticipate our new product lineup will sustain robust growth and bring further incremental live streaming revenue. We are confident our social entertainment segment will regain growth momentum, delivering healthy profitability and cash flow for the group.

Turning to BIGO Ads. In Q4, BIGO Ads delivered $128.1 million in advertising revenue, up 61.5% year-on-year and 23.3% Q-o-Q. Third-party ad revenue, Audience Network grew 82.5% year-on-year and 27.3% Q-o-Q, demonstrating accelerated growth momentum on a sequential basis for the third consecutive quarter. We feel this growth through broader traffic coverage, multi-vertical advertiser expansion and ongoing algorithm optimization.

First-party traffic expanded steadily supported by higher MAU and ad fill rates that drove sequential revenue and profit growth. Third-party traffic also increased with SDK requests growing by 166% year-on-year and 23% Q-o-Q.

Our diversified vertical strategy across insurance, e-commerce and IAA broaden market coverage and allowed us to capture business advertising demand more effectively.

Q4 was the peak season for U.S. [ insurance ], advertising and the prime right for e-commerce campaigns such as Black Friday web-based demand primarily from insurance, and B2C e-commerce advertisers grew 20%, contributing to a boost in revenue. [ Ad ] placement performance less IAA vertical, primarily casual games to a 39% sequential increase. Overall, the number of key cohorts increased by 29%, and the total spending on key cohort climbed 34%.

[indiscernible], we believe the market continued to be our priority in North America, up over 21% Q-o-Q and revenue, rising 46% Q-o-Q.

To take advantage of exciting [indiscernible], we will depend our presence in key verticals, including lead generation, e-commerce and games. This multi-vertical approach will serve as our structure and this relative competitive edge over the mid to long term. And currently, we will expand our advertiser base and penetrate deeper into development countries while continuously optimizing our [indiscernible].

We established a 3-year road map for the BIGO Audience Network, having a revenue milestone of $1 billion by 2028, accompanied by steady improvement in economics.

Finally, a word on Shopline. Beginning in 2026, we are considering to report Shopline as a separate business segment to reflect our confidence in its growth prospect. Over the past year, Shopline maintained double-digit revenue growth, driven by cross-broader merchant basis here double-digit expansion and its rising contribution to revenue. While we have normalized the Shopline's R&D spending backed by steady top line and growth cost-base gains, we see a clear and achievable path for Shopline to reach breakeven with sustain a double-digit revenue growth trajectory.

Turning to capital return. In Q4, we repurchased $67.4 million of shares. For the full year, total repurchases reached $134.6 million with momentum accelerating in the second half. We believe our current valuation does not fully reflect our intrinsic value. We remain committed to actively actualizing our buyback programs.

Looking ahead, as we continue to scale our business and strengthen our operating profitability, we will work closely with the Board to explore [indiscernible] measures to further enhance our shareholder return mechanism.

In summary, our strategic blueprint and ecosystem potential are only beginning and unfolding. We view 2026 as a fresh start toward our next phase of growth.

We remain [indiscernible] on execution, and we are confident that sustained growth and the profitability improvements will demonstrate our true value, leveraging our integrated ecosystem, which remains committed to strengthen joint position and deliver long-term value for our shareholders. Now that's beginning for Alex Liu.

Thanks, Ms. Ting. Hello, everyone. In the fourth quarter of 2025, we recorded total net revenues of $581.9 million, securing a year-over-year growth of 5.9% and quarter-over-quarter growth of 7.7%, [indiscernible] inflection point above our top line trend on a year-over-year base since the third quarter of 2024.

Our live streaming business delivered its third sequential recovery with its live streaming revenue increasing by 1.5% quarter-over-quarter.

Our advertising business, in particular, BIGO Ads, continued to deliver exceptional growth with its revenue up by 61.5% year-over-year and 23.3% quarter-over-quarter.

Our operating cash flow remained strong at $116 million in Q4. and we ended the quarter with roughly $3.26 billion in net cash. As previously communicated, we accelerated share buyback during the quarter, buying back 67.4 million, most of our sales, nearly doubling our Q3 share repurchase volume.

For the full year of 2025, we booked total net revenues of $2.12 billion. In particular, BIGO Ads [indiscernible] $398.5 million in total revenue, delivering 38.5% year-over-year growth.

Third-party BIGO Audience Network achieved impressive growth of 56.3% while sustaining profitability.

Our non-GAAP operating income was $150.8 million, up by 10.8% year-over-year, and our operating cash flow was $305 million. So after the year of 2025, our total capital return to shareholders including dividends reached $332 million, which represent 108.8% of our operating cash flow.

I will now dive deeper into our detailed financial performance. Looking at our live streaming business, our total live streaming revenues was $394.4 million for the fourth quarter. $331.8 million of which was from BIGO segment, both up quarter-over-quarter. Our refined streamer incentive and continued AI optimization of our content distributor and [indiscernible] user experience have contributed to improve [indiscernible] segment. The BIGO's total paying users increased by 1.5%.

Live streaming revenue from less countries increased by 3.4% quarter-over-quarter.

Our total non-live streaming base revenues were $187.5 million during the fourth quarter, up by 47.6% year-over-year. Non-live streaming now contribute 32.2% of our total group revenues, up from only 23.1% contribution in the same period last year.

BIGO's advertising revenues increased by 69.5% year-over-year and 23.2% quarter-over-quarter to $128.1 million. In particular, our third-party ad revenue, BIGO Audience Network, delivered exceptional results, recording 82.5% year-over-year and 27.3% sequential growth.

On the traffic front, SDK network and the requests was up by 166% year-over-year and 23% quarter-on-quarter in Q4. We continued to treat and optimize our algorithm to further improve our campaign performance, [indiscernible] to advertiser spending.

In Q4, the number of key cohorts was up by 29% quarter-on-quarter, with total spending from key cohorts up by 34% quarter-over-quarter.

Our multi-industry strategy has helped us helped broadened market opportunities. Web-based demand was up by 20% quarter-over-quarter. Mobile-based demand continue to be strong with app expanding up by 39% quarter-on-quarter.

We have outlined our 3-year strategic goal for BIGO Audience Network, which is maintaining high-velocity growth and reaching 3-year revenue milestone of $1 billion. In the near term, this means that we need to invest in the expansion of our R&D and sales capabilities as well as our network and computing infrastructure. But given the health economics of all this network at this stage, we are confident that as we scale, we will remain profitable and potentially further enhance all these network economics in the midterm.

Group's gross profit was $205.6 million in the quarter with a gross margin of 35.3%. BIGO's gross margin was down quarter-on-quarter due to a shift in our revenue mix. We saw an increased contribution from our lower-margin network and revenues.

Our other segment's gross margin was up by 5.1 percentage year-over-year to 46.7%, primarily due to growth in high-margin non-live streaming revenues.

Our group's operating expenses for the quarter were $187.8 million. Our operating expenses were higher last year due to certain noncash goodwill impairment charges.

Sales and marketing expenses were higher year-over-year as our ROI-focused user acquisition returned to normalized level following one-off advertising savings associated with temporary app store interrupted in Q4 last year.

For our R&D and G&A expenses, we maintained prudent and disciplined in our total spending through enhanced resources sharing and operating synergies across different business units.

While strategically allocating incremental share of our R&D resources towards BIGO Ads, our group's non-GAAP operating income for the quarter was $40.8 million. Our non-GAAP operating income was lower this year, primarily due to the impact of one-off advertising savings last year.

Non-GAAP net income attributable to controlling interest of JOYY in the quarter was $70.3 million. The group's non-GAAP net income margin was 12.1% in the quarter. Our non-GAAP net income was lower due to the impact of one-off advertising savings year and higher FX loss due to weakening dollar this year.

For the fourth quarter of 2025, we booked net cash inflows from operating activities of $160 million. Our balance sheet remains healthy with a strong net cash position of $3.26 billion as December 31, 2025.

Shareholder return continues to be an important component of our capital allocation strategy. We have returned $197.3 million to our shareholders through dividends and repurchased $134.6 million worth of our shares during the year. We believe we are still sustainably undervalued. We will continue to actively utilize our buyback program in 2026. Additional, in light of our strong performance and continued double-digit non-GAAP operating profitability improvement in 2025, the Board has approved an additional cash dividend of approximately $20 million, representing approximately 10% of the total cash dividends declared for the year of 2025 on top of the company's regular quarterly dividend schedule. This demonstrates our until commitment to drive original improvement and enhance shareholder returns.

Turning now to our business outlook. At the group level, we expect our net revenues for the first quarter of 2026 to be between $538 million and $548 million. This implies an8.8% to 10.9% year-over-year growth for the group's revenue in quarter 1 with live streaming revenues back to positive year-over-year growth, while BIGO Ads delivery mid-double digits year-over-year growth in the first quarter despite the impact of seasonality.

As Ms. Ting Li just mentioned, beginning in the first quarter of 2026, we are evaluating certain refinements to our segment reporting, and we are considering to report our results in 3 business segments which includes social entertainment, BIGO Ads and e-commerce SaaS. We believe the new segment will make it easier to see and understand our operation progress, particularly on the new initiatives.

Looking ahead, we are extremely excited about their tremendous synergy potential and the powerful flywheel lomentum that our business segment will deliver in the medium to long term.

That concludes our prepared remarks. Operator, we would now like to open up the call to questions. Thanks.

[Operator Instructions] Your first question today comes from Thomas Chong with Jefferies.

[Foreign Language] I have two questions. The first one is about live streaming business. Can management talk about the key factors for recovery? And how should we think about the long-term trend? And my second question is about the 2026 outlook, can management talk about the full year revenue and profit guidance?

[Foreign Language]

[Interpreted] Thank you, Thomas. This is Li ting. I will take your first question. In the fourth quarter, our live streaming business continued its sequential recovery with both paying users and ARPU up sequentially. On operational side, we continue to make progress across several areas, including refining our streamer incentive system, strengthening our content offerings and also applying AI optimizations across content distribution, content consumption and also the overall paying experience of our VIP. And these AI-driven optimizations have continued to translate into meaningful and sustainable improvements in our paying conversion efficiency.

Geographically speaking, this recovery has been primarily driven by the developed market. Our new product lineup continued to grow at a healthy rate and deliver solid Q-o-Q growth. And we expect these products to continue to bring in incremental revenue as well.

Looking ahead, as we have mentioned, these one-off operational adjustments had been fully implemented, and we no longer expect that to have any negative impact on our performance for the new year. And we will continue to advance refined user segmentation and also incentive upgrades, expand our high-quality content, global content offerings and also better strengthen our global payment infrastructure. And we also expect growing incremental contribution from our new product lineup. So on this basis, we expect our live streaming revenue to be back to steady positive year-over-year growth in the year 2026.

[Foreign Language]

[Interpreted] And this is Alex. I will take your second question. Let's first take a quick recap of Q4. Our group revenue in Q4 delivered a very solid growth both year-over-year and Q-on-Q with live that streaming continuing its sequential recovery for third consecutive quarters and our ad tech business continuing accelerating its year-over-year growth.

For Q1, our current guidance implies a year-over-year growth rate of 8.8% to 10.9% for group total revenue. Looking at live streaming, we expect live streaming revenue to be back to positive year-over-year growth since in Q1. But on a sequential basis, considering that the Lunar New Year and Ramadan both fall in Q1 of the year, similarly as last year, we expect there will be a similar seasonal softness for live streaming on a sequential basis.

For advertising, Q1 is also usually a subsequent for advertising as well, but we still expect very robust performance from BIGO Ads. Our current guidance implies mid double-digit year-over-year growth for BIGO Ads.

For the full year, based on the current momentum that we're observing across the 3 business units, we are very confident that we'll be able to achieve positive year-over-year revenue growth for the group in 2026.

On live streaming, as we previously mentioned, those one-off adjustments from last year have been fully implemented, and we expect our revenues to return to steady year-over-year growth.

On ad tech, entering into the year '26, we continue to see traffic expansion, deepening penetration across multi verticals and also ongoing model optimization to drive our revenue growth in year '26. And these drivers are mutually reinforcing. And together, we believe that this supports our expectation for a very strong double-digit year-over-year for BIGO Ads for the full year of '26.

On our e-commerce SaaS business, we continued product capability development, rapid penetration in cross-border merchants in key markets and also our gradual expansion into certain new markets in the new year, we expect our SaaS revenue to sustain its double-digit growth as well. Taken together, we believe that these 3 engines will put our top line back to a very stable and positive year-over-year trajectory and enabling us to tap into the massively broader long-term market opportunities as well.

Looking at our profitability outlook for the year '26, we expect stable operating profit contribution from live streaming with live streaming now returns to growth, along with continued cost optimization, we expect live streaming continue to generate a stable improving profit, although we do expect to selectively reinvest some of our incremental profits into the new social product lines.

Our ad tech business, particularly our third-party app revenue Audience Network is still in a high velocity growth. And in the near term, this means that we will need to invest in the expansion of our R&D and sales capabilities in addition to our network and computing infrastructure. But given the healthy unit economics of Audience Network at this stage, we are very confident that we will remain profitable. And as we scale, we believe that we can potentially further enhance Audience Network economics in the midterm.

Looking at our e-commerce SaaS, we expect as revenue continues to grow, we can continue to narrow its operating losses and that its loss reduction trajectory is very clear on track. And put it in all together, we expect the group's non-GAAP operating income and EBITDA to continue our improving trend similarly as '25 and deliver a steady year-over-year growth in the teens in 2026.

Your next question comes from Yuan Liao with Citic CS.

[Foreign Language]

Congratulations on the strong results. And my question is regarding your advertising business. So in last quarter, both our first-party and third-party advertising business achieved accelerated growth. And you also guided that in the first quarter 2026, you will realize mid-double-digit growth rate in your advertising business. So could management elaborate on the key drivers of your advertising growth rate in the first quarter 2026?

[Foreign Language]

[Interpreted] Thank you for your question. This is Li Ting. As we mentioned in the prepared remarks, our advertising mix is well diversified across different industries, including lead generation adds for insurance direct to e-commerce and also IAA, et cetera. Our current advertiser mix means that seasonality pattern could be very obvious as shown in our sequentially very robust ad spend from e-commerce and interim lead exploration that in Q4 while Q1 is typically sequentially softer, particularly due to our Q4 high comparison base. That said, we kept upgrading our core algorithms in Q4. We focused on improving our ROAS and CVR CPR models by adding general AI signals and also multichannel user behavior data while refining our targeting and delivery strategies. We also expanded our algorithm optimization across specific industries, across lead gen, IAA and also e-commerce to boost efficiency. These improvements have lifted our advertiser retention rate, our average ad spend per advertiser and also attracted new advertisers during the quarter. Such optimization also enabled us to effectively reach more traffic and also increase our monetization capability for publishers, which creates a flywheel effect. And we believe that, that day is a solid foundation for Q1. That's why even in a seasonally softer quarter, we still expect BIGO Ads to deliver mid-digit year-over-year growth as implied in our current Q1 guidance. questions.

Your next question comes from Brian Gong with Citi.

[Foreign Language] Congratulations on solid results. I think management mentioned that 3PS scale is expected to reach over USD 1 billion in 2028, which is a very, very positive number. What are drivers behind these numbers? And how should we think about long-term profitability of 3PS business?

[Foreign Language]

[Interpreted] Thank you, Brian. This is Li Ting. I will take your question. Yes, I just mentioned our midterm strategic goal for BIGO Ads. As we when we were talking at our Q1 outlook earlier, I mentioned the flywheel effect and the mutual reinforcement and continuous improvement across traffic, advertiser demand and algorithm and also our monetization strategies will continue to be long-term drivers throughout the entire development of BIGO Ads. And to be specific, on traffic side, first, we expect further organic traffic growth as we are being integrated with a running number of SDK publisher partners and also mediation platforms. We'll also continue to expand multichannel traffic and also iOS traffic. And second, we will accelerate our penetration into U.S., Europe and Japan and also potentially other new regions.

On demand side, in addition to our car verticals, we're simultaneously exploring new verticals, including sub-verticals of lead generation ADS, IAP and e-commerce, and we expect to further increase both the number of clients and also our customer density within each vertical.

On platform side, with rapid expansion in traffic and also in demand, we are continuously iterating and optimizing our algorithms and data capabilities, driving more vertical-specific optimizations and enhancing our bidding and delivery strategies. We believe that all of these initiatives are moving forward in parallel and they reinforce each other. So this is the first time we are disclosing our midterm strategic goals for BIGO Ads.

The team is exceptionally talented and also the company has dedicated additional resources to work together to that goal as well. And we deliver outstanding results in the year '25. Right now, the team and the company is fully committed and pushing forward aggressively toward our strategic targets for the year '26 and beyond. We remain highly confident in the continued velocity growth of BIGO Ads, particularly the third-party Audience Network proportion.

The next question comes from Xueqing Zhang with CICC.

[Foreign Language] My question on Shopline. Can the management provide more color on the current business momentum of Shopline and the key drivers behind its growth? And how should we think about the path towards narrowing losses and eventually achieving breakeven both in terms of strategy and the time line?

[Foreign Language]

[Interpreted] This is Li Ting. I will take this question. We remain optimistic on the long-term prospects of the SaaS-based e-commerce sector. Unlike walled garden marketplace platforms, Shopline provides an open and extensive solution to merchants through which the merchants can have full data ownership for advanced operations. And also quite distinctive to traditional SaaS monetization model, we don't charge by usage per person. We charge by -- we realize our value through empowering our merchants to capitalize GMV growth, and our monetization is based on the take of that growing GMV.

In the past several years, Shopline' line's core mission has been product excellence, and we've made substantial investments in R&D to evolve from a storefront builder to a full stack e-commerce ecosystem, seamlessly combining sales infrastructure, payment and also integrate the marketing tools into 1 powerful closed loop.

And since last year, our R&D investment have greatly stabilized our cross-border merchants, particularly brand customers have grown rapidly, and our revenue and gross profit growth have driven on improving operating leverage, resulting our significant reduction of -- in Shopline's operating losses. We believe that we are past the stage of business model validation. And now our rising gross profit has put us on a clear and sustainable path to breakeven. We look forward to and remain full committed to achieving breakeven for Shopline in 2028.

The final question today comes from Raphael Chen with BOCI Research.

[Foreign Language] We noticed that company distributed an additional cash dividend equate. Could management share the underlying consideration behind this? Also, given current valuation, this company intends to further accelerate share buyback?

[Foreign Language]

[Interpreted] Thank you, Raphael. This is Alex. I will take your question. First, looking back at 2025, capital return execution has been very, very robust. Under our current shareholder return program, we paid out approximately $197 million in dividends and repurchased approximately $135 million worth of shares throughout the year, bringing our total shareholder returns to surpassing $330 million. That represents around 10.9% of our current market cap, which we believe is a very, very competitive level within the industry.

Additionally, in light with our strong operating performance and double-digit improvement in our non-GAAP OP in '25, the Board has approved an additional cash dividend of approximately $20 million on top of our regular quarterly dividend schedule. This demonstrates our strong confidence in operating performance and also our ongoing commitment to drive operational improvement and enhance shareholder returns.

On buyback, we nearly doubled our repurchase execution in Q4, buying back additional $67.4 million in 1 quarter in Q4. We believe we're still undervalued, and we will continue to actively execute our buybacks going forward.

So looking forward, we are entering into the new phase of growth with our revenue back to growth and also operating profits continuing to improve. We believe that our shareholders can look forward to sharing in the greater returns.

Okay. So that was the last question. Thank you so much for joining this call. We look forward to speaking with everyone next quarter. Thank you.

This conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

Ladies and gentlemen, thank you for standing by, and welcome to JOYY Inc.'s Third Quarter 2025 Earnings Call. [Operator Instructions] 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 Third Quarter 2025 Earnings Conference Call. Joining us today are Ms. Ting Li, Chairperson and CEO of JOYY; and Mr. Alex Liu, the Vice President 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 financial results and webcast 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'd like to remind you that we may make forward-looking statements, including, but not limited to, the future development of our products and businesses, expected financial performance, our share repurchases and other future events, which are inherently subject to risks and uncertainties that may cause actual results to differ from our current expectations. For detailed discussions of the risks and uncertainties, please refer to our latest annual report on Form 20-F and other documents filed with the SEC.

We will also discuss certain non-GAAP financial measures that are included as additional clarifying items to aid investors in further understanding the company's performance and the impact that these items and events had on the financial results. The non-GAAP financial measures provided above should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. You may find a reconciliation of the differences between GAAP and non-GAAP financial measures in our earnings release.

Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in U.S. dollars.

I will now turn the call over to our Chairperson and CEO, Ms. Ting Li. Please go ahead, Ms. Li.

Hello, everyone. I'm Li Ting. Thank you for joining us today. This quarter, we have taken another firm step towards becoming a global technology company powered by multiple growth engines and a strong synergistic ecosystem. Starting with our Q3 results. Livestreaming revenues sustained steady sequential recovery, while our ad tech platform, BIGO Ads accelerated top line growth with its total ad revenue growing over 19.7% quarter-over-quarter. Meanwhile, we maintained a robust cash flow generation and continued to actively return value to shareholders.

Last quarter, I expressed our long-term commitment to building a meaningful and lasting presence in the ad tech industry. This quarter, we made concrete progress towards that goal. BIGO Ads daily growth revenue grew aggressively and reached new heights. As we further accumulate in scale and continuously iterate our AI algorithm, we are confident we will soon reach new milestones.

We achieved total revenue of $540 million in the third quarter, up 6.4% quarter-over-quarter. Our livestreaming revenue was $388 million, up 3.5% Q-o-Q, making 2 consecutive quarters of sequential growth. Meanwhile, BIGO Ads recorded $104 million in revenue, with a year-over-year growth of 33.1%, bringing total non-livestreaming revenues, including ad revenues and others to 28.1% of group revenues.

Non-GAAP operating income reached $41 million, up 16.6% year-on-year. Non-GAAP EBITDA reached $51 million, up 16.8% year-on-year and 4.9% Q-o-Q. Operating cash flow for the quarter reached $73 million. As of September 30, we had $3.3 billion in net cash. This provides strong support for our ongoing competitive shareholders' returns.

We will continue actively executing our share repurchase program. As we advance our strategic priorities alongside strong acquisitional momentum, we are positioned to deliver long-term value for our shareholders. As we approach year-end, I would like to outline our overall strategic direction for year 2026. In short, we will focus on 3 key priorities, strengthening ecosystem synergies, reinforcing organization vision, vitality and reigniting growth.

Beginning in 2022, we accelerated the diversification of our revenue stream, cultivating our 2B initiatives in ad tech and SaaS. We have made steady progress advancing towards our strategic positioning as a global tech company powered by multiple growth engines in the past several years.

Today, our livestreaming business serves as a reliable cash call, providing a solid foundation for profitable growth. In the meantime, our advertising platform and the e-commerce SaaS businesses have completed initial validation of their business models and are rapidly emerging as our net growth curve.

In Q3, our total non-livestreaming revenues exceeded 28.1% of group revenues. We have created a highly synergistic system where our global traffic, advertising and e-commerce SaaS businesses reinforce each other. The R&D capabilities, network infrastructure, local operations expertise and first-party data access, we accumulated through global social livestreaming are now powering our rapid 2B expansion.

In turn, our 2B progress strengthens our competitive moat in both data and technology. We are just beginning to unlock the full strategic value of this integrated business ecosystem.

We are transforming our high-growth ad tech business by establishing BIGO Ads as an AI-powered global platform for performance-driven, multichannel advertising across different verticals. In 2026, we expect to substantially extend our traffic coverage.

On mobile traffic, we are exploring partnerships with meditation platform and developers like Google AdMob to accelerate traffic expansion. On web traffic, we are extending traffic coverage through partnerships with channels like Microsoft Xandr and Google AdX.

On the demand side, as we establish web-to-web advertising capabilities and integrate our web models, we expect to capture continued growth from web-based advertise. For mobile-based advertising, we are enhancing our IAA D7 ROAS product to improve advertiser ROI for IAA, while advancing the optimization of our Target CPE and other products for IAP to expand into area.

Finally, on platform technology, we expect to establish and strengthen our iOS ecosystem in 2026, which will enable us to unlock substantial incremental growth potential from iOS high-quality traffic. We will also continue investing in AI, building our team and resources to accelerate model development and optimization. These enhanced models will leverage deep user behavior and conversion data across channels and verticals, enabling more precise targeting and a better performance for our advertisers.

We have clear strategies in place to drive continued growth in 2026 across all dimensions, including multichannels, traffic expansion, vertical-specific demand development and enhanced AI modeling capabilities. These initiatives will create powerful flywheel effects, which will compound enabling us to deliver increasing value to advertisers, while accelerating our own growth. We believe 2026 will be a milestone year for JOYY's ad tech business, and we are excited about the possibilities ahead.

Turning to Shopline. We remain bullish on the long-term prospects of the SaaS-based e-commerce sector. Unlike walled garden marketplace platform, Shopline provides an open and extensible solution to merchants, through which merchants have full data ownership for advanced operations. For the past several years, Shopline's core mission has been product excellence. We have made a substantial investment in R&D to involve from storefront builder into a full stake e-commerce system seamlessly, combining SaaS infrastructure payments and integrated making tools into 1 powerful closed loop. With this rise of AI, we are now embedding advanced AI capabilities deeply into every part of merchant's journey, continuously sharpening our product edge to drive real business success for our customers.

Since last year, we have seen accelerated growth in certain key regions with steady expansion in gross margins. This is an important strategic milestone for Shopline. Our long-standing commitment to R&D, excellence and talent recruitment has built the deep technological foundation that supports our success across all business segments. Through our modular organizational structure, we enhanced synergies by sharing resources and capabilities across business lines. Our approach enables us to remain agile and the execution focus while giving new ventures competitive advantages from day 1 and creating significant operating leverage as we scale.

As we expand and diversify into new initiatives, our results-driven incentive merchanting provide our top talent with equitable opportunities and broader career development takeaways. By fostering an entrepreneurial spirit, embracing innovation and leveraging competitive incentives to attract and retain excellent talent, while ensuring high strategic goal adjustment between management and the core team members, we drive more efficient corporate development.

From management strategic priority standpoint, we have a balanced framework incorporating both operating metrics and long-term shareholders' value accretion, which promotes strong argument with shareholders' interest.

After several quarters of adjustment, our livestreaming business has returned to a sequential recovery trajectory. We believe it is positioned for steady year-on-year growth in 2026. Meanwhile, we expect our ad tech and SaaS business will sustain robust double-digit revenue growth year-on-year in the coming year. This sets the stage for year-over-year group revenue growth starting in Q4 2025 as reflected in our newly announced guidance and continue into 2026 and beyond.

This is not just a return to growth, but rather the launchpad for unlocking vastly large addressable market.

Next, let me share with you our latest operational update and our outlook for the future. In the third quarter, our global average mobile MAUs reached 266 million, up 1.4% quarter-over-quarter. Our organic users growth continued to be strong, driven by our instant messages. In Q3, IMO product MAUs grew by 600 million Q-o-Q, with average time spent per user up 10.8% year-over-year. Product retention rate continued to improve year-on-year, driven by our ongoing enhancements to core IMO features.

On user acquisition, we maintained a disciplined ROI forecast, targeting users with strong monetization potential, BIGO LIVE's 30-day ROI from new devices improved 6.7% quarter-over-quarter as a result. In Q3, group livestreaming revenues reached $388 million. BIGO LIVE streaming revenue was $368 million, up 3.5% Q-o-Q, maintaining their sequential growth trend. BIGO's total paying users grew 0.8% Q-o-Q, while ARPPU increased 3.4% Q-o-Q.

BIGO LIVE delivered positive sequential growth for the second consecutive quarter. This recovery reflects our comprehensive integrated approach, where we have leveraged effective streamer inclusive program, a healthy and diverse high-quality content ecosystem, AI-powered user touch point enhancements, which improve content discovery and payment experiences and strong local operational campaigns. These initiatives together drove renewed growth.

Since the second half of last year, we have restructured our streamer incentive mechanism across regions, shifting support towards middle-tier streamers. We are now seeing significantly improved streamer engagement and content quality across the platform. In Q3, average streaming hours for newly signed steamers on BIGO LIVE rose 3.5% Q-o-Q and the average viewer numbers increased 3.9% Q-o-Q.

We continue advancing AI-powered improvement across content, distribution and payment experiences, by incorporating future user signals through AI and optimizing strategies for cross-regional and in-app scenarios in BIGO LIVE. We enhanced viewing experiences and drove users' average viewing time up 3.4% Q-o-Q. Meanwhile, our real-time transition, the title now supports 15 languages, significantly improving user interaction across different regions. We are also using AIGC technology to efficiently generate localized virtual gifts. In October, AI-powered interactive gifts represented 25% of total virtual gift consumption, demonstrating strong user adoption of AI-enhanced futures.

We have used packages, strategy to further optimize BIGO LIVE tiered paying users' benefit system. In Q3, mid-tier user ARPPU increased 2% Q-o-Q, while the total number of premium paying users achieved double-digit Q-o-Q growth.

Looking ahead to 2026, we are confident that our streamer incentives, content cultivation and AI-driven optimization will position BIGO LIVE to regain momentum for growth. We are also advancing payment infrastructure improvements to deliver more diverse, localized payment options for global users. We believe this will be a tailwind to drive payment rate improvements across all products over time. Overall, we are confident that livestreaming will return to steady growth in 2026 and continue contributing sustainable cash flow for the group.

Turning to BIGO Ads. In Q3, BIGO Ads achieved $104 million in advertising revenue, up 33.1% year-on-year and 19.7% in Q-o-Q, while first-party ad revenue and profit remained stable with single-digit Q-o-Q growth. Our third-party BIGO audience network was particularly strong, recording mid-double-digit year-on-year and 25% sequential growth.

On the traffic side, BIGO audience network traffic continued to grow this quarter. SDK ad requests were up 228% year-on-year and 29% Q-o-Q, representing significant growth.

On the technology front, we upgraded our IAA D7 ROAS optimization with AI-driven real-time prediction and smart building capabilities. By leveraging across channel and cross-vertical user behavior and attrition data, the enhanced model delivered significantly improved prediction accuracy and the generalization that enable advertisers to scale budgets with greater confidence, acquiring higher-quality users while sustaining strong return efficiency.

We saw strong growth across the board, driven the algorithm integration, elevated traffic, new market expansion and strong advertiser demand across multiple verticals. BIGO Ads daily gross revenue reached new heights and continued on its upward trajectory with strong momentum.

Web-based demand primarily for lead generation, maintained teens growth Q-o-Q, and we are optimistic on its Q4 growth prospects as we enter into the peak season. Meanwhile, improved IAA delivery and efficientiveness substantially drove IAA advertisers spending up by mid-double-digit Q-o-Q. During the third quarter, total spending from key cohorts increased by 30% Q-o-Q. At the same time, performance gains attracted a steady influx of new advertisers, with the numbers of key cohorts up by 17% Q-o-Q.

From regional perspective, we continued to deepen our penetration in the developed countries, with BIGO Audience network revenue from North America growing 22% Q-o-Q, while Western Europe growing 41% Q-o-Q. We delivered exceptional results in Q3, driven by rapid network traffic expansion, continuous algorithm, optimization and the delivery efficiency improvements and rapid growth flow in net verticals.

As we outlined in last quarter's earnings call, BIGO Ads represent our record second growth engine and the core long-term strategic initiative. We are committed to building a meaningful and lasting presence in this space and to see significant opportunities ahead.

Turning to capital return. As of November 14, we have repurchased USD 88.6 million under our share buyback program. Given our strong financial position and operating momentum, we believe our shares remain undervalued, and we will continue actively executing share repurchases as part of our commitment to returning value to shareholders.

Looking forward, with our livestreaming business stabilizing and driving revenue and profit from advertising and other emerging businesses, we expect the company's consolidated operating profit to continue to improve and our shareholders to benefit from long-term profitable growth. In summary, we are optimistic about the positive trends we are driving across our business units. Our core livestreaming business is a trajectory and the continued sequential growth, and we expect livestreaming to gradually remain momentum for growth.

BIGO Ads is scaling rapidly as our second growth engine, driven by traffic readiness and vertical expansion and algorithm optimization. And we are strengthening Shopline's product capability and strategic advanced stages as a fully integrated SaaS platform with anticipated synergies with our ad tech platform on the horizon.

As I mentioned earlier, we are just beginning to unlock the full strategic value of our integrated business ecosystem. We anticipate that 2026 will be renewed progress and serve as a jumping off plot into our next phase of growth.

I will now turn the call over to Ms. Alex Liu, the Vice President of Finance, to provide our financial update.

Thanks, Ms. Li. Hello, everyone. In the third quarter of 2025, we recorded total net revenues of $540.2 million, securing a quarter-over-quarter growth of 6.4%. Our livestreaming business delivered its second sequential recovery with its livestreaming revenues increasing by 3.5% quarter-over-quarter.

Our advertising business, in particular, BIGO Ads has demonstrated accelerating growth. BIGO Ads revenues was up by 33.1% year-over-year and 19.7% quarter-over-quarter. Our non-GAAP EBITDA for the quarter was $50.6 million, up by 16.8% year-over-year and 4.9% quarter-over-quarter. Operating cash flow remained strong at $73.4 million in quarter 3, and we ended the quarter with $3.3 billion in net cash.

We accelerated share buyback during the quarter. In quarter 3, we bought back $30.8 million worth of our shares. Between January 1 and November 14, we had bought back 1.7 million of our ADS for $88.6 million in 2025.

I will now dive deeper into our detailed financial performance. Looking at our livestreaming business, our total livestreaming revenue were $388.5 million for the third quarter. $367.7 million of which was from BIGO segment, both up quarter-over-quarter. Global MAU was $266.2 million during the quarter, up by 1.4% quarter-over-quarter, driven by a healthy growth of the user pool of our instant messenger.

Our ROI-oriented user acquisition, continued AI-driven optimization of our content quality and paying user experience have contributed to improved paying sentiment, with BIGO's total paying user and app increasing by 0.8% and 3.4% quarter-over-quarter.

By region, group's total livestreaming revenues from developed countries increased by 7.6% quarter-over-quarter, while livestreaming revenues from Southeast Asia increased by 4.4% quarter-over-quarter.

Our total non-livestreaming revenues were $151.7 million during the third quarter, up by 27.3% year-over-year. Non-livestreaming now contributes 28.1% of our total group revenues, up from only 21.3% contribution in the same period last year.

We are presenting advertising revenues as a separate line item in the financial statements in this quarter to help investors better understand the performance of our emerging business. BIGO's advertising revenues increased by 33.1% year-over-year and 19.7% quarter-over-quarter to $103.9 million. In particular, our third-party BIGO Audience network delivered exceptional results, recording mid-double-digit year-over-year and 25% sequential growth. We are making substantial progress on all fronts.

On the traffic front, SDK network ad request was up by 228% year-over-year and 29% quarter-on-quarter in quarter 3, leveraging multichannel and cross-industry user behavior and attrition data. We continued to train and optimize our algorithms to further improve our campaign performance, which drove advertiser spending.

In Q3, the number of key cohorts was up by 17% quarter-over-quarter, with total spending from key cohorts up by 30% quarter-on-quarter. BIGO Ads has certainly emerged as our second major growth engine, and it continued to make a positive contribution to our bottom line.

Group's gross profit was $193.1 million in the quarter, with a gross margin of 35.8%, up by 4.3% quarter-over-quarter. BIGO's gross margin was slightly down quarter-over-quarter due to the shift in our revenue mix, which saw an increased contribution from our low-margin network ad revenues. All other segment's gross margin was up by 3 percentage points year-over-year to 42.6% due to growth in higher margin SaaS revenues.

Our group's operating expenses for the quarter were $174.2 million compared with $192 million in the same period of 2024. For our sales and marketing expenses, we are consistently optimizing our user acquisition expenses to enhance ROI. For our R&D and G&A expenses, we maintained prudent and disciplined in our total spending through enhanced resources sharing and operational synergy across different business units, while strategically allocating incremental share of our R&D resources towards BIGO Ads.

Our group's non-GAAP operating income for the quarter was $40.7 million, up by 16.6% year-over-year. Non-GAAP net income attributable to controlling interest of JOYY in the quarter was $72.4 million, up by 18.4% year-over-year. The group's non-GAAP net income margin was 13.4% in the quarter. For the third quarter of 2025, we booked net cash inflows from operating activities of $73.4 million. Our benefit remains healthy with a strong net cash position of $3.3 billion as of September 30, 2025.

Shareholder return continued to be an important component of our capital allocation strategy. We have retained $147.9 million to our shareholders through dividends and repurchased $88.6 million worth of our shares during the year as of November 14, 2025. We believe we are still substantially undervalued, and we will remain firmly committed to actively utilize our outstanding share repurchase program.

Turning now to our business outlook. At the group level, we expect our net revenues for the fourth quarter of 2025 to be between $563 million and $578 million. This implies a 2.5% to 5.2% year-over-year growth for the group's revenue in quarter 4. As Ms. Li highlighted in her prepared remarks, we are now repositioned for growth, in particular, with advertising entering into the peak season of the year, we are expecting continued accelerating growth from BIGO Ads, with its total advertising revenue particularly delivering mid-double-digit year-over-year growth in the fourth quarter.

Based on the trends we are seeing across our business, we have clear visibility for the group to year-over-year revenue growth in year 2026, and we are extremely excited about the tremendous synergy potential and powerful flywheel momentum that our business segments will deliver in the medium to long term.

That concludes our prepared remarks. Operator, we'd now like to open up the call to questions. Thanks.

[Operator Instructions] Your first question comes from Xueqing Zhang from CICC.

[Foreign Language] Congratulations on the strong quarter. My question is about the livestreaming business. We have noticed the livestreaming growth slightly quarter-on-quarter for 2 consecutive quarters. How should we think about the long-term trend of the livestreaming business?

[Foreign Language]

[Interpreted] Thank you for your question. This is Li Ting. I will take your question. In the third quarter, our livestreaming business continued its steady sequential recovery, supported by growth in both our paying users and ARPPU. Across regions, developed countries and Southeast Asia maintained resilient and continue the improving trend we've seen in the recent quarters.

Over the past several quarters, we've been focusing and executing a series of structural enhancements across our ecosystem, including refining streamer incentive programs, strengthening a more diversified content supply and distribution and expanding the use of AI for content distribution and also paying experience optimization. And those have reinforced one another and also help livestreaming back to healthier growth.

Looking ahead to 2026, we expect livestreaming to return to year-over-year growth. First of all, the one-off operational adjustments that we made earlier this year are now largely behind us, and then we expect -- are now largely behind us. And going forward, we will continue to focus our resources on high-value paying users and developed countries while further enhancing refined operations globally through expanding higher-quality content supply, improving user segmentation and incentive existence while strengthening our global payment infrastructure.

We expect these to improve our paying conversion and also ARPPU. Additionally, we will also expect some incremental revenue contribution from our new product initiatives in the Middle East region in year 2026. With these drivers, we remain confident that livestreaming is well positioned to resume steady year-over-year growth in the new year. Thank you.

Your next question comes from Yuan Liao from Citic.

[Foreign Language] I'll translate myself. Congrats for the strong quarter results. My question is regarding your advertising business. Could management please share the long-term strategic goals for your advertising business and also your operation plans for 2026?

[Foreign Language]

[Interpreted] Thank you, Liao Yuan. This is Li Ting. I will take your question. We are transforming our high-growth ad tech business by establishing BIGO Ads as a global platform for performance-driven multichannel advertising across different verticals. In terms of our channels, we expect to establish a multi-channel layout, enabling monetization for a wide range of suppliers, including web open networks, mobile app developers and others, thereby significantly expand our supply base. And in terms of industry vertical coverage, we expect our advertiser base to become much, much more diversified and cover a much broader range of advertiser types. For example, for in-app advertising segment, we will continue to deepen penetration into casual games and tool and utility apps. And for the in-app purchase segment, we expect to explore penetration into core vertical such as mid- to hardcore games, content and social as well as e-commerce marketplace.

And on web-based advertising, we will also expect to penetrate into verticals such as finance, direct-to-customer, e-commerce, et cetera. So building on this foundation, as our advertising verticals become much, much more diversified and much more expanded advertiser coverage, together with rising traffic and diversifying traffic channels, we will accumulate an increasing volume of data. And this will empower our full domain user profiling and consequently enable us to further optimize the performance and efficiency of our model.

And geographically speaking, BIGO Ads will continue to have a global footprint, while our core regions will still be concentrated in developed countries such as North America and Europe, globalization remains a clear path as we continue to expand our platform.

And as for our specific plan for BIGO Ads for year 2026, we expect our growth drivers to come from the below 4 areas. First of all, continued expansion of our traffic; second, a strong growth in the number of IAA and web-based advertisers together with their advertiser spending and together with our expansion into new verticals; and thirdly, improvement of our advertising data infrastructure, including continuously enhancing data feedback, strengthening our iOS ecosystem, which we believe will accelerate our model optimization and efficiency; and fourth, geographic market expansion, building on our solid results and foundation that we have achieved regarding these 4 aspects, that has already been achieved in the year 2025. We have a very, very strong confidence in the development, and we really look forward to what we can achieve in the year '26.

Your next question comes from Thomas Chong from Jefferies.

[Foreign Language] I will translate myself. My question is about the 2026 outlook. Can management comment about the user and the revenue trend? And on the cost side, can management comment about the expenses trend and profitability outlook?

[Foreign Language]

[Interpreted] Thank you, Thomas. This is Li Ting. I will take your first question. Looking ahead to the year 2026, we're still in the process of finalizing detailed operational plan, and therefore, we will not provide a quantitative guidance at this stage. That said, based on the trends we are already observing across our major businesses, we have very clear visibility into the '26 for the group's return to positive year-over-year revenue growth, and we have very strong confidence in that.

First of all, on livestreaming, as I mentioned earlier, the business has returned to relatively stable sequential growth trajectory following the adjustments that we made in the previous quarters. And we expect livestreaming to resume steady year-over-year growth in the year '26.

And for -- secondly, for advertising and e-commerce SaaS, they have shown very strong momentum this year. BIGO Ads delivered approximately 30% year-over-year growth in the first 3 quarters of '25, and our e-commerce SaaS business also achieved double-digit growth. Looking into 2026, we expect both businesses to deliver very strong double-digit growth.

And for advertising, we continue to see high visibility across traffic expansion, model, our model capabilities and our advertiser coverage and regional penetration. For SaaS, enhanced product capabilities and rapid growth in key markets, we will continue to contribute to top line expansion. Taken together, as livestreaming returns to year-over-year growth, while both advertising and SaaS maintaining strong performance, we believe that the group is entering into a new growth cycle, with our top line returning to positive stable year-over-year growth trajectory and broader long-term opportunities ahead.

While on the user front, we will continue to focus on traffic quality. In Q3, our overall MAU base is still around 78% coming from our Instant Messenger product, which is highly sticky and purely organically acquired. And our IM product has delivered sequential growth for the past 3 quarters when it comes to MAU, and we expect this steady momentum to continue.

For our broader social entertainment portfolio -- product portfolio, we expect to remain ROI-oriented and focus on acquiring high-quality global users. Overall speaking, at group level, we expect our group MAU to remain broadly stable in the year 2026 with continued improvement in our user community, which we believe will provide a solid foundation for livestreaming monetization and other monetization opportunities, particularly our first-party ads.

[Foreign Language]

[Interpreted] Thank you, Thomas. This is Alex. I will take your second question. First of all, let us recap our performance in the third quarter. We delivered on better-than-expected profits in this quarter with our non-GAAP operating profit reached $40.7 million, up by 16.6% year-over-year. With our non-GAAP EBITDA increased by 16.8% year-over-year and 4.9% Q-o-Q to $50.6 million. For BIGO segment, our non-GAAP gross profit margin was 35% in Q3, down slightly Q-o-Q, mainly due to the change in our revenue mix as our rising third-party BIGO Audio network has a dilution impact on our segment gross margin. This was partially offset by our ongoing content cost optimization and better efficiency in the livestreaming -- in BIGO's livestreaming.

As a result, BIGO's non-GAAP operating margin remained stable at 14% in Q3. Looking at all other segments, non-GAAP gross margin improved -- was improved from 40% to 42.9% year-over-year, driven by revenue growth and higher contribution from our higher-margin SaaS business. Its operating -- its non-GAAP operating loss continue to narrow further to $25.5 million, down from $38 million in Q3 last year, reflecting disciplined spending in our operating expenses.

Looking into Q4, we expect the group's non-GAAP operating profit continues to improve Q-o-Q, and this implies that for the full year of '25, our group's total non-GAAP operating profit will achieve a nearly double-digit year-over-year increase compared to the year '24. And turning to the year 2026, looking at the 3 driving components with livestreaming returning to year-over-year growth -- top line year-over-year growth and maintaining stable profitability and BIGO Ads continue to go up, contributing incremental profit. And with e-commerce SaaS further narrowing its operating losses, we expect the group's total non-GAAP operating profit amount and non-GAAP EBITDA to continue the improving trend that we achieved this year and grow steadily in the year '26.

Your next question comes from Raphael Chen from BOCI Research.

[Foreign Language] Let me translate myself. Congrats on the third quarter. Just wondering could management share the latest thoughts and the strategies of our shareholder return initiatives?

[Foreign Language]

[Interpreted] Thank you, Raphael. This is Alex. I will take your question. Regarding capital return at the beginning of the year, we announced a 3-year shareholder return program totaling $900 million for the year '25 to '27, and we are currently executing this plan steadily, and we are well on track to deliver the plan. As of November 14, we have already paid out a total of $148 million in dividends and repurchased $88.6 million worth of our shares with share buyback execution accelerating in the third quarter.

As Ms. Li just shared, we are entering into a new growth stage and the group's revenue will return to a growth trajectory, and we expect to open up much broader market opportunities. While our share price is still at a relatively low level, we expect to actively accelerate our share buyback going forward.

Looking ahead, as our operating profit continues to grow, we expect that shareholders can look forward to enhance returns over time.

So that was our last question. Thank you so much for joining our call, and we look forward to speaking with everyone next quarter. Thank you.

Thank you. This conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]