JOYY Inc (YY) Q3 2021 Earnings Call Transcript

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JOYY Inc (YY -0.45%)
Q3 2021 Earnings Call
Nov 18, 2021, 9:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to the JOYY Incorporated's Third Quarter 2021 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.

Jane Xie -- Senior Manager, Investor Relations

Thank you, operator. Hello, everyone. Welcome to JOYY's third quarter 2021 earnings conference call. Joining us today are Mr. David Xueling Li, Chairman and CEO of JOYY; Ms. Ting Li, our COO; and Mr. Alex Leo [Phonetic], the General Manager of Finance. For today's call, management will first provide a review of the quarter and then we will conduct a Q&A session. The third quarter 2021 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 refer you to our Safe Harbor statement in our earnings press release, which apply to this call as well, as we will make forward-looking statements.

Finally, please note that, unless otherwise stated, all figures mentioned during this conference call are in US dollar.

I would now turn the call over to our Chairman and CEO, Mr. David Xueling Li. Please go ahead, sir.

David Xueling Li -- Chairman, Director and Chief Executive Officer

Yeah. Hello, everyone. Welcome to our third quarter 2021 earnings call. Despite the increasing uncertainty due to COVID-19, we had another solid quarter as we grew our total quarterly revenues by 21.7% year-over-year to $651 million, while BIGO's revenue increased by 60.1% year-over-year to $569 million. Notably, we achieved a non-GAAP profitability at the Group level for the first time since we deconsolidated YY Live and booked $35.1 million in non-GAAP net profit. This was mainly attributed to BIGO's margin expansion and improved operating leverage at Group level. During the quarter, BIGO's non-GAAP net profit expanded to $49.6 million, while its non-GAAP net margin improved from 3.3% to 8.7% in the previous quarter.

The persistent execution of our globalization strategy has enabled us to deliver steady progress across multiple aspects, including: one, the continued expansion of our global business; two, diversify content offering on various products that nurture interest-based interactive social connections; three, better synergy among multiple products that drive steady improvements in profitability at the Group level.

Next, let me share greater detail on some quarterly updates for each of our core product lines. Let's start with Bigo Live. Despite global economy uncertainties and other challenges posted by the resurgence of COVID-19, our business demonstrated resilience, as we entered the post-pandemic era. Bigo Live's live streaming revenue increased by 8.6% year-over-year in the third quarter. Our efforts to cultivate a global diversified content pool has been effective in further expanding the product reach of Bigo Live, as Bigo Live's MAU increased by 10.7% year-over-year to 31 million in the quarter. The continued execution of our localized operation strategy has contributed a gradual build up in the paying behaviors of our users, as the number of paying users increased by 60.1% year-over-year. We also continued to deliver a robust performance of Bigo Live in multiple regions. In particular, on a year-over-year basis, revenue and the paying user from Europe increased by 50.6% and 26.7%, respectively, while revenues and paying users from Southeast Asia and other emerging regions increased by 29.6% and 31.7%, respectively. As we expand Bigo Live's operation into multiple regions, our revenue mix continued to diversify, awarding reliance on any individual market.

Looking at the development of the global live streaming industry, we believe that the penetration rate for live streaming remains at very low levels, leaving us with tremendous growth opportunities ahead. Going forward, we will continue to deepen penetration in multiple key markets, including North America, Europe, Middle East and Eastern Pacific regions and dedicate more resources toward the emerging markets as well. In doing so, we will further solidify our leading global market position in the social and entertainment live streaming sector.

With regards to our content efforts, in the past few quarters, we have been enlarging our talent pool of content creators and expanding our localized premium content library via various cross industry partnerships and a series of localized operational activities. We have focused on a handful of categories, including pan-entertainment, gaming and lifestyles and further expanded our product reach. For example, for the pan-entertainment category, the first live broadcast of country music competition, Voice of BIGO, wrapped up recently, achieving a huge success in talent, attracting more than 100,000 current viewers for its final event.

In North America, Bigo Live launched a new channel feature and attracted many influencers to create their own personal channels on the platform, covering some of the hottest topics and pop culture, including Canadian singer, Chris Turner's [Phonetic] finance channel, Sam Asghari's fitness channel and American reality star and singer, Farrah Abraham's mental health channel. On the other hand, we provide a platform for those influencers to showcase their talent and creativity. On the other hand, we leverage our influencers to promote content diversification and high-quality engagement on Bigo Live platform.

In the gaming category, we partnered with two mobile game heavyweights in July, further enriching Bigo Live's gaming content. In France, Bigo Live partnered with a popular mobile RPG, Saint Seiya KotZ, which was published globally by GTarcade and hosted a series of incentive events for Bigo Live's gaming content creators. Meanwhile, through our cooperation with Garena, we hosted and streamed the Free Fire League, a national level e-sports tournament in South Asia. As a result, we further enriched our gaming UGC during the quarter. We are also further expanding our connections, while working mid-interactive sectors.

In the lifestyle category, we made our initial foray into e-commerce live streaming in Southeast Asia. In August, we launched the Bigo Marketplace channel in Indonesia, Malaysia, and Thailand. And we conducted or controlled beta test of the in-at-shop [Phonetic] feature, which enable a small group of talent users to complete their purchase through punch out things with listed third-party merchants, while Bigo Marketplace is still in its infancy in terms of development. It has the potential to expand our product reach by providing a diversified interactive experience for our users.

During the quarter, we continued to introduce innovative product features on Bigo Live to further improve our user experience. New features include picture in picture, new live streaming mode supporting trial simultaneous streamers for multi-users channels and more. As a result, the number of streamers of multi-users chat room increased by 2.3% and the average duration per live streaming session increased by 5.3% sequentially. In addition, we updated Bigo Live's non-real-time content sharing feature, BAR [Phonetic], and improved its user engagement further, achieving an 8.1% sequential increase in average user time spent view during BAR postings. Also, by optimizing its content recommendation algorithm with more pressure user profiling, we increased Bigo Live's user discovery of interested -- interest-based content beyond live streaming rooms, increasing its next day user retention rate by 0.5%. Going forward, we plan to further enrich our localized content offerings. We believe that it will help our users establish some of fulfilling interest-based social connections, further expand our product's reach, fuel our user base expansion and ultimately, help build driver inclusive global community.

Next, on Likee, in line with our emphasis long-term growth and sustainability, we have been fine-tuned turning Likee's marketing strategy since the first quarter of this year and priority in our investment on our content and social ecosystem. As a result, Likee's overall MAU experienced some short-term inflow -- short-term flow quotations and declined to 76.8 million. However, we are starting to see a slowdown in the downward chain, especially in the Gulf [Phonetic] space from the Middle East region. Therefore, Likee's live streaming revenue grew further by 58.1% year-over-year, mainly driven by the Middle East region, as revenues from the Middle East increased by 1.5 times year-over-year.

In the past quarter, our efforts have been centered on identifying, cultivating and supporting talent content creators to cultivate a friendly and vibrant content creation community. We launched a series of incentive programs offering both user traffic and other economic rewards to influential content creators with more than 10,000 fans. At the same time, we continued to uncover the most talent content creators through a variety of localized fans, event and challenge. As a result, the number of certified creators increased by 70% -- 17% sequentially in the third quarter.

As part of the incentive programs, Likee introduced a new product feature called Superlike in Russia and Indonesia, the Middle East and other regions. With the new feature, users are able to obtain Superlike at this role purchasing or viewing in-apps commercials and then grant to their favorite pictures and short videos. Essentially, Superlike enables creators to engage with a large range of same growth in non-real-time manner, stimulating social interactions and adding a diversified monetization tool for creators, motivating the production of more premium content. As a result, in Russia, for example, Likee's launch of Superlike guaranteed widespread -- garnered widespread interest from creators and evidenced by 7.1% month-to-month increased the number of certified creators joined the Likee community. Looking ahead, with the recruitment of an increasing number of talented creators, we should be able to augment Likee's rich and dynamic content ecosystem and pave the way toward the revival of its user base expansion.

Lastly, on Hago. Hago's live streaming revenue continued its rapid growth momentum as its revenue rose by 78.7% year-over-year and its number of paying user increased by 1.5 times. In terms of product development, over the last few quarters, we made some strategic changes to Hago's positioning, transitioning from the interactive platform, primarily focused on casual games through an audio and video multi-player social interaction and entertainment platform. We made successful -- successive launches of features, updates in the past few quarters, including the Hago 4.0 update with a major revamp of its channel feature, focusing on the improvement of multi-user social interactive activities. The virtual family group function and the most recently, the team up [Phonetic] audio live streaming service for mobile games. Those new features enable user continue making the -- in -- envelope entertainment and interactions need for our users.

Following a series of an adjustment, we have achieved a preliminary transformation in Hago's traffic structure, driving significant improvements in user interaction. On a sequential basis, channel penetration rates increased by 4%. In the penetration of our virtual family group function increased by 9.9%. The average duration of voice chat room increased by 40.3% to 80 minutes, while the penetration rates of team up audio live streaming service for mobile games increased significantly from 0% to 6.6% or 4.4%. In the future, we will continue to provide users with a more diverse multi-player interactive entertainment experience and cultivate an interest-based social entertainment community. All in all, during the third quarter, despite the recent volatility in the macro environment and the increased uncertainty during -- due to COVID-19, our persistent execution of our globalization strategy helped us to achieve substantial progress in multiple fronts.

Our efforts of enhancing our diversified and localized content ecosystem have helped Bigo Live further expand its product reach and user base while continuing the cultivation of talented content creators and effectively increasing engagement levels in Likee's content community. Through the combination of improved synergy among various products, enhanced operation leverage and prudent marketing strategy, we have achieved a steady expansion in profitability for both BIGO segment and for the entire Group. Going forward, we will continue to cultivate our localized content and social ecosystems, nurture interest-based interactive social connections and pursue long-term sustainable growth for our global business.

Lastly, in light of the current market condition on top of the current $200 million, new share repurchase plan announced in September 2021, our Board of Directors had just authorized additional share purchase plan, under which the Company may purchase up to $1 billion of our shares till November 2021 to demonstrate our confidence in the Company's long-term growth perspective -- prospect and to reward our shareholders for their long-term support of the Company.

This concludes my prepared remarks. I will now turn the call to our General Manager of Finance, Alex Leo, for a more detailed explanation of our quarterly financial results.

Alex Leo -- General Manager of Finance

Thanks, David. Hello, everyone. As JOYY's Financial General Manager, I will talk about the financial results. Since a majority of our revenues and expenses are now denominated in USD, starting from January 1, 2021, we have changed our reporting currency from RMB to US dollar to better illustrate our operational results. Please note that the financial information and non-GAAP financial information disclosed in our third quarter earnings press release is presented on a continuing operations basis, unless otherwise specifically stated. As the sale of YY Live was substantially completed on February 8, 2021, there's certain customary matters to be completed in the near future, the historical financial results of YY Live are reflected in the Company's consolidated financial statements as discontinued operations accordingly starting from the fourth quarter of 2020.

During the third quarter of 2021, despite the recent volatility in the macro environment and increased uncertainty due to COVID-19, we continued to deliver promising financial results. Our total net revenues for the third quarter increased by 21.7% year-over-year to $650.5 million from $534.4 million in the same period of 2020, primarily attributable to the continued paying users growth of BIGO. In particular, our live streaming revenues for the third quarter increased by 19.7% year-over-year to $612.2 million and other revenues in the third quarter increased by 66.8% to $38.4 million. Through the combination of improved synergy among multiple products, enhanced operating leverage and prudent marketing strategy, we have achieved a steady expansion in profitability for both BIGO segment and all the entire Group.

Cost of revenues for the third quarter increased by 16.1% year-over-year to $439.8 million. Revenue sharing fees and content costs increased to $290.1 million in the third quarter from $234 million in the same period of 2020, which was in line with the increase in live streaming revenues. Bandwidth costs decreased to $19 million from $27.6 million in the same period of 2020, primarily due to the Company's improved efficiencies and the termination of bandwidth usage for India users after the Indian government ban of Chinese apps in late June 2020, partially offset by user base expansion outside India.

Gross profit increased by 35.5% year-over-year to $210.8 million. Gross margin in the third quarter of 2021 improved to 32.4% from 29.1% in the same period of 2020.

Operating expenses for the third quarter decreased to $208.7 million from $249.4 million in the same period of 2020. Among the operating expenses, sales and marketing expenses decreased to $106.3 million from $134.6 million due to disciplined spending on user acquisition via advertisement for certain products, including Likee and Hago.

Our GAAP operating income for the third quarter was $6.9 million compared to operating loss of $89.3 million in the same period of 2020. Operating income margin for the third quarter was 1.1% compared to operating loss margin of 16.7% in the same period of 2020.

Our non-GAAP operating income for the third quarter, which excludes share-based compensation expenses, amortization of intangible assets from business acquisitions, as well as impairment of goodwill and investment and gain on disposal of subsidiaries and business was $31.3 million in the quarter compared to non-GAAP operating loss of $39.5 million in the same period of 2020. Our non-GAAP operating income margin for the third quarter was 4.8% compared to non-GAAP operating loss margin of 7.4% in the prior year period.

GAAP net income from continuing operations attributable to controlling interest of JOYY in the third quarter of 2021 was $7.5 million compared to net income of $191 million in the same period of 2020. Net income margin was 1.2% in the third quarter of 2021 compared to 35.7% in the corresponding period of 2020. Hago's net income was higher in the same period last year, mainly due to the gain from the of partial disposal of equity interest in Huya.

Non-GAAP net income from continuing operations attributable to controlling interest of JOYY was $35.1 million in the third quarter compared to non-GAAP net loss of $26.6 million in the same period of 2020. Non-GAAP net income margin was 5.4% in the third quarter of 2021 compared to non-GAAP net loss margin of 5% in the same period of 2020. This mismatch we have obtained non-GAAP profitability at Group level for the first time this quarter.

Since we deconsolidated YY Live, notably BIGO continued to achieve a positive non-GAAP net income for three quarters as its non-GAAP net income expanded to $49.6 million in the third quarter with non-GAAP net income margin improved to 8.7% from non-GAAP net loss margin of 2.1% in the prior year period.

Diluted net income per ADS in the third quarter of 2021 was $0.07 compared to $2.22 in the same period of 2020. Non-GAAP diluted net income per ADS was $0.42 compared to non-GAAP diluted net loss of $0.33 per ADS in the same period of 2020. In addition, in accordance with our quarterly dividend plan approved on August, 11, 2020 and on November 16, 2020, we will be distributing a dividend of $0.51 per ADS for the third quarter of 2021. This is expected to be paid on December 23, 2021, to shareholders of record as of the close of business on December 10, 2021.

Also, we would love to provide an update to our execution of the share repurchase program announced in August 2019 and later extended in May 2020. The Board of Directors has authorized a share repurchase program, under which the Company may repurchase up to $300 million of its shares till August 2021. As of September 30, 2021, such a share repurchase program already expired. The Company had almost fully executed this share repurchase program and repurchased approximately $300 million of its shares. In September 2021, the Company announced that its Board of Directors has authorized a new share repurchase plan, under which the Company may repurchase up to $200 million of its shares till September 2022. As of September 30, 2021, the Company had repurchased approximately $16.7 million of its shares under this program. Earlier today, our Board of Directors has further authorized additional share repurchase plan, under which the Company may repurchase up to $1 billion of its shares till November 2022, to demonstrate our confidence in the Company's long-term growth prospects and to reward our shareholders for their long-term support of the Company.

As David also mentioned, we will continue to further expand our global market risk, cultivate our highly engaged user community and enhance our high-quality content offerings. We will also continue to actively explore other ways to maximize shareholder value.

Beginning in the second quarter, we have anticipated some negative impact on users' online social entertainment activities from the gradual lift of pandemic-related lockdowns in certain countries. We expect our net revenues for the fourth quarter to be between $652 million and $661 million, representing a year-over-year increase between 14.7% to 16.3% on a constant currency basis, excluding the revenue contribution from YY Live in the same period of last year. We currently have limited visibility surrounding the COVID-19 pandemic's long-term impacts and geopolitical uncertainties on our business and the market in which we operate. Therefore, this forecast only reflects our current and preliminary views on the market and operational conditions, which are subject to change.

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

Questions and Answers:

Operator

[Operator Instructions] Thank you. Your first question comes from the line of Thomas Chong from Jefferies. Please ask your question.

Thomas Chong -- Jefferies -- Analyst

[Foreign Speech] Thanks management for taking my questions. I have three questions. The first question is about the COVID situation and how would that impact the user behavior in terms of the time spent, engagement and how that actually affects our monetization? And can we talk about by geographies how that impact these metrics?

And then my second question is about the Q4 revenue guidance. Can management elaborate a bit more about the trend for different business line?

And my third question is about the cost and expense trend. How we should think about it going forward? Thank you.

David Xueling Li -- Chairman, Director and Chief Executive Officer

[Foreign Speech] Thank you, Thomas. I will answer your first question. So, if you recall, last year, we realized very substantial growth in our global business. Our year-over-year growth in many quarters have actually surpassed 100% for multiple quarters. So, on top of that, when COVID -- there has been some short-term fluctuation caused by COVID-19, it has put some extra pressure for us to realize or maintain such a high-level of growth continuously. So, you can see that starting since the second -- the end of second quarter, we have encountered increased uncertainty due to COVID-19. On the one hand, you see some countries gradually lifting lockdown bans and there has been negative impact on users' online social entertainment activity. And on the other hand, with the resurgence of COVID-19 in certain areas, we've seen weakened consumer confidence on the economy, which has negative impact on users' playing behavior and these varies across different regions as well.

We have seen that with our assets to continue to introduce diversify content and new product features, which have improved user engagement. We see Bigo Live user time spent and retention rate in key markets have remained stable. But there has been some short-term fluctuation of Bigo's monetization capabilities, such as paying ratio and ARPU in certain regions such as US and the Middle East. So, so far, we do have limited visibility into the precise impact related to COVID-19, that's why we have provided a relatively conservative estimate for our Q4 revenue, which implies a year-over-year growth of 14.7% to 16.3% at Group level. We will provide further update once we have better visibility.

Alex Leo -- General Manager of Finance

Okay, Thomas. [Foreign Speech] And this is Alex. I will answer your second question. As there would be an increase number of marketing and operating activities in Q4, we expect our content costs and sales and marketing expenses to increase modestly in the fourth quarter, both in terms of absolute amount and expense margins over the third quarter level, resulting in a slight decrease in our gross margin and non-GAAP net margin for BIGO segment in Q4 on a sequential basis. But as you can notice, BIGO has achieved non-GAAP net profit for consecutive of three quarters. So, for the full-year, we believe that BIGO segment will achieve a low-single-digit non-GAAP net margin.

And for year 2022, after few quarters of marketing spend adjustment to Likee, we have seen some positive preliminary results to the product. We will continue to observe Likee's user engagement level, retention rate and content ecosystem progress and flexibly adjust Likee's marketing spend in the coming year. So, overall speaking, we will ensure a steady and balanced growth strategy, balanced growth and profitability of our global business in 2022 and increased investments in sales and marketing activities and further expand our global localized operational teams. In fact, BIGO segment to achieve steady growth in terms of revenue and will remain profitable in 2022. And in the longer-term, with the Group's multiple products gradually moving toward breakeven, we believe that the overall profit margin will be gradually increased. Thank you.

Thomas Chong -- Jefferies -- Analyst

Thank you.

Operator

Your next question comes from the line of Alex Poon from Morgan Stanley. Please ask your question.

Alex Poon -- Morgan Stanley -- Analyst

[Foreign Speech] My first question is related to Bigo Live and Likee. Can management share some of the new features and content, the users' feedback, revenue contribution from these features in Q3? And going forward, what new features and content are we are looking forward to expand into?

My second question is related to our deal progress update with Baidu. Thank you very much.

David Xueling Li -- Chairman, Director and Chief Executive Officer

[Foreign Speech] Thank you, Alex. This is David. I will answer your question. So, both for Bigo Live and Likee, we have been trying out new contents and new product features in the past few quarters. So, in early August, I've just mentioned, that for Bigo Live, we have beta tested the Bigo Pasar Malam, which is the night market e-commerce live stream channel in Malaysia and received some preliminary positive user reaction with average user views per live streaming session reached 150,000 to 200,000 per live streaming session. In response, in late August, we officially launched the Bigo Marketplace channel in Malaysia, Indonesia and Thailand. The viewers' DAU penetration rate was as high as 25% in certain regions. While Bigo Marketplace is still in its infancy in terms of development, it has the potential to expand our product outreach by providing a diversified interactive experience for our users. We do not charge the merchants any commission at this stage yet. So, there would be no contribution to revenue at this stage. In Q4, we would be launching gifting functions under our non-real-time content community, the BAR feature, to further improve the engagement level of BAR feature.

And for Likee, as I've just mentioned in my prepared remarks, we introduced a feature called Superlike in Russia, Indonesia, Middle East, and also in US in late August. We have seen Superlike MAU penetration rate reach 7.7% in the first month in certain regions. So, as the creators could actually obtain revenue share from Superlike, we believe that the feature could motivate the production of more premium content and help creators to better engage with their fan groups. So, as of today, as there is few limited space [Phonetic] available, revenue contribution from Superlike at this stage is very limited and we will continue to monitor our users' feedback. And in addition to Superlike, in Q4, we're planning to launch subscription feature on the Likee to continue our support for the KOLs and to help them fulfill our content creation as a lifelong career.

[Foreign Speech] As for the updates of the YY Live deal, there hasn't been new information since our previous communication. As mentioned in the SEC filings that the Company released, we have substantially completed the sale of YY Live to Baidu and there are still customer matters [Phonetic] in progress. So, both sides have agreed to extend the launch update of the proposed transaction to a day mutually agreed upon by the party. So, if there is any further updates, we will disclose it when and as required by applicable security laws.

Thank you.

Alex Poon -- Morgan Stanley -- Analyst

[Foreign Speech]

Operator

Your next question comes from the line of Yiwen Zhang from China Renaissance. Please ask your question.

Yiwen Zhang -- China Renaissance -- Analyst

[Foreign Speech] So, the first question is regarding Likee marketing. You mentioned you have some more Likee flexible marketing strategy, can you share more color on this? That is dependent on the landscape or the user acquisition cost or other factors? And what's our updated thoughts on the Likee marketing trend into 2022?

And secondly, can you give us update on the overseas live streaming and short video competition landscape? Thank you.

David Xueling Li -- Chairman, Director and Chief Executive Officer

[Foreign Speech] First of all, I'd like to separate two questions and begin with some thoughts on live streaming first. We've got the impression that the market is actually very concerned about the potential negative impact live streaming platforms might have from the mega social platforms with huge traffics. But actually, based on our observation of the Chinese peers and also competitors' data, we've seen that, for these larger scale social platforms, their monetization efficiency via live streaming is actually very low. It's lower than Bigo Live and it's lower than their own advertising business. That's why you never see, for these social platforms to put live streaming business as their priority growth engine, because they would believe that the efficiency and the ROI is actually lower than them pursuing an advertising-driven model. So, what we like to emphasize here is that, for these mega -- relatively larger scale social platforms, they do not actually compete with our business directly, because that is by nature of priority of their business growth model and we believe that we would still be able to obtain a longer-term sustainable growth from our live streaming business.

[Foreign Speech] As for Likee, what I'd like to emphasize is that, we've not only adjusted the marketing spend of Likee, we also changed our product strategy as well. You can see that as compared to our competitors who are actually going through a different direction, we are advertising -- advocating private traffic, enabling KOLs, celebrities, gaming companies with existing or establishment fan groups to establish or to attractive their fan groups on to Likee and also to be able to monetize their bandwidth via the platform.

If you look at the appearance [Phonetic] of Superlike, it looks like a gifting feature in its own. But actually, in nature, it's about helping these KOLs, helping these influencers to be able to locate the fan groups who are willing to pay for their content and be able to enable these KOLs and influencers to monetize their fan groups. And the introduction of the new feature, subscription, is also one of the monetization tools that we will provide for these KOLs. So, you can see that -- if you look at our competitors' platforms, you can see that a lot of the traffic distribution is prioritizing the public domain, centering, emphasizing the platforms' control over traffic, distribution and diminishing the KOLs and influencers' own personal influence on their fan group. So, what we would like to do is the opposite, we would like to advocate private traffic, help these users, help these KOLs and influencers to drive their own fan group, establish fan groups from other product or platforms to Likee and we, by providing such diversifying monetization tools, including the existing live streaming, Superlike's, subscription and even e-commerce, a diversified monetization toolbox to these KOLs and influencers, so that we would be able to drive the further growth of Likee.

So, all in all, you can see that we'd love to see a big change to Likee's business model, where, not only the marketing strategy is adjusted, but also, we have go for a differentiated product strategy, which avoids direct competition with other platforms. So going forward, you'll be able to see that we'll be able to continue to grow Likee's revenue with narrowing loss and in the future by continuing centering private traffic domain for these KOLs, we'd be able to further empower these KOLs and influencers and be able to drive further expansion both for our user base and monetization level.

Thank you.

Operator

I would now like to hand the conference back to the management for closing remarks. Please continue.

Jane Xie -- Senior Manager, Investor Relations

That concludes the end of this call, and we look forward to speaking with everyone next quarter. Thank you.

David Xueling Li -- Chairman, Director and Chief Executive Officer

Thanks.

Operator

[Operator Closing Remarks]

Duration: 66 minutes

Call participants:

Jane Xie -- Senior Manager, Investor Relations

David Xueling Li -- Chairman, Director and Chief Executive Officer

Alex Leo -- General Manager of Finance

Thomas Chong -- Jefferies -- Analyst

Alex Poon -- Morgan Stanley -- Analyst

Yiwen Zhang -- China Renaissance -- Analyst

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