JOYY

Ladies and gentlemen, thank you for standing by, and welcome to JOYY Inc.'s first quarter 2026 earnings call. At this time, all participants are in listen-only mode. After the management's prepared remarks, there will be a question-and-answer session. I'd 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 webcasts 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 when we make forward-looking statements, including but not limited to the future development of our products and businesses, expected future financial performance of the company, our share repurchases, and other future events, which are entirely 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 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 US dollars. I would now turn the call over to our Chairperson and CEO, Ms. Ting Li. Please go ahead, Ting.

Hello, everyone. I'm Ting Li. Thank you for joining us today. Apologize, but I have got a cold recently, and my voice is quite weak. For efficiency of this meeting, I'm going to have our IR team 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 diversified ecosystem is taking shape with social entertainment, advertising, and Smart Commerce fostering one another in a self-reinforcing strategic flywheel. This flywheel is propelling JOYY 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, BIGO 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 31st, 2026, we held over $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 22nd, 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 three years.

This underscores our strong confidence in the long-term potential of our business and demonstrates our continued commitment to delivering sustainable value to our shareholders and enabling shareholders to benefit from our operational improvements. This quarter marks the first quarter we are reporting results under our new three-segment structure, Social Entertainment, BIGO Ads, and Shopline. I would 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 compounding returns from our data assets through the deep integration of Social Entertainment, programmatic advertising, and omni-channel e-commerce, creating a self-reinforcing growth flywheel.

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 serves 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, we convert traffic into measurable, scalable advertising ROI. Each iteration further enriches our data assets and deepens our algo moat, building a network additive advantage. Shopline is the engine of our one-stop omni-channel 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 entire ecosystem, seamlessly connecting our social data assets, algos, and e-commerce capabilities. Together, these three 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. Core live streaming paying users grew 5.9% year-over-year. On the traffic side, global average mobile MAUs reached 276 million, up 6.1% year-over-year and 1.5% QOQ. Driven by high user stickiness and fully organic growth, traffic from the Insta Messenger increased by 3.1% QOQ.

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% QOQ, and average effective streaming hours per streamer rose 1.4% QOQ. 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 gifts 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% QOQ, 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 2026 and sustain this positive trajectory going forward. Moving to BIGO Ads. In Q1, BIGO Ads generated $125 million in advertising revenue, up 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 supply side, SDK traffic maintained strong growth, up 109% year-over-year and 7% QOQ in Q1. On demand side, our strategic presence across multiple verticals, including lead generation, e-commerce, and IAA, drove an enrichment of our advertiser mix and enhanced ecosystem density. This multi-vertical approach not only accelerates data accumulation and algo iteration, but also strengthens 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. South America remains our largest market for BIGO Ads, while Western Europe delivered notable momentum, with revenue up 27% QOQ. On the algo side, we're carefully 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 ad delivery efficiency. The fact that we're 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 BIGO Audience Network revenue by 2028. As our 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 autonomy 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 with payments, logistics, and marketing modules, we empower merchants across every stage of their journey, from store setup and transactions, to fulfillment and full lifecycle customer retention. Globally, very few vendors are capable of delivering this kind of OS-level closed-loop solution. We are also accelerating the integration of a suite of AI-powered capabilities. Tools will drive Shopline's ongoing evolution from an enablement tool to an AI-driven commerce engine could represent a fundamental shift in how merchants operate. AI-powered traffic allocation and automated decision-making will unlock new growth opportunities and new levels of precision 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 a fundamental distinction from traditional seat-based software tools.

This monetization model, deeply aligned with merchants' full lifecycle 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 Shopline's revenue growth accelerating to above 25% year-over-year in Q2. This meaningful progress marks Shopline's 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 Eagle Eye makes steady progress in the DTC e-commerce vertical and moves past its cold start phase, we anticipate increasingly tangible synergies between these two businesses going forward.

These mark 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 values remain in their early stages. Looking ahead, we expect our three 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 you through our financial results in detail.

Thanks, Misty and Jane Xie. Hello, everyone. Beginning this quarter, we are reporting Social Entertainment, Eagle Eye and Shopline as standalone segments. This reflects a strategic inflection point. Eagle Eye and Shopline have evolved from incubation projects into scalable growth engines. 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 recent years. Our non-GAAP EBITDA for the quarter was $45.7 million, and our operating cash flow was $46 million in quarter one, and we ended the quarter with roughly $3.18 billion in net cash. As previously communicated, we executed share buyback since the ante into 2026, buying back $87.9 million worth of our shares as of May 22.

In light of our solid operational performance and robust benefit, we have just announced an updated shareholder return program totaling $1.5 billion, in which we could repurchase up to $600 million worth of our shares and distribute up to $900 million in dividends over the next three years. This represents a 67% expansion 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 its first year-over-year recovery of 3.2% year-over-year. In particular, live streaming revenues returned to 2.4% year-over-year growth, which marks an inflection point and a result of the strategic adjustments we executed over the past several quarters. Total streaming paying users increased by 5.9% year-over-year, while live streaming revenues from developed countries increased by 11.2% year-over-year.

Bigo Edge continued to deliver exceptional growth, with its revenue up by 55.6% year-over-year to $124.8 million. In particular, our short video edge revenue, BIGO Audience Network, delivered outstanding results, recording 78.8% 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 Q1. Our multi-industry strategy has helped us capture growing market opportunities. Web-based demand was up by 90% year-over-year. Mobile-based demand continued to be strong, with RRS by NIM up by 97% year-over-year. We are right on track to achieve our three-year strategic goal for BIGO Audience Network, which is maintaining high velocity growth and reaching three-year revenue milestone of $1 billion. While we are prudently investing in the expansion for our R&D and tools capabilities, as well as our network and computing infrastructure, all these networks' economics remain healthy.

We are confident that as we scale, we will remain profitable and potentially further enhance all the network economics in the medium term. Shopline kicked off its busiest quarter, generating revenue of $30.5 million, delivering a 16.1% year-over-year revenue growth. Cross-border merchant revenue was up by 66%, with its revenue contribution up by 8% compared to Q1 last year. We expect cross-border merchant revenue to maintain a high velocity growth going forward, while lasting revenue contribution from this merchant segment will lead to gradual acceleration 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 shift in our revenue mix, which saw an increased contribution from our lower margin network ad revenues.

Shopline's gross margin was up by 6.8 percentage points year-over-year to 51.5%, primarily due to growth in high-margin subscription revenues, as well as improving gross margin for its value-added service revenues. Our group's operating expenses for the quarter were $183.4 million. Shopline 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 US 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 31st, 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 three-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 our new programs, and enable our shareholders to benefit from our operational improvements. Turning now to our business outlook. At a group level, we expect our net revenues for the second quarter of 2026 to be between $562 million and $581 million.

This implies a 10.7%-14.4% year-over-year growth on the gross revenue. With Social Entertainment sustaining positive growth year-over-year, BIGO Ads delivering mid-double-digit growth, while Shopline growth accelerating in the second quarter. To summarize, Q1 2026 marks a pivotal milestone for JOYY. We have delivered our strongest year-over-year revenue growth in recent years. We aligned 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 synergetic potential and the powerful flywheel momentum that our business segments will deliver in medium to long term. That concludes our prepared remarks. Operator, we would now like to open up the call to questions. Thanks.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. When asking a question, please state your question in Chinese first, then repeat your question in English for the convenience of everyone on the call. Your first question comes from Thomas Chong with Jefferies. Please go ahead.

早上好，谢谢管理层接受我的提问。我们看到这一次是公司首次按照社交娱乐、广告技术还有Shopline这三个业务板块披露我们的业绩。我们看到在社交娱乐业务下的直播的收入，在Q1也实现了同比的正增长。可否再进一步说一下这一个复苏是否可以持续？这个第一。第二的话，管理层可否分享一下我们2026年全年各个业务线的收入还有利润的指引。

Hi，good morning. Thanks management for taking my question. My first question is that this is the first time the company disclosed its performance in three business segments, namely Social Entertainment, BIGO Ads and Shopline. For Social Entertainment, live streaming revenue achieved a positive year-over-year growth in Q1. Can management further elaborate whether this is a sustainable recovery? 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.

谢谢Thomas。第一个问题会由我来回答。一季度正如此前所预期的，我们的社交娱乐的收入同比涨了3.2%，其中直播收入同比涨了2.4%，正式回归到了同比正增长的轨道。其实自24年下半年以来，推动的一系列的调整，尤其是主播激励机制的调整，持续对直播生态的修复发挥着作用。一季度本应该是主播开播的淡季，但我们仍然实现了有效开播主播数和人均有效开播时长的环比正增长。优质的内容品类，比如音乐主播的开播人数也获得大幅度的上涨。在整体的内容供应和主播能动性的提升的基础上，我们继续推动了精细化的用户分层运营和激励体系升级，并通过AI等多个环节的赋能，改善了内容分发和付费体验。这些改善也进一步推动了付费转化率的提升，以及核心直播付费用户增长了近6%。在新产品的矩阵方面，一季度也取得了显著的进展，同比增幅超过500%，收入持续创新高，为社交娱乐整体增长持续贡献了增量。目前来看，二季度指引预示社交娱乐收入同比增速将较第一季度进一步加速。基于这一势头，我们对2026年直播收入实现稳健正增长充满信心。

Thank you, Thomas. I will answer your question. For the first question, for Q1, as expected, our social entertainment revenue was up by 3.2% year-over-year, with live streaming revenue up 2.4% on year-over-year, returning to a positive year-over-year growth trajectory. We have been executing a series of structural enhancements since the second half of 2024, particularly with our streamer incentive mechanisms. These, we believe, have continued to strengthen our live streaming ecosystem. Despite Q1 typically being a slow season for streamer activity, we still achieved a sequential increase in the number of active streamers and also the average effective streaming hours per streamer. Notably, the music streamers, which is one of our key quality content genre, 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 tiers paying user benefit system. Combined with AI-driven optimization on content distribution and also 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.

Thomas，早啊，我是Alex，我来回答一下您的第二个问题。展望2026年二季度，我们目前给予市场的集团收入指引是实现同比10.7%到14.4%的增长。分业务线来看的话，社交娱乐的业务，我们预计二季度的收入会实现一个个位数的同比增长。那么BIGO LIVE将延续强劲的表现，实现一个中双位数的同比增长。春晚二季度的营收的同比增速会提升到20%以上。展望全年的话，我们预期社交娱乐实现同比稳健的增长。BIGO LIVE方面，随着流量规模持续的扩大、多维的广告主的覆盖搭配，以及我们算法模型的不断迭代优化，这些效应将推动BIGO LIVE全年保持强劲的中双位数的同比增长。春晚方面，跨界商户快速深度以及新市场的拓展，我们预期春晚业务也将维持两位数的营收增长。那么随着三条业务线均进入到上升通道，我们对2026年集团的全年收入实现正增长是充满信心的。经营利润方面的话，二季度随着各业务板块收入的环比增长，我们预期集团经营利润也获得环比的增长。全年来看，社交娱乐业务在直播业务重新回归增长的同时，直播整体的利润将保持平稳或小幅的增长。BIGO LIVE的第三方广告目前处于一个高速扩张的阶段，今年我们会在研发、在销售团队的建设以及基础设施上进行持续不断的投入。但考虑到当前阶段JOYY的模型已经非常的健康，我们有信心在保持盈利的基础上，随着规模的进一步提升，中期盈利能力有望持续的增强。那么对春晚来讲的话，运营费用是相对固定的，在收入和毛利增长的驱动下，相信亏损可以持续不断的收窄。所以从那来看，我们预计2026年集团non-GAAP经营利润将延续2025年的改善趋势，实现同比显著的稳步提升。当然，在净利润的层面上，我们承受外汇损益的科目进行一个补充解释。由于美元人民币汇率的持续贬值，我们一季度预计二季度会有比较大额的未实现的汇兑损失，unrealized FX loss。但这部分其实是和经营不相关的，是属于一个浮动的盈亏，在美元升值的时候就会产生未实现的货币收益。对。

This is Alex. I will take your second question. For Q2, our current guidance implies 10.7%-14.4% year-over-year growth for our group revenue. By segment, we expect Social Entertainment to deliver low-to-mid-single-digit year-over-year growth. BIGO Ads to sustain mid-double-digit year-over-year growth and Shopline driving the growth to accelerate to above 25% year-over-year. For the full year of 2026, we expect Social Entertainment to deliver steady year-over-year growth rate. For BIGO Ads, with continued traffic expansion, deepening multi-vertical advertisement coverage and ongoing algo optimization, we expect a strong mid-double-digit year-over-year growth for full year. For Shopline, with accelerating cross-border merchant penetration and also new market expansion, we expect to sustain double-digit revenue growth.

With 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 QoQ revenue growth across our 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. Given the healthy economics of the Audience Network at this stage, we are confident that as we scale, we will remain profitable and we expect to see further improvement in its economics over the medium term.

For Shopline, with its operating expenses relatively fixed and our 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 2025, delivering a steady teens year-over-year growth in 2026. At a net profit level, I do want to provide some additional context on FX fluctuations. Due to the continued weakening of the US dollar against RMB, we recorded significant unrealized FX losses in Q1, and we expect similar impact from FX in Q2. However, we'd like to remind you that these are non-operational mark to market fluctuations, so when the dollar strengthens, they will be reversed.

Next question, please.

Thank you. Your next question comes from P.K. with CLSA. Please go ahead.

管理层感谢接受我的提问，也恭喜公司交出强劲业绩。其实我想再追问一下，关于广告业务方面，因为我们一季度的话一般是一个传统的淡季，但是BIGO Ads它的表现是明显好于预期的，请问这个核心的驱动力是什么？另外，目前公司已经接入了像MAX、LevelPlay两大头部的聚合平台，能不能再介绍一下我们目前跟其他的聚合平台的合作进展，以及对业务有什么潜在影响？谢谢。

谢谢您的问题，这个问题会继续由我来回答。在一季度，BIGO Ads实现了同比增长55.6%，其中三方广告平台同比增长了78.8%，环比也实现了微增，整体的表现是好于预期的。核心的驱动力会来自以下几个方面。第一，多元垂类的战略布局全效显现。凭借着在线索收集、D2C的电商、IAA等垂类的深刻的耕耘，一季度的web端的预算同比增长了90.1%，环比也逆势取得了正增长。IAA的预算同比增长了97%，这是我们在传统淡季能够交出好于预期的成绩单的核心原因。第二个方面，算法的能力的持续升级。通过持续推动广告全渠道的数据回传，叠加了AI模型标签，更全面的用户行为数据，我们实现了用户画像的聚合迭代，显著提升了平台上的广告分发效率。此外，我们还完成了中台模型的框架升级，根据不同广告的特性，对模型进行有针对性的升级迭代，并针对线索、IAA、独立站电商等多垂类进行了专项优化，提高了算法效率。在数据的积累和算法迭代的作用下，流量触达和变现效率持续提升，广告主的留存和平均投放预算增加，形成了飞轮效应。接下来我们还是会持续优化迭代算法模型。从效果上看，多垂类行业的正向反馈已经验证了中台模型框架的泛化能力。随着数据规模的加速积累和垂类模型的持续精细化，算法飞轮效应正在加速释放，将逐步成为下个阶段、下半年乃至明年广告收入增长的主要引擎。

关于流量侧，我们还在积极地推进和头部适合品牌的合作。目前有一个合作项目已经进入了内测的阶段，我们预期将在2026年内完成正式对接。我们预期在正式接入后，将帮助广告主在全球范围内触达更广泛的优质流量，进一步提升我们的流量覆盖深度和广度，为飞轮效应注入新的加速力。我们对BIGO Ads的三方广告业务持续保持高度增长非常有信心。Thank you, this is Liping.

I will take your question. In Q1, BIGO has delivered 55.6% year-over-year growth, with third-party BIGO Audience Network growing by 78.8% year-over-year, also delivering a modest positive sequential growth. The overall performance was ahead of our expectations, I would attribute it to the following key drivers. First of all, our multi-vertical strategy is definitely delivering clear results, leveraging our established capabilities in lead generation, direct to customer e-commerce, and also IAA. Our web-based demand grew by 90% year-over-year in Q1, delivered positive sequential growth, despite Q1 being a slow season. IAA demand grew by 97%, this was the primary reason that we were able to deliver better than expected results during Q1. Secondly, the 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 enhanced our user profiling and ad delivery efficiency on the 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 algo iterates, we are seeing sustained improvements in monetization efficiency with higher advertiser retention and also a growing average spend per advertiser, forming a self-reinforcing effect. Going forward, we will continue to optimize and iterate our algo models. The positive results that we have already achieved across multiple verticals have validated 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 expected 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 your question on mediation partnerships, on traffic side, we are actively advancing integrations with industry leading mediation platforms. One of our partnership has already entered the 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 extending our traffic coverage in depth and breadth and injecting new momentum into the flywheel. We have very strong confidence in sustaining rapid growth for BIGO Audience Network. Thank you. Next question, please.

Thank you. The next question comes from Raphael Chen with BOCI Research. Please go ahead.

[Foreign language] Thanks management for the opportunity to ask question. Noticing that Shopline made its first standalone disclosure. Could management elaborate more insights on the latest business updates and the path to break even profitability? Thank you.

谢谢你的问题，这个问题会继续由我来回答。是的，这是我们第一次把Shopline作为一个独立板块来披露。刚才在讲稿中我们也有提到，Shopline的定位是以AI为底层的一站式全渠道电商基础设施。我们做的不是一个简单的建站工具，而是一套开放可扩展的全渠道零售操作系统。这里把支付、物流、营销都深度地集成在了一起，让商家在一个平台上完成从建站、交易、履约到用户获取和全生命周期留存的所有的环节。在全球的范围内，能提供这种操作系统级别的闭环方案的服务商非常有限。从收入模式来看，Shopline构建了高粘性订阅费基石加高爆发增值的差异化商业电建模式。一方面，稳健的订阅成为了底层入口，积累了商家的基础，形成了经常性的收入。另一方面，Shopline通过高速增长的支付、营销等增值服务，实现了对交易闭环的深度渗透的GMV电线。这种与商家全链路成长深度绑定的电建模式，将成为驱动Shopline业绩持续爆发的引擎。我们的商户群体可以分为本土和跨境商户两大部分。以品牌大客户为主导的跨境商户收入自去年以来保持了高速增长。目前我们主要投入研发费用已经趋稳，收入和毛利的提升都带来了经营杠杆效应，Shopline的亏损在大幅收窄，以及随着收入和毛利规模的加速提升，我们有信心也会全力推进Shopline在2028年实现盈亏平衡。

Thank you Raphael for your question. This is Lucy. Yes, this is the first quarter that we are putting Shopline as a standalone segment. As we mentioned in our prepared remarks, we have positioned Shopline as an AI-native one-stop omni-channel commerce infrastructure. What we are building is not a simple storefront building tool, but rather an 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 to fulfillment and full lifecycle 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 on 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. On the other hand, through deeply penetrating the transaction loop and monetizing GMV through rapidly growing value-added services including payment and also marketing. This monetization model, which is deeply aligned with the full lifecycle growth of merchants, will serve as the primary engine driving the continuous growth in Shopline's financial performance. When we look at Shopline's merchant base, we currently serve two major categories: local merchants and also cross-border 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's losses are narrowing meaningfully. Looking ahead, we see a clear and achievable path for Shopline to reach breakeven by 2028, and we are fully committed to delivering on that. Thank you.

Maybe one last question, please.

Thank you. The next question comes from Weijing Zhang with CICC. Please go ahead.

感谢管理层接受我的提问，我的问题是关于股东回报的。公司本季度宣布了全新的三年$15亿的股东回馈计划，包括$6亿的回购和$9亿的分红。想请问管理层能不能分享一下大幅提升股东回报的考虑？谢谢。

Thanks management for taking my question. My question about shareholder returns. The company announced a new three-year shareholder return plan of $1.5 billion this quarter, including $600 million in share buyback and $900 million in dividends. Can management share the thinking behind the significant increase in shareholder returns? Thank you.

谢谢，谢谢你的提问。我是Alex，我来回答一下。本季度我们非常高兴地宣布了全新的一个三年股东的回馈计划，总规模达到了15亿美金，覆盖2026年到2028年的财年。这个新的方案其实取代了前三年9亿美金的股东回馈计划，总体的规模提升了约67%。具体来看的话，新计划是两个方面，第一，每年3亿美金的年度分红，和以前的年度分红计划相比的话是提升了50%。第二的话是每年2亿美元的回购额度，比之前的回购翻了一倍。做出这个决定，其实我们背后有几个核心的考虑点。第一，首先我们三大业务线都已经进入到了一个清晰的增长的轨道，为更高水平的股东回馈其实是建立了非常扎实的一个基础。第二的话，公司维持强劲的一个净现金的储备，截止到三月底还有接近32亿美金，完全有能力支持这一承诺的执行。第三的话，我们认为当前股价仍然是显著低估了公司的长期价值的，持续加大回购力度本身也是管理层信心最直接的一个体现。未来在两到三年的话，我们将坚定地执行这一计划，让股东切实分享到公司经营改善所带来的红利。谢谢。

Thank you Qing Shi for your question. This is Alex. We are very pleased to announce this quarter our new three-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 two components: annual dividend of $300 million per year. That would be up by 50% from our previous $200 million per year. Our annual share buybacks, 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 three 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. We do believe that the current share price still materially undervalues 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 three years, we are firmly committed to executing this plan and enabling our shareholders to benefit from improving operations.

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

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

I'd 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 4th 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 webcasts of this conference call are available at ir.joyy.com. The 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, 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 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. 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. dollar. I will now turn the call over to our Chairperson and CEO, Ms. Ting Li. Please go ahead.

Hello, everyone. I'm Ting Li. Thank you for joining us today. In 2025, our group revenue and social entertainment business regained growth momentum since Q2. We saw meaningful progress in our second growth curve of AdTech and other emerging areas. Together, these results are shaping our clear strategic framework as a global technology company with multiple growth engines. Let me start with the overview of our results. In Q4, live streaming maintained its sequential recovery trend, while our advertising platform saw accelerated top-line growth. Meanwhile, non-GAAP operating profit and cash flow remained robust. In the 4th quarter, total revenue reached $581.9 million, up 7.7% QoQ and 5.9% year-over-year, representing our fourth positive year-over-year growth since the second half of 2024.

Live streaming revenue was $394.4 million, up 1.5% QoQ. Marking three consecutive quarters of sequential growth. BIGO Ads, including both first and third-party ads, generated $128.1 million in revenue, up 61.5% year-over-year, with third-party audience network revenue growth accelerating to 82.5% year-over-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 $116 million. For the full year, total revenue was $2.12 billion. Live streaming contributed $1.53 billion, while BIGO Ads contributed $398.5 million, up 38.5% year-over-year. In particular, BIGO Ads third-party ads revenue audience network delivered 56.3% year-over-year growth.

Non-live streaming businesses represented 28% of total revenue, an increase of 7.9 percentage point 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-over-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 consistent shareholder returns. In 2025, we returned $332 million through share repurchases and dividend. With 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 $20 million, representing approximately 10% of the total cash dividends 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 on outlook. We are currently evaluating refinements to our segment reporting structure, and we are considering to report our result on the three major business segments, social entertainment, ad tech, and e-commerce service beginning since the 1st quarter of 2026. This new structure will make it easier 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 fueling our next stage of growth with improving mid to long-term economics and expanding profitability potential. Together, these businesses position JOYY for a return to sustainable and profitable growth. From a long-term perspective, their combined strengths and synergies will serve as the unfailing 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 resolute beginning of our renewed growth journey and the 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 MAUs reached 272.1 million, up 2.2% quarter-over-quarter.

Traffic from our instant message increased 4.5% QoQ, driven by high user thickness and user organic growth. Both average user time spent and retention improved year-over-year. On the revenue side, live streaming revenue rose to $394.4 million, up 1.5% QoQ. The American market recorded a strong recovery, with revenue climbing 3.4% QoQ. BIGO's total paying users rose 1.5% QoQ. Okay, on our current four 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-model information into our recommendation system, 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% QoQ increase in BIGO LIVE's average viewing time per user in Q4. Furthermore, user adoption of AI-generated vertical gifts continues 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 in product development, content, payments, infrastructure, and local operations. We are expanding new product incubation and growth. In Q4, revenue from new products increased 37.9% QoQ, setting new monthly record. In 2026, we expect continued recovery with paying users of apps for our flagship products, driven by ongoing operational refinements. 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. In Q4, BIGO delivered $128.1 million in advertising revenue, up 61.5% year-over-year and 23.3% QoQ. Third-party ad revenue Audience Network grew 82.5% year-over-year and 27.3% QoQ, demonstrating accelerated growth momentum on a sequential basis for the third consecutive quarter. We fueled this growth through broader traffic coverage, multi-vertical advertiser expansion, and ongoing algorithm optimization. First-party traffic expanded steadily, supported by higher MAUs and ad fill rates that drove sequential revenue and profit growth. Third-party traffic also increased, with SDK requests growing by 166% year-over-year and 23% QoQ.

Our diversified vertical strategy across insurance, e-commerce, and IAA games broadened market coverage and allowed us to capture seasonal advertising demands more effectively. Q4 was a peak season for U.S. insurance, advertising, and primarily for e-commerce campaigns such as Black Friday. Web-based demand, primarily from insurance and D2C e-commerce advertisers grew 20%, contributing to a boost in revenue. Enhanced placement performance led the IAA vertical, primarily casual games, to a 39% sequential increase. Overall, the number of key cohorts increased by 29%, and the total spending of key cohorts climbed 34%. By region, we believe the market continued to be our priority, with North America up over 21% QoQ and Western Europe rising 46% QoQ. To take advantage of existing momentum, we will deepen our presence in key verticals, including lead generation ads, e-commerce, and games.

This multi-vertical approach will serve as our structure and a differentiated competitive edge over the mid to long term. Concurrently, we will expand our advertiser base and penetrate deeper into developing countries, while continuously optimizing our algorithm. We have established a three-year roadmap for the BIGO Audience Network, targeting a revenue milestone of $1 billion by 2028, accompanied by steady improvements 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 prospects. Over the past year, SHOPLINE maintained double-digit revenue growth, driven by the cross-border merchant base year double-digit expansion and its rising contributions to revenue.

While we have normalized SHOPLINE's R&D spending, backed by steady top line and growth profit gains, we see a clear and achievable path for SHOPLINE to reach breakeven while sustaining a double-digit revenue growth trajectory. Turning to capital return. In Q4, we repurchased 67.4 million 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 utilizing 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 possible measures to further enhance our shareholder return mechanism. In summary, our strategic blueprint and ecosystem potential are only beginning to unfold. We view 2026 as a fresh start toward our next phase of growth.

We remain focused on execution, and we are confident that sustained growth and profitability improvements will demonstrate our true value. Leveraging our integrated ecosystem, we remain committed to strengthening joint positions and delivering long-term value for our shareholders. Now let's begin from Alex Liu.

Thanks, Ms. Li. Hello, everyone. In the 4th 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%. This marks an inflection point of our top line trend on a year-over-year base since the 3rd 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 $160 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 worth of our shares, 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 booked $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. After the year of 2025, our total cash return to shareholders, including cash dividends, reached $332 million, which represents 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 1st quarter, $331.8 million of which was from BIGO segment, both up quarter-over-quarter. Our refined streamer initiatives and continued AI-driven optimization of our content distribution and paying user experience have contributed to improved paying sentiment, with BIGO's total paying users increased by 1.5%. Live streaming revenue from developed countries increased by 3.4% quarter-over-quarter. Our total non-live streaming revenues were $187.5 million during the 1st quarter. up by 47.6% year-over-year.

Non-live, non-live streaming now contributes 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 61.5% year-over-year and 23.3% 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 ad request was up by 166% year-over-year and 23% quarter-over-quarter in Q4. We continued to train and optimize our algorithms to further improve our campaign performance with strong advertiser spending. In Q4, the number of key cohorts was up by 29% quarter-over-quarter, with total spending from key cohorts up by 34% quarter-over-quarter.

Our multi-industry strategy has helped us capture broader market opportunities. Web-based demand was up by 20% quarter-over-quarter. Mobile-based demand continued to be strong, with ad spending up by 39% quarter-over-quarter. We have outlined our three-year strategic goal for BIGO Audience Network, which is maintaining high velocity growth and reaching three-year revenue milestones 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. Given the healthy economics of BIGO Audience Network at this stage, we are confident that as we scale, we will remain profitable and potentially further enhance BIGO Audience Network economics in the mid-term. 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-over-quarter due to a shift in our revenue mix, which saw an increased contribution from our lower-margin network ad revenues. Our other segments' gross margin was up by 5.1% 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 non-cash 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 interruption 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 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 $40.8 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 $30.3 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 last year and higher FX loss due to weakening US dollar this year. For the 4th 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 of December 31, 2025.

Shareholder return continued to be an important component of our capital allocation strategy. We have returned $197.3 million to our shareholders through dividends, and we 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. Additionally, in light of our strong performance and continued double-digit non-GAAP operating profitability improvements 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 ongoing commitment to drive operational improvement and enhance shareholder returns. Turning now to our business outlook.

At the group level, we expect our net revenues for the 1st quarter of 2026 to be between $538 million and $548 million. This implies an 8.8%-10.9% year-over-year growth for the group's revenue in quarter one, with live streaming revenues back to positive year-over-year growth, while BIGO Ads delivers mid-double digits year-over-year growth in the 1st quarter despite the impact of seasonality. As Ms. Li just mentioned, beginning in the 1st quarter of 2026, we are evaluating certain refinements to our segment reporting, and we are considering to report our results under three business segments, which includes social entertainment, BIGO Ads, and e-commerce SaaS. We believe the new segments will make it easier to see and understand our operational progress, particularly our new initiatives.

Looking ahead, we are extremely excited about their tremendous synergy potential and the powerful flywheel momentum that our business segments 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.

Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. When asking a question, please state your question in Chinese first, then repeat your question in English for the convenience of everyone on the call. Your first question today comes from Thomas Chong with Jefferies. Please go ahead.

Good morning. Thanks management for taking my question. I have two questions. The first one is about the live streaming business. Can management talk about the key factors for recovery, and how should we think about the long-term trend? My second question is about the 2026 outlook. Can management talk about the full year and revenue and profit guidance? Thank you.

Good morning. Thanks management for taking my question. I have two questions. The first one is about the live streaming business. Can management talk about the key factors for recovery, and how should we think about the long-term trend? My second question is about the 2026 outlook. Can management talk about the full year and revenue and profit guidance? Thank you. Good morning. Thanks management for taking my question. I have two questions. The first one is about the live streaming business. Can management talk about the key factors for recovery, and how should we think about the long-term trend? My second question is about the 2026 outlook.

Can management talk about the full year and revenue and profit guidance? Thank you. Good morning. Thanks management for taking my question. I have two questions. The first one is about the live streaming business. Can management talk about the key factors for recovery, and how should we think about the long-term trend? My second question is about the 2026 outlook. Can management talk about the full year and revenue and profit guidance? Thank you.

Thank you, Thomas. This is Ting Li. I will take your first question. In the 4th quarter, our live streaming business continued its sequential recovery with both paying users in our pool 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. 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 continue to grow at a healthy rate and deliver solid QoQ 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 they to have any negative impact on our performance for the new year. We will continue to advance our refined user segmentation, and also incentive upgrades, expand our high-quality content, global content offerings, and also better strengthen our global payment infrastructure. We also expect growing incremental contributions from our new product lineup. On these basis, we expect our live streaming revenue to be back to steady, positive year-over-year growth in the year 2026.

Hi, 大家好, Thomas.

对于您的第二个问题，我来回答一下。四季度其实我们可以看到集团收入实现了同比、环比的双增长。直播业务延续了环比增长的势头，已经连续三个季度环比增长。广告业务的增长呢是进一步加速的。展望2026年的一季度，目前我们的集团收入指引是实现同比8.8%到10.9%的增长。首先，直播业务侧我们预期一季度将恢复同比的正增长。但从环比角度来讲，今年的农历新年和三月都集中在一季度，和去年Q1情况是比较类似的。我们预期今年Q1还是会有季节性的影响。另外，Q1同样是广告业务的传统淡季，但我们仍然预期BIGO Ads将表现强劲，继续实现中双位数的同比增长。展望全年的话，我们对2026年的收入增长是非常有信心的。三条业务线的增长路径都非常清晰。首先，直播业务，正如我们前面提到的，去年一次性的调整已经基本到位了。我们预期直播业务会重新回到同比稳健增长的趋势上。其次，在广告业务方面，进入到2026年，流量规模在持续扩张，多个垂类的广告主的覆盖也是在持续加深。算法模型也在不断迭代优化。这几个维度的改善其实是相互叠加的，会让我们BIGO Ads全年保持强劲的两位数的同比增长。那么电商SaaS方面，随着产品能力的持续完善，重点市场跨境商户的快速渗透以及新市场的逐步拓展，SaaS业务也将维持两位数的营收增长，共同推动集团收入重回稳定的同比增长的轨道，并打开更广阔的赛道空间。利润方面，直播业务增长的同时，其实我们的成本结构也在持续优化。直播整体的利润将保持平稳的增长，但我们也会把其中一部分的利润投入到新的产品矩阵中来。第三方广告目前是处在一个高速扩张的阶段。今年在研发和销售团队的建设以及基建、带宽的投入上都会更加持续、更多的投入。但考虑在当前阶段，我们的盈利模型其实已经非常健康，我们有信心在保持盈利的基础上，随着规模的进一步提升，三方广告的盈利能力在中期可以持续增加。电商SaaS在收入增长的驱动下可以持续缩窄亏损，这个健康的趋势也是清晰可见。所以综合来看，我们预期2026年集团non-GAAP经营利润和EBITDA将延续2025年的改善趋势，实现同比近10%的稳步提升。

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 QoQ, with live streaming continuing its sequential recovery for third consecutive quarters, and our AdTech business continuing, like, accelerating its year-over-year growth. For Q1, our current guidance implies a year-over-year growth rate of 8.8%-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 Q1.

On a sequential basis, considering that the Lunar New Year and Ramadan both fall into one this 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 softer quarter 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 three 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 AdTech, entering into the year 2026, we continue to see traffic expansion, deepening penetration across multi verticals and also ongoing model optimization to drive our revenue growth in 2026. These drivers are mutually reinforcing, and together we believe that they support our expectation for a very strong double-digit year-over-year growth for BIGO Ads for the full year of 2026. On our e-commerce SaaS business, with 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 three engines will put our top line back to a very stable and positive year-over-year growth trajectory, and enabling us to tap into the massively broader long-term market opportunities as well. Looking at our profitability outlook for the year 2026, 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 AdTech business, particularly our third-party ad revenue audience network, is still in a high velocity growth phase. 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. Given the healthy unit economics of audience network at this stage, we are very confident that we will remain profitable. As we scale, we believe that we can potentially further enhance audience network's economics in the midterm. Looking at our e-commerce SaaS, we expect, as its revenue continue to grow, we can continue to narrow its operating losses and that its loss reduction trajectory is very clear on track.

Putting it all together, we expect the group non-GAAP operating income and EBITDA to continue our improving trend similarly as 2025 and deliver a steady year-over-year growth in the teens in 2026.

Thank you. Next question, please.

Your next question comes from Yuan Liao with CITIC Securities. Please go ahead.

感谢管理层接受我的提问，也恭喜这个季度取得非常强劲的业绩。那我的问题其实是关于广告的。我们也看到了，我们在上个季度，我们的一方和三方广告也实现了一个加速的增长。那同时，刚才CFO也指引了26 Q1，也有望实现一个中双位数的增长。那我想请问一下，这个我们26年的一季度的增长的驱动主要来自于哪些方面？Thanks for taking my questions.

Congratulations on the strong results. My question is regarding your advertising business. In last quarter, both our first party and third party advertising business achieved accelerated growth. You also guided that in the 1st quarter 2026, you will realize a mid-double digit growth rate in your advertising business. Could management elaborate on the key drivers of your advertising growth rate in the 1st quarter 2026? Thank you.

好的，谢谢您的问题。那这个问题先由我来回答。正如在prepared remarks里边所提到的，我们的广告预算组，它的预算结构是多元化的，包括保险为主的线索类广告、垂类的独立站电商垂类的、II垂类的这些客户。那这样的一个结构其实使我们的广告业务呈现了更加明显的季节性特征，所以体现在Q4的电商线索广告环增其实更强，而Q1的环比对比Q4来讲，其实是有一定的这个基数压力的。但是我们持续升级了我们整个广告系统的核心算法。在Q4的时候，我们重点优化的是ROAS、CVR等核心模型，融入了AI的标签、全渠道的用户行为等多元特征，并且加速了优化的投放策略。在这个同时，我们还推进了线索类、II、电商等多场景的算法适配，提高了算法效率，算法和策略的优化，使得Q4的广告主在留存和平均的投放预算上都不断地增加，并且不断地吸引了更多的新进的广告主。在这个同时，也使得我们的流量触达和变现效率有了持续的提升，形成了飞轮效应。所以这使得我们在淡季的时候依然可以期待比较好的表现。那目前我们的指引隐含了BIGO Ads将保持中双位数的同比增长。

Thank you for your question. This is Ting Li. As we mentioned in the prepared remarks, our advertiser mix is well diversified across different industries, including lead generation ads for insurance, direct to customer e-commerce, and also IAA, et cetera. Our current advertiser mix means that seasonality patterns could be very obvious, as shown in our sequentially very robust ad spend from e-commerce and insurance lead generation ads 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 models by adding additional AI signals and also multi-channel 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 optimizations also enabled us to effectively reach more traffic and also increase our monetization capability for publishers, which creates a flywheel effect. We believe that that creates a solid foundation for Q1. That's why even in a seasonally softer quarter, we still expect BIGO Ads to deliver mid-double-digit year-over-year growth, as implied in our current Q1 guidance.

Thank you. Next question, please.

Your next question comes from Brian Gong with Citi. Please go ahead.

Uh.

I will translate myself. Thanks, management, for taking my question, and congratulations on solid results. I think management mentioned that, 3P Ads scale is expected to reach over $1 billion in 2028, which is a very positive number. What are drivers behind these numbers, and how should we think about long-term profitability of 3P Ads business? Thank you.

谢谢您的问题，那我还继续回答这个部分。是的，我刚才有明确提到我们广告的这样一个长期的目标，因为在刚刚展望一季度业绩的时候，我有提到飞轮效应、流量、预算以及广告技术和策略的相互之间的促进，它们之间的相互的持续的优化和增长，这些都将贯穿BIGO Ads业务发展的全周期。所以具体来看，在流量侧，首先是需要接入更多的SDK流量和聚合平台，将推动我们整个流量规模内生性的这样的增长。同时我们将持续地拓展多渠道流量以及iOS流量的扩张。再其次呢，我们也会加速在美国、欧洲、日本市场的渗透以及潜在新市场的拓展。在整体的预算侧，除了现有的垂类外，我们还会持续探索更多的线索类广告的细分垂类，IAP和电商等，进一步提升各个垂类客户的数量和密度。在平台侧呢，随着流量和预算侧的扩张，我们将持续地迭代算法和数据，细化垂类的模型，优化投放策略。那所有上述的这些措施都在并行地推进，而且相互推动和相互之间有所促进。同时这也是我们第一次对外公布公开我们对BIGO Ads的中期战略目标。团队非常的优秀，那公司也集中了合力，都一起在努力。所以在2025年的交付，我们的成绩非常好。那现在的团队和公司正在为2026年以及后续的增长目标全力地推进中。我们对BIGO Ads的3P Ads业务持续保持高速增长，非常有信心。Thank you, Brian.

This is Ting Li. I will take your question. Yes. I just mentioned our midterm strategic goal for BIGO Ads. As we were talking about 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. To be specific, on traffic side, first, we expect further organic traffic growth as we are being integrated with a rising number of SDK publisher partners and also mediation platforms. We'll also continue to expand multi-channel traffic and also iOS traffic. Second, we'll accelerate our penetration into U.S., Europe and Japan, and also potentially other new regions.

On demand side, in addition to our current verticals, we're simultaneously exploring new verticals, including sub-verticals of lead generation ads, IAP and e-commerce. We expect to further increase both the number of clients and also our customer density within each vertical. On platform side, with the rapid expansion in traffic and also in demand, we are continuously iterating and optimizing our algorithm 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. This is the first time we're 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.

We deliver outstanding results in the year 2025. Right now, the team and the company is fully committed and pushing forward aggressively toward our strategic targets for the year 2026 and beyond. We remain highly confident in the continued high velocity growth of BIGO Ads, particularly the third-party audience network proportion. Thank you. Next question, please.

The next question comes from Xueqing Zhang with CICC. Please go ahead.

Thanks, management, for taking my question. My question is on SHOPLINE. Can management provide more color on the current business momentum of SHOPLINE and the key drivers behind its growth? How should we think about the path towards narrowing losses and eventually achieving breakeven, both in terms of strategy and the timeline? Thank you.

It is our value to empower our merchants to capitalize on GMV growth, and our monetization is based on the take rate of that growing GMV. In the past several years, SHOPLINE's core mission has been product excellence, and we've made substantial investments in our R&D to evolve from a storefront builder to a full stack e-commerce ecosystem, seamlessly combining SaaS infrastructure, payment, and also integrates the marketing tools into one powerful closed loop. Since last year, our R&D investment has greatly stabilized. Our cross-border merchants, particularly brand customers, have grown rapidly, and our revenue and gross profit growth have driven improving operating leverage, resulting in our significant reduction 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 fully committed to achieving break even for SHOPLINE in 2028. One last question, please. Thank you.

Your final question today comes from Raphael Chen with BOCI Research. Please go ahead.

We noticed that the Company distributed an additional cash dividend this quarter. Could management share the underlying considerations behind this? Also, given current valuation, does the Company intend to further accelerate share buyback? Thank you.

Alex.

Thank you, Raphael. This is Alex. I will take your question. First, looking back at 2025, our capital return execution has been 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 competitive level within the industry. Additionally, in line with our strong operating performance and double-digit improvement in our non-GAAP OP in 2025, 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 one quarter, in Q4. We believe we are still undervalued and we will continue to actively execute our buybacks going forward. 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 even greater returns. Okay, 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 is now concluded. Thank you for attending today's presentation. You may now disconnect.