JOYY Inc. (JOYY) Q4 2025 Earnings Call Transcript

Ladies and gentlemen, thank you for standing by, and welcome to Joy Inc.'s fourth quarter and full year 2025 earnings call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, there will be a question and answer session. I'd now like to hand the conference over to your host today, Jane Scheer, the company's Senior Manager of Investor Relations. Please go ahead, Jane.

Thank you, Operator. Hello, everyone. Welcome to JOY's fourth quarter and four-year 2025 earnings conference call. Joining us today are Ms. Ting Lee, chairperson and CEO of JOY, 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.joy.com. The replay of this call will also be available on our website in a few hours. Before we continue, I would like to remind you that we may make forward-looking statements, including but not limited to the future development of our products and businesses, the expected future financial performance of the company, our share repurchases, and other future events which are inherently subject to risk and uncertainties that may cause actual results to differ from our current expectations. For detailed discussions of the risk and uncertainties, please refer to our latest annual report on Form 20F and other documents filed with the SEC. We will also discuss certain non-GAF 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-GAF 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 on U.S. dollar. I will now turn the call over to our chairperson and CEO, Ms. Ting Lee. Please go ahead.

Hello, everyone. I'm Lee Ting. Thank you for joining us today. In 2025, our group revenue and social entertainment business regained growth momentum since Q2. And we saw meaningful progress in our second growth curve of Aztec 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 a sequential recovery trend. Well, our advertising platform saw accelerated top-line growth. Meanwhile, we profit 7% QQ and 5.9% year-year. We're presenting our fourth positive year-year growth of 2024. Live streaming revenue was $394.4 million, up 1.5% QQ, marking three consecutive quarters of sequential growth. Bigel A's, including both first- and third-party A's, generated $128.1 million in revenue, up 61.5% year-year, with third-party audience network revenue growth accelerating to 82.5% year-year. Overall, non-lifestreaming business contributed 32.2% of total group revenue. Non-GAAP operating profit stood at $40.8 million and operating cash flow totaled $116 million. In the last four-year, total revenue was $2.12 billion. Live streaming contributed $1.53 million, while BeagleAids contributed $398.5 million, up 38.5% a year. In particular, we got a third-party age revenue audience network delivered 56.3% year-to-year growth. Non-life streaming businesses represented 28% of total revenue, 0.9 percentage point compared with 2024. In light of our strong performance and continued double-digit non-gap option, we share our strategic forecast on Outlook. We are currently evaluating refinements to our segmented reporter structure. 2026, becoming a multi-engine technology consented structure information to QQ, citing new monthly records. 2026, we expect continued recovery. The paying users are approved for our flagship professional refinance, momentum, over-MAUS, quenched revenue, and profit growth. The traffic also amplified vertical stretching across the percent to continue to 21% QQ and Western Europe rising 46%.

All to question.

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 today comes from Thomas Chong with Jefferies.

Please go ahead. 如何看直播业务长期的发展趋势呢? 第二个问题是关于我们今一年传年的收入还有利润的经营。谢谢。 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? And my second question is about the 2026 outlook. Can management talk about the full year and revenue and profit guidance?

Thank you. 激励机制 内容的生态搭建 还有AI在内容分发和用户内容消费 以及VIP付费用户的体验改善等多个方面进行了优化 那这些AI驱动的用户体验的改善也进一步推动了付费转化率的持续提升 从区域来看的话 这轮的复苏主要是由发达国家的市场营收的复苏来驱动的 In the new product, the whole thing is actually achieved a good quality growth. In 2016, the new product has been mentioned before. The new product has been done by the new product, and will not affect the new product in the 2026. So in this foundation, we will continue to promote the new product of the different production and the new product. And the new product has been improved by the new product. And the new product has been improved by the new product.

In the fourth quarter, our live streaming business continued its sequential recovery with both paying users and 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. And these AI-driven optimizations have continued to translate into meaningful and sustainable improvements in our paying conversion efficiency. Geographically speaking, this recovery has been primarily driven by the developed market. Our new product lineup continues 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 have been fully implemented, and we no longer expect they to have any negative impact on our performance for the new year. And we will continue to advance, refine user segmentation and also incentive upgrades to expand our high-quality global content offerings and also better strengthen our global payment infrastructure. And we also expect growing incremental contributions from our new product lineup. So on this basis, we expect our live streaming revenue to be back to steady positive year-over-year growth in the year 2026. The second question, let's first take a quick look at our group revenue in Q4 to deliver a very solid growth, both year-over-year and QOQ, with live streaming continuing its consequential recovery for third consecutive quarters, and our ad tech business continuing revenue to be back. Lunar, New Year, and Ramadan both fall into one of the year, similarly as last year, with softness for live streaming. Advertising, Q1 is also usually a stop-to-culture for advertising as well, but we still expect very robust performance from Beagle Ads and price mid-double-digit year-over-year growth for Beagle Ads. For the full year, based on the current momentum that we're observing across the three business units, we're very confident that year-over-year revenue growth for 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 ATTAC, entering into the year 26, we continue to see traffic expansion, deepening penetration across multi-verticals and also ongoing model optimization to drive our revenue growth in year 26. And these drivers are mutually reinforcing, and together we believe that they support our expectation for a very strong double-digit year-over-year growth for Beagle Ads for the full year of 26. 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 26, we expect stable operating profit contribution from live streaming. With live streaming now returns to growth, along with continued cost optimization, we expect live streaming continue to generate a stable, improving profit, although we do expect to selectively reinvest some of our incremental profits into the new social product lines. Our ad tech business, particularly our third-party ad revenue audience network, is still in a high-velocity growth phase. And in the near term, this means that we will need to invest in the expansion of our R&D and sales capabilities in addition to our network and computing infrastructure, but given the healthy unit economics of audience network at this stage, we are very confident that we will remain profitable, and as we scale, we believe that we can potentially further enhance audience network's economics in the midterm. Looking at our e-commerce thoughts, we expect as its revenue continues to grow, we can continue to narrow its operating losses and that its loss reduction trajectory is very clear on track. And put it in all together, we expect the group non-GAAP operating income and EBITDA to continue our improving trend similarly as 25 and deliver a steady year-over-year growth in the teens in 2026. Thank you. Next question, please.

Your next question comes from Yuan Liao, what's 30 CS? Please go ahead.

Thanks for taking my questions, congratulations on the strong results, and my question is regarding your advertising business. So in last quarter, both our first party and third party advertising businesses achieved accelerated growth, and you also guided that in the first quarter, 2026, you will realize a mid-double-digit growth rate in your advertising business. So, could management elaborate on the key drivers of your advertising growth rate in the first quarter of 26? Thank you.

好的, thank you for your question. That's the question I'll answer. As I mentioned in the prepared remarks, our advertising team's plan is multi-dimensional. 包括保险为主的线索类广告,锤类的,独立站电商锤类的,IA锤类的这些客户,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,还增其实更强,而Q1的环比对比Q4来讲,其实是有一定的这个基础压力的。 但是我们持续升级了我们整个广告系统的核心算法 在4Q的时候 我们重点优化的是Royce 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 我们还推进了线左类 IAA 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 投放预算上都不断的增加 并且不断的吸引了 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 Thank you for your question. This is Li Ting.

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 pattern could be very obvious, as shown in our sequentially very robust ad spend from e-commerce and interim lead generation ads in Q4, while Q1 is typically sequentially softer, particularly due to our Q4's high comparison base. That said, we kept upgrading our core algorithms in Q4. We focused on improving our ROAS and 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 advertiser, and also attracted new during the quarter. Such optimizations also enabled us to effectively reach more traffic and also increase our monetization capability for publishers, which creates a flying wheel effect. And we believe that that creates a solid foundation for Q1. That's why even in a seasonally soft quarter quarter, we still expect Vigo apps 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 Sophie.

Please go ahead. 华力诚如何看待如何展望这个业务的未来的盈利潜力 长期的一个盈利潜力 谢谢 I will trust it myself Thanks to management for taking my question And congratulations on solid results I think management mentioned that 3PS scale is expected to reach over 1 billion US dollars in 2028 Which is a very positive number what are drivers behind these numbers and how should we think about long-term profitability of 3PS business?

Thank you. 持续的优化和增长 这些都将贯穿 BigOA的业务发展的全周期 所以具体来看 在流链侧 首先是需要介入更多的FDK流量和聚合平台 将推动我们整个流量规模内生性的这样一个增长 同时我们将持续的拓展多渠道流量 以及LS流量的拓张 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 在整体的预算册 除了现有的锤类外 我们还会持续探索更多的线索类广告的细分锤类 IAP和电商等 进一步提升各个锤类客户的数量和密度 呃 在平台测呢 随着流量和预算测的扩张 我们也将持续的迭代算法和数据 呃 细化锤类的模型 优化投放策略 呃 那所有上述的这些措施都在并行的推进 而且相互推动和相互之间有所促进 呃 同时这也是我们第一次对外公布 Thank you, Brian.

This is Leetting. I will take your question. Yes, I just mentioned our mid-term strategic goal for bigger ads. When 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. We'll continue to be long-term drivers throughout the entire development of Beagle ads. And to be specific, on traffic sites, we expect further organic traffic growth as we are being integrated with a rising number of SDK publishing partners and also mediation platforms. We'll also continue to expand multi-channel traffic and also iOS traffic. And second, we'll accelerate our penetration into the U.S., Europe, and Japan, and also potentially other new regions. On the 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. and 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. So this is the first time we're disclosing our midterm strategic goals for Beagle Ads. The team is exceptionally talented, and also the company has dedicated additional resources to work together to that goal as well. And we deliver outstanding results in the year 25. Right now, the team and the company is fully committed and pushing forward aggressively toward our strategic targets for the year 26 and beyond. We remain highly confident in the continued high-velocity growth of VEGO ads, particularly the third-party audience network proportion. Thank you. Next question, please.

The next question comes from Suqing Zhang with CICC.

Please go ahead. 问题是关于Suppline的,管理层能否展开讲一下目前Suppline业务的状态以及增长的驱动力? 那我们该如何展望Suppline逐步扭亏,最终达到盈亏平衡的路径和时间表? 谢谢。 Thanks, management for taking my question onSuppline. Can management provide more color on the current business momentum ofSuppline and the key drivers behind its goals? And how should we think about the path towards narrowing losses and eventually achieving break-even both in terms of strategy and timeline? 可连接数据由卖家拥有 并且可以持续地去运营和营销 并且它和传统的SaaS去卖这种座位席的这种收费方式不同 ShopLite的收入模式更多地来自于为卖家提供了GNV的增长动力所带来的GNV Take Rate 所以在过去几年 ShopLite的核心命题一直是产品能力 投入了 brands cũng được emil choice of research 將整個產品的厚度 升級到電商的整個生態系統 成為電商 삶加支付解決方案 再加營銷整合的這樣一個完整的 GNV的可以驅動的壁環 從去年開始 we整個的研發投入已經非常的穩定 有品牌客戶主導的跨境電商客戶 等區域的經營快速的增長 这里我们看到收入和毛利的增长 推动了真正的经营杠杆 带来了Shopline亏损的大幅减少 那整个商业模式的验证 以及目前经营毛利的增长 让Break-Even的这个趋势 是非常的清晰 而且可持续的 所以我们期待并且全力的在推进 Shopline会在2028年实现盈亏平衡 Thank you.

This is Li Ting. I will take this question. We remain optimistic on the long-term prospects of the SaaS-based e-commerce sector. Unlike WorldGuard and Marketplace platforms, ShopLine provides an open and extensive solution to merchants through which the merchants can have full data ownership for advanced operations. And also quite distinctive to traditional SaaS monetization model, we don't charge by usage per person. We realize our values through empowering our merchants to capitalize 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. And since last year, our R&D investment has greatly stabilized. Our cross-border merchants, particularly grand customers, have grown rapidly, and our revenue and gross profit growth have driven on 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 break even. 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. 公司是否有议员进一步提速股票的回购 我来翻译一下 我们先回顾一下二维党非常机器的 变现新一维

Looking back at 2025, capital return execution has been very, very robust. Under our current shareholder return program, we paid out approximately $197 million in dividends and repurchased approximately $135 million worth of shares throughout the year, bringing our total shareholder returns to surpassing $330 million. That represents around 10.9% of our current market cap, which we believe is a very, very competitive level within the industry. Additionally, in light with our strong operating performance and double-digit improvement in our non-GAAP OP in 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. And on buyback, we nearly doubled our repurchase execution in Q4, buying back additional $67.4 million in one quarter in Q4. We believe we're still undervalued, and we will continue to actively execute our buybacks going forward. So, looking forward, we're entering into the new phase of growth with our revenue back growth and also operating profits continuing to improve we believe that our shareholders can look forward to sharing even greater returns okay so that was the last question and 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