JOYY Inc. (JOYY) Q2 2026 Earnings Call Transcript

Ladies and gentlemen, thank you for standing by, and welcome to Joy Inc.'s second quarter 2026 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, Sinyuan Liu, the company's Head of Investor Relations. Please go ahead, Sinyuan.

Thank you, operator. Hello, everyone. Welcome to JOI's second quarter 2026 earnings conference call. Joining us today are Ms. Qing Li, chairperson and CEO of JOI and Mr. Alex Liu, vice president of finance. For today's call, management will provide a review of this quarter followed by a Q&A session. The financial results and webcasts of this conference call are available on our website ir.joi.com. Please know that today's code contains forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. For detailed discussions of these risks and uncertainties, please refer to our latest annual report on Form 20F and other documents filed with the SEC. Please also note that Joyce Earnings Press release and this conference call include disclosures of GAAP and non-GAAP financial matters. A reconciliation of these non-GAAP measures to GAAP measures is included in today's Earnings Press release. All figures referenced on today's call are in U.S. dollars, unless otherwise noted. I will now turn the call over to our chairperson and CEO, Ms. Qing Li. Please go ahead.

Hello everyone, I'm Li Ting. Thank you for joining us. Building on a strong first quarter, we delivered another solid result in Q2. Recording accelerated revenue growth and notably improvement in upgrading profit. Our social entertainment, bigot aid, and shop line business all advanced in tandem, while our globally diversified ecosystem continued to unlock growth momentum, propelling our long-term value to its next level. In the second quarter, we generated total revenue of $591 million, up 16.3% a year. and 6.3% QQ. Social entertainment revenue was $423 million, up 7.4% year-year and 5.6% QQ. Bigger A's, including both first-party and third-party businesses, generated $134 million in revenue, up 53.1% year-year, with our third party Beagle Audum's network sustaining strong growth of 74.1% year-year. Shopline revenue reached $34 million, with year-year growth further accelerating to 28.6%. Non-Live Streaming Revenue supports 31.8% of total revenue for the quarter. Non-GAAP Operating Profit reached 49 million, up 28.2% year, and non-GAB EBITDA reached $57 million, up 18.1% year-year. The trading cash flow for the quarter was $65 million. As of January 30, 2026, we held $3.06 billion in net cash. Since the start of this year, we have accelerated our capital returns. Year-to-Data through August 21, 2026, we repurchase accumulative $215 million in share and paid $142 million in data for total return of $359 million in shareholders. Meaningful shareholders' returns remain a key part of our strategy as we continue to execute our 1.5 billion shareholder return program running through the end of 2028, which our board organizes this month. At this mid-year mark, I would like to take a few minutes to share our perspectives on our overall strategy. Today, Joy is steadily evolving into a multi-engine global technology company. In the first half of this year, the core social entertainment business maintained a steady recovery, with all flagship products returning to solid growth and profitability continuing to improve. This further validates the effectiveness of the judgments we have made to our content ecosystem, user experience, and localized operations over the past several quarters. At the same time, our second growth curve comprising ad tech and smart commerce such a strong performance, making an increasingly greater contribution to the group. We remain committed to building a global technology ecosystem driven by AI. By leveraging the synergies of social entertainment, programmatic advertising, and omnichannel e-commerce, We are fueling our growth's fly view and building the core competitiveness that will define our future. First, social entertainment remains an important strategic cornerstone for the growth. We will continue to strengthen the growth momentum and the profitability of our core products, while accelerating the build-out of our social product portfolio. These initiatives are expected to further reinforce the recovery trend and the growth resilience of our core business, providing a stable foundation for profitability cash flow generation. At the same time, we are cultivating our ad tech and smart commerce businesses to boost overall revenue expansion. We will prioritize enhancing the stand-alone competitiveness of each business, expanding our customer base and business footprint, and further depending on our data, technology, and product capabilities. Moving ahead to 2028, as this business continues to scale, we currently expect non-live streaming segments to contribute close to half of the group's total revenue and operating profit. We see this as a testament to the strength of our monkey engine growth strategy and validation of our long-term strategic approach. AI is a critical, foundational technology supporting our long-term strategy across all of our businesses. We continue to leverage AI to drive mirable products, enhancements, and efficiency gains across the range of scenarios, including our streamer ecosystem, content distribution, payment experience, advertising vertical models, and the shopline merchant operations. We are also applying AI to enhance our data analysis, decision making, and execution capabilities. By turning proven experience and the workflow into replicable AI capabilities, we can accelerate knowledge sharing and skill best practices further improving overall upgrading efficiency addition to our long-term business development shareholder returns remain a persistent strategic priority of a strong cash position and robust operating cash flow provide a solid foundation for ongoing business investment and shareholder returns. We expect to continue actively advancing our share reportage and the dividend programs as the company grows over the long term. We remain committed to validating the strategic path through solid operating results, driving great market recognition of our long-term I will walk through our Q2 results and share our outlook for the future. In Q2, social entertainment revenue grew 7.4% year-year and 5.6% QQ. Within this segment, live streaming revenue grew 7.3% year-year and 5.9% QQ. Call live streaming paying users grew 3.9% per year and 1.7% QOQ. On the traffic side, our global average mobile MAUs reached $277 million, up 5.5% per year, supported by strong user engagement and organic growth. Our instant messaging product increased its contribution towards total annuals to 82%. Bigel Life, our flagship product, recorded stronger sequential growth in Q2. This momentum was driven by ongoing enhancements to our streamer incentive and growth mechanism, a read content ecosystem, and AI-powered improvements to content distribution and payment experiences. Alongside localized up-reading campaigns, together, these efforts effectively drove user engagement and greater willingness to pay. In Q2, bigger lives average daily active streamers increased 4.4% Q2, while newly signed streamer growing lives increased 5.4% Q2. As we further enhance our streamer recruitment, incubation, and development mechanisms the supply of high-quality content on our platform should continue to expand. In content distribution, we continue to develop and refine our AI-driven content understanding capabilities. In particular, our focus is on improving onboarding content for a few users and the depending users consumption. By distribution high-quality content across regions. We can better match content with users' interests and improve their consumption experiences. To improve payment experience, we have been expanding our AI-generated content and interactive virtual gifts. In May, these gifts are quoted for 34.3% of total virtual gift consumption. Further, validating the value of AI in reaching our content supply and enhancing users' interactive experience. At the same time, our few new voice products continued to drive solid growth. In Q2, revenue from these new products increased more than 400% year-year and 39% QQ, gradually becoming a meaningful completement to our social entertainment growth. Our current Q3 guidance projects moderate single-digit year-year growth for social entertainment revenue. In the second half, we will continue to strengthen localized operations, enrich content supply and further optimize user and payment experiences. As call live streaming paying users expand steadily and our new voice product portfolio contribute to further incremental growth, we expect stronger momentum for our social entertainment business. Based on current trends, we are confident that our social entertainment business will achieve four-year revenue growth in 2026 and such a daily growth trajectory beyond. In Q2, Bigel Aids generated $134 million in revenue, up 53.1% year-year and 7.1% QQ. notably our third-party business the bigger audience network continued a strong momentum delivering seventy four point one percent year-year girls and the nine point three percent QQ growth accelerating traffic expansion a more diversified advertiser mix omni-channel positioning and the significant algorithm efficiency gains are all strengthening the fly-view effect because A's developer ecosystem and the global traffic coverage continued to expand. Our SDK traffic maintained a steady increase of 37.7% year-year in Q2. On the On the demand side, our strategy presents across multiple verticals, combined with AI-driven algorithms, integration, zero-in traffic scale, and regional market expansion drove strong advertiser demands. As a result, performance advertising demands across multiple channels, including web and and IAA, delivered standout result, web-based demand, primarily from lead generation and e-commerce, grew 91.7% year-year and 14.4% QQ. In Q2, we continued to expand our advertiser base in sub-verticals set to base-based e-commerce. Further, in reading our advertising mix, as we approach the peak seasons in the second half, we are making early pay perishes in Q3 and remain optimistic about the growth prospects of web-based demand. Meanwhile, NIA spending recorded 70.3% per year growth. Algorithm side continued investments in algorithm and engineering infrastructure, platform algorithm, capability, and cost efficiency and converting into a positive circle that will drive the next stage of bigger edge development. As we accumulate our customer feedback data and refine our multi-channel attribution capabilities, our user profiling and targeting capabilities are improving. Building on this, we continue to integrate our vertical-specific models and strengthen our platform algorithm capabilities. We are focusing on traffic segmentation and budget matching, traffic bidding and post-campaign optimization. Together, these efforts are improving the matching efficiency between budget and traffic. We have an overall monetization efficiency. At the same time, we are advancing our algorithms and engineering systems and continuously optimizing compute scheduling and several costs, which allow us to manage infrastructure costs more efficiency even after our three-layer system of vertical algorithm, platform algorithm capabilities, and engineering infrastructure. The data accumulated from growing customers and traffic-based will feed back into model optimization if you drive value of forecast such as lead generation, e-commerce, and gaming. We aim to further bolster of a different shortage competitive advantage by expanding customer scale and the very more regional continues to profitability

to the revenue revenue growth 23 million for 7.5 streaming revenue growth 0.3 percent year-over-year and 5.9 percent quarter-over-quarter further After confirming the recovery momentum of our call business, call-like streaming paying users increased by 3.9% year-over-year, while apps returned to positive growth up 2.4% year-over-year. Live streaming revenues from developed countries continued to deliver strong growth, increasing by 11.8% year-over-year. Beagle ads revenues increased by 53.1% year-over-year and 7.1% quarter-over-quarter to $174 million. In particular, our short-party advertising business, Beagle Audiences Network, delivered another exceptional result, recording 74.1% year-over-year and 9.3% sequential growth. The traffic front SDK network and ad request increased by 37.7% year-over-year in the second quarter. Optimized our organization to improve ad campaign performance and drive at a multi-vert 91.7% year-over-year, while mobile-based demand remained strong with RAA spending up 70.6% year-over-year. We remain for a strategic goal for big-goal audience network of 1 billion in revenue. It continues to scale. We are confident in its ongoing profitability with room to further improve its economics over the medium term. supply to 28.6% year-over-year and a 12.5% quarter-over-quarter. Revenue from cross-border merchants increased by 73.5% year-over-year while its revenue contribution rose by 7.2%, making aid of supply over 10 quarter-over-quarter. With growth margin 34.1%, it continued to improve user engagement and monetization. Legal ads growth margin was down quarter over quarter due to reflecting a higher contributing revenues. Primarily, driving by a lower margin value added service. market that investment is above the late 8 million percent year-over-year and 2.6 percent for market expenses were higher year-over-year due to increased share based compensation expenses R&D expenses were lower year-over-year as we remained prudent and disciplined in our total spending through enhanced resource sharing and original synergy with these units, while strategically allocating incremental shares of our R&D resources towards bigger than $49 million over a year and 29.4% quarter over quarter. Non-GAAP net income attributable to controlling interest of joy in the quarter was 63 million representing a non-gap net margin of our non-gap net income was lower year-over-year due to a higher FX loss of 14 million and the US dollar vacant they have be 77 million broadly in line with their prior year second quarter of 2026 we booked net cash inflows from operating activities of 65 Our balance sheet remains healthy with a strong net cash position of $3.06 billion as of June 30, 2026. Moving to capital, an important component of our capital allocation strategy 21, 2026. We have retained $59 million to our shareholders through dividends and share repurchase this full amount retained to shareholders for the full year of 2025 our share repurchase program outlook driving by continued growth momentum across our social entertainment vehicle ads and software business they expect our total net revenues for the third quarter of 2026 to be between 602 million and 622 million, implying year-over-year revenue growth of 11.4% to 15.2% in delivering solid revenue growth across the group. On the profitability front of regional performance in the first half of the year, an enhanced operating leverage from improve the efficiency across our business segments. We now expect the group's full year 2026 non-GAAP operating income to grow around the 20% year-over-year after our previous expectations of teens level growth of results in the second quarter with all three encouraging growth and operating profitability continue to improve looking ahead we remain confident in our growth outlook and the views they focus on improving operating efficiency sustaining profitability growth and creating long-term value for our shareholders that concludes our prepared remarks operator 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 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 Suqing Zhang with CICC.

Please go ahead. 我的问题是关于直播业务的 我看到公司的社交娱乐业务下的直播收入二季度实现了同比环比双增长 那能不能请管理层帮我们阐述一下这个复苏的一个可持续性以及后续的展望 谢谢 Thank you for taking my question and congratulations on this John Carter My question about live streaming business Yes, we see live streaming revenue return to both year-on-year and quarter-on-quarter growth in the second quarter. Could measurement elaborate on the sustainability of this recovery and share your view on the longer-term outlook for the live streaming business? Thank you.

Okay, thank you. 多个方面进行了优化,这些AI驱动的用户体验改善,进一步推动了付费转化率的持续提升,所以核心直播付费用户同比增长了3.9%。 从区域来看,这轮复苏继续由发达国家市场的收入增长驱动,中东地区在新语音产品矩阵的增长驱动下也实现了不错的环比增长。 目前来看,我们三季度指引预示了社交娱乐业务将继续录得低个位数至中高个位数的同比增长 随着核心直播付费用户的稳步增长,以及新语音产品矩阵进一步贡献增量 我们预计社交娱乐业务的增长动能将能够持续增强 基于目前的业务趋势,我们有信心推动社交娱乐业务在2026年实现全年收入同比震增涨,并在此基础上保持稳健的发展态势。 In Q2, we continue to optimize across multiple areas, including streamer incentive mechanisms, content ecosystem development,

and AI-driven improvements across content distribution, user content consumption, and payment experience. These AI-driven enhancements to the user experience further drove sustained improvements in pain conversion rates. Therefore, our core live streaming pain users grew through 3.9% year-over-year. From a regional perspective, this recovery continues to be driven by revenue growth in developed markets. The Middle East market also delivers solid sequential growth, driven by our new voice product portfolio. Our current third quarter guidance projects moderate single-dated year-over-year growth for social entertainment revenue. As core live streaming paying users continue to grow steadily and the new voice product portfolio contributes further incremental gains we expect the growth momentum of our social entertainment business to continue strengthening based on current trends we are confident that our social entertainment business will achieve full year revenue growth in 2026 while maintaining steady business momentum. Operator, next question, please.

Your next question comes from Daniel Chen with JP Morgan. Please go ahead.

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

Thank you. 在流量测,我们和Mac,LevelPlay等聚合平台的合作有持续地去深化,全球流量的覆盖进一步扩大,FDK的流量保持了稳健的增长。 在预算测,多元锤类的战略布局成效进一步会显现,在线索收集,网页电商和IA游戏等锤类的持续深耕下,Q2的Web端的广告预算同比增长了91.7%, IAA 广告预算同比增长了 70.6% 同时我们也在持续地探索更多的线索广告的细分锤类 进一步提升各锤类的客户数量和密度 在平台测 随着流量和预算的扩展 我们持续迭代了算法和数据的能力 细化了锤类模型 优化了投放策略 同时继续推进算法和工程体系的智能化升级 At the same time, in case of the network and information, we also will continue to look for more of the sessions and more of the Ahíse. On the same page, following the severity and probability of the comparison, we will continue to get down the understanding and data capabilities, in a way to build a more strategic strategy and look for the right officials and look for tuer. 同时继续推进算法和工程体系的智能化升级,优化算力调度和机器成本,在业务请求量快速增长的同时,更高效地控制了基础设施的成本,为规模扩张提供了核心支撑。 基于目前的业务趋势,我们对 BeagleAge的三方广告业务继续保持强劲增长充满信心,在利润率方面,三方广告目前仍然处于一个快速扩张的阶段,那今年在研发销售团队的建设以及资源设施上需要持续的投入,但是当前业务的单位经济模型还是健康的,

Thank you, Daniel, for your question. I will take your question. In the second quarter, our third-party advertising business sustained a strong growth momentum, with revenue increasing 74.1% year-over-year and 9.3% quarter-over-quarter, exceeding our previous expectations. Growth in traffic and advertiser budgets together with continued improvements in our advertising algorithms further strengthen our business flywheel. On the traffic side, we continue to deepen our partnerships with mediation platforms such as max and level play, further expanding our global reach while maintaining steady growth in SDK traffic. On the demand side, our strategic presence across multi-verticals continue to drive strong advertiser demand. Leveraging our established capabilities across lead generation, web e-commerce, and in-app advertising, our second quarter web-based demand grew 91.7% year-over-year, while IA spending grew 70.6% year-over-year. At the same time, we continue to expand our advertiser base in sub-verticles across lead generation and other key verticals, further enriching our advertiser mix. On the platform side, as traffic and budgets expand rapidly, we are continuously iterating our algorithms and data capabilities, driving more vertical-specific optimizations and enhancing our bidding and delivery strategies. At the same time, we are advancing AI-driven upgrades to our algorithm and engineering systems, optimizing compute scheduling to manage infrastructure costs efficiently, even as request volumes grow rapidly. Based on current business trends, we are highly confident that our third-party advertising business will continue to deliver strong growth. Turning to profitability, our third-party advertising business is doing a rapid expansion phase requiring continued investment in research and development, sales capabilities, and infrastructure this year. That said, this business has healthy unit economics giving us confidence that we can remain profitable, while steadily improve margins over the medium term, as we scale. Operator, next question, please.

The next question comes from Thomas Chong with Jefferies. Please go ahead.

早上好,谢谢管理层接受我的提问,也恭喜很好的一个 result. 我的问题是关于我们传年的营收还有利润的经营的。 我的问题是关于我们传年的营收还有利润的指引的。 管理层可以分享一下在不同的各个业务线那边我们今年年的营收还有利润的指引。 Hi, good morning. Thanks to management for taking my questions, and congratulations on a very strong set of results. My question is about the full year outlook. Can management comments about the 2016 revenue and profit guidance across different business segments?

Thank you.

We'll see you next time. 非常高的确定性的增长动力 将推动Big Edge全年实现一个中收位数的同比增长 Sophan方面的话 随着产品能力的持续完善 跨境商户的快速渗透以及新市场的拓展 为全年的收入的加速增长也带来了动能 我们预期Sophan的业务同比增速较2025年会进一步加快 全年会有20%以上的营收的增长 随着三条业务线今进入到了一个上升通道 我们对2026年集团的收入增长还是非常有信心的 经营利润方面的话展望第三季度 我们预期集团党GAP的经营利润同比会延续增长的趋势 那从全年来看的话 社交娱乐业务在直播业务重回稳健增长的同时 那么整个直播业务整体的经营利润将保持小幅的增长 那么对于BQS来讲的话 随着收入规模的进一步提升 中期盈利能力也是有望持续增强的 而Supportline的运营费用是相对稳定的 在收入毛利持续不断增长的驱动下 预期这个亏损会进一步的收窄 那么综上来看的话,基于上半年整体的经营表现是比预期要好,以及各个业务的经营效率提升所带来的经营杠杆,我们预计2026年全年non-gap的经营利润同比的增幅有望达到约百二十,对,这个是我们调高的指引。 那从净利润层面上来看的话 我还是想解释一下 外汇损益这个科目 由于美元对人民币 持续的走弱 我们上半年 以及预期三季度 都会有比较大的 未实现的一个汇兑损失 这会影响到我们的净利润 但这部分是与运营表现无关的 属于账面的浮动的盈亏 那么在美元升值的时候 又会产生相应的账面的 未实现汇兑的收益 对

Good morning Thomas. Thank you for your question. Looking ahead to the third quarter of 2026, our current guidance implies 11.4% to 15.2% year-over-year growth for our total revenue. By business segment, for social entertainment, we expect the third quarter revenue to deliver moderate single-digit year-over-year growth. BOS will continue to deliver strong double-digit year-over-year growth in Q3. For Shopline, we expect it to remain more than 25% year-over-year growth. For the full year 2026, we expect social entertainment to deliver steady year-over-year growth. For BigOS, with continued traffic expansion, deepening multiple vertical advertiser base and ongoing algorithm optimization, we expect strong mid-double-digit year-over-year growth for the full year. For shop line, supported by maturing product capabilities, accelerating cross-border merchant penetration, and new market expansion, we expect its year-over-year growth to further accelerate, exceeding 20% year-over-year growth for the full year 2026. With all these three segments on an upward trajectory, we are confident in the solid revenue growth for 2026. Regarding operating profit, looking at the third quarter, we expect our non-DAAP operating profit to continue its year-over-year growth trend, while operating expenses are expected to rise slightly, quarter-over-quarter, due to the seasonality of certain cost items. For the full year 2026, regarding social entertainment, as live streaming returns to steady growth, overall life-streaming operating profit will maintain modest year-over-year growth. As we mentioned earlier, with continued scale expansion, bigger as mid-term profitability is also expected to steadily enhance. For shop line, with relatively fixed operating expenses, the growth of revenue and gross profit will continue to grab narrowing of its operating losses. In summary, based on the better than expected overall operating performance in the first half of the year, as well as the operating leverage brought about by improved operating efficiency across businesses, we expect our full year net gap operating profit to achieve around 20% yield growth in 2026. We guided up our guidance. For net profit, I would like to add on a little bit regarding the foreign exchange loss items. Due to the continued weakening of the US dollar, we recorded significant unrealized foreign exchange losses in the first half and we expect a similar trend in the third quarter. However, these are non-operational mark-to-market fluctuations and are unrelated to our underlying operating performance. Conversely, a strengthening U.S. dollar would also result in unrealized foreign exchange gains. Operator, next question, please.

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

Hi, everyone. Hello, everyone. First of all, congratulations on this業界. And I want to ask you about ShopPlan. 这一块的,就是工资明确Shopeline目标在2028年实现盈亏平衡,能不能请管理层展开讲一下目前的这个业务的状态和增长的这个 driver,以及未来纽亏的一个路径,那我很快翻译一下。 Thanks to the management for taking my question. I have a question on ShopLine. We target to achieve profit break-even for ShopLine in 2028. The management gave us an update on the latest development and the growth drivers for ShopLine. And what would be the profit break-even roadmap for the business? Thank you.

Thank you, Brain. This question is from me. Thank you very much. 呃 我们的商业模式和商户的成长是高度一致的 订阅收入为我们提供稳定的收入基础 而支付和营销等增值服务 使我们能够更多的参与到商户的交易和GMV的增长当中 呃 商户在shopline上经营的渠道越多 交易的规模越大 对这些服务的使用就越深 因此啊 我们的增长不仅来自于新增商户 也来自现有商户在平台上 持续成长和服务渗透率的提升 第二个季度 以品牌大客户为主导的跨境商户 收入保持了高速的增长 同比路德的增长是73.5% 带动了整体收入的增长加快 由于扭亏的路径 关于扭亏的路径 我们的研发投入作为主要运营支出 已经趋于稳定比较久了 收入和毛利的提升 all brought to the company's business. Shopline has increased the growth of the growth rate. Shopline has increased the growth rate and the growth rate. On the basis of the market, we have to keep a stable basis. Shopline has increased the growth rate of the growth rate. Shopline has increased the growth rate of the growth rate.

Thank you for your questions. As we discussed earlier, AI is creating new growth opportunities for both the e-commerce industry and shopline. as the new traffic and transaction entry points continue to emerge. The commerce landscape is becoming increasingly diverse and fragmented, driving stronger demand for a unified operating system from merchants. This trend will further underscore shoplines value as an omnichannel commerce infrastructure. We remain firmly confident in the long-term prospects of this market. Our business model is closely aligned with the success of the merchants. Subscription fees provide us with a stable and recurring revenue base. Value-added services such as payments and marketing services enable us to participate more directly in the roles of the merchant transactions and GMV. As merchants expand across more channels and scale their businesses on shop line, they tend to adopt more of our services, making the platform increasingly valuable to them. As a result, our growth is driven not only by new merchant acquisition but also by the continued growth of existing merchants and the increasing penetration of our services. We have already seen this dynamic play out in our cross-border business. In the second quarter, revenue from cross-border merchants, mainly led by brand customers, grew 73.5% year-over-year, helping drive a further acceleration in Shopline's overall revenue growth. On the roadmap to break even, our R&D expense, which has been our primary OPEX for Shopline, has largely stabilized. Continued growth in revenue and gross profit is driving operating leverage, resulting significant narrowing of shopline's losses. If gross profit continuing to grow and operating expenses remaining relatively stable, we are confident that shopline will further narrow its losses in 2026 and the rich operating break-even by 2028.

Operator, Your next question comes from Saadona Song with UBS. Please go ahead.

Thank you, Manchuan, for taking my question. 想请问管理层怎么展望后续的这个回购之行? 集团又是如何平衡增长,投入,还有股东现金的回馈呢? I'll translate myself. My question is on shareholder return. The company has a three-year, 1.5 billion U.S. shareholder return program with ample net cash at present. Observe that measurement has accelerated buyback in 2Q and quarter to date. What will be the pace of future buybacks ahead? And how does the group balance growth-oriented investments versus cash return to shareholders? Thank you.

那么在增长的投入和股东回报的平衡上 其实对于我们来讲并不冲突 对我们公司的特点大家是了解的 存量资金底子是非常厚实的 增量资金也是持续的充沛 首先我们账上截止到二季度末 还有30.6亿美元的净现金 其次我们三大业务线都已经进入到了清晰的增长的轨道 那么业务基本面和现金流的贡献会持续的改善 所以股东回馈和增长投入 我们是可以两手抓的 同时我们认为当前股价 其实仍未充分反映 我们三大业务的长期增长潜力 那么积极进行回购 也是管理层对公司长期价值 和发展前景信心的一个体现 接下来我们会继续积极的推进股东回馈 那么随着经营利润的持续提升

Thank you, Sedona, for your question. As I just mentioned, since the beginning of the year to August 21st, we have already bought back 216 million U.S. dollars of our shares in total. Even under the new share buyback program authorized this May, as of August 21st, we have bought back 128 million U.S. dollars of our shares. There is no inherent trade-off between investing for growth and returning capital to shareholders. We are backed by a strong net cash balance and robust cash generating capabilities. Firstly, we held a net cash position of 3.06 billion U.S. dollars on our balance sheet by the end of the second quarter. Secondly, all these three of our business segments have embarked on well-defined growth trajectory which will drive continuous improvement in underlying business fundamentals and cash flow contribution. Therefore, our shareholder return framework is built on an exceptionally solid and resilient foundation. We believe that the The current share price still does not fully reflect the long-term growth potential of our three businesses. And our active share buybacks demonstrate the confidence from the senior management team in the company's longer-term value and prospects. Going forward, we will continue to actively return capital to shareholders. As our operating profit continues to grow, we believe shareholders can look forward to greater returns in the long run. Thank you.

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

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

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