NYSE:YALA Yalla Group Q3 2024 Earnings Report $7.54 +0.01 (+0.11%) As of 04/24/2025 03:53 PM Eastern This is a fair market value price provided by Polygon.io. Learn more. Earnings History Yalla Group EPS ResultsActual EPS$0.22Consensus EPS N/ABeat/MissN/AOne Year Ago EPSN/AYalla Group Revenue ResultsActual Revenue$88.92 millionExpected RevenueN/ABeat/MissN/AYoY Revenue GrowthN/AYalla Group Announcement DetailsQuarterQ3 2024Date11/11/2024TimeAfter Market ClosesConference Call DateMonday, November 11, 2024Conference Call Time8:00PM ETUpcoming EarningsYalla Group's Q1 2025 earnings is scheduled for Monday, May 19, 2025, with a conference call scheduled on Tuesday, May 20, 2025 at 8:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Yalla Group Q3 2024 Earnings Call TranscriptProvided by QuartrNovember 11, 2024 ShareLink copied to clipboard.There are 9 speakers on the call. Operator00:00:00Good morning and good evening, ladies and gentlemen. Thank you for standing by for Yalla Group Limited's Third Quarter 2024 Earnings Conference Call. At this time, all participants are in listen only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. Operator00:00:22Now, I will turn the call over to your speaker host today, Ms. Carrie Gao, IR Director of the company. Please go ahead. Speaker 100:00:33Hello, everyone, and welcome to Yalla's Q3 2024 earnings conference call. We released our earnings press release earlier today and the release is now available on our IR website as well as on newswire outlets. Before we continue, please note that the discussion today will contain forward looking statements made under the Safe Harbor provision of the U. S. Private Securities Litigation Reform Act of 1995. Speaker 100:00:56Forward looking statements involve inherent risks and uncertainties. As such, our future results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in our earnings release and our annual report filed with the SEC. Yalla does not assume any obligation to update any forward looking statements except as required by law. Please also note that Yalla's earnings press release and this conference call include a discussion of unaudited GAAP financial information as well as unaudited non GAAP financial measures. Speaker 100:01:29Yalla's press release contains a reconciliation of the unaudited non GAAP measures to the unaudited most directly comparable GAAP measures. Today, we will hear from Mr. Tao Yang, our Chairman and Chief Executive Officer, who will provide an overview of our latest achievements and growth strategies. He will be followed by Mr. Sifu Ma Yu, the Company's President, who will briefly review our recent business developments. Speaker 100:01:53Mrs. Karen Hu, our Chief Financial Officer, will then provide additional details on the Company's financial results and discuss our financial outlook. Following management's prepared remarks, we will open the call to questions. Mr. Jeff Xu, our Chief Operating Officer will join the Q and A session. Speaker 100:02:10With that said, I would now like to turn the call over to our Chairman and Chief Executive Officer, Mr. Tao Yang. Please go ahead, sir. Speaker 200:02:20Thank you, everyone, for joining our Q3 2024 earnings conference call. We are thrilled to report a robust quarter, marked by record high revenues and enhanced profitability. Our 3rd quarter revenues reached USD 88,900,000 exceeding the upper end of our guidance by 8%, while our net income increased by USD 11.2 percent year over year to USD 39,200,000. Behind this impressive performance was our continuous commitment to deepening our localization capabilities, which enabled us to keep rolling out new communications features and operating events that fulfill Mina users' social and entertainment needs. Driving quality revenue growth while improving operating efficiencies has been a key company objective this year. Speaker 200:03:28To that end, the team has consistently refined operational procedures and optimized user acquisition strategies over the past several quarters. Moving forward, we will remain focused on user experience and product excellence in reaching our product ecosystem and pursuing high quality sustainable development. MENA's digital transformation has progressed rapidly this year, drawing a surge of global attention, talent and investment to the region. We have seen gaming emerge as one of the critical drivers of this digital transformation. GCC countries are introducing supportive policies and initiatives to facilitate the development of the gaming and Esports sectors. Speaker 200:04:28This summer, the Esports World Cup puts Saudi Arabia in the global spotlight for gamers and industry professionals worldwide, with over 1500 players worldwide competing across multiple games for record breaking USD 60,000,000 prize. The event showcased key MENA countries' policy commitment to the gaming industry and their infrastructure capacity for large scale events. As a crucial growth market for the global gaming industry, Mina still holds immense potential for further development, which is gradually being unleashed. Looking at the group's business, gaming services are now a revenue contributor with growing importance within our group. The proportion of revenues attributable to game services has surpassed 30% over the past few years. Speaker 300:05:39In Speaker 200:05:40addition, our keen insight into Mina's gaming industry dynamics have led to our proactive entry into the mid core and hardcore game market with the yellow game. We currently have several staff development, medical and hardcore games and expect to begin testing some of them by year end. Our product development and release schedules are designed to bring premium polished games to market at optimal times to capture their corresponding user base and market share. And we look forward to seeing these new initiatives for fresh growth in the upcoming years. Expanding from casual games to midcall and hardcore game is a milestone, not a sprint. Speaker 200:06:41We are committed to elevating Yara Games' standing in midcall and hardcore game market, capitalizing on our wealth of experience and know how in casual games to drive success. Guided by Yalla's core organizational values, Mu USD, especially the last two letters for simple and target. We will continue to refine every Yala game product by taking a straightforward and pragmatic approach. We are confident that we can engage our loyal users in the region whom we served for nearly a decade with high quality games that align with the Yalla brand while also leveraging these new games to broaden Yalla Group's product ecosystem and market reach. In conclusion, the phased rollout of digital transformation initiatives across MENA countries is steadily unlocking the market growth potential. Speaker 200:07:56As the largest online social networking and gaming platform in MENA, we will seize every opportunity to contribute to this transformation and the economic development of the region. With strong business fundamentals and increasingly robust product ecosystem, we have full capital confidence in our ability to expand our role in the region's evolution. Now, I will turn this call over to our President, our Saipri Ismail for a closer look at our recent developments. Speaker 400:08:37Hello, everyone. Thanks for joining us today. Let's move on to our Q3 operations and the performance of our products. We continued to broaden our user base, thanks to our strong execution of effective user acquisition strategies. Our average monthly active users grew to 40,200,000, up 14.5% year over year. Speaker 400:09:04As we dedicated to enhancing our product gamification and user experience, our paying users increased to 12,600,000, up 12% year over year. During the quarter, our products demonstrated remarkable strength with Yalla Ludo and 101 Okay Yalla, both setting new quarterly revenue records. We were delighted to reach new heights within our casual game metrics and look forward to replicating Yalla Ludo's success with other products. As we advance the company's development, we continue to identify and create products with deep cultural roots that attract a strong user base in MENA, while keeping a close eye on market dynamics and user changing needs. Our highly skilled team boosts a profound understanding of MENA users preferences, empowering the consistent development of products as well as online and offline events with enduring appeal. Speaker 400:10:13For instance, this quarter we expanded the regional footprint of our Ludo Champion Offline tournament series. Our team not only hosted 2 tournaments in Abu Dhabi and Egypt, but also teamed up with the UAE Esports Federation to host an additional Yalla Ludo offline tournament in Abu Dhabi. This steady stream of offline event has deepened our brand awareness, solidifying Yalaludu's industry leadership, while also meeting MENA users' entertainment needs. We will continue to cooperate with local and global industry participants to increase user engagement and facilitate development across MENA's gaming industry. We also upgraded Yalla, our flagship products with a diverse array of fresh features. Speaker 400:11:04We were pleased to see Yalla users investing significant time and gain currency into our engaging on trend activities. This quarter, we embedded a crazy soccer game in Yalla's chat room, Tapping into this soccer frenzy currently sweeping the Middle East, chatroom users compete in teams and make plays by sending messages and gifts in the chatroom, fostering stronger social type and deeper user engagement. On a related note, I was honored to be invited for an interview this quarter by BookIt Gamer, a globally recognized media leader in the mobile gaming industry, celebrated for its cutting edge news and insights. We delved into the emerging trends shaping MENA's social networking and gaming industry during our in-depth exchange, with a particular focus on the crucial importance of content localization. We are grateful to BookIt Gamer for this opportunity and its recognition of Yalla Group's leadership in MENA's social networking and gaming industry. Speaker 400:12:16As a leading MENA based Internet company, we remain dedicated to creating social and economic value by enhancing digital lifestyle and advancing the region's digital transformation. To sum up, as MENA's leader in online social networking and gaming, we will continue delivering high quality products and services to our users while playing an active role in the region's digital transformation. We are poised to broaden our business horizon and enhance external collaboration, consistently elevating our brand influence. And as always, we will stay true to our vision to become the largest online social networking and entertainment platform in the MENA region. With that, I will now turn the call over to our CFO, Karen, who will discuss our key financial and operational results. Speaker 500:13:18Thank you, Sophie. Hello, everyone. Thank you for joining us today. During the Q3, we continued to execute high quality growth strategies, leading to our revenues reaching an all time high, we also continue to boost the efficiency and operating leverage. As a result, we enhanced our profitability with expanded net margin of 44.1 percent and excluding share based compensation, non GAAP net margin of 47.9 percent. Speaker 500:13:49Our fundamentals remain solid, strongly supporting our current business operations as well as our investments in further development. We will continue to pursue high quality, sustainable development, creating long term value for all our stakeholders. Let's move on to our detailed financials for Q3 of 2024. Our revenues were US88.9 million dollars in Q3 of 2024, a 4.4% increase from US85.2 $1,000,000 in the Q3 of last year. The increase was primarily driven by our broadening user base and enhanced monetization capability. Speaker 500:14:34This growth was also partially attributable to the significant increase in the number of paying users, which grew to ky12.6 million in the Q3 of 2024 from ky11.2 million in the Q3 of 2023. Now let's take a look at our costs and expenses. Our total costs and expenses were US56.4 million dollars in the Q3 of 2024, a $0.069 increase from US52.8 million dollars in Q3 of last year. Our cost of revenues was US31.8 million dollars in the Q3 of 2024, a 14.6% increase from US27.8 million dollars in same period last year, primarily due to higher commission fees paid to third party payment platforms as a result of increasing revenues generated. Cost of revenues as a percentage of total revenues increased to 35.8 percent in the Q3 of 2024 from 32.6% in the Q3 of last year. Speaker 500:15:49Our selling and marketing expenses were US7.4 million dollars in the Q3 of 2024, a 34.9% decrease from US11.3 million dollars in the same period last year, primarily driven by our more disciplined advertising and promotion approach. Selling and marketing expenses as a percentage of total revenues decreased to 8.3% in the Q3 of 2024 from 13.3% in the Q3 of last year. Our general and administrative expenses were US10.1 million dollars in the Q3 of 2024, a 38.3% increase from US7.3 million dollars in the same period last year, primarily due to an increase in the incentive compensation. GA expenses as a percentage of our total revenues increased to 11.4% in the Q3 of 2024 from 8.6% in the Q3 of last year. Our technology and product development expenses were US7.1 million dollars in the Q3 of 2024, an 11.1% increase from US6.4 million dollars in the same period of last year, primarily due to an increase in salaries and benefits for our technology and product development staff. Speaker 500:17:22Technology and product development expenses as a percentage of total revenues increased to 8% in the third quarter of 2024 from 7.5% in the Q3 of last year. As such, our operating income remained relatively stable at US32.5 million dollars in the Q3 of 2024. Our interest income was US7.8 million dollars in Q3 of 2024 compared with US5.6 million dollars in Q3 of last year, primarily due to an increase in interest rates applicable to the company's bank deposits. Our income tax expenses was US1.29 million dollars in the Q3 of 2024 compared with US0.71 million dollars in the Q3 of last year. The increase was primarily due to the introduction and the implementation of U. Speaker 500:18:24S. Corporate tax law, which is effective for the financial year starting on or after June 1, 2023. As a result of foregoing, our net income was US39.2 million dollars in the Q3 of 2024, an 11.2% increase from US35.2 million dollars in Q3 of last year. Turning to our liquidity and capital resources. Our cash position remains solid. Speaker 500:18:55As of September 30, 2024, we had cash and cash equivalents, restricted cash, term deposits and short term investments of US570.1 million dollars compared with US535.7 million dollars as of December 31, 2023. Under our US150 million dollars share repurchase program that began May 21, 2021 and has since been extended by our Board through May 21, 2025, we had repurchased 1,736,383 ADS or Class A ordinary shares in open market cash repurchases, totaling approximately US7 $1,000,000 in Q3 of 2024. Cumulatively, we have repurchased 5,709,259 ADS or Class A ordinary shares in open market cash repurchases, totaling approximately US42.5 million dollars as of September 30, 2024. Moving to our outlook. For the Q4 of 2024, we expect our revenues to be between US77 $1,000,000 US84 $1,000,000 The above outlook is based on the current market conditions and reflects the company's management's current and preliminary estimates of the market and operating conditions and customer demands, which are all subject to change. Speaker 500:20:35This concludes our prepared remarks for today. Operator, we are now ready to take questions. Operator00:20:43Thank you very much. We will now begin our question and answer session. Today's first question comes from Chuking Zhang with CICC. Please go ahead. Speaker 600:21:19Thanks management for taking my question. Congratulations on another solid quarter. I have two questions. The first one is about game business. Can management share more information about your new game products such as testing and the launching schedules and how does management feel the performance of game business in 2025? Speaker 600:21:42And my second question is about flagship products. Regarding flagship products, how we have seen some new gameplay attempts on Yalla this year. Could management share your strategies for flagship products moving forward? And what's the change for flagship products in Q4 and next year? Thank you. Speaker 300:22:05Thank you, Shaqing for your question. I'll be taking the first one and leave the second one to our CEO, Mr. Tao Yan. Currently, we have 3 new self developed mid core games in our pipeline. Some of these we entered testing in Q4 2024. Speaker 300:22:20After connecting user feedback and then refining the products, we will start promoting them at scale. Looking ahead at the game business in 2025, first of all, we expect Yadaloo's performance to remain strong and stable with single digit percentage growth next year. Besides that, more upside or additional growth will come from our new products, as mentioned, as well as potential external collaborations. We will provide more accurate guidance on that after we get a better sense of their product potential from the testing. Thank you. Speaker 200:22:53Good morning, Xiaoxing. This is Tao. Regarding our flagship products, as you mentioned, we upgraded Zala with a diverse area of fresh features this quarter. We will continue to roll out new features for Yalla during the rest of 2024 and into 2025. For Yalla Ludo, we will also keep launching interactive operational events and maybe even new gateway to boost user engagement. Speaker 200:23:24In terms of revenue growth, we are confident that in 2025 both flagship products will maintain their current scale and have the potential to achieve single digit growth. Hope this answers your questions. Thank you, Operator00:23:50Thank you. The next question comes from Sheng Hao Lee with CICC. Please go ahead. Speaker 700:23:58Hi management. Thanks for taking my question and congratulations on a robust quarter. My question is about our game business. Regarding casual game products, we mentioned that yellow Ludo and 101OKYalla both achieving new quarterly revenue records. Could management elaborate more on drivers of growth on these two products? Speaker 700:24:19Thank you. Speaker 400:24:21Thank you, Shingha. This is Seifi. I will answer your question. So overall, our consistent efforts to optimize user experience and refine operational procedures have paid off. In the second half of the quarter, user enthusiastically appreciated the Yalla Ludo diverse operational events. Speaker 400:24:43Meanwhile, Yalla Ludo once again successfully held 2 offline tournaments, further strengthening our brand's local impact. Regarding 101 Okay Yalla, it has been deeply involved in the Turkish market for a few years now, and our team has been constantly enhancing the user experience. One of the new features we launched this quarter has gained excellent feedback, which I believe underscores our long term localization capabilities and deep understanding of our user needs. Thank you. Operator00:25:25Thank you. The next question comes from Sarah Hu with Haitong International. Please go ahead. Speaker 500:25:34Hello, management. Thank you for taking my questions and congratulations on a solid quarter. So can management give us an update on the shareholder returns? Thank you. Hello, Sarah. Speaker 500:25:47Good morning. This is Karen. I will answer your question. Yalla is committed to return value to shareholders through our share repurchase program. This quarter, we repurchased more than 1,700,000 ADS in the open market for an aggregate amount of approximately US7 $1,000,000 As of September 30, 2024, we had deployed a total of US42.5 million dollars for share repurchases. Speaker 500:26:17Given our solid fundamentals, we will continue to conduct our share repurchase program while considering cash dividend payments in due course. We will keep you posted if we have more updates. In short, we believe strongly in Yalla's long term potential and dedicate to generating value for all parties involved. I hope this answers your question. Thank you. Operator00:26:45Thank you. The next question is from Kaifeng Jia with CITIC. Please go ahead. Speaker 800:26:54Hi, management. Thanks for taking my question and congratulations for a short quarter. So could management share about any updates about the external cooperation and expansion into new IVRs? Thank you. Speaker 200:27:11Good morning, Kaifeng. Thank you for your question. With MENA's ongoing digital transformation and our company's deep local route and business investment experience in the region, Yalla has begun engaging in more discussions with top tier overseas Internet companies interested in exploring this market. We will take pride in our localization capabilities and potential perspective, which position us well to assist in the development of localized content as well as distribution in the MENA region. In terms of verticals, social networking and gaming remain our core focus areas. Speaker 200:28:00To address your second question, while the Middle East market remains our primary focus and we've consistently emphasized we have already gained a certain level of users in Europe, South America and Southeast Asia. In the future, we see new products with suitable content, we may consider conducting global promotions. Thank you, Kaifeng. Operator00:28:33Thank you. The next question is from Rachel Guo with Nomura. Please go ahead. Speaker 600:28:42Hi. Hello. Thanks to your management for giving me this opportunity to ask the question. My question is about your margin. How do we think about the margin trend in the Q4 of 2024? Speaker 600:28:54Thank you. Speaker 500:28:56Hi, Rachel. Thanks for your question. Regarding our profitability for Q4, as we continue to improve our operating efficiency, We are confident that we can maintain our net margin of the 40% level and potentially reach around 45%. Hope this answers your question. Thanks. Operator00:29:20As there are no further questions now, I would like to turn the call back over to management for closing remarks. Speaker 100:29:29Thank you once again for joining us today. We look forward to speaking with you in the next quarter. If you have further questions, please feel free to contact Yalla's Investor Relations or PSNT Financial Communications. Both parties' contact information is available in today's press release as well as on our company website. Thank you.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallYalla Group Q3 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K) Yalla Group Earnings HeadlinesYalla Group Releases 2024 ESG ReportApril 24 at 6:41 AM | gurufocus.comYalla Group Releases 2024 ESG ReportApril 24 at 6:00 AM | prnewswire.comTrump’s betrayal exposed Trump’s Final Reset Inside the shocking plot to re-engineer America’s financial system…and why you need to move your money now.April 25, 2025 | Porter & Company (Ad)Yalla Group Limited Files 2024 Annual Report on Form 20-FApril 23 at 1:48 PM | gurufocus.comYalla Group Limited Files 2024 Annual Report on Form 20-F | YALA Stock NewsApril 23 at 1:48 PM | gurufocus.comYalla Group Limited Files 2024 Annual Report on Form 20-FApril 23 at 6:50 AM | prnewswire.comSee More Yalla Group Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Yalla Group? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Yalla Group and other key companies, straight to your email. Email Address About Yalla GroupYalla Group (NYSE:YALA) operates a social networking and gaming platform primarily in the Middle East and North Africa region. It provides mobile applications, including Yalla, a voice-centric group chat platform; and Yalla Ludo, a casual gaming application. The company's platform offers group chatting and games services; and sells virtual items, as well as provides upgrade services. The company was formerly known as FYXTech Corporation. Yalla Group Limited was founded in 2016 and is headquartered in Dubai, the United Arab Emirates.View Yalla Group ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of EarningsAmazon's Earnings Could Fuel a Rapid Breakout Tesla Earnings Miss, But Musk Refocuses and Bulls ReactQualcomm’s Range Narrows Ahead of Earnings as Bulls Step InWhy It May Be Time to Buy CrowdStrike Stock Heading Into EarningsCan IBM’s Q1 Earnings Spark a Breakout for the Stock? 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There are 9 speakers on the call. Operator00:00:00Good morning and good evening, ladies and gentlemen. Thank you for standing by for Yalla Group Limited's Third Quarter 2024 Earnings Conference Call. At this time, all participants are in listen only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. Operator00:00:22Now, I will turn the call over to your speaker host today, Ms. Carrie Gao, IR Director of the company. Please go ahead. Speaker 100:00:33Hello, everyone, and welcome to Yalla's Q3 2024 earnings conference call. We released our earnings press release earlier today and the release is now available on our IR website as well as on newswire outlets. Before we continue, please note that the discussion today will contain forward looking statements made under the Safe Harbor provision of the U. S. Private Securities Litigation Reform Act of 1995. Speaker 100:00:56Forward looking statements involve inherent risks and uncertainties. As such, our future results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in our earnings release and our annual report filed with the SEC. Yalla does not assume any obligation to update any forward looking statements except as required by law. Please also note that Yalla's earnings press release and this conference call include a discussion of unaudited GAAP financial information as well as unaudited non GAAP financial measures. Speaker 100:01:29Yalla's press release contains a reconciliation of the unaudited non GAAP measures to the unaudited most directly comparable GAAP measures. Today, we will hear from Mr. Tao Yang, our Chairman and Chief Executive Officer, who will provide an overview of our latest achievements and growth strategies. He will be followed by Mr. Sifu Ma Yu, the Company's President, who will briefly review our recent business developments. Speaker 100:01:53Mrs. Karen Hu, our Chief Financial Officer, will then provide additional details on the Company's financial results and discuss our financial outlook. Following management's prepared remarks, we will open the call to questions. Mr. Jeff Xu, our Chief Operating Officer will join the Q and A session. Speaker 100:02:10With that said, I would now like to turn the call over to our Chairman and Chief Executive Officer, Mr. Tao Yang. Please go ahead, sir. Speaker 200:02:20Thank you, everyone, for joining our Q3 2024 earnings conference call. We are thrilled to report a robust quarter, marked by record high revenues and enhanced profitability. Our 3rd quarter revenues reached USD 88,900,000 exceeding the upper end of our guidance by 8%, while our net income increased by USD 11.2 percent year over year to USD 39,200,000. Behind this impressive performance was our continuous commitment to deepening our localization capabilities, which enabled us to keep rolling out new communications features and operating events that fulfill Mina users' social and entertainment needs. Driving quality revenue growth while improving operating efficiencies has been a key company objective this year. Speaker 200:03:28To that end, the team has consistently refined operational procedures and optimized user acquisition strategies over the past several quarters. Moving forward, we will remain focused on user experience and product excellence in reaching our product ecosystem and pursuing high quality sustainable development. MENA's digital transformation has progressed rapidly this year, drawing a surge of global attention, talent and investment to the region. We have seen gaming emerge as one of the critical drivers of this digital transformation. GCC countries are introducing supportive policies and initiatives to facilitate the development of the gaming and Esports sectors. Speaker 200:04:28This summer, the Esports World Cup puts Saudi Arabia in the global spotlight for gamers and industry professionals worldwide, with over 1500 players worldwide competing across multiple games for record breaking USD 60,000,000 prize. The event showcased key MENA countries' policy commitment to the gaming industry and their infrastructure capacity for large scale events. As a crucial growth market for the global gaming industry, Mina still holds immense potential for further development, which is gradually being unleashed. Looking at the group's business, gaming services are now a revenue contributor with growing importance within our group. The proportion of revenues attributable to game services has surpassed 30% over the past few years. Speaker 300:05:39In Speaker 200:05:40addition, our keen insight into Mina's gaming industry dynamics have led to our proactive entry into the mid core and hardcore game market with the yellow game. We currently have several staff development, medical and hardcore games and expect to begin testing some of them by year end. Our product development and release schedules are designed to bring premium polished games to market at optimal times to capture their corresponding user base and market share. And we look forward to seeing these new initiatives for fresh growth in the upcoming years. Expanding from casual games to midcall and hardcore game is a milestone, not a sprint. Speaker 200:06:41We are committed to elevating Yara Games' standing in midcall and hardcore game market, capitalizing on our wealth of experience and know how in casual games to drive success. Guided by Yalla's core organizational values, Mu USD, especially the last two letters for simple and target. We will continue to refine every Yala game product by taking a straightforward and pragmatic approach. We are confident that we can engage our loyal users in the region whom we served for nearly a decade with high quality games that align with the Yalla brand while also leveraging these new games to broaden Yalla Group's product ecosystem and market reach. In conclusion, the phased rollout of digital transformation initiatives across MENA countries is steadily unlocking the market growth potential. Speaker 200:07:56As the largest online social networking and gaming platform in MENA, we will seize every opportunity to contribute to this transformation and the economic development of the region. With strong business fundamentals and increasingly robust product ecosystem, we have full capital confidence in our ability to expand our role in the region's evolution. Now, I will turn this call over to our President, our Saipri Ismail for a closer look at our recent developments. Speaker 400:08:37Hello, everyone. Thanks for joining us today. Let's move on to our Q3 operations and the performance of our products. We continued to broaden our user base, thanks to our strong execution of effective user acquisition strategies. Our average monthly active users grew to 40,200,000, up 14.5% year over year. Speaker 400:09:04As we dedicated to enhancing our product gamification and user experience, our paying users increased to 12,600,000, up 12% year over year. During the quarter, our products demonstrated remarkable strength with Yalla Ludo and 101 Okay Yalla, both setting new quarterly revenue records. We were delighted to reach new heights within our casual game metrics and look forward to replicating Yalla Ludo's success with other products. As we advance the company's development, we continue to identify and create products with deep cultural roots that attract a strong user base in MENA, while keeping a close eye on market dynamics and user changing needs. Our highly skilled team boosts a profound understanding of MENA users preferences, empowering the consistent development of products as well as online and offline events with enduring appeal. Speaker 400:10:13For instance, this quarter we expanded the regional footprint of our Ludo Champion Offline tournament series. Our team not only hosted 2 tournaments in Abu Dhabi and Egypt, but also teamed up with the UAE Esports Federation to host an additional Yalla Ludo offline tournament in Abu Dhabi. This steady stream of offline event has deepened our brand awareness, solidifying Yalaludu's industry leadership, while also meeting MENA users' entertainment needs. We will continue to cooperate with local and global industry participants to increase user engagement and facilitate development across MENA's gaming industry. We also upgraded Yalla, our flagship products with a diverse array of fresh features. Speaker 400:11:04We were pleased to see Yalla users investing significant time and gain currency into our engaging on trend activities. This quarter, we embedded a crazy soccer game in Yalla's chat room, Tapping into this soccer frenzy currently sweeping the Middle East, chatroom users compete in teams and make plays by sending messages and gifts in the chatroom, fostering stronger social type and deeper user engagement. On a related note, I was honored to be invited for an interview this quarter by BookIt Gamer, a globally recognized media leader in the mobile gaming industry, celebrated for its cutting edge news and insights. We delved into the emerging trends shaping MENA's social networking and gaming industry during our in-depth exchange, with a particular focus on the crucial importance of content localization. We are grateful to BookIt Gamer for this opportunity and its recognition of Yalla Group's leadership in MENA's social networking and gaming industry. Speaker 400:12:16As a leading MENA based Internet company, we remain dedicated to creating social and economic value by enhancing digital lifestyle and advancing the region's digital transformation. To sum up, as MENA's leader in online social networking and gaming, we will continue delivering high quality products and services to our users while playing an active role in the region's digital transformation. We are poised to broaden our business horizon and enhance external collaboration, consistently elevating our brand influence. And as always, we will stay true to our vision to become the largest online social networking and entertainment platform in the MENA region. With that, I will now turn the call over to our CFO, Karen, who will discuss our key financial and operational results. Speaker 500:13:18Thank you, Sophie. Hello, everyone. Thank you for joining us today. During the Q3, we continued to execute high quality growth strategies, leading to our revenues reaching an all time high, we also continue to boost the efficiency and operating leverage. As a result, we enhanced our profitability with expanded net margin of 44.1 percent and excluding share based compensation, non GAAP net margin of 47.9 percent. Speaker 500:13:49Our fundamentals remain solid, strongly supporting our current business operations as well as our investments in further development. We will continue to pursue high quality, sustainable development, creating long term value for all our stakeholders. Let's move on to our detailed financials for Q3 of 2024. Our revenues were US88.9 million dollars in Q3 of 2024, a 4.4% increase from US85.2 $1,000,000 in the Q3 of last year. The increase was primarily driven by our broadening user base and enhanced monetization capability. Speaker 500:14:34This growth was also partially attributable to the significant increase in the number of paying users, which grew to ky12.6 million in the Q3 of 2024 from ky11.2 million in the Q3 of 2023. Now let's take a look at our costs and expenses. Our total costs and expenses were US56.4 million dollars in the Q3 of 2024, a $0.069 increase from US52.8 million dollars in Q3 of last year. Our cost of revenues was US31.8 million dollars in the Q3 of 2024, a 14.6% increase from US27.8 million dollars in same period last year, primarily due to higher commission fees paid to third party payment platforms as a result of increasing revenues generated. Cost of revenues as a percentage of total revenues increased to 35.8 percent in the Q3 of 2024 from 32.6% in the Q3 of last year. Speaker 500:15:49Our selling and marketing expenses were US7.4 million dollars in the Q3 of 2024, a 34.9% decrease from US11.3 million dollars in the same period last year, primarily driven by our more disciplined advertising and promotion approach. Selling and marketing expenses as a percentage of total revenues decreased to 8.3% in the Q3 of 2024 from 13.3% in the Q3 of last year. Our general and administrative expenses were US10.1 million dollars in the Q3 of 2024, a 38.3% increase from US7.3 million dollars in the same period last year, primarily due to an increase in the incentive compensation. GA expenses as a percentage of our total revenues increased to 11.4% in the Q3 of 2024 from 8.6% in the Q3 of last year. Our technology and product development expenses were US7.1 million dollars in the Q3 of 2024, an 11.1% increase from US6.4 million dollars in the same period of last year, primarily due to an increase in salaries and benefits for our technology and product development staff. Speaker 500:17:22Technology and product development expenses as a percentage of total revenues increased to 8% in the third quarter of 2024 from 7.5% in the Q3 of last year. As such, our operating income remained relatively stable at US32.5 million dollars in the Q3 of 2024. Our interest income was US7.8 million dollars in Q3 of 2024 compared with US5.6 million dollars in Q3 of last year, primarily due to an increase in interest rates applicable to the company's bank deposits. Our income tax expenses was US1.29 million dollars in the Q3 of 2024 compared with US0.71 million dollars in the Q3 of last year. The increase was primarily due to the introduction and the implementation of U. Speaker 500:18:24S. Corporate tax law, which is effective for the financial year starting on or after June 1, 2023. As a result of foregoing, our net income was US39.2 million dollars in the Q3 of 2024, an 11.2% increase from US35.2 million dollars in Q3 of last year. Turning to our liquidity and capital resources. Our cash position remains solid. Speaker 500:18:55As of September 30, 2024, we had cash and cash equivalents, restricted cash, term deposits and short term investments of US570.1 million dollars compared with US535.7 million dollars as of December 31, 2023. Under our US150 million dollars share repurchase program that began May 21, 2021 and has since been extended by our Board through May 21, 2025, we had repurchased 1,736,383 ADS or Class A ordinary shares in open market cash repurchases, totaling approximately US7 $1,000,000 in Q3 of 2024. Cumulatively, we have repurchased 5,709,259 ADS or Class A ordinary shares in open market cash repurchases, totaling approximately US42.5 million dollars as of September 30, 2024. Moving to our outlook. For the Q4 of 2024, we expect our revenues to be between US77 $1,000,000 US84 $1,000,000 The above outlook is based on the current market conditions and reflects the company's management's current and preliminary estimates of the market and operating conditions and customer demands, which are all subject to change. Speaker 500:20:35This concludes our prepared remarks for today. Operator, we are now ready to take questions. Operator00:20:43Thank you very much. We will now begin our question and answer session. Today's first question comes from Chuking Zhang with CICC. Please go ahead. Speaker 600:21:19Thanks management for taking my question. Congratulations on another solid quarter. I have two questions. The first one is about game business. Can management share more information about your new game products such as testing and the launching schedules and how does management feel the performance of game business in 2025? Speaker 600:21:42And my second question is about flagship products. Regarding flagship products, how we have seen some new gameplay attempts on Yalla this year. Could management share your strategies for flagship products moving forward? And what's the change for flagship products in Q4 and next year? Thank you. Speaker 300:22:05Thank you, Shaqing for your question. I'll be taking the first one and leave the second one to our CEO, Mr. Tao Yan. Currently, we have 3 new self developed mid core games in our pipeline. Some of these we entered testing in Q4 2024. Speaker 300:22:20After connecting user feedback and then refining the products, we will start promoting them at scale. Looking ahead at the game business in 2025, first of all, we expect Yadaloo's performance to remain strong and stable with single digit percentage growth next year. Besides that, more upside or additional growth will come from our new products, as mentioned, as well as potential external collaborations. We will provide more accurate guidance on that after we get a better sense of their product potential from the testing. Thank you. Speaker 200:22:53Good morning, Xiaoxing. This is Tao. Regarding our flagship products, as you mentioned, we upgraded Zala with a diverse area of fresh features this quarter. We will continue to roll out new features for Yalla during the rest of 2024 and into 2025. For Yalla Ludo, we will also keep launching interactive operational events and maybe even new gateway to boost user engagement. Speaker 200:23:24In terms of revenue growth, we are confident that in 2025 both flagship products will maintain their current scale and have the potential to achieve single digit growth. Hope this answers your questions. Thank you, Operator00:23:50Thank you. The next question comes from Sheng Hao Lee with CICC. Please go ahead. Speaker 700:23:58Hi management. Thanks for taking my question and congratulations on a robust quarter. My question is about our game business. Regarding casual game products, we mentioned that yellow Ludo and 101OKYalla both achieving new quarterly revenue records. Could management elaborate more on drivers of growth on these two products? Speaker 700:24:19Thank you. Speaker 400:24:21Thank you, Shingha. This is Seifi. I will answer your question. So overall, our consistent efforts to optimize user experience and refine operational procedures have paid off. In the second half of the quarter, user enthusiastically appreciated the Yalla Ludo diverse operational events. Speaker 400:24:43Meanwhile, Yalla Ludo once again successfully held 2 offline tournaments, further strengthening our brand's local impact. Regarding 101 Okay Yalla, it has been deeply involved in the Turkish market for a few years now, and our team has been constantly enhancing the user experience. One of the new features we launched this quarter has gained excellent feedback, which I believe underscores our long term localization capabilities and deep understanding of our user needs. Thank you. Operator00:25:25Thank you. The next question comes from Sarah Hu with Haitong International. Please go ahead. Speaker 500:25:34Hello, management. Thank you for taking my questions and congratulations on a solid quarter. So can management give us an update on the shareholder returns? Thank you. Hello, Sarah. Speaker 500:25:47Good morning. This is Karen. I will answer your question. Yalla is committed to return value to shareholders through our share repurchase program. This quarter, we repurchased more than 1,700,000 ADS in the open market for an aggregate amount of approximately US7 $1,000,000 As of September 30, 2024, we had deployed a total of US42.5 million dollars for share repurchases. Speaker 500:26:17Given our solid fundamentals, we will continue to conduct our share repurchase program while considering cash dividend payments in due course. We will keep you posted if we have more updates. In short, we believe strongly in Yalla's long term potential and dedicate to generating value for all parties involved. I hope this answers your question. Thank you. Operator00:26:45Thank you. The next question is from Kaifeng Jia with CITIC. Please go ahead. Speaker 800:26:54Hi, management. Thanks for taking my question and congratulations for a short quarter. So could management share about any updates about the external cooperation and expansion into new IVRs? Thank you. Speaker 200:27:11Good morning, Kaifeng. Thank you for your question. With MENA's ongoing digital transformation and our company's deep local route and business investment experience in the region, Yalla has begun engaging in more discussions with top tier overseas Internet companies interested in exploring this market. We will take pride in our localization capabilities and potential perspective, which position us well to assist in the development of localized content as well as distribution in the MENA region. In terms of verticals, social networking and gaming remain our core focus areas. Speaker 200:28:00To address your second question, while the Middle East market remains our primary focus and we've consistently emphasized we have already gained a certain level of users in Europe, South America and Southeast Asia. In the future, we see new products with suitable content, we may consider conducting global promotions. Thank you, Kaifeng. Operator00:28:33Thank you. The next question is from Rachel Guo with Nomura. Please go ahead. Speaker 600:28:42Hi. Hello. Thanks to your management for giving me this opportunity to ask the question. My question is about your margin. How do we think about the margin trend in the Q4 of 2024? Speaker 600:28:54Thank you. Speaker 500:28:56Hi, Rachel. Thanks for your question. Regarding our profitability for Q4, as we continue to improve our operating efficiency, We are confident that we can maintain our net margin of the 40% level and potentially reach around 45%. Hope this answers your question. Thanks. Operator00:29:20As there are no further questions now, I would like to turn the call back over to management for closing remarks. Speaker 100:29:29Thank you once again for joining us today. We look forward to speaking with you in the next quarter. If you have further questions, please feel free to contact Yalla's Investor Relations or PSNT Financial Communications. Both parties' contact information is available in today's press release as well as on our company website. Thank you.Read morePowered by