Investment Rating - Neutral rating for YY US with a target price of $37, implying a potential upside of 10.9% [1][2] Core Views - YY's Q4 2023 revenue of $570 million slightly exceeded expectations by 2%, with adjusted net profit of $64 million, up 28% YoY [2] - BIGO segment showed steady recovery with 3% YoY revenue growth in Q4 2023, driven by 8% YoY growth in paying users [2] - Management guided Q1 2024 revenue of $543-560 million, 5% above Bloomberg consensus [2] - 2024 BIGO revenue growth is expected to be 6%, partially offset by adjustments in the voice business [2] - The termination of the YY Live deal with Baidu has negatively impacted investor sentiment [2] Financial Performance - YY's 2023 revenue declined 6% YoY to $2.268 billion, with a 1.4% growth expected in 2024 [5] - Non-GAAP net profit for 2023 was $293 million, with a forecasted decline of 8% to $270 million in 2024 [5] - BIGO Live MAU grew 4% YoY in Q4 2023, with strong growth in Middle East (+13%), Europe (+11%), and Japan/Korea/Australia/New Zealand (+8%) [2][6] - Likee MAU declined 14% YoY in Q4 2023, but ad revenue surged nearly 2.5x for the full year [2] - Hago achieved positive operating cash flow for the first time in 2023 [2] Valuation and Shareholder Returns - Target price revised down to $37 from $39 based on a 10-year DCF model, implying a 2024 P/E of 8x [2] - YY returned $355 million to shareholders in 2023 through dividends and buybacks, representing 122% of adjusted net profit [2] - Over $500 million in buyback capacity remains as of the report date [2] Industry Context - YY is categorized under the entertainment content sub-sector, alongside peers like Bilibili, Kuaishou, and Tencent Music [11] - The report covers a broad range of internet and education companies, with most receiving Buy ratings [11]

[Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) [Fourth Quarter 2023 Financial Highlights](index=1&type=section&id=Fourth%20Quarter%202023%20Financial%20Highlights) In the fourth quarter of 2023, JOYY's net revenues were US$569.8 million, a decrease from the prior year, yet the company achieved a significant turnaround to a net income of US$45.8 million from a substantial net loss in Q4 2022, with Non-GAAP net income growing to US$64.2 million Fourth Quarter 2023 Financial Highlights | Financial Metric | Q4 2023 | Q4 2022 | Change | | :--- | :--- | :--- | :--- | | Net Revenues | US$569.8 million | US$604.9 million | -5.8% | | Net Income/(Loss) Attributable to JOYY | US$45.8 million | (US$377.5 million) | Turnaround to Profit | | Non-GAAP Net Income Attributable to JOYY | US$64.2 million | US$50.0 million | +28.4% | [Full Year 2023 Financial Highlights](index=1&type=section&id=Full%20Year%202023%20Financial%20Highlights) For the full year 2023, net revenues decreased to US$2,267.9 million, but both GAAP and Non-GAAP net income increased significantly, with GAAP net income more than doubling to US$301.8 million, driven by improved operational efficiency and investment gains Full Year 2023 Financial Highlights | Financial Metric | Full Year 2023 | Full Year 2022 | Change | | :--- | :--- | :--- | :--- | | Net Revenues | US$2,267.9 million | US$2,411.5 million | -6.0% | | Net Income Attributable to JOYY | US$301.8 million | US$128.9 million | +134.1% | | Non-GAAP Net Income Attributable to JOYY | US$292.5 million | US$199.3 million | +46.8% | [Fourth Quarter 2023 Operational Highlights](index=1&type=section&id=Fourth%20Quarter%202023%20Operational%20Highlights) Operationally, JOYY experienced mixed results in Q4 2023, with Bigo Live's average mobile MAUs growing by **4.5%** year-over-year and BIGO's total paying users increasing by **7.9%**, while MAUs for Likee and Hago declined due to reduced user acquisition spending - Global average mobile MAUs increased by **2.6%** YoY to **274.9 million**[3](index=3&type=chunk) Fourth Quarter 2023 Operational Highlights | Operational Metric | Q4 2023 | Q4 2022 | Change | | :--- | :--- | :--- | :--- | | Bigo Live Avg. Mobile MAUs | 38.4 million | 36.8 million | +4.5% | | Likee Avg. Mobile MAUs | 39.1 million | 45.3 million | -13.7% | | Hago Avg. Mobile MAUs | 4.6 million | 6.7 million | -31.3% | | BIGO Paying Users | 1.67 million | 1.55 million | +7.9% | | BIGO Avg. Revenue per Paying User | US$244.8 | US$251.3 | -2.6% | [Management Commentary](index=1&type=section&id=Management%20Commentary) [CEO's Review of 2023 and Outlook for 2024](index=1&type=section&id=CEO's%20Review%20of%202023%20and%20Outlook%20for%202024) Chairman and CEO Mr. David Xueling Li highlighted 2023 as a year of progress, marked by enhanced profitability for the third consecutive year and a resumption of MAU growth, with the core strategy for 2024 being 'globalization through localization' to cultivate content ecosystems, explore long-term growth opportunities, and diversify revenue streams - Key achievements in 2023 included relentless optimization of operational efficiency, leading to enhanced profitability for the third straight year[4](index=4&type=chunk) - BIGO's revenue sustained its recovery in Q4, increasing by **3.1%** annually, driven by a **7.9%** YoY growth in paying users[4](index=4&type=chunk) - The core strategy for 2024 is 'globalization through localization' to grow the user community and reinforce leadership in key regions, aiming to diversify revenue streams and capture long-term sustainable growth[5](index=5&type=chunk) [Detailed Financial Results](index=2&type=section&id=Detailed%20Financial%20Results) [Fourth Quarter 2023 Financial Results](index=2&type=section&id=Fourth%20Quarter%202023%20Financial%20Results) In Q4 2023, JOYY's net revenues decreased by **5.8%** YoY to **$569.8 million**, yet the company successfully controlled costs and operating expenses, shifting from an operating loss of **$14.2 million** in Q4 2022 to an operating income of **$4.8 million**, with net income attributable to JOYY reaching **$45.8 million** [Net Revenues](index=2&type=section&id=Net%20Revenues) Q4 2023 net revenues were **$569.8 million**, primarily impacted by a decline in live streaming revenues to **$486.2 million** due to adjustments to non-core products, partially offset by growth in BIGO's streaming revenue and a **7.9%** increase in other revenues Net Revenues | Revenue Component | Q4 2023 | Q4 2022 | | :--- | :--- | :--- | | Live Streaming Revenues | US$486.2 million | US$527.4 million | | Other Revenues | US$83.6 million | US$77.5 million | | **Total Net Revenues** | **US$569.8 million** | **US$604.9 million** | [Cost of Revenues and Gross Profit](index=2&type=section&id=Cost%20of%20Revenues%20and%20Gross%20Profit) Cost of revenues fell by **6.2%** to **$368.4 million** in Q4 2023, resulting in a gross profit of **$201.5 million** and a slight improvement in gross margin to **35.4%** from **35.1%** in the corresponding period of 2022 Cost of Revenues and Gross Profit | Metric | Q4 2023 | Q4 2022 | | :--- | :--- | :--- | | Cost of Revenues | US$368.4 million | US$392.6 million | | Gross Profit | US$201.5 million | US$212.3 million | | Gross Margin | 35.4% | 35.1% | [Operating Expenses and Income](index=2&type=section&id=Operating%20Expenses%20and%20Income) Total operating expenses decreased to **$199.4 million** from **$231.2 million** year-over-year, driven by optimizations in sales and marketing strategies and improved management efficiency, leading to a GAAP operating income of **$4.8 million** - Sales and marketing expenses decreased to **US$92.3 million** due to optimization of marketing strategies to focus on ROI[8](index=8&type=chunk) Operating Expenses and Income | Metric | Q4 2023 | Q4 2022 | | :--- | :--- | :--- | | Operating Income/(Loss) | US$4.8 million | (US$14.2 million) | | Operating Margin | 0.8% | -2.3% | | Non-GAAP Operating Income | US$27.9 million | US$27.8 million | | Non-GAAP Operating Margin | 4.9% | 4.6% | [Net Income and EPS](index=2&type=section&id=Net%20Income%20and%20EPS) The company achieved a net income of **$45.8 million**, reversing a **$377.5 million** net loss from Q4 2022 primarily due to a one-time impairment loss, with Non-GAAP net income growing to **$64.2 million** and diluted net income per ADS at **$0.74** Net Income and EPS | Metric | Q4 2023 | Q4 2022 | | :--- | :--- | :--- | | Net Income/(Loss) Attributable to JOYY | US$45.8 million | (US$377.5 million) | | Non-GAAP Net Income Attributable to JOYY | US$64.2 million | US$50.0 million | | Diluted Net Income/(Loss) per ADS | US$0.74 | (US$5.38) | | Non-GAAP Diluted Net Income per ADS | US$1.01 | US$0.65 | [Balance Sheet and Cash Flows](index=2&type=section&id=Balance%20Sheet%20and%20Cash%20Flows) As of December 31, 2023, JOYY maintained a strong cash position with **$3.69 billion** in cash, cash equivalents, and short-term deposits/investments, generating **$97.2 million** in net cash from operating activities during the fourth quarter - As of December 31, 2023, the Company had cash and cash equivalents, restricted cash, short-term deposits, and short-term investments totaling **US$3,685.6 million**[12](index=12&type=chunk) - For the fourth quarter of 2023, net cash from operating activities was **US$97.2 million**[13](index=13&type=chunk) [Full Year 2023 Financial Results](index=4&type=section&id=Full%20Year%202023%20Financial%20Results) For the full year 2023, net revenues were **$2.27 billion**, a decrease from 2022, but profitability improved substantially with net income attributable to JOYY increasing by **134.2%** to **$301.8 million**, driven by disciplined marketing, investment gains, and higher interest income, while Non-GAAP net income also rose by **46.8%** to **$292.5 million** Full Year 2023 Financial Results | Metric | Full Year 2023 | Full Year 2022 | | :--- | :--- | :--- | | Net Revenues | US$2,267.9 million | US$2,411.5 million | | Operating Income | US$28.8 million | US$50.7 million | | Non-GAAP Operating Income | US$130.5 million | US$164.0 million | | Net Income Attributable to JOYY | US$301.8 million | US$128.9 million | | Non-GAAP Net Income Attributable to JOYY | US$292.5 million | US$199.3 million | | Diluted Net Income per ADS | US$4.90 | US$1.59 | | Non-GAAP Diluted Net Income per ADS | US$4.13 | US$2.54 | [Business Outlook and Recent Developments](index=4&type=section&id=Business%20Outlook%20and%20Recent%20Developments) [Business Outlook](index=4&type=section&id=Business%20Outlook) JOYY anticipates its net revenues for the first quarter of 2024 to be between **US$543 million** and **US$560 million**, a forecast subject to changes, particularly from macroeconomic uncertainties - For the first quarter of 2024, the Company expects net revenues to be between **US$543 million** and **US$560 million**[16](index=16&type=chunk) [Recent Developments](index=4&type=section&id=Recent%20Developments) The company is actively managing its capital and corporate structure, having extended its share repurchase program with **$25 million** in shares repurchased recently, while also addressing the termination of the YY Live sale by Baidu and seeking legal advice on the matter - In November 2023, the board authorized the continued use of the unutilized **US$530 million** share repurchase quota for another 12 months, with **US$25 million** of shares repurchased as of March 15, 2024[17](index=17&type=chunk) - On January 1, 2024, Baidu terminated the share purchase agreement for YY Live, prompting JOYY to engage in discussions with Baidu, seek legal advice, and consider all available options[18](index=18&type=chunk) [Financial Statements and Reconciliations](index=11&type=section&id=Financial%20Statements%20and%20Reconciliations) [Consolidated Balance Sheets](index=11&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2023, JOYY's balance sheet showed total assets of **$8.48 billion**, down from **$9.07 billion** at the end of 2022, with total liabilities decreasing to **$3.17 billion** and total shareholders' equity standing at **$5.29 billion**, reflecting a solid financial position Consolidated Balance Sheets | Balance Sheet Item | Dec 31, 2023 (US$ thousands) | Dec 31, 2022 (US$ thousands) | | :--- | :--- | :--- | | Total Current Assets | 4,072,640 | 4,644,649 | | **Total Assets** | **8,483,865** | **9,071,653** | | Total Current Liabilities | 3,086,407 | 3,071,684 | | **Total Liabilities** | **3,171,716** | **3,568,921** | | **Total Shareholders' Equity** | **5,290,016** | **5,411,366** | [Consolidated Statements of Operations](index=13&type=section&id=Consolidated%20Statements%20of%20Operations) The consolidated statements of operations for the year ended December 31, 2023, detail a net revenue of **$2.27 billion** and a gross profit of **$813.0 million**, achieving a net income attributable to controlling interest of **$301.8 million**, a significant increase from **$128.9 million** in 2022, despite lower revenues Consolidated Statements of Operations | Income Statement Item | Twelve Months Ended Dec 31, 2023 (US$ thousands) | Twelve Months Ended Dec 31, 2022 (US$ thousands) | | :--- | :--- | :--- | | Total Net Revenues | 2,267,870 | 2,411,516 | | Gross Profit | 813,028 | 852,128 | | Operating Income | 28,815 | 50,735 | | Net Income Attributable to Controlling Interest | 301,816 | 128,891 | [Segment Reports](index=18&type=section&id=Segment%20Reports) The segment report for Q4 2023 highlights the BIGO segment as the company's core profit engine, generating **$491.3 million** in net revenues and **$53.0 million** in operating income, while 'All other' segments reported revenues of **$79.0 million** and an operating loss of **$48.2 million** Q4 2023 Segment Performance | Q4 2023 Segment Performance | BIGO (US$ thousands) | All other (US$ thousands) | Total (US$ thousands) | | :--- | :--- | :--- | :--- | | Total Net Revenues | 491,261 | 79,036 | 569,839 | | Operating Income (Loss) | 53,011 | (48,215) | 4,796 | Q4 2023 Non-GAAP Segment Performance | Q4 2023 Non-GAAP Segment Performance | BIGO (US$ thousands) | All other (US$ thousands) | Total (US$ thousands) | | :--- | :--- | :--- | :--- | | Non-GAAP Operating Income (Loss) | 66,973 | (39,042) | 27,931 | | Non-GAAP Net Income (Loss) | 63,507 | (4,124) | 59,383 |

JOYY Inc. (NASDAQ:YY) Q4 2023 Earnings Conference Call March 18, 2024 9:00 PM ET Company Participants Jane Xie - Senior Manager, Investor Relations David Li - Chairman of the Board, Director and CEO Alex Liu - Vice President, Finance Conference Call Participants Yiwen Zhang - China Renaissance Alex Poon - Morgan Stanley Brian Gong - Citi Henry Sun - JP Morgan Operator Ladies and gentlemen, thank you for standing by. And welcome to the JOYY Inc.’s Fourth Quarter and Full Year 2023 Earnings Call. At this time ...

SINGAPORE, March 18, 2024 /PRNewswire/ -- JOYY Inc. (NASDAQ: YY) ("JOYY" or the "Company"), a global leading technology company, announced its unaudited financial results for the fourth quarter and full year of 2023.During the fourth quarter, JOYY's revenue came in at US$570 million. The Company's core business segment BIGO generated revenues of US$491 million, up 3.1% year over year. For the full year of 2023, JOYY's revenue reached US$2.27 billion, with BIGO contributing US$1.92 billion. Due to continue ...

SINGAPORE, March 19, 2024 (GLOBE NEWSWIRE) -- JOYY Inc. (NASDAQ:YY) ("JOYY" or the "Company"), a global technology company, today announced its unaudited financial results for the fourth quarter and full year of 2023. Fourth Quarter 2023 Financial Highlights1 Net revenues were US$569.8 million, compared to US$604.9 million in the corresponding period of 2022.Net income attributable to controlling interest of JOYY2 was US$45.8 million, compared to net loss of US$377.5 million in the corresponding period of 2 ...

SINGAPORE, March 07, 2024 (GLOBE NEWSWIRE) -- JOYY Inc. (NASDAQ:YY) ("JOYY" or the "Company," formerly known as YY Inc.), a global technology company, today announced that it plans to release its fourth quarter and full year 2023 financial results after the U.S. market closes on March 18, 2024. The Company's management will host an earnings conference call at 9:00 PM U.S. Eastern Time on Monday, March 18, 2024 (9:00 AM Singapore/Hong Kong Time on Tuesday, March 19, 2024). Details for the conference call are ...

Core Viewpoint - The "Mass Village Evening" events in Xinjiang are a vibrant expression of local culture and community spirit, showcasing the rich traditions and aspirations of the residents as they celebrate the Lunar New Year [1][3]. Group 1: Event Overview - The "Mass Village Evening" in Moyu County features performances by local residents, highlighting the festive atmosphere and cultural pride [1][3]. - The event includes a variety of performances such as dragon and lion dances, and traditional folk dances, creating a lively celebration despite the cold weather [3]. - The series of events lasts nearly three months, with performances rotating among different towns and streets, incorporating local customs and sports activities [3]. Group 2: Cultural Significance - The "Mass Village Evening" reflects the cultural needs of the villagers, showcasing their desire for a better quality of life and cultural engagement [3]. - The events serve as a platform for villagers to express their talents and creativity, fostering a sense of community and cultural identity [3][4]. - The participation of diverse ethnic groups in the celebrations illustrates the unity and vibrancy of the local culture in the region [3].

Core Viewpoint - JOYY's stock experienced a 60% increase in the last seven months of 2023, driven by strong buybacks and improved net income margins despite declining sales. However, the cancellation of Baidu's acquisition of YY Live has led to a 25% decline in JOYY's stock year-to-date in 2024 [1][2]. Group 1: Baidu Deal Cancellation - The $3.6 billion acquisition deal between Baidu and JOYY for YY Live was initially agreed upon in November 2020 but was never finalized due to regulatory issues from the Chinese State Administration for Market Regulation (SAMR) [3][5]. - Baidu had been operating YY Live as if it owned it for nearly three years, but the deal's cancellation has ended the uncertainty surrounding it, potentially allowing JOYY to pursue legal avenues for a cash payout from Baidu [6][10]. - JOYY is expected to receive approximately $700 million in offshore cash from Baidu, which could be used for share buybacks, alongside a potential $500 million from a spinoff of YY Live [12][13]. Group 2: JOYY's Business Segments - Bigo Live, JOYY's primary business, has shown growth with 40.3 million monthly active users, contributing 81% of JOYY's sales and virtually all profits, with 94.5% of livestreaming sales coming from Bigo Live [14][15]. - JOYY's sales from its Chinese business have significantly declined, indicating a strategic shift towards international markets [16]. - Shopline, an e-commerce platform in which JOYY holds a 70.4% stake, is projected to grow sales over 30% per year from 2022 to 2024, although it is still in the early stages of scaling [21][23]. Group 3: Financial Position and Capital Allocation - JOYY has a strong cash position with $3.8 billion on its balance sheet, which will be impacted by the return of $1.9 billion from Baidu due to the deal's cancellation [32]. - The company has returned $1.38 billion to investors through buybacks from 2020 to Q3 2023, with plans to continue enhancing shareholder returns through share buybacks [28][30]. - JOYY's management has indicated a preference for buybacks over dividends, especially given the current low valuation of the stock [30][29]. Group 4: Valuation and Market Outlook - JOYY is currently trading at 10.5 times its 2024 EPS estimates, with potential upside driven by its cash position, expected cash from Baidu, and the valuation of Shopline [33][34]. - The market cap of JOYY could realistically reach $6.3 billion if all cash is offshore, representing over 150% upside from its current valuation [34].

JOYY Inc. (NASDAQ:YY) Q3 2023 Earnings Conference Call November 29, 2023 9:00 PM ET Company Participants Jane Xie - Senior Manager, Investor Relations David Xueling Li - Chairman and CEO’ Ting Li - Chief Operating Officer Alex Liu - Vice President, Finance Conference Call Participants Thomas Chong - Jefferies Brian Gong - Citi Yiwen Zhang - China Renaissance Lei Zhang - Bank of America Securities Operator Ladies and gentlemen, thank you for standing by. And welcome to the JOYY Incorporates’ Third Quarter 20 ...

[Third Quarter 2023 Highlights](index=1&type=section&id=Third%20Quarter%202023%20Highlights) JOYY achieved solid performance in Q3 2023 with a slight year-over-year decrease in total revenue but a year-over-year increase in Non-GAAP net income, driven by strong user growth in Bigo Live Q3 2023 Key Financial Metrics | Metric | Q3 2023 (Million USD) | Q3 2022 (Million USD) | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Net Revenues | 567.1 | 586.7 | -3.3% | | Net Income Attributable to JOYY Inc. Shareholders (GAAP) | 72.9 | 515.3 | -85.8% | | Net Income Attributable to JOYY Inc. Shareholders (Non-GAAP) | 81.2 | 76.9 | +5.6% | Q3 2023 Key Operating Metrics | Metric | Q3 2023 | Q3 2022 | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Global Average Mobile MAU | 276.8 million | 269.8 million | +2.6% | | Bigo Live Average Mobile MAU | 40.3 million | 35.4 million | +14.0% | | Likee Average Mobile MAU | 41.0 million | 50.6 million | -19.0% | | BIGO Paying Users | 1.61 million | 1.51 million | +6.6% | | BIGO Average Revenue Per Paying User (USD) | 253.4 | 259.8 | -2.5% | - The significant year-over-year decrease in GAAP net income was primarily due to a one-time gain from the revaluation of equity investments recorded in the prior year period[8](index=8&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Chairman and CEO Mr. David Xueling Li highlighted the solid third-quarter results, with continued recovery in BIGO segment revenue, profit, and user engagement - BIGO segment revenue increased by **2.2% year-over-year** and **4.9% quarter-over-quarter** in the third quarter, indicating a sustained recovery trend[3](index=3&type=chunk) - Core product Bigo Live's MAU grew **14.0% year-over-year** to **40.3 million**, with healthy growth in paying users and improved average revenue per paying user quarter-over-quarter[3](index=3&type=chunk) - The company is committed to shareholder returns, having cumulatively returned **$355.4 million** to shareholders through dividends and share repurchases in the first three quarters of 2023, including **$43.5 million** in share repurchases during the third quarter[3](index=3&type=chunk) [Third Quarter 2023 Detailed Financial Results](index=2&type=section&id=Third%20Quarter%202023%20Financial%20Results) In Q3 2023, the company's net revenues were $567.1 million, a 3.3% year-over-year decrease, with a decline in live streaming revenues partially offset by strong 62.1% growth in other revenues [Net Revenues](index=2&type=section&id=Net%20Revenues) Third-quarter net revenues were $567.1 million, a 3.3% year-over-year decrease, primarily due to a decline in live streaming revenues partially offset by strong growth in other revenues Q3 2023 Revenue Composition | Revenue Category | Q3 2023 (Million USD) | Q3 2022 (Million USD) | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Live Streaming Revenues | 495.8 | 542.8 | -8.7% | | Other Revenues | 71.3 | 44.0 | +62.1% | | **Total Net Revenues** | **567.1** | **586.7** | **-3.3%** | [Cost of Revenues and Gross Profit](index=2&type=section&id=Cost%20of%20Revenues%20and%20Gross%20Profit) Third-quarter cost of revenues decreased by 2.3% year-over-year to $357.9 million, resulting in a gross profit of $209.2 million and a slight decrease in gross margin to 36.9% Q3 2023 Gross Profit Analysis | Metric | Q3 2023 (Million USD) | Q3 2022 (Million USD) | | :--- | :--- | :--- | | Cost of Revenues | 357.9 | 366.5 | | Gross Profit | 209.2 | 220.2 | | Gross Margin | 36.9% | 37.5% | [Operating Expenses and Income](index=2&type=section&id=Operating%20Expenses%20and%20Income) Total operating expenses decreased year-over-year to $191.3 million in the third quarter, with reduced sales and marketing expenses offset by increased research and development expenses Q3 2023 Operating Expenses Breakdown | Expense Category | Q3 2023 (Million USD) | Q3 2022 (Million USD) | | :--- | :--- | :--- | | Research and Development Expenses | 71.6 | 61.2 | | Sales and Marketing Expenses | 92.5 | 96.8 | | **Total Operating Expenses** | **191.3** | **202.2** | Q3 2023 Operating Income | Metric | Q3 2023 (Million USD) | Q3 2022 (Million USD) | | :--- | :--- | :--- | | Operating Income (GAAP) | 12.0 | 19.8 | | Operating Margin (GAAP) | 2.1% | 3.4% | | Operating Income (Non-GAAP) | 40.4 | 43.1 | | Operating Margin (Non-GAAP) | 7.1% | 7.4% | [Net Income and EPS](index=2&type=section&id=Net%20Income%20and%20EPS) Third-quarter GAAP net income significantly decreased year-over-year due to a one-time investment gain in the prior year, while Non-GAAP net income increased by 5.6% to $81.2 million Q3 2023 Net Income and Earnings Per ADS | Metric | Q3 2023 (Million USD) | Q3 2022 (Million USD) | | :--- | :--- | :--- | | Net Income (GAAP) | 72.9 | 515.3 | | Net Margin (GAAP) | 12.9% | 87.8% | | Net Income (Non-GAAP) | 81.2 | 76.9 | | Net Margin (Non-GAAP) | 14.3% | 13.1% | | Diluted Earnings Per ADS (GAAP) | 1.86 | 6.28 | | Diluted Earnings Per ADS (Non-GAAP) | 1.22 | 0.96 | [Balance Sheet and Cash Flows](index=2&type=section&id=Balance%20Sheet%20and%20Cash%20Flows) As of September 30, 2023, the company maintained a strong financial position with $3.8228 billion in cash, cash equivalents, and short-term investments, generating $72.9 million in net cash from operating activities during the third quarter - As of September 30, 2023, the company's total cash, cash equivalents, restricted cash, short-term deposits, and short-term investments amounted to **$3.8228 billion**[10](index=10&type=chunk) - In the third quarter of 2023, the company generated **$72.9 million** in net cash from operating activities[10](index=10&type=chunk)[11](index=11&type=chunk) [Business Outlook and Recent Developments](index=4&type=section&id=Business%20Outlook%20and%20Recent%20Developments) The company anticipates Q4 2023 net revenues to be between $551 million and $579 million, and its board has extended the existing share repurchase program by 12 months - The company expects its net revenues for the fourth quarter of 2023 to be between **$551 million** and **$579 million**[12](index=12&type=chunk) - The board of directors approved extending the validity of the remaining **$530 million** under the existing share repurchase program for an additional 12 months[13](index=13&type=chunk) - The company appointed Ms. Ting Li, its Chief Operating Officer, as a director of the company, effective November 30, 2023[14](index=14&type=chunk) [Appendix: Financial Statements](index=10&type=section&id=Appendix%3A%20Financial%20Statements) This section provides the company's unaudited consolidated balance sheets, statements of operations, GAAP to Non-GAAP reconciliation, and segment report, highlighting BIGO as the primary revenue and profit driver [Unaudited Condensed Consolidated Balance Sheets](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2023, the company's total assets were $8.449 billion, a decrease from $9.072 billion at the end of 2022, with total liabilities decreasing to $3.141 billion and total shareholders' equity at $5.286 billion Balance Sheet Key Items (As of September 30, 2023) | Item | September 30, 2023 (Billion USD) | December 31, 2022 (Billion USD) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 1.240 | 1.214 | | Total Current Assets | 4.172 | 4.645 | | Total Assets | 8.449 | 9.072 | | Total Liabilities | 3.141 | 3.569 | | Total Shareholders' Equity | 5.286 | 5.411 | [Unaudited Condensed Consolidated Statements of Operations](index=12&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) The financial statements detail the company's revenues, costs, expenses, and profits for Q3 2023 compared to the prior year, showing a decrease in total net revenues and operating income Q3 2023 Statements of Operations Overview | Item | Q3 2023 (Million USD) | Q3 2022 (Million USD) | | :--- | :--- | :--- | | Total Net Revenues | 567.1 | 586.7 | | Gross Profit | 209.2 | 220.2 | | Operating Income | 12.0 | 19.8 | | Net Income | 65.1 | 509.5 | | Net Income Attributable to Controlling Interests | 72.9 | 515.3 | [Unaudited Reconciliation of GAAP and Non-GAAP Results](index=15&type=section&id=Unaudited%20Reconciliation%20of%20GAAP%20and%20Non-GAAP%20Results) This section provides a detailed reconciliation from GAAP to Non-GAAP metrics, with key adjustments including share-based compensation expenses, amortization of intangible assets, and loss from disposal of a subsidiary Q3 2023 GAAP to Non-GAAP Operating Income Reconciliation | Item | Amount (Thousand USD) | | :--- | :--- | | Operating Income (GAAP) | 12,049 | | Add: Share-based Compensation Expenses | 6,297 | | Add: Amortization of Intangible Assets | 15,890 | | Add: Loss from Disposal of a Subsidiary | 6,177 | | **Operating Income (Non-GAAP)** | **40,413** | [Unaudited Segment Report](index=17&type=section&id=Unaudited%20Segment%20Report) The company's business is divided into BIGO and All Other segments, with BIGO contributing the vast majority of revenue and all operating profit in Q3 2023, underscoring its role as the core earnings engine Q3 2023 Segment Performance | Item | BIGO (Million USD) | All Other (Million USD) | Total (Million USD) | | :--- | :--- | :--- | :--- | | Total Net Revenues | 494.1 | 73.5 | 567.1 | | Operating Profit (Loss) | 68.51 | (56.46) | 12.05 | | Net Profit (Loss) | 70.24 | (5.16) | 65.08 |