2024-11-14 10:00Financial Performance - Total net revenue for Q3 2024 reached RMB 7.306 billion (USD 1.041 billion), an increase of 26% year-over-year[7] - Gross profit was RMB 2.547 billion (USD 363 million), representing a 76% year-over-year increase, with a gross margin of 34.9%, up from 25.0% in the same period last year[7] - Adjusted net profit for Q3 2024 was RMB 236 million (USD 33.6 million), compared to an adjusted net loss of RMB 863 million in the same period last year[7] - Operating cash flow for Q3 2024 was RMB 2.226 billion (USD 317 million), compared to RMB 277 million in the same period last year[7] - Net loss narrowed by 94% to RMB 798 million (USD 114 million) compared to the same period in 2023[12] - Total operating expenses were RMB 2.614 billion (USD 372 million), reflecting a 2% increase from the previous year[10] - Adjusted operating profit was RMB 272 million (USD 38.8 million), compared to an adjusted operating loss of RMB 755 million in the same period last year[11] Revenue Breakdown - Mobile gaming revenue was RMB 1.823 billion (USD 260 million), up 84% year-over-year, driven by the strong performance of the exclusive licensed game "Three Kingdoms: Strategizing the World"[9] - Advertising revenue amounted to RMB 2.094 billion (USD 298 million), a 28% increase year-over-year, attributed to optimized advertising products and improved efficiency[9] - Value-added services revenue was RMB 2.821 billion (USD 402 million), a 9% increase year-over-year, mainly due to growth in live streaming and other value-added services[9] User Engagement - Daily active users (DAUs) reached 107.3 million, compared to 102.8 million in the same period last year, with average daily usage time increasing to 106 minutes[8] - The company is focused on retaining and enhancing user engagement, providing quality content, and expanding its product and service offerings[20] - The significant improvement in financial performance demonstrates the resilience of the company's business model and the substantial commercialization potential of its community[8] Cost Management - Operating costs amounted to RMB 4.758 billion (USD 678 million), an increase of 9% compared to the same period in 2023, primarily due to higher revenue sharing costs[10] - Sales and marketing expenses rose to RMB 1.202 billion (USD 171 million), a 21% increase year-over-year, driven by higher marketing expenditures for exclusive licensed games[11] - Research and development expenses decreased by 15% to RMB 906 million (USD 129 million), mainly due to the termination of several game projects in the previous year[11] - The company is actively managing costs and expenses as part of its strategic initiatives[20] Future Outlook - The company aims to enhance its commercialization capabilities and strengthen its community ecosystem for long-term value creation[8] - The company continues to focus on enhancing its user engagement and expanding its market presence, which is expected to drive future revenue growth[27] - Forward-looking statements are identified by terms such as "will," "expect," "anticipate," and involve inherent risks and uncertainties that may cause actual results to differ significantly from those projected[20] Shareholder Information - The company announced a share repurchase plan, authorizing up to USD 200 million in repurchases over the next 24 months[14] - The company will hold an earnings conference call on November 14, 2024, to discuss its third-quarter performance[15] - The company has a dedicated investor relations team available for inquiries, indicating a commitment to transparency and communication with stakeholders[21] Regulatory and Economic Environment - The company acknowledges the competitive landscape of the online entertainment industry and its impact on future performance[20] - The company is subject to regulatory policies and economic conditions in China, which may influence its operational strategies[20] Cash and Assets - Cash and cash equivalents, along with short-term investments, totaled RMB 15.234 billion (USD 2.171 billion) as of September 30, 2024[12] - Total assets as of September 30, 2024, were RMB 32,021,300, a decrease from RMB 33,159,067 as of December 31, 2023[25] - Total liabilities as of September 30, 2024, were RMB 18,298,184, down from RMB 18,754,800 as of December 31, 2023[25]