Financial Data and Key Metrics Changes - The company's revenue for Q2 2019 reached RMB1.4 billion, nearly tripling compared to the same period last year [31] - Average user acquisition cost was RMB6.93, while user engagement expenses were RMB0.13 per DAU per day, and ARPU was RMB0.39 [25] - Gross margin for Q2 2019 was 74.0%, a decline of 1.2% quarter-on-quarter and 9.1% year-on-year [34] - Non-GAAP net loss was RMB496 million, representing a loss ratio of 35.8%, which increased from the previous year [39] Business Line Data and Key Metrics Changes - The overall business saw a quarterly average combined DAU of 38.7 million and combined MAU of 119.3 million, both more than tripling from a year ago [8] - Midu Lite was launched, attracting a different user base and contributing to user growth [9] - Midu's peak DAU reached over 8 million at the beginning of Q3, but faced a suspension from July 15 to October 15 [48] Market Data and Key Metrics Changes - The overall digital advertising market is experiencing weakness due to supply/demand imbalance and weak macro conditions [22] - Despite the tough environment, the company is delivering one of the fastest growth rates in the industry [22] Company Strategy and Development Direction - The company is focusing on growth, compliance, and optimization of internal teams to support future growth [8] - A significant investment in IT infrastructure is being made to accommodate data-intensive content [34] - The company aims to reach a DAU target of 50 million to 60 million by year-end, doubling the level at the end of the previous year [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in resuming normal operations for Midu by mid-October and expects limited impact on Q4 [60] - The company anticipates that Midu could contribute up to 20% of total revenue in Q4 [60] - Management acknowledged the challenges in user acquisition and engagement costs but remains optimistic about future growth [62] Other Important Information - The company has been granted an Internet news license, marking a significant achievement in compliance [11] - The company is diversifying its monetization avenues by growing contributions from casual games and live streaming [22] Q&A Session Summary Question: DAU was stagnant in Q2; what is the user acquisition strategy? - Management noted some pressure in user growth due to competition and market weakness but observed recovery starting in June, with a 10% to 15% increase in DAU for Qutoutiao in Q3 [46][47] Question: How confident is management regarding regulatory headwinds? - Management expressed confidence in resuming normal operations by October 15, supported by the recent Internet News License [58] Question: What is the revenue outlook for Q4? - Management expects Q4 to be strong, with Midu potentially contributing up to 20% of total revenue [60][72] Question: What are the trends in advertising sectors? - E-commerce remains strong, continuing to be the largest segment of advertisers, with other segments remaining stable [85]
Qutoutiao(QTTOY) - 2019 Q2 - Earnings Call Transcript