2025-11-13 13:00Financial Data and Key Metrics Changes - Total net revenues grew 5% year-over-year to RMB 7.7 billion, with gross profit increasing 11% year-over-year to RMB 2.8 billion [6][22][23] - Gross margin expanded to 36.7%, marking the 13th consecutive quarter of growth [6][23] - Non-GAAP operating profit surged 153% year-over-year, while non-GAAP net profit increased 233% year-over-year, with margins reaching 9% and 10.2% respectively [6][23] Business Line Data and Key Metrics Changes - Monthly paying users reached a record high of 35 million, up 17% year-over-year, driven by premium membership growth [5][30] - Advertising revenue grew 23% year-over-year to RMB 2.6 billion, with significant contributions from high-margin businesses [5][13][22] - Game revenues decreased 17% year-over-year to RMB 1.5 billion, primarily due to a high base from the previous year [16][22] Market Data and Key Metrics Changes - Daily active users (DAUs) rose 9% year-over-year to 117 million, while monthly active users (MAUs) grew 8% to 376 million [4][5] - Average daily time spent per user increased to 112 minutes, a 6-minute rise from the same period last year [5][9] Company Strategy and Development Direction - The company aims to empower its unique PUGV community and strengthen commercialization capabilities while sustaining profitability [9][20] - AI is identified as a key enabler for future growth, with plans to launch several AI-powered applications [8][9] - The focus remains on high-quality content and community engagement to drive sustainable growth [20][30] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for high-quality content, which is expected to continue driving user growth [27][30] - The company anticipates further improvements in gross and net margins, with a target gross margin of 37% for Q4 [50][51] - The advertising business is expected to see substantial growth potential, particularly in the context of evolving consumer behaviors [41][48] Other Important Information - The company has repurchased a total of 6.4 million shares at a cost of $116.4 million, with $83.6 million remaining for future buybacks [24][52] - ESG principles are central to the company's mission, with an A rating reaffirmed by MSCI ESG [20] Q&A Session Summary Question: What are the drivers behind the growth in DAUs, MAUs, and monthly paying users? - Management attributed growth to a focus on high-quality content and a unique community that supports content discovery and creator engagement [26][30] Question: Can management share insights on the gaming business and future plans? - The success of "Escape from Duck Hof: Tao Li Ya Ke Fu" was highlighted, with plans for mobile and console versions in development [33][38] Question: How does management view the growth potential in the advertising business? - Management noted that the advertising business is expected to grow significantly, driven by improved targeting and the unique community engagement [41][42] Question: What are the expectations for gross and net margins moving forward? - Management expects gross margins to reach 37% in Q4, with a mid-term target of 40-45% [50][51]