JOYY Q3 2024 Earnings Report

JOYY EPS Results

• Actual EPS: $1.01
• Consensus EPS: $0.79
• Beat/Miss: Beat by +$0.22
• One Year Ago EPS: N/A

JOYY Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

JOYY Announcement Details

• Quarter: Q3 2024
• Date: 11/26/2024
• Time: After Market Closes
• Conference Call Date: Tuesday, November 26, 2024
• Conference Call Time: 9:00PM ET

JOYY (NASDAQ:YY) (NASDAQ: YY) is a global social media and digital entertainment company that operates online platforms connecting users through live streaming, short-form video, instant messaging and other interactive services. Its products are designed to support user-generated content, online communities and real-time social engagement across mobile and web platforms.

JOYY’s principal brands include Bigo Live, a global live-streaming platform; Likee, a short-video and video-editing application; and imo, an instant-messaging and voice and video communication service. The company has also operated Hago, a social gaming and entertainment platform. Its services are available across multiple international markets, with a significant presence outside China.

The company was founded in China in 2005 as YY Inc. and later changed its name to JOYY Inc. In 2020, JOYY agreed to sell YY Live, its domestic live-streaming business in China, to Baidu, subject to regulatory review and closing conditions. Following the transaction, JOYY has focused primarily on its international social-media and entertainment businesses, particularly those operated by its BIGO subsidiary. JOYY was founded by Li Xuelin, who has served as the company’s chairman and chief executive officer.

JOYY Q3 2024 Earnings Call Transcript

Key Takeaways

• Group revenue reached RMB558.7 million in Q3, with the Bigo segment delivering a slight year-over-year increase; group non-GAAP operating profit rose 15.4% quarter-over-quarter to RMB34.9 million and Bigo’s non-GAAP operating profit increased 5% to RMB72.9 million.
• Non-live streaming revenue grew 13.1% sequentially to RMB119.2 million (21.3% of group revenue), led by a 15.5% quarter-over-quarter increase in Bigo’s advertising revenue, particularly in Europe and North America.
• Management emphasized three strategic priorities—globalization of its social platform, ROI-driven operational efficiency in developed markets and the Middle East, and diversifying revenue streams—which yielded double-digit ROI improvements even as user acquisition spending was cut by 7.3%.
• Joy generated RMB61.1 million of positive operating cash flow in Q3 and repurchased an additional RMB117.8 million of shares, leaving RMB283 million available under its buyback program, underscoring its strong financial position and shareholder return focus.
• For Q4 2024, the company forecasts net revenues of RMB546 million to RMB563 million, implying moderate full-year top-line growth and continued emphasis on profitable expansion and operational excellence.

Presentation

[Operator]

Ladies and gentlemen, thank you for standing by, and welcome to the JOYY's third quarter 2024 earnings call. At this time, all participants are in listen-only mode. After the management's prepared remarks, there will be a question-and-answer session. I'd now like to hand the conference over to your host today, Jane Xie, the company's senior manager of investor relations. Please go ahead, Jane.

[Jane Xie, Senior Manager of Investor Relations at JOYY]

Thank you, operator. Hello, everyone. Welcome to JOYY's third quarter 2024 earnings conference call. Joining us today are Ms. Ting Li, Chairperson and CEO of JOYY, and Mr. Alex Liu, Vice President of Finance. For today's call, management will first provide a review of the quarter, and then we will conduct a Q&A session. The financial results and webcast of this conference call are available at ir.joyy.com. A replay of this call will also be available on our website in a few hours. Before we continue, I'd like to remind you that we may make forward-looking statements, which are inherently subject to risk uncertainties that may cause actual results to differ from our current expectations. For detailed discussions of the risk uncertainties, please refer to our latest annual report on Form 20-F and other documents filed with the SEC.

[Jane Xie, Senior Manager of Investor Relations at JOYY]

Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in U.S. dollars. I will now turn the call over to our Chairperson and CEO, Ms. Ting Li. Please go ahead, Ms. Li.

[Ting Li, Chairperson and CEO at JOYY]

Hello, everyone. I'm Ting Li. Welcome to our third quarter 2024 earnings call. Let's begin with a review of our overall performance during the third quarter. During the third quarter, we effectively executed our strategic priorities, maintaining a strong focus on optimizing our products, deepening our market penetration in developed countries, and enhancing our global operational capabilities and efficiencies. These efforts yielded solid results. In the third quarter, our group revenue reached $558.7 million. Our core business segment, BIGO, recorded revenues of $496 million, delivering a slight year-over-year increase. Our disciplined execution has led to improvements in operational efficiency at both the BIGO segment and group level. Our group non-GAAP operating profit came in at $34.9 million, up 16.4% quarter over quarter. BIGO's non-GAAP operating profit expanded to $72.9 million, up 5% quarter over quarter, exceeding our expectations, excluding the impact of FX losses.

[Ting Li, Chairperson and CEO at JOYY]

Bigo's non-GAAP net profit was also up quarter over quarter. We briefly outlined our strategic priorities in our previous earnings call. Now, let me quickly touch on each of these. First, we continued to advance our globalization strategy in reaching user interaction and content offerings, while building on our unique position as a global social platform. As we have previously mentioned, Bigo Live is a highly globalized product, offering content across 30 languages and fostering meaningful cross-regional connections. This is particularly evident among our users in developed countries who actively engage in cross-cultural interactions. What truly set us apart is the global nature of our user community and the organic social connections that flourish across our platform, a unique value proposition that we are committed to amplifying.

[Ting Li, Chairperson and CEO at JOYY]

To further enhance our global ecosystem, we have implemented a series of upgrades to boost the creation, quality, and distribution of content on our platform. For example, we fine-tuned our content recommendation algorithm to better facilitate content sharing within the same language regions and expand cross-regional content flow between highly interactive markets such as North and South America. We also launched global cross-regional initiatives based on user interaction patterns, such as this quarter's BIGO's Most Talented competition, organized by our North American team. The event brought together creators from America, Southeast Asia, and Africa, highlighting our ability to unite diverse talent across high engagement regions. On the technology front, we are preparing to introduce standardized global content guidelines and the common architecture of AI-powered real-time caption translation in select languages.

[Ting Li, Chairperson and CEO at JOYY]

This enhancement will streamline our cross-regional content delivery and better serve our users' growing appetite for global content and social connections. Second, we are shifting focus on operational efficiency by optimizing every aspect of our global localized operations, from user acquisition to KOL management to our user engagement and monetization mechanism. We aim to comprehensively strengthen the efficiencies and capabilities of our global operations and drive margin expansion in product and group profitability. During the quarter, we conducted comprehensive ROI analysis across product regions and user acquisition channels. Leveraging this insight, we optimized our resource allocation, redirecting our advertising spending from underperforming regions toward developed countries and focused on the acquisition of premier users with greater monetization potential.

[Ting Li, Chairperson and CEO at JOYY]

As a result, Bigo Live has achieved consistent year-over-year and sequential user growth in developed countries, with overall ROI improving by double digits from the previous quarter, even with a 7.3% sequential reduction in its total user acquisition spending. In other underperforming regions, we have shifted some of our efforts from traditional advertising channels to more cost-effective user acquisition methods, such as KOL partnerships and leveraged social features like rematch, to expand our product reach. These targeted initiatives underscore our commitment to cultivating a sustainable, high-quality user base where substantially enhanced content quality and social experience to drive long-term user monetization potential. For Likee, we have maintained a strategic focus on our core market in the Middle East and Europe, successfully implementing monetization through both live streaming and advertising. This targeted approach has enabled us to achieve our initial milestone and profitability.

[Ting Li, Chairperson and CEO at JOYY]

To further unlock Likee's monetization potential, we recently redirected some of its operational resources, including personnel and traffic, toward a new social live streaming product. This means that the resources currently allocated to non-core markets, which do not contribute much to Likee's monetization, will be further optimized, potentially leading to declines in Likee's user metrics in the near term. However, we believe this aforementioned strategy will accelerate our new product development, strengthen our position in Likee's core market, and ultimately enhance Likee's monetization potential in the long run. Third, we have continued to cultivate long-run initiatives that will further diversify our revenue streams. In the third quarter, our group non-live streaming revenue grew 13.1% sequentially to $119.2 million, representing 21.3% of group revenue. BIGO's non-live streaming revenue, primarily generated from advertising, increased 15.5% quarter over quarter to $78.2 million.

[Ting Li, Chairperson and CEO at JOYY]

This growth was fueled by strong momentum in Europe and North America, underscoring our strategic initiatives and commitment to expanding our footprint in this market. Building these new initiatives into meaningful revenue streams requires patience and substantial investment. We remain committed to nurturing these opportunities to realize their full potential. We sustained our positive operating cash flow in the third quarter, generating $61.1 million at the group level. Supported by our strong cash flow and healthy financial position, we actively advanced our shareholder return initiative. In the third quarter, we accelerated our share repurchase, buying back an additional $117.8 million worth of our shares, with $283 million remaining amounting under our repurchase program. We will continue to actively execute share buybacks to reward our shareholders' ongoing support. Now, let's take a closer look at our product, starting with Bigo Live.

[Ting Li, Chairperson and CEO at JOYY]

In the third quarter, we sharpened our operational strategy by prioritizing our advertising investment and operational resources toward developed countries and premium users. This targeted approach yielded strong results in developed countries, where end users grew 3.4% year-over-year and paying users increased 9.1% year-over-year. We also saw encouraging momentum in the Middle East, where Bigo Live's revenue increased 5.6% sequentially. During the quarter, Bigo Live successfully organized the third season of Bigo's Most Talented, featuring categories including music, dance, and beauty. The event attracted outstanding creators from around the world. Building on previous seasons, we introduced a more comprehensive judging system incorporating key audience engagement metrics. This allowed a seamless merger of interactive live streaming with traditional talent show elements. The season culminated in the grand finale broadcast from Los Angeles on October 16, captivating a global audience.

[Ting Li, Chairperson and CEO at JOYY]

The event resonated strongly with viewers, amassing an impressive 5.79 million audience votes, highlighting the high level of engagement surrounding the competition. We also strengthened bonds with our business partners and our user community through a series of mid-year gatherings across Saudi Arabia, Vietnam, Thailand, and the Philippines. These gatherings brought together the cornerstone members of our ecosystem: top creators, users, and partners to celebrate their achievements and vital contributions to our progress in the first half of the year. Throughout the quarter, we further developed Bigo Live's social engagement features, prioritizing improvements to rematch and messaging functionality. These upgrades drove deeper user connections and more efficient follow-up conversions. Notably, rematch's average DAU penetration rate increased significantly to 23.4%, where the number of direct chat messages rose by 15.9% from the previous quarter. We also saw a 4.3% rise in average new followers per user, indicating stronger community building.

[Ting Li, Chairperson and CEO at JOYY]

By directing traffic to premier hosts and upgrading interactive features, we saw broader creator participation and user engagement in multicast rooms. We achieved a 3.9% sequential increase in the penetration rate of user hosting a live session in multicast rooms, alongside a 3.6% sequential increase in the overall rate of users going live as guest speakers. Next, moving to Likee. Our strategy for Likee remains rooted in the Middle East and European markets, where we continue to build momentum and enhance monetization across both live streaming and advertising. As a result, Likee advertising revenue grew 33.4% year-over-year in the third quarter, and Likee maintained its profitability. During the quarter, we elevated Likee's user experience across its core markets through enhanced content quality, interactivity, and community engagement.

[Ting Li, Chairperson and CEO at JOYY]

A standout community-building initiative was our August music festival tour across five European cities, which brought together Likee's top creators, from music bloggers to dance groups, alongside established performers and celebrities. This unique event delivered an unprecedented interactive experience for the Likee community. In September, Likee served as the official media partner for Phygital Games 2024, providing eight days of live streaming coverage to immerse users in the competitive prowess of top athletes in digital football, basketball, laser shooting, and simulated dance. Our expanded premier content offerings and content diversity drove a 12.3% quarter-over-quarter increase in users' video time spent. Finally, turning to Hago, in the third quarter, our targeted incentive strategy across different paying user segments drove improved monetization metrics. We saw positive momentum in Hago's paying users and ARPU, with its total revenue growing 6.1% quarter-over-quarter.

[Ting Li, Chairperson and CEO at JOYY]

Hago's operating losses further narrowed from the previous quarter, and its operating cash flow remained positive. Hago's social engagement metrics remained strong in the third quarter. Average time spent in social channels increased 2.5% quarter-over-quarter to 105 minutes, and the next day, retention rates showed substantial improvements. This positive trend underscores the success of our engagement strategy and reflects our commitment to enriching user experiences while advancing monetization efforts within the platform. Looking ahead, our strategic roadmap continues to center on three core priorities: strengthening our position as a distinctive global social platform through enhanced user experiences, developing diverse revenue streams to drive sustainable growth, and advancing excellence across our global operations. Anchored by our strong cash flow and solid financial footing, we are dedicated to driving profitable growth and creating enduring value for our shareholders. I will now turn the call over to Mr.

[Ting Li, Chairperson and CEO at JOYY]

Alex Liu, the Vice President of Finance, to provide our financial updates. Thank you.

[Alex Liu, VP at JOYY]

Thanks, Miss Li. Hello, everyone. Before I go into the details, we would like to remind you that despite the latest development in the sale of YY Live, to the date of this press release, we have not obtained control over YY Live and therefore have not consolidated the business. The financial results presented in our press release and this conference call primarily consisted of BIGO and all other segments, excluding YY Live. I will now provide a recap of some key financial highlights for the third quarter. Our total net revenues were $558.7 million in the third quarter, compared with $567.1 million in the same period last year. Revenues from the BIGO segment were $496 million, up slightly year-over-year.

[Alex Liu, VP at JOYY]

In particular, Bigo's non-live streaming revenues were $78.2 million, which was up substantially year-over-year, primarily due to the increase of advertising revenues. Bigo's live streaming revenues were down year-over-year, mainly due to our proactive actions to optimize Bigo Live's content and user acquisition costs, and adjustments to Bigo's non-call audio live streaming product in certain markets. We believe these changes in turn enhanced our margin profile and contributed to long-term business sustainability. Geographically speaking, as we prioritized to allocate our operational resources towards developed countries and the acquisition of premier users with great monetization potential, our group revenues from developed countries and regions were up by 21.6% year-over-year, with revenues from the Middle East back to sequential growth of 2.1%.

[Alex Liu, VP at JOYY]

Cost of revenues for the quarter decreased by 2.1% to $350.5 million, primarily driven by a decrease in cost of revenues of our all-other segment, which was consistent with its revenue trend, partially offset by increase in cost of revenues of BIGO. BIGO's cost of revenues was $312.6 million, which was up by 4.5% year-over-year, mainly driven by increased traffic acquisition costs paid to third-party partners in relating to our advertising business. Gross profit was $208.1 million in the quarter, with a gross margin of 37.3%. BIGO's gross profit was $183.4 million, with a gross margin of 37%. BIGO's gross margin was lower year-over-year due to a shift in our revenue mix, which saw an increased contribution from our lower-margin audience network advertising revenues.

[Alex Liu, VP at JOYY]

However, during the third quarter, our disciplined execution has significantly improved the operational efficiency of BIGO's live streaming business, effectively offsetting the dilution impact on BIGO's gross margin. As a result, we observed a meaningful sequential improvement in BIGO's gross margin during the quarter. Our group operating expenses for the quarter were $192 million, compared with $191.3 million in the same period of 2023. Among the operating expenses, sales and marketing expenses decreased to $83.5 million from $92.5 million in the same period of 2023, primarily due to our reduced spending on user acquisition through advertising, as we continued to focus on ROI and the effectiveness of user acquisition. General and administrative expenses increased to $36.1 million from $27.1 million in the same period of 2023, primarily due to an increase in salary and welfare expenses.

[Alex Liu, VP at JOYY]

BIGO's total operating expenses for the quarter were $120.7 million, decreased from $126.7 million in the same period of 2023, primarily due to a decrease in sales and marketing expenses. Our disciplined execution has driven enhanced operational efficiency at both the group and BIGO segment. Our group's GAAP operating income for the quarter was $16.4 million, up by 623.5% quarter-over-quarter. Our group's non-GAAP operating income for the quarter, with excluded SBC expenses, amortization of intangible assets from business acquisitions, gain on the consolidation and disposal of subsidiaries, as well as impairment of goodwill and investments, was $34.9 million in this quarter, up by 16.4% quarter-over-quarter. BIGO's GAAP operating income for the quarter was $62.7 million, and BIGO's non-GAAP operating income was $72.9 million, up by 5% quarter-over-quarter.

[Alex Liu, VP at JOYY]

Our group's GAAP net income, attributable to controlling interest of JOYY in the quarter, was $60.6 million, compared to $72.9 million in the same period of 2023. GAAP net income margin was 10.8% in the third quarter of 2024, compared to 12.9% in the same period of 2023. Our GAAP net margin was lower this year due to larger foreign currency exchange losses and lower net interest income due to the decreased net cash balance after we fully repaid our CB in the second quarter. BIGO's GAAP net income in the quarter was $63.3 million, compared to $70.2 million in the same period of 2023. BIGO's GAAP net margin was lower this year due to foreign currency exchange losses of $10.3 million in the third quarter of 2024.

[Alex Liu, VP at JOYY]

Non-GAAP net income, attributable to controlling interest of JOYY in the quarter, was $61.2 million, compared to $81.2 million in the same period of 2023. The group's non-GAAP net income margin was 10.9% in the quarter, compared to 14.3% in the same period of 2023. BIGO's non-GAAP net income was $67.1 million, compared with $81.9 million in the same period of 2023. BIGO's non-GAAP net margin was 13.5% in the quarter, compared with 16.6% in the same period last year. For the third quarter of 2024, we booked net cash inflows from operating activities of $61.1 million. Our balance sheet remains healthy, with a strong net cash position of $3.3 billion as of September 30 of 2024. In the third quarter, we continued to enhance returns to shareholders. We purchased an additional approximately $117.8 million worth of our shares.

[Alex Liu, VP at JOYY]

During the first three quarters of 2024, we have altogether repurchased 7.31 million of our ADS for a total of $243.7 million, which was approximately 12% of our outstanding ADS as of December 31, 2023. Turning now to our business outlook. As mentioned previously, we are fully dedicated to strengthening the efficiency and sustainability of our global operations. We have taken some proactive actions to optimize our content costs and introduced certain adjustments to BIGO's audio live streaming product to enhance risk control in recent quarters. We anticipate such adjustments might negatively affect BIGO's top line in Q4. At group level, we expect our net revenues for the fourth quarter of 2024 to be between $546 million and $563 million. This implies that for the full year of 2024, BIGO is still posting moderate top line growth.

[Alex Liu, VP at JOYY]

Looking forward, we will remain dedicated to our strategic priorities, enhancing our unique value proposition as a global social platform, exploring diverse gross revenues, and actively driving operational efficiency at all levels. Supported by our strong cash flow and healthy financial position, we are well positioned to deliver sustainable, profitable growth and create enduring value for our shareholders. That concludes our prepared remarks. Operator, we would now like to open up the call to questions. Thanks.

[Operator]

Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. When asking a question, please state your question in Chinese first, then repeat your question in English for the convenience of everyone on the call.

[Operator]

Your first question comes from Thomas Chong with Jefferies. Please go ahead.

[Thomas Chong, Analyst at Jefferies]

[FOREIGN LANGUAGE]Good morning. Thanks, Management, for taking my question. My question is about 2025 outlook. Can Management comment about the trend in user as well as revenue? On top of that, Management also comments about the trend in operating expenses and profit. Thank you.

[Thomas Chong, Analyst at Jefferies]

[FOREIGN LANGUAGE]

[Ting Li, Chairperson and CEO at JOYY]

Thank you, Thomas, for your question. I will take your first question first. And first of all, I'd like to add a few more comments regarding our performance in the third quarter. You can see that in Q3, BIGO's non-live streaming revenue continued to grow substantially year over year, while our live streaming revenue experienced a year-over-year decline. And we've mentioned the reasons behind the decline of our live streaming revenues, which reflect the combination of two factors. First, we have optimized content costs in certain regions of BIGO Live.

[Ting Li, Chairperson and CEO at JOYY]

And second, we have made proactive adjustments to the features of BIGO's non-core audio live streaming product in Q3 to enhance compliance and also for building up a sustainable ecosystem. These adjustments together did have led to a short-term fluctuation in BIGO's live streaming revenues in Q3, which we believe would likely continue in Q4, and it has already been taken into account in our current revenue guidance in the fourth quarter. However, as we've mentioned in the last quarter, these proactive adjustments that we are making now aim at developing a healthier profit model for our products and also for building a sustainable growth ecosystem. We've already seen some positive outcomes from these adjustments in Q3, including sequential improvements in BIGO's gross margin, ROI, and also operating profit.

[Ting Li, Chairperson and CEO at JOYY]

[FOREIGN LANGUAGE]

[Ting Li, Chairperson and CEO at JOYY]

Looking ahead to the year 2025, as we're still in the process of formulating detailed operational plans for the next year, and we believe that our expected growth would be varied based on the estimated operating resources that we intend to allocate. So I'd like to share a few key trends first

[Ting Li, Chairperson and CEO at JOYY]

[FOREIGN LANGUAGE]。

[Ting Li, Chairperson and CEO at JOYY]

With the series of adjustments have already been implemented throughout the year 2024, we believe that both BIGO and JOYY is poised for a fresh start for the year 2025. For BIGO segment, we will continue to concentrate our operating resources on developed countries and the acquisition of premium users. We expect BIGO's paying user will gradually return to sequential and even year-over-year growth in year 2025, together with stabilizing our pool, which we believe can drive the live streaming revenue of BIGO to be back on a growth trajectory compared to a previous year.

[Ting Li, Chairperson and CEO at JOYY]

Additionally, we expect the non-live streaming revenue of BIGO segment will continue to maintain double-digit growth year over year. However, as we've mentioned just now, the adjustments to BIGO's non-live streaming non-core audio live streaming product will still exert certain negative impact on BIGO's overall growth rate, particularly when you consider the high base in the first half of 2024, which could still possibly offset some of the positive momentum that we've just mentioned, and for all other segments, we expect its non-live streaming revenue to continue to grow, driving a top line growth of the whole segment.

[Ting Li, Chairperson and CEO at JOYY]

As for our group MAU, I believe you can observe that it's been under some fluctuation over the past two quarters, and this is primarily due to our current proactive strategy of optimizing resources towards core developed countries and premium users, while strategically directing some of our resources away from areas and users with limited long-term monetization potential. While this strategy might have a short-term negative impact on our overall MAU, we believe that by focusing on high-quality premium users, we would be able to drive an ROI-driven growth strategy, enhance our user quality and monetization efficiency, and therefore laying a more solid foundation for our long-term sustainable growth. Alex will take your second question.

[Alex Liu, VP at JOYY]

[FOREIGN LANGUAGE] This is Alex.

[Alex Liu, VP at JOYY]

If you look at BIGO segment in Q3, we saw a non-GAAP gross margin of 36.9%, which is up by 1.4 percentage points from 35.5% in Q2, and BIGO's non-GAAP operating margin was now expanded to 14.7%, up by one percentage point compared to Q2, with an absolute amount of non-GAAP operating profit extending by 5% quarter over quarter. That was mainly due to optimized content cost of BIGO Live and also savings of our sales and marketing expenses, particularly our user acquisition spending. If you look at all other segments, the non-GAAP gross margin was also substantially improved in the quarter, up from 34.5% in Q2 to 40% in Q3, which is up by 5.5 percentage points in the quarter, and that was mainly due to sequential quarter over quarter revenue recovery.

[Alex Liu, VP at JOYY]

And the operating, the non-GAAP operating loss was RMB 38 million during the quarter, narrowing by 3.7% compared to Q2, mainly due to our effective expenses control, particularly a steady decline in our R&D expenses as a percentage of our revenue.

[Alex Liu, VP at JOYY]

[FOREIGN LANGUAGE]

[Alex Liu, VP at JOYY]

So looking ahead to the fourth quarter for BIGO segment, we anticipate BIGO Live's profit contribution to remain relatively stable. However, due to the adjustment that we made to our non-core audio live streaming product, together with this seasonality impact, as our sales and marketing expenses might increase in the end of the year, we expect a slight decline in BIGO's non-GAAP operating profit as compared to Q3.

[Alex Liu, VP at JOYY]

For all other segments, we expect its non-GAAP operating loss amount to further narrow in Q4. Looking ahead for the year 2025, we will continue to execute an ROI-oriented operational strategy, persistently optimizing content cost and user acquisition strategies within BIGO segment. We anticipate the profit margins and absolute amount of profit contribution from BIGO Live to likely increase in the year 2025. Nonetheless, due to the adjustment that we've just mentioned that we made to the non-core audio live streaming products under the BIGO segment, which we believe will have a negative impact on the segment's profit, considering the above-mentioned two factors together, we expect that the overall non-GAAP operating profit for BIGO segment will likely remain stable with certain potential for growth for the new year.

[Alex Liu, VP at JOYY]

In terms of all other segments, we expect improving under the assumption of improving monetization, disciplined spending with our R&D expenses as a percentage of our revenue continue to likely decline in the new year. We foresee a potential further narrowing of non-GAAP operating losses in 2025 compared to 2024. Therefore, at group level, we believe that our non-GAAP operating profit amount will continue to show an improving trend in 2025. All in all, we believe that efficiency optimization requires ongoing efforts. Therefore, we'll continue to optimize every aspect of our global localized operation, enhance our operational efficiency in order to drive a sustainable, profitable growth of our business. Thank you. Next question, please.

[Operator]

Thank you. Your next question comes from Raphael Chen with BOCI Research. Please go ahead.

[Raphael Chen, Analyst at BOCI Research]

[FOREIGN LANGUAGE]I will translate myself. Thanks, management, for taking my question.

[Raphael Chen, Analyst at BOCI Research]

Could management share the general monetization trends across different key regions in fiscal year 2025? Thank you.

[Raphael Chen, Analyst at BOCI Research]

[FOREIGN LANGUAGE]

[Ting Li, Chairperson and CEO at JOYY]

This is Ting Li. I will take your question. At group level, the developed countries region continues to provide momentum of growth in the third quarter. Revenues from developed countries increased by 21.6% year over year, outperforming all other regions, with its revenue contribution to the group increasing to 54.9%. In terms of sequential trends, the group's revenues from the Middle East region grew by 2.1% quarter over quarter, showing signs of rebound. Looking at the long term, as we continue to execute on our ROI-oriented operational strategy and prioritizing operational resources towards regions with high monetization potential, we expect that both the developed countries and also the Middle East will remain our top priority. Thank you. Next question, please.

[Operator]

Thank you. Your next question comes from Derek Feng with Morgan Stanley. Please go ahead.

[Derek Feng, Analyst at Morgan Stanley]

[FOREIGN LANGUAGE] I'll translate myself. Thank you, management, for taking my question. My question is, could you give us a little bit more color on the progress in capital return? Should we expect the company to fully utilize the repurchase program in 2025? Thanks.

[Alex Liu, VP at JOYY]

Hi, Derek.[FOREIGN LANGUAGE]

[Alex Liu, VP at JOYY]

Thank you, Derek, for your question. This is Alex. I will answer your question. So if you look at our overall execution, so far we've been very, very active in our shareholder return initiatives throughout the year. And in Q3, we purchased an additional $118 million worth of our shares.

[Alex Liu, VP at JOYY]

For the first three quarters of the year, we have in total bought back 7.31 million ADS for a total of $244 million, which accounts for an impressive 12% of our total shares outstanding as of the end of last year. While looking ahead to the year 2025, we will continue to consider shareholder returns as one of our strategic priorities and continue to create value for our shareholders. Next question, please. And due to the limited time, I believe this will be our last question.

[Operator]

Thank you. Your next question comes from Yuan Jiang with China Renaissance. Please go ahead.

[Yuan Jiang, Analyst at China Renaissance]

[FOREIGN LANGUAGE] So thanks for taking my question. Can management discuss the outlook for our advertising and other new initiatives into 2025? Thank you.

[Yuan Jiang, Analyst at China Renaissance]

[FOREIGN LANGUAGE]

[Ting Li, Chairperson and CEO at JOYY]

Thank you for your question. This is Ting Li. I will take your question.

[Ting Li, Chairperson and CEO at JOYY]

In the third quarter, BIGO's advertising revenue remained robust growth, which significantly increased its contribution to the segment's total revenue, now reaching 15.8%, among which the advertising revenue from our own social platform Likee delivered a year-over-year growth of 33.4% and a sequential growth of 8.9%. Revenues from our advertising platform, BIGO Audience Network, continue to show strong momentum, with a sequential growth exceeding 20%, primarily driven by Europe and North America. Notably, the operating profit and OP margins of BIGO's Audience Network business have been improved sequentially during the quarter. So far, the growth in our revenue, advertising revenue from our own social platforms such as Likee, is mainly attributed to optimization of our ad inventory and our bidding strategies.

[Ting Li, Chairperson and CEO at JOYY]

Future sustained growth will be dependent on the expansion of its own DAU, while the growth of our advertising platform, or BIGO Audience Network, has been driven by multiple factors, including the expanding network DAU pool, entering into new markets, or the exploration of new vertical or new clients. However, it always takes time to accumulate scale in order to drive further profit growth. In order to drive further growth, we will again take a long-term view, continue to explore and refine our operations, and drive a steady increase of our market share over time. So that's the end of our questions, and thank you so much for joining our call. We look forward to speaking with everyone next quarter. Thank you.

[Operator]

This conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Participants

Executives

• Jane Xie, Senior Manager of Investor Relations
• Ting Li, Chairperson and CEO
• Alex Liu, VP

Analysts

• Thomas Chong, Analyst at Jefferies
• Raphael Chen, Analyst at BOCI Research
• Derek Feng, Analyst at Morgan Stanley
• Yuan Jiang, Analyst at China Renaissance