Joyy (JOYY) Q1 2026 Earnings Call Transcript

Date

Monday, May 25, 2026 at 9 p.m. ET

Call participants

• Chairperson and CEO — Ting Li
• Vice President of Finance — Fuyong Liu
• Investor Relations — Tingzhen Xie

Takeaways

• Total Revenue — $555.7 million, up 12.4% year over year, marking the highest growth rate in recent years.
• Social Entertainment Revenue — $400.4 million, up 3.2% year over year, with a 2.4% rise in live streaming revenue, and core live streaming paying users up 5.9% year over year.
• BIGO Ads Revenue — $124.8 million, up 55.6% year over year; third-party BIGO Audience Network contributed 78.8% year-over-year growth.
• Shopline Revenue — $30.5 million, up 16.1% year over year, with cross-border merchant revenue up 66% year over year, and segment gross margin reaching 51.5% (up 6.8 percentage points year over year).
• Gross Profit — $189.3 million, with a group gross margin of 34.1%.
• Non-GAAP Operating Profit and EBITDA — Non-GAAP operating profit of $38 million, and non-GAAP EBITDA of $45.7 million, up 22.5% and 13.2% year over year, respectively.
• Non-GAAP Net Income — Attributable to controlling interest: $55.9 million; margin at 10.1%. Excluding FX losses, non-GAAP net income was $69.5 million, up 8.7% year over year.
• Operating Cash Flow — $46 million for the quarter; net cash position at quarter end was $3.18 billion.
• Shareholder Returns — $156.8 million returned through dividends and buybacks as of May 22, 2026.
• New Shareholder Return Program — $1.5 billion over three years (2026-2028), including $600 million in buybacks, and $900 million in dividends; this represents a 67% increase from the prior plan.
• User Metrics — Global average mobile MAUs reached 276 million, up 6.1% year over year, and 1.5% sequentially; traffic from instant messenger rose 3.1% sequentially.
• Streamer Metrics — Number of active streamers increased 1.5%, and average effective streaming hours per streamer rose 1.4% sequentially.
• AI Penetration — As of April, AI-generated virtual gifts accounted for 34% of Bigo Live’s total virtual gift consumption.
• Product Revenue Growth — New product lineup revenue rose over 500% year over year, and 45% sequentially, setting new monthly records.
• BIGO Ads Web-Based Demand — Up 90% year over year, with IAA (in-app advertising) spending up 97% year over year; SDK network requests grew 109% year over year, and 7% sequentially.
• Shopline Path to Profitability — Management states Shopline is expected to reach breakeven by 2028, with narrowing segment losses driven by stabilized OpEx, and rising gross profit.
• Guidance — Q2 group net revenue is expected between $562 million and $581 million, implying 10.7%-14.4% year-over-year growth; Social Entertainment guided to low to mid-single-digit growth, BIGO Ads to mid double-digit growth, Shopline to above 25% year-over-year growth.

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Risks

• Vice President of Finance Fuyong Liu said, “we recorded significant unrealized FX losses in Q1 and we expect similar impact from FX in Q2,” attributing this to the weakening U.S. dollar against the RMB.
• BIGO Ads’ gross margin declined sequentially due to a shift toward lower-margin network revenues within the segment’s mix.
• General and administrative expenses increased year over year, “primarily due to increased share based compensation expenses.”

Summary

Management introduced a new three-segment reporting structure—Social Entertainment, BIGO Ads, and Shopline—reflecting the strategic maturity and importance of each unit. JOYY (NASDAQ: YY) announced a $1.5 billion shareholder return plan over three years, a 67% increase from its previous authorization, driven by operational strength and a substantial net cash position. The company delivered its highest year-over-year revenue expansion in recent years and guided to continued double-digit revenue growth for the group in Q2 2026, and accelerated growth for Shopline and BIGO Ads.

• Chairperson and CEO Ting Li highlighted the integration of AI across the ecosystem, stating that “AI is the backbone” driving compounding effects by unifying social data assets, ad algorithms, and ecommerce capabilities.
• BIGO Ads set a revenue milestone target of $1 billion for its third-party Audience Network by 2028, with management reiterating confidence in “maintaining high velocity growth.”
• Management described Shopline’s model as an “AI-native, 1-stop, omnichannel ecommerce infrastructure,” emphasizing its differentiated monetization approach and ongoing AI-powered feature rollout.
• Management identified tangible long-term synergies between BIGO Ads and Shopline as a “crucial long term strategic objective,” and committed to leveraging these for future growth.

Industry glossary

• SDK: Software Development Kit; a set of software tools and libraries enabling third-party developers to integrate with JOYY’s advertising network.
• MAU: Monthly Active Users; the number of distinct users engaging with a product or service in a given month.
• IAA: In-App Advertising; revenue generated from advertisements placed within applications, distinct from web-based or other forms of ad demand.
• GMV: Gross Merchandise Value; the total value of merchandise sold via a marketplace or platform within a certain period.

Full Conference Call Transcript

Tingzhen Xie: Thank you, operator. Hello, everyone. Welcome to JOYY’s First Quarter 26 Earnings Conference Call. Joining us today are Ms. Ting Li, Chairperson and CEO of JOYY and Mr. Alex Liu, the 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 would like to remind you that we may make forward-looking, including but not limited to the future development of our products and businesses expected future financial performance of the company, our share repurchases and other future events, which are inherently subject to risks and uncertainties that may cause actual results to differ from our current expectations. For detailed discussions of the risks and uncertainties please refer to our latest annual report on Form 20 F and other documents filed with the SEC.

We will also discuss certain non-GAAP financial measures that are included as additional clarifying items to aid investors in further understanding the company’s performance and the impact of these items and events had on their financial results. Non GAAP financial measures provided above should not be considered as a substitute for or superior to the measures of the financial performance prepared in accordance with GAAP. You may find a reconciliation of the differences between GAAP and non-GAAP financial measures in our earnings release. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in U. S. Dollar. I will now turn the call over to our Chairperson and CEO, Ms. Li.

Operator: Please go ahead, Hello, everyone.

Ting Li: I am Ting Li. Thank you for joining us today. Apologize, but I have caught a cold recently. And my voice is quite weak. For efficiency of this meeting. I am going to have our IR team read through the prepared remarks for me. I will be back to take your questions during the Q&A. Thank you for the understanding.

Tingzhen Xie: Thank you. As we enter 2026, our social entertainment business has returned to year over year growth. While our second growth curve ad tech and smart commerce is progressing with strong momentum. Our globally diversified ecosystem is taking shape with social entertainment, advertising, and smart commerce bolstering 1 another in a self reinforcing strategic flywheel. This flywheel is propelling Joy into its next phase of growth. Let me begin with an overview of our Q1 results. Total revenues reached $556 million up 12.4% year over year. Marking our strongest year over year growth rate in recent years. Social entertainment revenue was $400 million up 3.2% year over year.

BIGO Ads contributed $125 million up 55.6% year over year among which our third party BIGO Audience Network, delivered 78.8% year over year growth. Shop line revenue reached $31 million up 16.1% year over year. Q1 non-GAAP operating profit and EBITDA reached $38 million and $46 million, up 22.513.2% year over year, respectively. Operating cash flow for the quarter was $46 million. As of March 31, 2026, we held over $3.18 billion in net cash. Our strong cash generation continues to support meaningful shareholder returns. Since the start of 2026, we have accelerated our buyback program.

Through May 22, 2026, we have repurchased a cumulative $88 million in shares and paid $69 million in dividends for total return of $157 million to shareholders. In light of our solid operational performance, and robust balance sheet, the board has approved an updated shareholder return program totaling $1.5 billion under which we could repurchase up to $600 million worth of our shares and distribute approximately $900 million in dividends over the next 3 years. This underscores our strong confidence in the long term potential of our business and demonstrates our continued commitment to delivering sustainable value to our shareholders and enabling shareholders to benefit from our operational improvements.

This quarter marks the first quarter of reporting results under our new 3 segment structure, social entertainment, BIGO Ads, and Shopline. I would like to take this opportunity to reaffirm our long term strategic vision We are building a global technology ecosystem driven by AI. This ecosystem is designed to unlock compounding from our data assets through the deep integration of social entertainment programmatic advertising, and omnichannel ecommerce, creating a self reinforcing growth flywheel. Social entertainment is our foundational business. Providing the user base data assets, and cash flow that support the broader ecosystem. By building a highly engaged global user community we have accumulated a valuable first party data asset and a scaled global traffic pool.

Supported by established technology infrastructure and localized operational networks across key markets. Social entertainment underpins our cash flow generation and serves as the long term anchor of the group. BIGO Ads accelerates our flywheel, strengthening our data and algorithm advantages. Through advanced predictive models and algorithm optimization We convert traffic into measurable scalable advertiser ROI. Each iteration further enriches our data assets and deepens our algorithm mode, building positive advantage. Shopline is the engine of our 1-stop omnichannel ecommerce offering. And provide merchants with open connectable infrastructure that puts data ownership back in their hands This control empowers them to maximize business performance across the full customer life cycle. AI is the backbone of this enterprise ecosystem.

Seamlessly connecting our social data assets, algorithms, and ecommerce capabilities Together, these 3 pillars form a closed loop system. That deepens our economic moat and drives long term value creation for JOYY. Now let me walk through our Q1 performance. And share our outlook on the future. In Q1, social entertainment revenue returned to year over year growth of 3.2% with live streaming revenue up 2.4% year over year. Core live streaming paying users grew 5.9% year over year. On the traffic side, global average mobile MAUs reached 276 million up 6.1% year over year and 1.5% Q-o-Q. Driven by high user stickiness and fully organic growth traffic from the instant messenger increased by 3.1% Q-o-Q.

For our flagship products, we improved our streamer incentive structure launched targeted support programs for high quality content categories and integrated new AI capabilities. These initiatives drove ongoing gains in both content engagement and payment conversion. Streamer activity improved sequentially despite seasonal impact. Number of active streamers increased 1.5% Q-o-Q and average effective streaming hours per streamer rose 1.4% Q-o-Q. We have now fully rolled out our AI smart tools for streamers across key markets, meaningfully improving indirect efficiency, As of April, AI generated interactive virtual gift accounted for 34% of total virtual gift consumption on Bigo Live.

Our new product lineup continued to gain traction with revenue up over 500% year over year and 45% Q-o-Q, setting new monthly revenue records. Our current Q2 guidance implies low to mid single digit year over year growth for social entertainment revenue. Building on this momentum, we are confident that our social entertainment business will achieve full year revenue growth in the 2026 and sustain this positive trajectory going forward. Moving to BIGO Ads. In Q1, BIGO Ads generated $125 million in advertising revenue up 55.6% year over year. Our third party business the BIGO Audience Network, delivered 78.8% year over year. Despite the seasonal softness of Q1.

Broader traffic coverage, multi vertical advertiser expansion and ongoing algorithm optimization fueled this momentum. On the supply side, SDK traffic maintained strong growth of 109% year over year and 7% Q-o-Q in Q1. On the demand side, our strategic presence across multiple verticals including lead-generation, ecommerce, and IAA drove an enrichment of our advertising mix and enhanced ecosystem density. This multi vertical approach not only accelerated data accumulation and algorithm iteration, but also strengthen our traffic bidding capabilities. Notably, web based demand, primarily from lead-gen and e-commerce advertisers grew 90% year over year and delivered positive sequential growth. Incremental spend from both new and existing advertisers fully offset the typical seasonal softness of Q1.

IAA spending sustained 97% year over year growth. Geographically, we prioritize high value developed markets South America remains our largest market. For BIGO Ads, while Western Europe delivered Notable momentum with revenue up 27% Q-o-Q. On the algorithm side, we are deliberately and prudently scaling our computing infrastructure and strengthening our R&D talent base. By integrating data feedback from advertisers across channels, and leveraging the dual growth of traffic scale and advertiser density, we have built a rich behavioral data layer This enables multidimensional precise user profiling and real time model iteration. Which in turn improves ad delivery efficiency.

The fact that we are seeing positive feedback across multiple verticals validates the generalization capabilities of our model framework As our data scale accelerates and with vertical-specific models we expect our algorithm flywheel will increasingly serve as the primary engine of our revenue growth going forward. We reiterate our strategic commitment to reaching 1 billion in BIGO Audience Network, revenue by 2028. As our third party advertising business continues to scale, we expect a steady structural improvement in profitability. Turning to Shopline. This is the first quarter we are reporting Shopline as a standalone segment. The decision to do so now reflects our belief that Shopline has reached a critical mark in terms of importance to the group.

And that Shopline will become an increasingly meaningful contributor to our growth going forward. As Global Commerce enters the omni channel era, merchants increasingly desire autonomy and full funnel data ownership. We have built Shopline as an AI-native, 1-stop, omnichannel ecommerce infrastructure. What we offer merchants is not simply a storefront building tool, but a fully open connectable retail operating system. Through deep integration with payments, logistics, and marketing modules, we empower merchants across every stage of their journey from store setup and transactions to fulfillment and full life cycle customer retention. Globally, very few vendors are capable of delivering this kind of OS level closed loop solution.

We are also accelerating the integration of a suite of AI powered capabilities. The tools will drive Shoplines ongoing evolution from an enablement tool to an AI driven commerce engine. This represents a fundamental shift in how merchants operate AI powered traffic allocation and automated decision making will unlock new growth opportunities and new levels of precision across omnichannel retail. On monetization, beyond high retention subscription fees, we generate revenue through transaction based value added services and payment and marketing. These reflect the fundamental distinction from traditional SaaS-based software tools. This monetization model deeply aligns with merchants’ full life cycle growth that will fuel Shopline’s ongoing accelerating performance.

Q1 is traditionally a slow season for ecommerce, yet Shopline delivered solid results Revenue was $31 million up 16.1% year over year with gross margin expanding further to 51.5%. Revenue growth from cross border merchants remain robust sustaining over 60% year over year growth. Our Q2 guidance implies Shopline’s revenue growth accelerating to above 25% year over year in Q2. This meaningful progress marks Shopline’s transition from incubation to a phase of scaled growth propelled by accelerated revenue and gross profit growth Shopline is on a clear and visible path to achieve breakeven by 2028. Additionally, as BIGO Ads marks steady progress in the DTC e commerce vertical, and moves past its cold-start phase.

We anticipate increasingly tangible synergies between these 2 businesses going forward. This marks a crucial long term strategic objective of JOYY and we are committed to solid execution to unlock this untapped potential. Finally, in summary, our strategic layout and the unlocking of our ecosystem’s value remain in their early stages Looking ahead, we expect our 3 business segments to generate stronger structural synergy, further deepening our competitive moat and driving JOYY’s long term value to its next level. With that, I will now hand the call over to Alex Liu, our Vice President of Finance to walk you through our financial results in detail.

Fuyong Liu: Thanks, Ms. Li and Tingzhen. Hello, everyone. Beginning this quarter, we are reporting social entertainment, BIGO Ads, and Shopline as stand alone segments. This reflects our strategic inflection point. BIGO Ads and Shopline have evolved from incubation projects into scalable growth engines. Now let’s turn to financial overview of the quarter. In the first quarter of 26, we recorded total net revenues of $555.7 million. Securing a year over year growth of 12.4%. Our strongest year over year growth rate in recent years. Our non-GAAP EBITDA for the quarter was $45.7 million, Our operating cash flow was $46 million in Quarter 1. And we ended the quarter, with roughly $3.18 billion in net cash.

As previously communicated, with accelerated share buyback since we entered into 2026. Buying back $87.9 million worth of our shares as of May 22. In light of our solid operational performance and robust balance sheet, We have just announced an updated shareholder return program totaling $1.5 billion. under which we could repurchase up to $600 million worth of our shares and distribute up to $900 million in dividends. Over the next 3 years. This represents a 67% expansion from the previous program. We have a strong confidence in the company’s long term prospects. I will now dive deeper into our detailed financial performance.

Social entertainment revenues were $400.4 million for the first quarter delivering its first year over year recovery of 3.2% year over year In particular, live streaming revenues returned to 2.4% year over year growth. With marks an inflection point and a result of the strategic adjustments. we executed over the past several quarters. Core live streaming paying users increased by 5.9% year over year while live streaming revenues from developed countries increased by 11.2% year over year. BIGO Ads continued to deliver exceptional growth. With its revenue up by 55.6% year over year to $124.8 million. In particular, our third-party ads revenue BIGO Audience Network, delivered outstanding results recording 78.8% revenue growth year over year.

On the traffic front, SDK network and request was up by 109% year over year and 7% quarter-on-quarter in Quarter 1. Our multi industry strategy has helped us capture broadened market opportunities Web-based demand was up by 90% year over year Mobile based demand continued to be strong, with IAA spending up by 97% year over year. We are right on track to achieve our 3 year strategic goal for BIGO Audience Network. This is maintaining high velocity growth and reaching our 3-year revenue milestone of $1 billion. While we are prudently investing in the expansion of our R&D and sales capabilities, as well as our network and computing infrastructure BIGO Audience Network’s economics remain healthy.

We are confident that at scale, BIGO Ads, we will remain profitable and potentially further enhance BIGO Audience Network’s economics in the mid-term. Shopline kicked off a solid quarter. Generating revenue of $30.5 million delivering a 16.1% year over year revenue growth. Cross-border merchant revenue was up by 66% with its revenue contribution up by 8% compared to quarter 1 last year. We expect cross border merchant revenue to maintain a high velocity growth going forward. We believe matching revenue contribution from this merchant segment will lead to gradual acceleration of Shopline’s overall revenue growth. Group’s gross profit was $189.3 million in the quarter. With a gross margin of 34.1%.

BIGO Ads’ gross margin was down quarter over quarter due to a shifting in our revenue mix. Which saw an increased contribution from our lower margin network and revenues. Shopline’s gross margin was up by 6.8 percentage points year over year to 51.5% primarily due to growth in high-margin subscription revenues as well as in gross margin for its value added service revenues. Our group’s operating expenses for the quarter were $183.4 million. Sales and marketing expenses were higher year over year, consistent with revenue increase. G&A expenses were also higher year over year, primarily due to increased share based compensation expenses.

Our group’s non-GAAP operating income for the quarter was $38 million Non-GAAP net income attributable to controlling interest of JOYY in the quarter was $55.9 million The group’s non-GAAP net income margin was 10.1%, in the quarter, Our non-GAAP net income was lower due to higher FX loss of $13.6 million due to the weakening US dollar. Excluding the impact of FX losses. our non-GAAP net income was $69.5 million up by 8.7% year over year. For the first quarter of 26, we booked net cash inflows from operating activities of $46 million. Our balance sheet remains healthy with the strong net cash position of $3.18 billion. As of March 31, 2026.

As of May 22, we have returned $156.8 million to our shareholders through dividends and share buyback. I want to accept– I want to repeat, share buybacks. In the past quarters and the newly introduced 3 year shareholder return program. This reaffirms our previous statement Shareholder return has been and will continue to be an important component of our capital allocation strategy. We will remain focused on delivering strong results actively executing our new programs, and enable our shareholders to benefit from our operational improvements. Turning now to our business outlook. At group level, we expect our net revenues for the second quarter of 26 to be between $562 million and $581 million.

This implies a 10.7% to 14.4% year over year growth for the group’s revenue. The social entertainment sustained positive growth year over year BIGO Ads delivering mid-double-digit growth. while Shopline’s growth is accelerating in the second quarter. To summarize, Q1 2026 marks a pivotal milestone for Joy. We have delivered our strongest year over year revenue growth. In recent years realigned our reporting structure to match our strategic priorities and accelerated our commitment to capital returns through enhanced buybacks. Looking ahead, are extremely excited about the tremendous synergy potential and the powerful flywheel momentum that our business segments will deliver in medium to long term. That concludes our prepared remarks.

Operator, we would now like to open up the call for questions.

Operator: Thank you. If you wish to ask a question, please press 1 on your telephone, and wait for your name to be announced. If you wish to cancel your request, please press 2. If you are on a speaker phone, please pick up the handset to ask your question. When asking a question, please state your question in Chinese first, repeat your question in English for the convenience of everyone on the call. Your first question comes from Thomas Chong with Jefferies. Please go ahead.

Analyst (Thomas Chong): Hi. Good morning. Thanks management for taking my question. My first question is that this is the first time the company disclosed its performance in 3 business segments. Namely social entertainment, BIGO Ads, and Shopline. So for social entertainment, live streaming revenue are Can management further elaborate whether this is A positive year on year growth in Q1. a sustainable recovery? And my second question is about our full year outlook. Can management comment about our 2020 revenue and profit guidance for each business line this year? Thank you.

Ting Li: Thank you, Thomas. This is Li Ting. I will answer your question. So for the first question, first of all, in Q1, as expected, our social entertainment revenue was up by 3.2% year over year, with live streaming revenue up 2.4% year over year, returning to a positive year over year growth trajectory. Well, we have been executing a series of structural enhancements since the second half of 24, particularly with our streamer incentive mechanisms. And these, we believe, have continued to strengthen our live streaming ecosystem. Despite Q1 typically being a low season for streamer activity, we still achieved a sequential increase in the number of active streamers and also the average effective streaming hours per streamer.

Notably, the music streamers, which is 1 of our key quality content genre, also saw a meaningful uptick in streamer participation. Building on the improved content supply, and streamer engagement, we continue to refine our user segmentation and also upgrade our tiered paying user benefit system. Combined with AI driven optimization on content distribution and also payment experience These efforts drove further improvement in paying conversion with core live streaming paying users growing nearly 6% year over year. Our new product lineup also continued to gain traction in Q1 with revenue up over 500%, setting new monthly records and contributing incremental revenue to social entertainment.

Looking ahead, our current Q2 guidance implies a low to mid single digit year over year growth for social entertainment revenue which represent an acceleration from Q1. Building on this momentum, we are confident that Life streaming revenue and also social entertainment revenue will achieve steady positive growth in 2026.

Fuyong Liu: This is Alex. I will take your second question. So for Q2, our current guidance implies 10.7% to 14.4% year over year growth for our group revenue. By segment, we expect Social Entertainment to deliver low to mid single digit year over year growth BIGO Ads to sustain mid double digit year over year growth and Shopline’s revenue growth to accelerate to about 25% year over year. For the full year of 2026, we expect our social entertainment to deliver steady year over year growth rate for BIGO Ads with continued traffic expansion, deepening multi vertical advertising coverage and ongoing algo optimization, we expect a strong mid double digit year over year growth for the full year.

For Shopline, with accelerating cross border merchant penetration and also new market expansion, we expect it to sustain double digit revenue growth. With all segments all 3 segments now entering into an upward trajectory, we are confident that the group will deliver positive solid revenue growth for the full year of 2026. Turning to operating profit. For Q2, we expect sequential improvement in the group operating profit, in line with our Q o Q revenue growth across all segments. For the full year, on social entertainment side, live streaming revenue back to growth, expect live streaming profit to remain stable or grow modestly.

For Bigo Ads, our audience network is rapidly scaling, and we will need to continue to invest in r and d sales and also our network infrastructure. But given the healthy economics of the audience network at this stage, we are confident that as we scale, we will remain profitable and we expect to see further improvement in its economics over the medium term. For Shopline, with its operating expenses relatively fixed and gross profit growth will drive continued narrowing of the operating losses. Overall speaking, we expect the group’s non-GAAP operating profit and EBITDA to continue the improving trend that we achieved in 2025, delivering a steady teens year over year growth in 2026.

At the net profit level, I do want to provide some additional context on FX fluctuations due to the continued weakening of the U. S. Dollar against RMB, we recorded significant unrealized FX losses in Q1 and we expect similar impact from FX in Q2. However, we would like to remind you that these are nonoperational mark to market fluctuations. So when the dollar strengthens, they will be reversed. Next question, please.

Operator: Thank you. Your next question, it comes from Cece Chang with CLSA. Please go ahead.

Analyst (Cici Cheng): Thank you.

Ting Li: This is Li Ting. I will take your question. In Q1, BIGO Ads delivered 55.6% year over year growth with third party BIGO Audience Network growing by 78.8% year over year and also delivering a modest positive sequential growth. The overall performance was ahead of our expectations and I would attribute it to the following key drivers. First of all, our multi vertical strategy is definitely delivering clear results, leveraging our established capabilities and lead-generation direct to customer ecommerce and also IAA, our web based demand grew by 90% year over year in Q1 and delivered positive sequential growth. Despite Q1 being a slow season.

IAA demand grew by 97% and this was the primary reason that we were able to deliver better than expected results in during Q1. Secondly, the continuous upgrade of our algorithm capabilities We have been driving broader cross channel data feedback from advertisers. Combined with AI powered labeling and richer user behavioral data, which significantly enhance our user profiling and ad delivery efficiency on the platform. We have also completed a framework upgrade to our core predictive model with specialized optimizations across lead-gen, IAA, and ecommerce verticals. As data accumulates and algorithms iterate, we are seeing sustained improvements in monetization efficiency with higher advertiser retention and also growing average spend per advertiser forming a self reinforcing effect.

Going forward, we will continue to optimize and iterate our algorithm model The positive result that we have already achieved across multiple verticals have validated that the generalization capability of our model framework as data continue to accumulate at an accelerating pace and vertical specific models continue to mature, the algorithm flywheel is gaining momentum and we expect it to increasingly serve as the primary engine for our advertiser revenue growth. And in the following stage, particularly in the second half and also even beyond? Regarding your question on mediation partnerships on traffic side, we are actively advancing integrations with industry leading mediation platforms. 1 of our partnerships has already entered the beta testing phase.

And we expect to complete official integration within 2026 Once live, it will enable advertisers to reach a broader pool of high quality traffic globally, further expanding our traffic coverage and depth and breadth, injecting new momentum into the flywheel. We have very strong confidence in sustaining rapid growth for BIGO Audience Network. Thank you. Next question, please.

Operator: Your next question comes from Rafael Chen with BOCI Research.

Analyst (Raphael Chen): Thanks management for the opportunity to ask question. Noticing that Shopline made its first, noticing that Shopline made its first stand alone disclosure. Could management elaborate more insights on the latest business update and the path to breakeven and profitability? Thank you.

Operator: Thank you, Rafael, for your question.

Ting Li: This is Li Ting. Yes, this is the first quarter that we are reporting Shopline as a standalone segment. As we mentioned in our prepared remarks, we have positioned SHOP LINE as an AI native 1 stop omnichannel e-commerce. What we are building is not a simple storefront building tool, but rather an open and connectable extensible retail operating system that deeply integrates payments, logistics, and marketing modules, allowing merchants to manage everything from store setup and transactions to fulfillment and full life cycle customer retention. on 1 single platform. Globally speaking, very few vendors are capable of delivering this kind of OS level closed loop solution.

In terms of revenue model, we have built a differentiated monetization framework anchored by high stickiness subscription fees and accelerated by high growth value added services. On the 1 hand, a stable subscription revenue sets us a foundational entry point, building a robust merchant base and generating recurring revenue. And on the other hand, we deeply penetrate the transaction and monetize this GMV through rapidly growing value added services, payment and also marketing. This monetization model, which is deeply aligned with the full life cycle growth of merchants will serve as the primary engine driving the continuous growth in Shopline’s financial performance. When we look at Shopline’s merchant base, we currently serve 2 major categories.

Local to local merchants and also cross border merchants. Revenues from cross border merchants predominantly key accounts, the larger brands have maintained high velocity growth since last year. Our R&D spend, which has been our primary OpEx, has largely stabilized. And the improvement in revenue and gross profit is generating operating leverage and Shoplines losses are narrowing meaningfully. Looking ahead, we see a clear and achievable path for short line to reach breakeven by 2028, and we are fully committed to delivering on that. Thank you. Maybe 1 last question, please.

Operator: Thank you. And your next question, it comes from Zweking Zhang with DICC. Please go ahead.

Analyst (Xueqing Zhang): Okay. Thanks, management, for taking my question. My question is about shareholder returns. The company announced a new 3 year shareholder return plan of $1.5 billion this quarter, including $600 million in share buybacks and $900 million in dividends. Can management share the thinking behind the significant increase in shareholder returns. Thank you.

Operator: Thank you, Xueqing, for your question.

Fuyong Liu: This is Alex. We are very pleased to announce this quarter our new 3 year shareholder return plan totaling $1.5 billion covering fiscal years 2026 through 2028. This replaces our previous program totaling $900 million representing a roughly 67% expansion in our total commitment. Specifically, the new plan comprises 2 components, annual dividend of $300 million per year, that would be up by 50% from our previous $200 million per year. On our annual share buybacks, the share repurchase authorization. Per year, the annualized buyback quota would be $200 million and that would be nearly doubling the average quota of $100 million under the previous plan. There were several key considerations behind our decision.

First of all, all 3 business segments are now on a clear growth trajectory. Providing a very solid foundation for a higher level of shareholder returns. At the same time, our strong net cash position as of the end of Q1, we still have around $3.2 billion of net cash on hand. This gives us a full financial capacity to execute on this commitment. And we do believe that the current share price still materially undervalues our long term potential and our commitment to increasing buyback is a very direct expression of the management’s strong conviction in the future of the company.

Looking ahead over the next 3 years, we are firmly committed to executing this plan and enabling our shareholders to benefit from improving operations. That was the last question. And thanks so much for joining us today. We look forward to speaking with everyone next quarter. Thank you.

Operator: Thank you. This conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.