Sound Group Inc. Q2 FY2023 earnings call

Audio Entertainment Business

• Effectively enlivened community atmosphere via refined operational management and diversified themed activities, e.g., midyear voice gala and podcast week.
• Diversified content matrix to suit young users' tastes, enhancing audio-based interaction experience.

Content Creator Ecosystem

• Upgraded creative management system, launched summer success program for streamer development, set up rising star official channel to support emerging creators.

Global Business

• Empowered product innovation in TIYA App, launched chatbot MY AI FRIEND, enriched user experience with new product functions like virtual AI preset companions and expressive Animated Avatar feature, and will push forward with product localization and core technology development.

In the second quarter of 2023, Lizhi Inc.'s total net revenues were RMB592.9 million, representing a 15% year-over-year increase. Cost of revenues were RMB418.4 million, an increase of 23% year-over-year. Gross profit was RMB174.4 million, with non-GAAP gross profit being RMB175.6 million. Gross margin was 29% (non-GAAP 30%). Operating expenses were RMB166.6 million. Operating income was RMB7.8 million (non-GAAP operating income RMB13.6 million). Net income was RMB11.6 million (non-GAAP net income RMB17.3 million). Total average mobile MAUs amounted to 45.6 million, and average monthly paying users totaled 433,700.

Forward-looking Statements

• Will go all out to elevate product competitiveness through innovative products, optimize ecosystem and refined operations.
• Continue to adopt and deeply integrate AIGC and voice AI technologies across business, empowering development through technological innovation.
• Further advance global expansion.