Hello, ladies and gentlemen. Thank you for standing by for iClick Interactive Asia GroupLimited's Fourth Quarter and Full Year 2019 Financial Results Conference Call. At this time, all participants are in listen-only mode. After management's prepared remarks, there will be a question-and-answer session. Today's conference call is being recorded.I will now turn the call over to your host, Ms. Lisa Li, Senior Manager of Investor Relations. Lisa, please go ahead.

Hello, everyone. And welcome to iClick's fourth quarter and full year 2019 financial results conference call. The company's results were issued earlier today and are posted online. You can download the earnings press release and sign up for our distribution list by visiting the IR section of our Web site, ir.i-click.com.Sammy Hsieh, our Chairman of the Board and Co-Founder will provide a high level overview of 2019, a record year for us. Then Jian Tang, TJ, Chief Executive Officer and Co-Founder of iClick will review the fourth quarter results, share insights on our focus and execution strategy, followed by our Chief Financial Officer, Terence Li, who will give us more highlights on the financial results and guidance for 2020. Then we will turn the call back over to TJ for closing remarks and open the call for Q&A.Before we continue, please know that today's discussion will contain forward-looking statements made under the Safe Harbor provisions of the U. S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from these expressed today. Further information regarding these and other risks and uncertainties is included in the company's 20-F as filed with the U. S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law.Please also note that iClick's earnings press release and this conference call include discussions of unaudited GAAP financial information, as well as unaudited non-GAAP financial measures. iClick's press release contains a reconciliation of the unaudited non-GAAP measures to the most directly comparable unaudited GAAP measures.I will now turn the call over to our Chairman of the Board and Co-Founder, Sammy Hsieh. Sammy, please go ahead.

Thank you, Lisa. And welcome everyone to our call today. I am very happy to share with you that in 2019 we were proud to celebrate our 10 year anniversary and achieve another record year with strong top line and bottom line results.Our gross billings increased by 60%, while revenues increased by 25% year-over-year. Our gross profit increased 45% year-over-year, while our adjusted EBITDA for 2019 reach $5.9 million. I'm very proud to note that our adjusted EBITDA is more than triple the total we reported in 2018. I want to take a moment here to point out that our record high adjusted EBITDA is proof that we’re achieving ever increasing economies of scale. I'm excited to report that our business has reached an inflection point, and we expect the increase in operating leverage to continue to drive profitability in the future.Now, I would like to highlight some of our key accomplishments. Our marketing solutions business hit another record high in 2019 with such a large market opportunity before us. We were always confident that this organic growth was inevitable, but it took 10 years of hard work to get here. Our marketing solutions business forms a solid bedrock for our company and it is gratifying to acknowledge that we have arrived at this place in our history. In early 2019, we launched our enterprise software solution business, ushering in a new era of our company. iClick now offers our client's total solutions to facilitate collection and analysts, allow marketers to target new consumers and increase sales from existing customers.These capabilities fulfill an important need in China as marketers are eagerly looking for cost effective ways to infuse their online sales and enhance customer loyalty. Our solutions generate useful insights for successful marketing campaigns, customer retention and increased sales performance.…

Thank you, Sammy. And welcome to the call everyone. I'm happy to report that the fourth quarter of 2019 capped off another record breaking year for our company. In the fourth quarter, we increased revenue by 43%, while our gross profit increased by 46% year-over-year. Our adjusted EBITDA was $2.5 million, a new record and most importantly, we reached a new milestone as we reported quarterly adjusted net income for the first time ever in the fourth quarter of 2019. This confirms what Sammy mentioned as we are reaching higher economies of scale by continuing to concentrate on profitability, which is our major focus for 2020.So the current microenvironment remains challenging, we think our strategy will be very effective in driving the business forward. This year, we have three major goals. First, improve the profitability of our marketing solution business. iClick is now a leading programmatic marketing platform in China, and we should continue to benefit from our economics of scale under the building of new and higher margin offerings. As an example, our Influencer multichannel marketing products and outbound traveling products help us improve our product mix and give our customers more options.Second, continue our revenue growth trajectory along with increasing margin contribution from enterprise software solutions business. Our team has worked very hard to develop various innovative products, services and business models in this area. We've seen promising results so far and are firmly committed to dedicating the resources to grow this business as it will become a major revenue driver and gross margin contributor well into the future.Third, continue to recognize the source opportunities from partnerships that leverage our existing data and the technology. In 2019, we entered into various agreements and partnerships that will either serve to strategically enhance our position in the marketplace or enhance…

Thank you, TJ. Despite the challenging macro environment in 2019, we have managed to deliver another record year. Our gross billings, revenues, gross profit and adjusted EBITDA all hit historical high and our adjusted net loss reached a record low.I would like to begin my comments with a few key highlights from the full year and fourth quarter of 2019. Despite the unfavorable foreign currency movement during the year, we recorded revenues of $199.4 million for 2019, an increase of 25% year-over-year. Revenues for the fourth quarter of 2019 were $56.7 million, an increase of 43% over the same period in 2018. The growth was due to the original growth of our marketing solution business coupled with the contribution from our new enterprise software solution divisions, which commenced operations in January of 2019. Please note that renminbi depreciated against U. S. dollar by 4% and 5% respectively in the fourth quarter and full year of 2019 compared with the same period in 2018.Looking at each business separately, marketing solutions reported a record high $189 million in revenue, an 18% increase on a standard loan basis in 2019. For the fourth quarter of 2019, the revenues from this business segments grew by 34% to $53.1 million compared with the same period of last year. I’m very pleased to point out that we have a good start to our enterprise software solutions business in 2019, and it scaled up very quickly generating $10.4 million revenue in its first full year of operation. The business continues to scale as revenue for the fourth quarter grew by 38% sequentially to $3.6 million, reflecting the spillover effect we mentioned in last earnings conference call.Gross profit grew by 46% and 45% year-over-year to $17.2 million and $56.7 million in the fourth quarter and full year of…

Thank you, Terence. As we begin 2020, the long-term strength of our business is compelling and the market dynamics are exciting. Chinese enterprises, such as iClick, are benefiting from perhaps the world's richest array of data sources. Data lies at the heart of virtuous cycle whereby machine learning fed by data powers continued development enhancing capabilities. These dynamics are helping us provide better products and services with better refinements that are enhancing customer engagement for the brands we serve in all sectors.Our company has a considerable strategic advantage as we have accumulated a massive repository of consumer data. As such, we are transforming from China's marketing technology leader to a global integrated marketing and enterprise cloud platform, creating new opportunities for us. Our data dominance effectively creates economic modes, sprouting new entrants and creating new synergies for potential M&A.And finally, as mentioned previously, we are facing the challenges associated with the coronavirus. Everyone in our organization is absolutely focused on protecting the health of our workforce, as well as preserving the resilience of our business. The weeks and the months to come will inevitably continue to be challenging, but we are prepared and ready. We look forward to 2020 as it will be a critical year for our company to fully transition into a platform with two unique gross businesses and our core focus on profitability.This concludes our prepared remarks. Thank you for joining us on today's call. We will now open the call to questions. Operator, please go ahead.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] The first question today comes from Fawne Jiang of Benchmark.

First one I do want to focus on the virus outbreak disruption. Just wonder whether you could give us a bit snapshot in terms of your conversation with your key accounts like throughout this quarter, and now we're moving into second quarter how their advertising sentiments generally are? So basically trying to get a sense of the pace, as well as the magnitude of the potential recovery if we're looking at one right now? And also I think you mentioned that in different verticals have different performance throughout the process, just wander your exposure to these specific verticals, whether it's travel or on the positive side of gaming and I think retail entertainment side?

Honestly speaking, we do observe that this pandemic has some impact to certain sector customers in terms of their advertising budgets. And particularly the sectors are including like hospitality, hotels and also the offline business like automobile industry. On the other hand, there are some unexpected benefits to certain industries, for example, like online gaming, e-commerce and online education sectors.Another observation we made is that customer do have a tendency to put their budgets to the mobile and online sites and to expect the higher return on investments. However, most of our customers are in need to large size international top tier brands. And for that background, they have very strong foundation and they have very good deployment for online arrangements. Therefore, they have more flexibility to face the change.Also we do have a client or working to help our customer to move their offline projects to online project and help them develop our marketing solutions. And also your question you mentioned about from the first quarter to second quarter, what are the changes we have observed. For Chinese markets generally that actually quite common to putting advertisements budget and that was also the case for the second quarter due to the impact of the pandemic we do see, we did observe some cancellations of the budget and now we are into March and we start seeing the advertisement business coming back. Anything you want to add, Terence?

I guess TJ has summarize where we might see about our observation and also some of the business of being picking up right now starting in March. I think that we point out just want to add about our experience first is that we are mobile driven. Second is that we have performance different and lastly, our client base are always the top tier times in the market. So I think these add up while we feel cautiously optimistic about our Q1 and also going into Q2, and I think our guidance already given to the market and this is a clear signal about our own expectation at this moment.

My second question, actually focus on the enterprise solution side, just given what’s going on with the last recent lockdown, it seems like it further highlight how important to have integrated online offline channels for lot of the retailers. Just wonder whether it has potentially opened up the customer base for you on enterprise solution side, your update on the pipeline for 2020 and your strategic thinking and how they're shaping up, whether we’re essentially looking at a potential acceleration for the industry as a whole, as well as for you guys?

Maybe I just answer a bit first and then TJ may add on some point. I think at the beginning of our new enterprise solution business in 2019, it was quite a good start by having like Q-by-Q growth from Q3 to Q4 what’s basically 38% substantial growth $3.6 million. So I think this momentum has been keeping on and we have successfully achieved our first year target and that we are going into our second year.We have complete our 50 key accounts for 2019 and right now we are seeing the momentum basically keep on. And as this virus situation that actually bringing more opportunities than ever that brands and marketers understand more about the online, offline data integrations in importancy property as basically TJ also mentioned before and also in our script. And in addition I think retailers potentially also wanting to extend more new channels, including e-commerce and WeChat commerce. So I think our solution was building on both the retail platform and also the offline online integrations data is kind of really on the sweet spot right now.So we believe that was actually driving more demand having said so, as we also understand current challenges during this virus situation. So properly going into the first quarter, we may not be seeing substantial uplift yet but going into the second quarter, I think there would be some more demand in this particular business and the outlook of these solutions, enterprise software solution remain positive.So our target for the year is still double this revenue and we are building a very strong pipeline right now going into the second quarter. So there would be at least 20 accounts in the pipeline and projects that we got during this period. So we believe that after the virus pass, we'll be able to execute them quite well in the second quarter. And just -- if there's anything at all from TJ, if not maybe first that we have to move on to the next questions properly.

I’ll supplement just one point. In the way, actually the outbreak actually lowered our market educational cost for our enterprise software solutions customers. We have a lot of customer coming from particularly the customer goods size that they actually actively approach us during the outbreak and help us to help them to connect the offline to online business, and to help them to speed up. So in a way in a long run it’s actually quite beneficial for our enterprise software solutions. So of course in the short-term, we still see the impact for communication with our customers.I’ll give you an example when the outbreak was at the worst in February, our engineer couldn't go into the field go outside to visit or to help the clients. These are only the technical issues we can fix. And strategically speaking, it’s actually the pandemic is quite helpful to push this business forward. So we actually try to work on enabling our engineers to work better with our customer in the enterprise software solution sectors during the pandemic.The confirmed cases in mainland are decreasing regulatory in March and we are still working on the solution, we can provide it and we have more demand coming from the customer side. So we actually have a very positive outlook for our enterprise software solutions business. Thank you. That's my supplement.

[Operator Instructions] The next question comes from Darren Aftahi of Roth Capital Partners.

I'm curious on your guidance more so on marketing solutions, which I think for 2020 implies $220 million to $240 million for revenue. Maybe Terence, what's the implied assumption of, one, is there a recovery and two, if so, when does that sort of occur specific to your business and advertising budget? And then embedded in that, could you just maybe break out what online base businesses, gaming, education and e-commerce kind of makeup as a percentage of mix of marketing solution customer budgets? Thank you.

I think you're talking about how we are so confident about the 2020 guidance in terms of the marketing solution, and also a breakdown of some of the verticals that we mentioned, basically having strong momentum. And I think if you look at our Q4 result, basically our gross billing have already reached over $200 million. So it represents actually a recurring runway that we have for our business. So actually our client base is increasing, our client projects are also increasing over the year and most of our clients are recurring clients, we're having relatively long-term relationship and contract with the company.So we believe that, that even in the first quarter, I think we will still be running quite a billing number and that actually translate to how we divide our revenue number and also our confidence in terms of marketing solutions business growth in 2020. So we do expect that the pick up more actually maybe in the second half of the year, because in the first quarter there will be definitely some impact due to the virus situation. But as TJ also mentioned, we are seeing some of the pickup right now. So we believe that that going to the second quarter there would be even more picking up.So in terms of your second part of the question about the breakdown of some of the key verticals, I think as we understand our business is quite diversified. So basically we have six or seven verticals, each of verticals generally we are controlling at around 10% to 15% in terms of our billing and even the revenue number. So basically the e-commerce, the online gaming and also the education is picking up in the relative new sector or vertical for the company and actually a lot more scale will be around like 25% or 30% of our budget but during this virus situation, actually these two verticals, the e-commerce and the gaming and education, these three verticals actually growing quite substantially. So I believe in the first quarter alone that the verticals basically would be having more than 30% to 45% of our gross billing, which would be over the normal range of like 30%.

Next question today comes from Thomas Chong of Jefferies. Please go ahead.

I have a big picture question. Can management comment about the overall online advertising market in China? What's the growth rate that you're expecting and how much we are actually outpacing the industry growth? I just want to get to see the delta from there. And on that point, can you comment about the social advertising revenue growth in China, because we are seeing Tencent is quite resilient in social advertising. Can you also comment about how you think of Tencent’s social advertising in 2020? That's my first question. Thank you.

I’ll be sharing with you on my view of the advertisement business in China. We see huge impact by the pandemic to the advertisement business in China, particularly for offline business industries and media and actually we don't really focus on the offline customers and offline media. As we answered that question before, it's highly relevant to which sector you are in when you ask the question of advertisement industry in China. For example, hospitality, airlines hotel and offline business, such as automobile, they are highly impacted.So this is rather opportunity for the online business, such as the gaming and online education. For mega customer who has both online and offline arrangements they will try to transfer their offline version to online. So overall, it's a huge impact for the advertisement industry in China. However, when you look at these sectors, the online are less impacted than the offline business. And also how we deploy our operations, we try to focus more on the online business. That will be my sharing. Thank you.

The next question today comes from [Brian Yanger] of Alliance Global Partners. Please go ahead.

I realized Forbes Media has been a great investor. I'm curious if their connections or their business in any way has led to new business opportunities or you expected will going forward?

Pardon me ladies and gentlemen it appears we're having some technical difficulties. Give us one moment while we reconnect.

I would like to double check with you about your question. You're asking what are the new business opportunity under the impact brought by the pandemic. Is that correct?

Actually I'm curious with the investment from Forbes Media, I'm wondering how that has led to potentially new business opportunity in the marketing solutions side, keeping their business if that’s actually been the case.

So maybe let me answer this question, because it also related to the investment side. The new investor from the shareholder the Fox actually we foresee that there would be a lot of new strategic initiatives that we are actually undergoing discussion right now, including some of the potential M&A opportunities right now that we're in discussions. I cannot release too much of the details but right now, we have many initiatives discussing with the Fox shareholders. So there will be potential some of the media assets or business that maybe that we would get some of the distribution rights in the region. So that's basically the directions that we are working on right now.

Your next question today comes from Carson Lo of Nomura.

This is Carson from HSBC. So I've one question about the bigger picture as well, so regarding the overall ad industry, we see actually the short video platforms like [Indiscernible] there, I think a lot more inventories being in given market since 2019 and leading to some other platforms facing the advertising under pressure. So what are the implications to this phenomenon to iClick in particular? Thank you.

This is Terence. Maybe I could also answer this question. And I think quite sure other short videos basically they will make their whole advertising industry more dynamic and with more content rich new formats of advertisement. So from our perspective we're always trying hard to basically enrich our traffic, content, data and also the operations of our products and services. So I think these video related kind of format would also allow whole market to have more traffic.And from this market conditions, particularly under these drivers impact I think this would give the company, gives us more solutions to basically to provide to our advertisers and our customers and it would definitely provide more ROIs in terms of our business portfolio, our inventory will be enriched, and we’ll have more room to basically arbitrate across different media, because you have to understand we are kind of independent platform and we are agnostic about different media.So basically that would help us and we are not the media itself, but we are the platform who aggregate these media and provide value add on top of that. So if these video related kind of media publishers release more ad format or at a space, our traffic basically increases and we would be able to help our clients to also find the best solutions and reaching their advertising returns on investment as well. I think from that perspective actually would be a benefit to company like us.

The next question today comes from Bo Pei of Oppenheimer. Please go ahead.

Just with the comment on the coronavirus impact. Just want to get more details here. So, can you share with us the business growth rate in January, February and March respectively? I just want to get the recovery trend. Thank you very much.

I think if you look at our guidance, basically that represent still 15% plus growth that we are budgeting right now. And we have a comparing to I mean last year on a year-over-year basis that will still get to 15%, 20% growth in terms of overall marketing solutions.

So before the coronavirus outbreak, can you tell us like what was the growth rate in January? And then what the decline in February and then what is the recovery so far in March? I'm just trying to get a sense of how fast we're recovering from the impact there? Thank you very much.

Unfortunately, I don't really have the exact figures right now, because our March number is still in accounting right now. But I believe as TJ mentioned, February is slowing down, January is a normal runway growth, so that would be like 15%, 20% growth comparing to last year. So the March actually is picking up. So basically we are missing the February growth and that actually impact us around overall 10% numbers in the first quarter. So that basically high level picture at this moment that I could give my best right now.

The next question today comes from Nelson Cheung of Citi. Please go ahead.

Thanks for taking my question and congratulations on the first solid FY '19. I have a quick question on your margin guidance going into first quarter 2020 and full year. On your guidance, the gross margins will be around 37% in first quarter 2020 compare it to around 30% last quarter. Can management briefly explain the drivers behind the margin change? And given the full year margin guidance at around 30%, can management provide your long-term margin target of gross margin level and operating margin level longer term?

I think for the first quarter actually, our margins expectation is lower. The obvious reason is because of the slowdown in the executions of our enterprise solutions. Although, we foresee more demand but the execution still take a bit time. And you can look at our numbers in Q4 actually our gross margin is increased quite substantially. The major contributor is obviously coming from enterprise solution business.So that's why in the first quarter, we would see the numbers or the margins would have some impact by that. But overall in the year as we still relatively confident and also because we believe that this situation would ultimately be passed by and that entering into probably first, the second half or even the second quarter, to be able to execute more of the enterprise solution business and also we’re also planning on some new high margins marketing solutions products.So we believe that all these adding up we would still be able to remain the 28% to 30% gross profit margins in the year. And longer term of course, we are targeting to basically reach at least 20%, 30% of our revenue coming from that enterprise solution business, but we are not talking about this year or even next year but we are talking about relatively longer term period. But we would be able to achieve that so basically, our gross margin would be able to upgrade to probably 35% plus and also that our operational leverage was there.So you can look at right now as our 2019 numbers, we've been able to basically doing around like a 3% operating EBITDA margins. So going into 2020 and also into more relatively long term, we believe that we'll be able to probably produce or update that numbers to high single-digit number at least in the next two to three years. So that's basically target right now that we have, I hope this make sense and answer your questions.

As there are no further questions, I'd like to turn the call back over to the company for closing remarks.

Thank you once again for joining us today. If you have any further questions, please feel free to contact iClick’s Investor Relations department through the contact information provided on our Web site.

This concludes the conference call. You may now disconnect your lines. Thank you.