Good evening, good day and welcome to the iClick Interactive Asia Group Limited’s First Quarter 2020 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Thank you. Please note this event is being recorded. I would now like to turn the conference over to Lisa Li, Senior Manager, IR. Please go ahead.

Hello, everyone and welcome to iClick’s first quarter 2020 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 website at ir.i-click.com.Sammy Hsieh, our Chairman of the Board and Co-Founder will provide a high level overview of the first quarter of 2020 for us. Then Jian Tang, TJ, Chief Executive Officer and Co-Founder of iClick will review first 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 the res of 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 maybe materially different from the views 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 un-audited GAAP financial information as well as un-audited non-GAAP financial measures. iClick’s press release contains a reconciliation of the un-audited non-GAAP measures to the most directly comparable un-audited 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. I am extremely excited to share our first quarter financial results, which were robust despite the continuing impact of the COVID-19 pandemic. We delivered the strongest first quarter results compared to any other first quarter in our company’s history as we reported record high revenues, gross profit, adjusted EBITDA, adjusted net income and gross billings.I am also proud to report that we have realized a second consecutive quarter of adjusted net income, which demonstrates the profit capabilities of our business model as we reach higher economies of scale. TJ and Terence will provide more details on the results later in the call. These numbers reflect solid growth as we are still operating in a very challenging environment. Little by little, life is beginning to return to normal in China. We see restrictions being lifted and the economy start – the economy slowly restarting with measures in place to prevent a second wave of coronavirus infections.Against this backdrop, we believe this impact brought by the COVID-19 pandemic, will be profound in terms of permanently altering the wave consumers behave going forward. For example, we expect that consumers will maintain their increased online presence as they enjoy the personalization of buying experiences, convenience and other advantage it affords. The COVID-19 pandemic has also created a pivotal moment in our industry as brands are faced with greater sense of urgency than ever before to understand rapidly changing customer behaviour. Brands now understand the necessity for data-driven analytics to develop smart marketing campaigns and establish comprehensive online to offline data integration to enhance customer loyalty and generate more sales opportunities. These factors will continue to drive demand for our marketing and enterprise solutions and we are confident in our ability to execute and deliver superior results for our customers and shareholders.Now, I would like to turn the call over to Jian Tang, our CEO and Co-Founder to further discuss the first quarter results, our company’s strategy and our focus on execution in 2020. TJ?

Thank you, Sammy and welcome to the call everyone. In the uncharted territory presented by COVID-19, we are happy to report significant improvement in our execution and financial performance. As Sammy mentioned in his remarks, in the first quarter, we achieved historically high levels of revenue, gross profit, adjusted EBITDA, adjusted net income and the gross billings despite market turmoil. Our results echo what we talked about in our last call as China’s information consumption level received a huge boost in the first quarter as millions of residents confined to their homes during the coronavirus pandemic, turned to digital methods to work and satisfy the everyday needs.Our brand plans recognized the potential upside of these circumstances. And most of the homebound activities, heavy industry sectors, spend a great portion of the marketing projects to capitalize on it, resulting in a 64% increase in our gross billings in the first quarter. We expect to experience additional increases as our business continues to benefit from the healthy organic growth of the digital advertising market and the programmatic advertising in particular. iClick is well-positioned as we continue to build and support our enterprise software solutions capabilities, which provide [Technical Difficulty] support, profitability for the rest of 2020 and the beyond. I am also very happy to report that we continue to successfully ramp up our Enterprise Solution business. We reported $4.4 million in revenues for the first quarter of 2020, a triple-digit increase of 202% from the same period of last year. As a reminder, we started reporting these revenues separately in the first quarter of 2019 and this marks the first time we can make year-over-year comparisons.Entering into the second year of operation, the customer base we have developed in this segment has created a solid foundation of recurring revenues by our…

Thank you, TJ. We conclude 2019 with record results in an environment with a unique set of macro challenges created by the trade conflicts between U.S. and China. In 2020, we are facing another set of challenges related to the coronaviruses. Despite the pandemic, our financial results were significantly higher in the first quarter, which is generally softer on seasonally adjusted basis. Our gross billings, revenues, gross profit, adjusted EBITDA and adjusted net income, all increased year-over-year and were all first quarter records for our company.Our Enterprise Software Solutions business continues to scale as revenue tripled over the first quarter of 2019 while we reported a second quarter in a row of adjusted net income. I am excited to share a few highlights from the first quarter of 2020. Our revenue for the first quarter of 2020 grew to $49 million, which was an increase of 25% from $39.2 million for the same period of the prior year. The overall results were attributable to the increase in contributions from existing Marketing Solutions and Enterprise Software Solutions. I would like to comment that we are experiencing strong demand as marketer recognized the value of data-driven marketing campaigns as well as digital tours to optimize online customer engagements.The revenue for Marketing Solutions grew to 44% – at $44.6 million for the first quarter of 2020, up 18% from $37.8 million for the first quarter of 2019. This is our bread and butter business and the continuous strong demand from marketers highlights the value we provide in the age of digital optimization. The revenue from Enterprise Software Solutions grew to $4.4 million for the first quarter of 2020, an increase of 202% from $1.5 million for the first quarter of 2019, which was driven by the increasing lead for online and offline customers’…

Thank you, Terence. As we finish our prepared remarks, we would like to reiterate that we are off to a great start this year, yet we are facing a period of continued volatility as China is in the midst of recovery from COVID-19. Despite the negative social and economic impact, the outbreak quickly led to adjustment in people’s behavior from fear to action to effectively deal with the situation. We will continue to see its impact on consumers’ online behavior for the feasible future as daily activities may continue to shift and become permanent from offline. This is a positive development here as it brings relief for the economy and sets the cost for a faster recovery. Also this activity creates a unique situation for us as our company is singularly positioned to supply customer analytics that can track and respond to rapidly changing consumer behavior. It plays to our strength, especially in the enterprise solutions area and we are optimistic that it will continue to impact our entire business in a positive way.In closing, as our company manages through our unprecedented business environment near term, we remain committed to long-term value creation for our shareholders and stakeholders. We stand committed to protecting the health of our workforce as well as fostering the competitive advantage of our business. We are encouraged by the progress being made facing and fighting the efforts of this pandemic. People’s initial panic and anxiety have rapidly shifted toward business to respond with helpful measures. These actions in response to crisis reflect the powerful resilience of the government, the population and the economy. 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.

[Operator Instructions] Thank you. The first question comes from Darren Aftahi of ROTH Capital. Please go ahead.

Hello, everybody. Good morning, good evening and hope you guys are well and congratulations on the nice results and the profitability. It’s good to see. Couple of things if I may. First, did you guys give us maybe a sense of the trend line of what you are seeing in your advertising business from maybe the month of March to April and then maybe through the part of May? Second question on your enterprise business, could you perhaps talk about some of the trends you are seeing in pipeline over the last few months perhaps what your current customer count is and then how retention is going given the economic environment? Thank you.

Hi, everyone, TJ. First, I would like to give a brief introduction of the trend of the advertising budget in the first quarter and also in March and April. So as we mentioned in the earnings call of the last quarter, due to the pandemic in China, some industries were severely affected, like the tourism industry, but we did see the slow recovery of this industry starting in April and – starting in March and in April and May, we further saw their speeding up in the recovery of their advertising budget.So last, my understanding of the question is about the enterprise solution. I would like to also talk about it. So as due to the impact of the pandemic in the first quarter, a lot of consumers have to stay home which actually increased the time they spend on the online activities. And this also urge our clients to quickly restructure their online layout. And thus, they have stronger demand for the enterprise solution. I am not sure if my answer has satisfied your question?

Yes. Just maybe if I could follow-up on that, just on the number of enterprise customers you have and what pipeline looks like as well as customer retention? Thank you.

Okay. Hi, Darren. This is Terence. So maybe I could help answer these questions. I think as we communicate to the market early on, our achievement on our target for 2019 will still get 50 core accounts or key accounts, major customers. So we have achieved that in 2019 in terms of the pipeline and we are going into the 2020 in the first quarter. We add on around like 15 core accounts and then like 20, 30 as you know middle and small accounts. So our pipeline is still building up and the outlook for the enterprise solution is still quite bright at the moment and we got a lot of inquiry. As like what just TJ mentioned, under this pandemic environments, the offline/online integrations are actually becoming a very important part for a lot of our brands and the enterprise. So I hope this could get a bit more color on how this business is growing.

Thank you, Terence.

[Operator Instructions] The next question comes from Brian Kinstlinger of Alliance Global Partners. Please go ahead.

Hi, guys. Solid results in a difficult period. For customers that have already installed the primary mini apps, are you seeing demand for additional mini apps and functionality from those customers. I guess the first question really is, is growth coming from new customers or is it more so from the existing customers taking more technology?

Hi, Brian. I am TJ. Thanks for your questions. So we are actually starting in the year of 2019 we started to release the online Enterprise Solutions and a lot of the clients we are working with have actually worked with us for less than 1 year. So right now, our cooperation mainly focused on the existing function, but there were some clients who actually came to us and discussed with the potential of extending our functionality modules to more opportunities in the future, because especially after they saw our added value service of providing – of helping them make more efficient and smarter business decisions. Please go ahead, TJ, sorry.So, the clients especially saw our importance of the Enterprise Solutions after they realized our great capability of analyzing the data and they have also applied what they learned in the Enterprise Solutions into other areas. So, our clients and us have threw a very good cooperation cycle together and this can also help us further improve our ARPU value in the future.

Great. If I can just…

Yes. And Brian, just let me add a bit in terms of how the first quarter’s Enterprise Solutions business revenues coming from, I think as I answered like Darren’s questions, we did have like around like 15 new accounts. And these 15 are basically forming around like 70%, 80% of the pipe and the rest like 20%, 40%, actually coming from existing clients that we are still building on new features and also recurring – having some recurring contributions. So, that’s how the formations of the $4.4 million for this being built up in terms of the Enterprise Software Solutions business.

Great. That’s helpful. I can ask a follow-up to Terence, you commented that as enterprise revenue increases, your gross margin should also increase, which makes sense. Can you comment by my calculation you had 27% gross margin in the first quarter compared to 30% in the first quarter of last and over 30% in the fourth quarter of ‘19. Were there one-time benefits that either aided or hurt any of these periods to help explain the trend?

I guess, first, we ought to understand the normal kind of like gross profit margin and our marketing solution is always at the range of 22% to 24%. And we have experiencing that basically into 2018. And 2019 in some of the quarters or in the full year, we see the uplift because of the contribution from the Enterprise Solutions, basically a relatively high margin business with over 60% gross profit margins. And that’s particularly true for 2019, how we uplift the gross profit margins. And comparing to last years, I mean it’s like 2019 first quarter, now first quarter with this year’s first quarters, we could see the gross profit margin actually I think you are pointing to that, is there is some job on that. So, it’s basically coming from two reasons. The first is that because we actually change a bit in terms of the contribution of the different verticals during this particular pandemic environment. We got a lot of e-commerce, online gaming and online education clients. They do have a lot of contributions and they do provide bigger budgets. But on the other hand, the margin profile is a little bit lower than some of the high margin like branding and hospitality clients. So, we cannot fill up the gap by helping more coming from the Enterprise Solutions. And but going like into the second quarter and the third quarter, actually, we are expecting that the higher margins clients actually would be coming back and we are still pretty confident to remain a certain high margins business on hand and that going into the same quarters. And I think the margins profile would be improving as well. I hope this could give you more color on what’s going on in the first quarter in terms of the margin profile.

Great. That’s really helpful. Thanks so much.

[Operator Instructions] Thank you. And we have a follow-up from Brian Kinstlinger of Alliance Global Partners. Please go ahead.

No one else is in the queue. I will ask a few more. I am wondering in many industries there is lots of smaller players who are struggling. I take it your business is not that different and there is some small companies struggling. Are you seeing any of your peers that are smaller financially struggle that could enable bargain-price acquisitions or is that not a focus right now and it’s the core business that you had to keep your eyes on?

Brian, this is Terence. I think we are constantly looking for different targets for acquisitions. And I think inorganic strategy is definitely one path to grow the company, but in terms of some of the targets that probably you are mentioning, like some of the smaller peers coming or running into certain financial difficulties. I think for us it may not be an ideal approach, because we do having the best or one of the best client base in our industry and also we build a very good foundations and chat and platform. So you are looking at how we grow and in this Marketing Solution business, I think, instead of capturing some peers in the situations that you just mentioned. It maybe making more sense for us to work on, others, marketing solutions that provide us more higher like ARPU, like revenue per client bases. For example, we are actually very active expanding our KOL networks and MCN solutions. So if there is some interesting companies in that particular booming sectors in China, then I think we will be more interested. And also in terms of the enterprise solutions, we are also looking at different possibilities to grow that both organically and inorganically. So we may from time to time look at company with appropriate data and technologies that would enrich and enlarge our enterprise solutions offerings. So I think these probably would be making more sense for the companies in organic strategy. So this could give you some color on that.

That’s very helpful. Thanks guys.

[Operator Instructions] This concludes our question-and-answer session. I would like to turn the conference back over to Lisa Li for any 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 website. Thank you.

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