Hello, ladies and gentlemen. Thank you for standing by for iClick Interactive Asia Group Limited, Third Quarter 2021 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, Investor Relations Director. Lisa, please go ahead.

Hello, everyone; and welcome to iClick 's Third Quarter 2021 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. In addition, during the call, management will give their prepared remarks in English. During the Q&A session, we will take questions in both English and in Mandarin, and a third-party translator will provide consecutive translation. All translations are for convenience purpose only. In case of any translation discrepancy, management's statement in the original language shall prevail. Jian Tang ''TJ '', Chairman of the Board, Chief Executive Officer, and Co-Founder of iClick will first provide a high-level review of the third quarter 2021 results and share his thoughts on our execution strategy ahead. Chief Financial Officer, Terence Li, will follow and give us additional insight on the financial results for the third quarter and provide guidance for full year of 2021. He will then turn the call back over to TJ for closing remarks before the call is opened for Q&A. Before we continue, please note 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 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, Chief Executive Officer and Co-Founder, Jian Tang, TJ, please go ahead.

Thank you, Lisa Li. And welcome to the call, everyone. Our third quarter performance was marked by continued exceptional Enterprise Solutions growth, and a modest growth in our Marketing Solutions business. iClick 's Enterprise Solutions business has achieved impressive eighth consecutive quarter of record revenues, growing 131% year-over-year to $20 million. We are encouraged by this performance, which continues to demonstrate the consistently growing demand for private domain traffic and online and offline integrations. Our Marketing Solutions revenues for the quarter grew 11% year-over-year to $67 million, which was a deceleration from prior quarters. I want to first emphasize that the challenges we faced in this third quarter in our Marketing Solutions business were not unique, as we have observed this as an industry-wide phenomenon with our key partners and peers having likewise reported similar performance and outlook due to impact from shifting regulations and the uncertain macroeconomic environment. Having said this, we remain confident in the long-term growth of China's digital advertising industry and are evolving to adjust to the changing market conditions. During the quarter, we adopted a strategy to balance sales growth and a profitability in order to maximize the long-term client retention. With this, we believe that our robust and diverse client portfolio puts us in a strong position to benefit from the eventual market recovery. By contrast, the demand for private domain traffic remains solid and we continue to capitalize on this trend through investment in our Enterprise Solutions business and a robust execution strategy. Our leading industry solutions, coupled with our growing loyal client base, are driving healthy revenue growth, while offsetting volatility in the advertising environment among our branded clients. The uncertain micro-environment may result in a wider impact across business sectors in China. And we expect our Enterprise Solutions. We are not…

Thank you, TJ. Hello, everyone. I'm pleased to share with you our financial performances in the third quarter of 2021. Our third quarter finance shows improved record results for Enterprise Solutions for the eighth consecutive quarter. Let me briefly walk you through the key financial figures. Revenue for the third quarter of 2021 grew to $86.8 million, up 26% from $68.9 million for the same period of the power year, attributable to the increase in contributions for Marketing Solutions and Enterprise Solutions. Revenue for Marketing Solutions grew to $66.6 million for the third quarter of 2021, up 11% from $6.1 million for the first quarter of 2020, primarily as a result of growing market demand from specific Asian marketing campaigns. Revenue from Enterprise Solutions was $20.3 million for the third quarter of 2021, up approximately 131% from $8.8 million for the third quarter of 2020, primarily due to the increasing bids for online and offline consumer behavior data integration and digital transformation. Gross profit for the first quarter of 2021 was $21.7 million, representing 8% increase compared with $20.1 million for the third quarter of 2020 mainly due to contribution from higher margin Enterprise Solutions. As of September 30, 2021, the Company had cash and cash equivalents, time deposits, and distribute cash of 20 -- of $96.7 million compared with $94.5 million as of September 31st, 2020. For the rest of my discussion, I will focus on our non-GAAP results. You can find reconciliations of these non-GAAP results in the press release we posted earlier today, which can be accessed at our Investor Relations ' website. Adjusted EBITDA for the third quarter of 2021 was $3.6 million compared with $4.7 million for the third quarter of 2020. Adjusted net income for the third quarter of 2021 was $0.8 million compared…

Thank you, Terence. Our data-driven solutions are clearly driving scalability and sustainable growth, and the cross-selling opportunities we are seeing from our existing marketing solutions and through multiple partnerships continue to fill strong growth opportunities despite the challenges of the macro-environment. We remain proud of our performance throughout 2021 and believe this growth will continue even if at a slower rate than experienced in the first half of the year. We are confident that our core value proposition for brands and our innovative SaaS plus approach will be among the cornerstones for our ongoing growth. We also remain optimistic for continued strong growth in our higher-margin Enterprise Solutions segment. We will continue to pursue a balanced approach to retaining clients and cure advertising demand rebounds in our Marketing Solutions segment. Always we'll eye toward continuing to improve the overall profitability of the Company. I wish to thank all of our key stakeholders, partners, clients, and the shareholders who see what we see in iClick. That is, the promise for a very bright future, the promise of delivering true innovation against the backdrop of the digital transformation overtake in China. We remain focused on executing our clear strategies to weather these changing dynamics and are confident that we are pursuing the correct path. To all our devoted iClick ers who help us to deliver excellence every day, I say thank you to each of you for it is with you that our success surely rests. Thank you for your continued support. 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.

Now begin the question-and-answer session. For the benefit of all participants on today's call, if you are a Mandarin speaker, please raise your questions in Mandarin and then immediately repeat your questions in English. Please limit your questions to only one each time. The first question is from Nelson Cheung of Citi. Please go ahead.

So let me translate myself. So first, thank you very much for taking my questions. My question is on Marketing Solutions and it's about your outlook into the fourth quarter, and to whether you believe that the worst situation is already behind us or we're going to face -- we're going to face greater uncertainty in the future, and which verticals will be impacted more severely? And then my second question is about the Enterprise Solutions, just wondering given the rise of other big players like Tencent and Baidu on their SaaS development, what do you think about the latest competitive landscape in the market? Thank you.

This is TJ. Thank you, Nelson for asking questions. I'd like to take your first question about Marketing Solutions as well as the outlook of the entire advertising industry. Short-term speaking, that is in Q4 this year and the first 2 quarters of next year, I believe the advertising industry will still be affected by macro - economy. We are tightening regulations in some industries, as well as the resurgence of the pandemic. Short-term speaking, the advertising industry will be put under some macro pressure. And therefore, in the next following quarters, the entire advertising industry will remain weak. And actually, our view is in line with the market players in this industry as well as some of our media partners. And as to our advertising business, our advertising business, many target key account clients who have very solid financial positions and in addition, our Marketing Solutions has a client that was divide in different industries. Therefore, in the face of the changing -- challenging market environment, we will be resilient enough to adjust our client mix, or -- and strike a balance between growth and the profitability. We can choose to increase profitability short-term or we can choose to sacrifice profitability to gain market share so that when the market rebounds, we will be able to actually make better returns. Then, we will also continue to pay attention to new forms of advertising in the Marketing Solutions business such as KOL and short-form videos, which I believe will help our Marketing Solution business in the future. As to the long-term outlook of the advertising industry, that is in the next 1 or 2 years or even longer, we are still optimistic about the digital advertising industry in China. We really thought the digital advertising has a great potential here.

As to your second question about the competitive dynamics in the Enterprise Solutions business, our view is that the SaaS industry in China is still at its early stage of development and this market is still very decentralized. Different suppliers have been exploring different business models and the Enterprise Solutions business actually is a huge market. Since we've launched the Enterprise Solutions in 2019, we have been targeting key accounts clients. We have been helping them by providing them with SaaS solutions as well as operation services, that is the SaaS -Plus model, and so as to help our clients adapt to the new media ecosystem in China. New media here refers to WeChat and other social media or other KOL and any other online celebrity ecosystems. And for key accounts clients or the big brands, by providing them with SaaS solutions operation services, we can help them to identify new opportunities in the new media environment. So I think that we have a clear target customers and we have well established our Enterprise Solutions strategies. And based on our years of development, we've found out that there are quite a lot of opportunities in the Enterprise Solutions market. And for the big brands, actually it is very difficult for them to grow further on the e-commerce platform, but on the WeChat, on the KOL or other live streaming platforms, they still have more opportunities to grow. Just so by using the Enterprise Solutions as well as the operation services, the big brands will have a greater opportunity to grow in the future. And I think that our Company has great competitive edge in this sector because we have years of experience serving key account clients and we have a great data analytics and the consumer insights, we offer both SaaS products and operations services, and we also can customize solutions for key account clients, and we also have thousands of Marketing Solutions clients who we can cross-sell or up-sell products to them. And so I think that -- you also mentioned that some tech giants such as Tencent and Baidu are also launching their Saas solutions. Our view towards that is that the Enterprise Solution market is big enough and we actually target different customers, we use different service models. And many of our SaaS products are already included in the change of plan of Tencent and have been deployed on Tencent Cloud as to serve the clients of Tencent. So for key account clients, what they need is not only SaaS products, but also operational services. In this regard, I think there are more opportunities for us to cooperate with Tencent and other tech giant than competing with them. So this is our position.

Thank you.

The next question is from Thomas Chong of Jefferies. Please go ahead.

I would translate myself. My first question is, how do regulations on data privacy and the viewership of will impact our advertising business? And my second question is about the update on cooperation with Baozun? Thank you.

Okay. Thank you for your questions. And the first question is about the TITL and the data security. I think compared with the last quarter, there are no big changes. And China now is tightening the data regulation and long-term briefing, I think it's good for the healthy development of the entire industry and I also -- I think that the purpose for tightening regulations is to eliminate those gray or some dark -- illegal practices in data transactions, which actually has hurt the entire industry. And our Company has always been compliant in collecting and using data. We have been -- we have already received Level 3 certification in information security, which is the highest certification that can be given to non-banking institutions and to its impact on advertising industry. Yes, the will have some impact on the advertising industry. It means that the media needed to provide options to consumers, and let consumers to decide whether they agree to authorize the advertisers to use this information in their advertisements. And short-term speaking, it may affect the advertising precision, but long-term speaking, I don't think that it will actually affect the brand's demand for online advertising. And I think that it actually will lead to a new balance, and as long as people have figured out how to better use data. In addition, sometimes when customers opt-out this option, they found out that they still receive advertisements, so probably they will opt-in later. So we need to wait and see. And as to the data security, both our Marketing Solutions and Enterprise Solutions targeting to be customers, not to see. So we don't directly collect data from customers, instead we collect mask data from advertisers and the media and the data partners. And for Marketing Solutions, the data we've collected is non - PII data. That is, data cannot identify the identity of consumers, we use some virtual symbols and use our algorithm to place advertisements. And we've checked the current laws and regulations and these are not actually forbidden or regulated according to the latest law.

Well, second question is about the -- our cooperation with Baozun as I also mentioned previously, Baozun is an important partner of iClick and our cooperation meaning lies with WeChat ecosystem that is to help a friend to increase their private domain e-commerce. And both companies have leveraged our advantages in providing the omnichannel private domain solutions to clients. Currently, our cooperation is underway, and we have dedicated teams on both the sides to jointly serve customers. Previously, with the release of We've actually as well as Baozun 's warehousing and logistics capabilities in serving the entire lifecycle of our customers, including the WeChat ecosystem to the delivery of e-commerce. And we are also jointly serving some other customers. These customers are a big and they have very stringent authorization policies. So we cannot disclose now. And -- but we think about that there is -- there are great opportunities to cooperate with Baozun in serving the key account clients. And also it takes some time for both companies to integrate technologies and services. And now we are working with other partners too, for example, through Parllay, an acquired products of us, we have been working with HubSpot to providing overseas customers with WeChat solutions. And we have been also building a cross-border e-commerce for CN Logistics. We are at the same time using the cross-border logistic capabilities of CN Logistics in serving our customers. And also, they are some cross-selling between our Marketing Solutions and Enterprises Solutions customer base. And these kind of cross-selling has helped us to actually convert more customers into the Enterprise Solutions customers. So this is my answer to your question.

The next question is from Brian Kinstlinger of Alliance Global Partners. Please go ahead.

Okay, great. Thanks for taking my question. Can you talk about the surprising gross margin pressure, especially with a much stronger mix of enterprise revenue? Is this the new baseline? And how long do you think it'll take to recover back that 29% range? And then my second question is. You mentioned, you are maximizing long-term retention. What are those steps you're taking and what is the incremental expense and will that increase, decrease, or flatten out going forward, that spend? Thank you.

Hello, Brian, this is Terence. So maybe let me get back to you on the gross margins, the questions about that. So basically, as TJ has mentioned, during the quarters we do face a lot of unusual issues within the market and overall the sentiment and a lot of pressures are coming from different verticals. We've been missing some of the major verticals like education and some of the kinds from some of the gaming sector as well. So, we've been trying to capture new demand and also trying to compete for new budgets. And I guess in this process, we're also trying to retain our long-term customers and we've been providing a little bit more discounts towards these clients, and that's why it pressures much our margins. And at the same time, because the media is probably also having some changes, so we're also trying to capture more benefits, but it seems that potential is there and that we're trying to strike for the balance between the profit and also the growth and the retention of clients. And these two, a ton of job in terms of the gross margin in the quarter. And it probably would last for until next quarters. And maybe in the next year, we will have more visibility as T.J. mentioned I think this is only a sub term phenomenon that we are observing right now. And as you said, the Enterprise Division side, it's still growing pretty much strong. And is still maintaining a decent margins overall. And so, we've been forecasting or looking forward to that going into next year. Hopefully when the enterprise revenues do keep going, and that will be growing to -- right now is already keeping like 20% in the mix. And when going to next year is…

Hey, hello, operator, can we open up the question to the next participant?

The next question is from Colin Lieu of China Renaissance. Please go ahead.

So I'll just translate it for myself. Thanks, management, for the chance of asking the question, I only have one. If we look at gross margin for this quarter, it is actually declining on 2 basis. I wonder what's the reason behind. Is there anything to do with the broad and macro witness? Thank you.

Okay. Let me take your question first and then see whether Terence has anything to add. You've mentioned about the declining gross profit margin. And I think that actually this is largely due to the entire sentiment in the advertising industry. In Q3, and even in the second half of this year, the entire marketing -- advertising industry has faced very severe challenges. And you can see that in the financial statements in the mainstream media. And due to the weak market of sentiments, the weak demand actually has intensified the competition in this industry. So, our strategy right now is to adapt to this changing environment by sacrificing some gross and profit margin so that we can maintain the long-term healthy relationship with our customers. We want to share the growth of customers so that we can recover in healthy manner when the market rebounds. And in addition, as I'd mentioned previously, our Marketing Solutions actually cover a wide variety of industries. So, we are resilient enough to strike a balance between growth and gross profit margin. In addition, we are currently working to connect data of Marketing Solutions and Enterprise Solutions so that we can create more synergies from these two businesses. I believe that each will help improve the gross profit margin of our Marketing Solutions in the future. So, this is my answer.

As there are no further questions, I would like to turn the call back over to Lisa Li 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 website. See you next time. Thank you. Bye, bye.

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