Good day, and thank you for standing by. Welcome to Weibo's Second Quarter 2022 Financial Results Call. At this time, all participants are in a listen-only-mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. And now I'd like to hand the conference over to Ms. Sandra Zhang from Weibo IR team. Thank you. Please go ahead.

Thank you, operator. Welcome to Weibo's second quarter 2022 earnings conference call. Joining me today are our Chief Executive Officer, Gaofei Wang; and our Chief Financial Officer, Fei Cao. The conference call is also being broadcasted on the Internet and is available through Weibo's IR website. Before the management remarks, I would like to read you the safe harbor statement in connection with today's conference call. During today's conference call, we may make forward-looking statements, statements that are not historical facts, including statements of our beliefs and expectations. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. We will assume no obligation to update the forward-looking statements in this conference call and elsewhere. Further information regarding this and other risks is included in Weibo's annual report on Form 20-F and other filings with the SEC. All the information provided in this press release is occurring as of the date hereof. Weibo assumes no obligation to update such information, except as required under applicable law. Additionally, I would like to remind you that our discussion today includes certain non-GAAP measures, which excludes stock-based compensation and certain other expenses. We use non-GAAP financial measures to gain a better understanding of Weibo's comparative operating performance and future prospects. Our non-GAAP financials exclude certain expenses, gains and losses, and other items that are not expected to result in future cash payments or are non-recurring in nature or not indicative of our core operating results and outlook. Please refer to our press release for more information about our non-GAAP measures. Following management's prepared remarks, we will open up the lines for a brief Q&A session. With this, I would like to turn the call over to our CEO, Gaofei Wang.

[Foreign Language] Thank you. Hello, everyone, and welcome to Weibo's second quarter 2022 earnings conference call. [Foreign Language] On today's call, I will share with you highlights in Weibo's user product monetization in the second quarter of 2022. [Foreign Language] On the user front, Weibo's MAU reached 582 million, and the average daily users reached 252 million in June 2022, adding approximately 16 million and 7 million users year-over-year, respectively. In June, 95% of Weibo's MAUs came from mobile. [Foreign Language] Our monetization in the second quarter, the COVID resurgence together with lockdown measures in certain areas of China adversely affected the ad placement by clients. And most of our clients postponed or cut their marketing margins since the beginning of the second quarter. In June, with Shanghai and Beijing ended lockdown step by step, this is gradually came back into operation. As the June '18 e-commerce event key cost, advertisers gradually resumed their online marketing campaigns. In this quarter, our total revenues reached of US$450.2 million, a decrease of 22% year-over-year or 19% year-over-year on a constant currency basis. Our ad revenues reached US$385.6 million, a decrease of 23% year-over-year and 95% of our ad revenues came from mobile. This quarter, our non-GAAP operating income reached US$145.3 million, representing a non-GAAP operating margin of 32%, up from 29% in the prior quarter. [Foreign Language] Next, let me share with you our progress made in product monetization in the second quarter. On product front, given the current market conditions, we continue to focus on enhancing Weibo's competitiveness to improve operating efficiency, maintain user scale and drive user engagement. [Foreign Language] On channel front, in the second quarter, we continue to implement optimization strategies on channel investment and focus on improving channel ROI. In the first half of this year, our…

Thank you, Gaofei, and hello, everyone. Welcome to Weibo's second quarter 2022 earnings conference call. Let's start with user metrics. In June 2022, Weibo's MAUs represent 582 million, representing a net addition of approximately 16 million users. Average DAUs reached 252 million, representing a net addition of approximately 7 million users year-over-year. This was achieved through our disciplined channel marketing strategy demonstrating Weibo's core value proposition to users. Turning to financials. As a reminder, my prepared remarks will focus on non-GAAP result. All monetary amounts are in U.S. dollar terms and all the comparisons are on a year-on-year basis, unless otherwise noted. Now let me walk you through our financial highlights for the second quarter of 2022. Weibo's second quarter 2022 net revenues were $415.2 million, a decrease of 22% and or 19% on a constant currency basis. Operating income was $145.3 million, representing operating margin of 32%. Net income attributable to Weibo reached $109.7 million, representing a net margin of 24%. Diluted EPS was $0.46 compared to $0.79 last year. Now let me give you more color on revenues. Weibo's advertising and marketing revenues for the second quarter 2022 were to $385.6 million, a decrease of 23%. Mobile ad revenue was $364.5 million, contributing approximately 95% of total ad revenues. The second quarter of 2022 post the challenging as we expected with the [indiscernible] Omicron outbreak disrupting economic activities, resulting in broad-based headwinds across the overall advertising market for the second quarter 2022. Our leading verticals in terms of ad revenue contributions were FMCG, first lead [ph] products and gaming. In terms of growth, gaming, food and beverage and electronic vehicle sector continued to trend up against the tough market conditions. Benefiting from relatively resilient ad demand from this sector, we are pleased to capture incremental ad value share…

Thank you. [Operator Instructions] Our first question comes from the line of Miranda Zhuang from Bank of America Securities. Please ask your question.

Thank you for taking my questions. My question is about the advertising. Can you share more color on outlook for the ad spend in the second half and the measures that you're taking to address the new trend and demand in the brand advertisers that you discussed before and to get more spend amid this weak macro and COVID uncertainties? Thanks.

[Foreign Language] So in general, if we look at the second half of the year and if we look at the revenue structure of Weibo, we see that two thirds of our revenue is related to consumption-related industries, for example, FMCG or cell phones or consumer electronics and also e-commerce. So those things are highly related to the recovery trend of the macro economy. [Foreign Language] So currently, I think for - part of the industries, there are already some stimulus policies. For example, the NAV industry and also, there have been some issuance of the consumption coupons that brings us some stimulation to the macro economy. But it takes time for the policies to pass on to the economy for the economy to recover, and then it gets reflected in the advertising industry. But we still think that the trend of the consumption upgrade will continue. And also, the habits and behavior of the consumers are already shifting from offline to online, and that brings some structural benefit to the advertising industry. For example, some of like the automotive industry and some other industries are already shifting their strategies, and they are already putting some of their product releases online, and those are very favorable for our industry. [Foreign Language] So in the mid-term and short term, of course, the economic recovery trend is real, but the speed of recovery for different industries are quite different. [Foreign Language] So actually, since the COVID is here. So we saw that for some of the brands and for some of the advertisers, actually, they are shifting their budget from offline to online. For example, the automotive industry, luxury industry, as well as the FMCG industry. We saw very obvious trends from those industries. And compared to 2020 when a lot of…

[Foreign Language] So I think that's it. Thank you.

Thank you. Our next question comes from the line of Ashley Xu from Credit Suisse. Please ask your question, Ashley.

[Foreign Language] My question is related to our efficiency optimization and cost control. What types of measures would be in place for second half? And what's the financial impact? Thank you.

[Foreign Language] So for Q2, actually, as I have already mentioned, our profit margin was around 32%, which is similar or even 3% higher than that of Q1. And actually, starting from the beginning of the year, we already foresaw some of the impact from the macro economy. It was just that we didn't expect the impact of the COVID outbreak. So back then, we already started to make some approaches, and actually, our marketing fee actually went down by 27% year-on-year and went down by 9% compared to the last quarter. But still, at the same time, the user acquisition cost for our customers went down by one third. So with similar user acquisition scale, the quality of the user vision actually got better. And also for some of our non-core businesses with that cash flow, we tried to peel them off. And at the same time, we continued to invest in our core business scenarios. [Foreign Language] So actually, we see that the optimization of our operational efficiency is not just from the financial perspective. Actually, we do the things based on the judgment of the market competition landscape, as well as the industry trend. So if we were to scientifically look at the COVID situation, some may say that the lifting of the control policies may bring benefit to the industry. But in the mid-term and short-term, we think that, that kind of judgment may be a little too optimistic because the outcome was not that optimistic. Actually, for our cost reduction and efficiency improvement approaches, actually, we were focusing on two things. One is to improve our operating efficiency. The other is to bring up our core competitive edge. So it may be reflected in our approaches to cut the cost and improve the efficiency. But…

All right. Thank you very much for your questions. We have now reached the end of the question-and-answer session. I'll now turn the conference back to Mr. Sandra Zhang for closing remarks.

Thanks, operator, for the conference call today. Thank you for joining us. We'll see you next quarter.

This concludes today's conference call. Thank you for participating. You may now disconnect.