Good morning and good evening, ladies and gentlemen. Thank you for standing by for Yalla Group Limited’s Fourth Quarter and Full-Year 2024 Earnings 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. Now, I will turn the call over to your speaker host today, Ms. Kerry Gao, IR Director of the Company. Please go ahead.

Hello, everyone, and welcome to Yalla’s fourth quarter and full-year 2024 earnings conference. We issued our earnings release earlier today, and it is now available on our IR website as well as on Newswire outlets. Before we continue, please note that the discussion today will contain forward-looking statements made under the Safe Harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our future results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in our earnings release and our annual report filed with the SEC. Yalla does not assume any obligation to update any forward-looking statements, except as required by law. Please also note that Yalla’s earnings press release and this conference call include a discussion of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. Yalla’s press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. Today, you will hear from Mr. Tao Yang, our Chairman and Executive Officer, who will provide an overview of our latest achievements and growth strategies. He will be followed by Mr. Saifi Ismail, the Company’s President, who will briefly review our recent business developments. Ms. Karen Hu, our Chief Financial Officer, will then provide additional details on the Company’s financial results and discuss our financial outlook. Following management’s prepared remarks, we will open the call to questions. Mr. Jeff Xu, our Chief Operating Officer, will join the Q&A session. With that said, I would now like to turn the call over to our Chairman and Chief Executive Officer, Mr. Tao Yang. Please go ahead, sir.

Thank you, everyone, for joining our fourth quarter and full-year 2024 conference call. We concluded 2024 with robust fourth quarter results. Our revenue rose to US$91 million, reaching a new record high for the second consecutive quarter and once again beating the upper-end of our guidance. We are bringing our annual revenue to US$340 million. This exceptional performance is a testament to our deep commitment to enhancing user experiences and boosting user engagement across our vertical system with content tailored to the local culture. Additionally, we have made significant strides in improving our operational efficiency by enhancing management practices with our service providers, optimizing user acquisition strategies and refining our internal processes, which led to a 26% year-over-year increase in operating profitability for full-year 2024. These impressive results further demonstrate our ability to drive high-quality growth and fulfill MENA users’ evolving online social networking and gaming needs. Looking back at 2024, the driving digital economy in the MENA region continued to attract attention globally. By increasing number of global leading internet companies are investing more resources and talent into the MENA market, driving evolving demand trends among local users. This vibrant landscape underscores MENA’s potential as one of the fastest growing mobile internet markets. On a related note, according to industry research, the digital transformation market in MENA was valued at US$55 billion in 2024 and it is expected to grow at a compound annual growth rate of 22.5%, reaching US$418.54 billion by 2034. This dynamic expansion creates tremendous profit and growth opportunities for businesses. Leveraging nearly a decade of experience in the MENA region, a well-established product portfolio and flourishing online social and gaming community, Yalla is well-positioned for continued market leadership in the MENA region. We remain dedicated to serving local users’ evolving needs for social interaction and…

Hello, everyone. Thanks for joining us today. Let’s take a closer look at our fourth quarter operations and our products performance. As of December 31, 2024, our MAU increased by 14.4% year-over-year to 41.4 million. Paying users increased by 3.2% year-over-year to 12.3 million with ARPPU reaching 7.24%, an increase of 10.2% year-over-year. During the quarter, we continued to launch innovative features and engaging operational events for our flagship products, strengthening users’ engagements and maintaining these products’ profitability. For our regional products, we continued to unleash their immense potential with iterations and upgrades. Revenue from 101 Okey Yalla reached a new record high contributing to our overall growth. We are delighted to see our legacy products exhibits during popularity and generate strong results as we continue to invest in new opportunities to drive future growth. We continue to strengthen Yalla Ludo’s momentum with a series of outstanding offline events this year. In December 2024, we held our Yalla Ludo Champion Tournament in Riyadh in Saudi Arabia featuring a host of customized experiences inspired by local culture traditions to suit local gamer states. We also provided VR gaming experiences and other immersive activities to strengthen users’ engagement. With these influential events, we create unique opportunities for talented gamers and game enthusiasts to connect while cementing our bond with users and extending our reach to the border gaming community. In terms of regional products, we announced in the third quarter of 2024 that 101 Okey Yalla has set a new quarterly revenue record, a milestone. It swiftly surpassed this quarter. Meanwhile, the product achieved a significant year-over-year increase in monthly average MAU during Quarter 4. These remarkable results have inspired us to remain laser focused on crafting high-quality regional products and challenge ourselves to seize every opportunity for success in their respective…

Thank you, Saifi, and hello, everyone. Thank you for joining us today. We delivered robust 2024 results, reflecting our unwavering commitment to driving high-quality growth in dynamic and rapidly evolving market. For full-year 2024, our revenues reached US$339.7 million. In the fourth quarter alone, our revenues increased by 12.2% year-over-year to US$90.8 million exceeding the up end of our guidance and underscoring the ongoing success of our user acquisition and monetization strategies. Moreover, we remained focused on enhancing our operational efficiency and optimizing costs, which has significantly contributed to our operating profitability. Our operating income increased by 29.4% year-over-year to US$30.1 million in the fourth quarter and by 26% year-over-year to US$121.4 for the full-year. This meaningfully boosted our overall profitability with net income increasing by 18.7% to US$134.2 million for the full-year 2024. As we move into 2025, we will continue to prioritize quality development, focusing on both product innovation and the refined operational processes. We will also deepen our commitment to enriching the user experience and expanding our services to cater to the region’s evolving needs. With our deep local insights and strong financial fundamentals, we are well-positioned to navigate the market dynamics and see future growth opportunities. Let’s move on to our detailed financials for the fourth quarter of 2024. Our revenues were US$90.8 million in the fourth quarter of 2024, a 12.2% increase from US$80.9 million in the same period last year. The increase was primarily driven by our broadening user base and enhanced monetization capability. Our solid revenue growth was also partially attributable to the substantial increase in the number of paying users, which grew to 12.3 million in the fourth quarter of 2024 from 11.9 million in the same period last year. Turning to our costs and expenses. Our total costs and expenses were…

Thank you. [Operator Instructions] Our first question today comes from Xueqing Zhang with CICC. Please go ahead.

Good morning, management. Thanks for taking my question. My question about your game business. Could management share the latest progress of new game products and what’s your insights into commercialization expectations? Thank you.

Thanks, Xueqing, for your question. This is Jeff. I will take your question. Throughout 2024, we focused on advancing the research and development of our new gaming products, consistently exploring new avenues to expand our product portfolio. We have completed the version 1.0 development of two mid-core games and are now in the process of fine tuning them. Meanwhile, we have been proactively pursuing external collaborations that complement our business, leveraging Yalla’s extensive experience in the Middle East. We are working with more potential partners to unlock the local market opportunities and establish a deeper foothold in the Middle East. As the largest MENA-based online social networking and entertainment platform, we aim to curate top-tier games and upper game players a richer entertainment experience. We hope Yalla Games’ recent achievement will contribute new revenue streams to the Group this year. The specific financial guidance will be disclosed in due course. Thank you very much about your question.

Thank you. And our next question comes from Xiaoyue Hu with Haitong International. Please go ahead.

Hello, management. Thank you for taking my question. So, can management elaborate on the Company’s strategic priorities and the key initiatives for 2025? Thank you.

Thank you, Xiaoyue. This is Yang. I will answer his question. I think 2025 marks the 10th anniversary of our Company’s founding. Our two flagship products continue to thrive and we are immensely grateful for our MENA-based users and wavering support and enthusiasm over the years. We will continue to iterate this flagship app by enhancing gamification and rolling out innovative new content, while leveraging advanced technology to offer diverse and engaging experience for our users. Additionally, as we mentioned earlier, we have a number of new apps in our pipeline that have potential to contribute to the Company’s revenue growth in the second half of this year. Going forward, we plan to further expand our local team in the Middle East to enhance our local presence and align with the region’s sweeping digital transformation trend. We will keep a sharp eye on MENA’s evolving user needs and stay open to the new market opportunities while consistently delighting local users with products that appeal to their culture values and taste. Thank you, Xiaoyue.

Thank you.

Thank you. And our next question comes from Kaifang Jia with CITIC. Please go ahead.

Hi, management. Thanks for taking my question. I have a question about how should we think about the revenue and margin trades in 2025? Thank you.

Hello, Kaifang. Glad to see you here. This is Karen. For 2025, even without factoring in potential revenue from new products, we anticipate at least maintaining our current revenue size. We also think that maintaining a net profit margin of around 40% is reasonable. Of course, our upcoming products are likely to generate new revenue streams this year, but we will wait until these products are launched to provide revenue guidance. Given the necessary marketing investments for these new products, we expect a margin of around 35%, but we will adjust our investment budget depending on the specifics of these new product launches. Thank you.

Thank you. And our next question comes from Rachel Guo with Nomura. Please go ahead.

Hi, good morning, management. Thanks for taking my question. My question is about your shareholder returns. Can management to provide an update on your share repurchase plan? Thanks.

Thank you, Rachel. This is Yang. I think we are committed to delivering value to our shareholders through our share repurchase program. In 2024, we repurchased around 3 million ADS, amounting to approximately US$14 million. Moving into this year, we will accelerate shareholders’ returns through our share repurchase program. We are fully committed to achieving our target of at least doubling our buyback activity to US$28 million this year. We may escalate this amount later this year and we will provide quarterly updates on the plan’s progress. We host strong confidence in Yalla’s long-term potential and are dedicated to generating sustainable long-term value for all stakeholders. I hope that helps. Thank you.

Thank you. And our next question comes from Lincoln Kong at Goldman Sachs. Please go ahead.

Thank you, management for taking my question. So, can management elaborate about our strategic vision for leveraging AI to drive our growth and innovation here? Thank you.

Hi, Lincoln. This is Yang. Thank you for raising this. As we noted earlier, we have a dedicated algorithm team and proprietary AI task platform and we are already capitalizing on AI to empower our products, boosting efficiency and elevating user experience. Meanwhile, we see tremendous upside potential in further integrating AI into our ecosystem. We are actively evaluating various user cases across our products, exploring how to synergize our internal teams with external AI resources to deepen user engagement and expand our market reach. We aim to harness AI not only as a tool for enhancing efficiency, but also as a catalyst for innovation, ensuring that our products remain at the forefront of MENA’s digital entertainment market. I hope this offers a clear picture. Thank you, Lincoln.

Thank you.

Thank you. And our next question comes from Jenny Yuan with UBS. Please go ahead.

Thanks management for taking my question. My question is regarding our regional strategy. So, could you please provide any update on whether our Company’s future development will still be MENA-focused or if we have any plans to expand operations to other regions? Thank you.

Thanks, Jenny. This is Saifi, and I’ll take this question. We have always viewed MENA as our core market and strategic home base, making it the solid foundation supporting our business growth. At the same time, as our products portfolio expands, we may reach users elsewhere, diversifying our user base. Some of our new products may also have the potential for distribution in other regions. We will also carefully evaluate such situations based on the market data and market prudent decisions that maximize our potential and enhance our ROI. However, wherever else we may go, the MENA region will always remain at the heart of our business and we will continue to deepen our presence in this region to strengthen our market leadership. Thank you.

Thank you. And this concludes our question-and-answer session. I’d like to turn the conference back over to the Company for closing remarks.

Thank you once again for joining us today. We look forward to speaking with you in the next quarter. If you have further questions, please feel free to contact Yalla’s Investor Relations or Piacente Financial Communications. Both parties’ contact information is available in today’s press release as well as on our Company website. Thank you.

Thank you. This concludes today’s conference call. You may now disconnect your lines and have a wonderful day.