Q2 2023 ContextLogic Inc Earnings Call
Participants
Jun Yan; CEO & Director; ContextLogic Inc.
Ralph Fong; Head of IR; ContextLogic Inc.
Ying Liu; CFO & COO; ContextLogic Inc.
Kunal Madhukar; Analyst; UBS Investment Bank, Research Division
Laura Allyson Champine; Director of Research; Loop Capital Markets LLC, Research Division
Presentation
Operator
Good day, and thank you for standing by. Welcome to Wish's Second Quarter 2023 Earnings Conference Call. (Operator Instructions) As a reminder, today's program is being recorded.
I would now like to turn the conference over to Mr. Ralph Fong, Wish's Director of Investor Relations. Please go ahead, sir.
Ralph Fong
Good afternoon, everyone, and welcome to Wish's second quarter 2023 earnings conference call. I am Ralph Fong, Director of Investor Relations, and joining me today are our CEO, Joe Yan; and our CFO and COO, Vivian Liu.
Today's prepared remarks have been prerecorded. There is also a slide deck that has been posted to our Investor Relations website, which is available for your reference. Once we are finished with Joe and Vivian's remarks, we will hold a live Q&A session.
The remarks made today include forward-looking statements that are related to, among other things, our financial expectations; business and restructuring plans, including the impact of our reduction in force; logistics and operational efficiencies, including flat rate shipping and related initiatives; initiatives to improve customer experience and engagement; expectations regarding merchant relationships and strategic partnerships; the impact of our strategic, marketing and product initiatives, including ad spending and promotional events; the renewed supply strategy; and the anticipated return on our investments and their ability to drive future growth.
Our actual results may differ materially from the results implied by these forward-looking statements if certain risks materialize or assumptions prove incorrect. Forward-looking statements involve risks and uncertainties, which are described in today's earnings release and our periodic reports filed with the SEC. Any forward-looking statements that we make on this call are based on our beliefs and assumptions today, and we disclaim any obligation to update them.
Also, during the call, we will present both GAAP and non-GAAP financial numbers and metrics. A reconciliation of non-GAAP to GAAP results is included in today's earnings release, which you can find on our Investor Relations website and which is also filed with the SEC. A replay of this call will be posted to our Investor Relations website.
With that, I will now turn the call over to Wish's CEO, Joe Yan.
Jun Yan
Thank you, Ralph. I would like to thank everyone for joining our second quarter 2023 earnings call. On this call, I will share with you our Q2 financial updates, discuss the business highlights, and key strategic focus for 2023. Vivian will then provide a deeper dive into financial results, share the third quarter guidance, and comment on our operations. Finally, I will provide additional closing remarks before opening up the call to your questions.
In the second quarter of 2023, total revenues of $78 million were down 42% year-over-year and below our guidance range of $91 million to $102 million. On the bottom line, we reported adjusted EBITDA loss of $66 million in Q2, which was within the guidance range of a loss of $60 million to $75 million. We ended the second quarter with cash, cash equivalents and marketable securities of $531 million.
During the quarter, our top line performance, including revenue and DAU, was impacted by the challenging operating environment as we continued to navigate macro headwinds as well as competitive pressures in the e-commerce space. At the macro level, we continued to experience a high level of economic uncertainty, which impacted consumer spending habits. Macro conditions, which include inflation, elevated interest rates and cost of living, continued to pressure our value-oriented consumers. This had a direct impact on discretionary spending across the markets we serve.
The e-commerce market is large and growing and yet highly competitive and rapidly evolving, which is characterized by rapid changes in technology and consumer sentiment. We acknowledge that competition in our industry has intensified, and we expect this trend to continue. That being said, we are focused on the things we believe we can control going forward.
Despite a dynamic and challenging environment, the team executed on our strategies and made progress in our various strategic initiatives. I'll begin by reviewing some of the progress we have made on our 3 foundational pillars that we continue to believe are the most important to the long-term financial health and growth of Wish.
Our first pillar is improving the customer experience. As part of our efforts to drive basket building and further improve the customer experience, we rolled out flat rate shipping on all eligible orders in each of our major geographies in the first half of 2023. In Q2, we took it up a notch and expanded the flat rate shipping initiative by offering free shipping on all eligible orders over $10 during the Wish Anniversary merchandising event that ran from June 24 to July 7.
Flat rate shipping is part of a broader effort to improve the shipping experience on Wish and it remains a key component in addressing one of the major pain points amongst our users. We expect to further expand it in the second half of 2023. Some ideas we plan on experimenting with include offering free shipping for orders above established thresholds and making all items on Wish eligible for flat rate shipping, instead of a limited number. Ultimately, our vision is to remove shipping as a major point of friction for our customers from here on in.
From a product discovery and exploration standpoint, in Q2 we also increased the scale of product collections in support of the Wish Anniversary merchandising event by ratcheting up the volumes of product groupings based on a specific category, such as home and garden, beauty and wellness, jewelry and accessories, et cetera., and showing those products in featured modules that lead to unique collection pages. Going forward, we intend to leverage generative AI to create product collections at scale to drive engagement and meaningful basket-building opportunities for our customers, which I am excited about.
Another aspect of improving the customer experience is our quest to provide seamless guest experiences, regardless of the entry point. In Q2, our product team significantly reduced friction on the mobile web by launching a guest checkout experience across a number of major geographies. The new experience enables new users to discover products, add items to the cart and transact without needing to set up an account, the result of which has driven improvements in customer engagement and conversion. As most of our new and churned user traffic comes in via other mobile-based apps, it's critical we get the m-web guest experience right in order to harness that traffic. Mobile web is becoming an important channel for our platform distribution in addition to our iOS and Android apps.
Speaking of user traffic, ads are the first experience new and returning buyers have with Wish, and we intend to focus on making that experience engaging, retentive, and frictionless in the second half of 2023, as part of our growth strategy. We plan to optimize ad landing pages to focus on enticing customers from m-web to download the app, highlighting new buyer incentives, and testing a variety of new recommendations to drive exploration.
At Wish, our transition to allow guest experience is nearly complete. Looking ahead, the next phase in this program for the remainder of the year includes passwordless accounts and removing friction associated with account creation and recovery. The goal is to leverage onetime passwords, OTP, and links to increase the number of successful log-ins and prevent account takeovers with more secure authentication at the secondary wall.
In an effort to further improve the customer experience and drive basket-building, our team intends to make the shopping cart as a living part of the users' Wish experience by launching the live cart in the second half of the year. The live cart allows users to prominently see the status of their cart throughout their entire shopping journey. In other words, the live cart will help users to understand what's in their cart at any given time without having to go to a different place within the app. Moreover, the live cart will surface timely coupons, encouraging customers to add more relevant items to their carts or baskets before checking out, providing a more personalized shopping experience to customers.
This brings me to our second pillar, which is deepening our merchant relationships. Within the U.S., we have successfully onboarded a number of new merchants in recent months. Of particular note is a reseller of refurbished consumer electronics products and brand owners within the beauty, fashion, and licensed sports collectibles space. Importantly, these authorized resellers have domestic warehouses in the U.S., enabling faster shipping times for North American Wish customers.
Additionally, we announced a strategic partnership with one of South Korea's leading logistics providers, Rincos. The partnership is designed to streamline the process for Korean merchants seeking to ship goods overseas through the Wish platform. We look forward to joining forces with Rincos to deliver a better shipping experience for our merchants and our customers and to grow our merchant base in the region.
As a marketplace platform, we recognize that our merchants play an integral part of providing a great customer experience. We are committed to further strengthening our relationships with those merchants who provide outstanding experiences to our consumers. Europe should continue to be a strategically important region for Wish as our European customer base accounted for nearly half of our core marketplace revenue in Q2. Consequently, we plan to host our first European Merchants Summit in September this year.
The 2-week-long Wish Anniversary merchandising event was another successful event for Wish and was well received by our merchants and buyers. It allowed our merchants to position their products strategically within targeted categories and create doorbuster deals to help attract customers. To put things in perspective, approximately 6,000 merchants participated in the Wish Anniversary event, enrolling over 360,000 product listings and 15,000 doorbuster deals. Importantly, we saw a double-digit increase in GMV during the event.
On our last earnings call, we introduced our renewed supply strategy which aims to further deepen our merchant network to provide customers with fresh, fun, quality products at competitive prices. As a 3P marketplace, the breadth and depth of our product range is a key differentiator, as is our ability to enable both domestic and cross-border trade.
For the second half of the year, we plan to implement a renewed supply strategy by rightsizing our supply pool to focus on a certain number of core listings and high-touch categories. This will involve creating distinct experiences for each of our highest-touch categories such as health and beauty, women's fashion, refurbished electronics, and home essentials. We'll have separate landing pages, theme-based collections, marketing messages, et cetera, all designed to be better aligned with our users' home and life needs.
I will now discuss our third pillar of achieving operational excellence. In Q2, the average time to door in 6 of our major markets improved by 6 days when compared to the same time period of 2022. Our on-time delivery rate was 91%, largely flat when compared to last quarter. We also saw our average time to door improve in the major markets we serve, favorably impacting customer order cancellation rates, refund rates and customer experience.
Our customer order cancellation rates declined 47% year-over-year in Q2, and customer refund rates dropped by 30% within the same time period. Additionally, we saw a 28% year-over-year improvement in customer NPS alongside encouraging buyer conversion and customer retention trends in Q2. In particular, buyer conversion and customer retention improved by 13% and 3%, respectively, in the second quarter of 2023, when compared to the same period last year.
Having said that, we have a lot of work ahead to further improve our business operationally, and our first steps are to rationalize corporate overhead and operating expenses. As part of these efforts, we will be implementing a restructuring plan. Earlier this week, we notified Wish employees that we will undertake a new round of reduction in our global workforce as part of a broader realignment of our resources. We anticipate that this reduction will decrease our global workforce by approximately 255 positions, representing about 34% of our headcount. This is an incredibly difficult decision to make and a process to go through, but it is critical that we rightsize our spend to match the current size and scope of our business.
We estimate that we will incur onetime charges of approximately $8.7 million for severance and personnel reduction costs. We expect the majority of these charges will be incurred in Q3 and that the implementation of the workforce reduction will be largely complete by the end of fiscal year 2023. We expect to realize run-rate savings of approximately $43 million to $46 million on an annualized basis, starting in the fourth quarter of 2023. We intend on making Wish a much leaner and a more efficient business with the goal of becoming a profitable company longer term.
With that, let me now turn the call over to our CFO and COO, Vivian Liu, to discuss our financial results in more detail and give you an update on our operations.
Ying Liu
Thank you, Joe. Now I will add more color on Q2 financial performance and provide Q3 financial guidance.
On the user metrics, we had 12 million monthly active users and 10 million last 12-month active buyers in the second quarter of 2023, which represented a decline of 48% and 50%, respectively, year-over-year. The decline was partially driven by the cumulative reduction in ad spend over the past several quarters as we continued to focus on achieving target returns on our ad spend.
The total last 12-month ad spend decreased by 30% versus the same period of the prior year. In addition, as Joe shared earlier, we started to see increased competition in the e-commerce industry as some of the market participants focused on driving new user acquisition and retention by offering deep discounts and incentives. We believe that such competition further contributed to the decline in our monthly active users and buyer count in Q2 2023.
Total revenues in Q2 were $78 million, a decline of 42% year-over-year. This decline was across Core Marketplace, ProductBoost, and Logistics, primarily driven by reduced ad spend and the pricing changes that were fully implemented by the end of Q2 2022. Similar to what we experienced last quarter, the pricing changes impacted our Q2 revenue and EBITDA, resulting in an unfavorable comparison to the prior year. Please note that the impacts from the pricing changes will be lapped fully starting Q3 2023.
Q2 gross profit was $16 million, a decline of 62% year-over-year. Gross margin was 21% vs 31% in Q2 2022. Gross margin performance was mainly driven by the decline in marketplace gross profits due to the pricing changes as discussed earlier, as well as the lower margin logistics business contributing a higher percentage of the total revenues.
Total operating expenses were $99 million, a reduction of 26% year-over-year. Lower ad spend, lower customer support services costs, and a reduced employee headcount accounted for a majority of the reduction in operating expenses. Excluding stock-based compensation expenses, total operating expenses were down by 19% year-over-year.
Our net loss was $80 million compared to a net loss of $90 million in the second quarter of 2022. On a year-over-year basis, the decrease in gross profit was offset by the decline in operating expenses, resulting in a decrease in net loss in Q2 2023.
Our adjusted EBITDA was a loss of $66 million compared to an EBITDA loss of $58 million in Q2 2022. The year-over-year decline in adjusted EBITDA was primarily driven by lower revenues and the impact of our pricing changes, which made Q2 2023 unfavorable from a year-over-year comparison standpoint. Q2 2023 EBITDA result was within the guided range of a loss of $60 million to $75 million.
Operating cash flow was negative $88 million and free cash flow was negative $91 million for Q2 2023, compared to operating cash flow and free cash flow of negative $67 million in Q2 2022. The year-over-year increase in net cash used in operating activities was primarily driven by unfavorable changes in working capital as the balance of total payables declined corresponding to lower transaction volume and amounts.
We ended Q2 with $531 million in cash, cash equivalents and marketable securities, and no long-term debt.
I would now like to provide guidance for the third quarter of 2023. For Q3, we expect total revenue to be in the range of $55 million to $65 million, adjusted EBITDA loss to be in the range of $55 million to $65 million. Revenues are expected to remain under pressure primarily driven by reduced monthly active users and buyer count on a quarter-over-quarter and year-over-year basis.
EBITDA is expected to improve quarter-over-quarter largely due to better cost efficiency associated with lower employee expenses. From a year-over-year standpoint, EBITDA is expected to improve significantly as the projected decline in revenue is more than offset by cost savings across COGS and operating expenses.
To sum up, the competitive landscape is changing rapidly in the cross-border e-commerce space, and we are experiencing unprecedented headwinds from intensified competition in the industry. As a result, we expect user acquisition and retention to remain pressured for the near term, negatively impacting our monthly active users, active buyer count and revenue.
As Joe shared earlier, we have made the difficult decision to further rightsize our cost structure. In addition to the annualized savings of approximately $43 million to $46 million as a result of this round of workforce reduction, we are working to achieve additional annualized savings of approximately $20 million in nonemployee-related cost items. The enhanced cost efficiency should enable us to improve cash flow and invest in our critical initiatives for the future.
We will continue to double down on the 3 pillars, customer experiences, merchant engagement and operational excellence, to deliver differentiated shopping experiences and great value at competitive prices for our buyers and merchants alike. We are now on an accelerated path to reinvent Wish with an ever-greater sense of urgency. Financially, we will sharply focus on return on investments, EBITDA and cash optimization to improve shareholder values.
With that, I will now turn over the call to Joe for his closing remarks.
Jun Yan
Thank you, Vivian. To close, I'll leave you with a few final thoughts. We are cautiously optimistic within Wish about all the initiatives we have in place from a user and merchant experience standpoint, but we still have a lot more work ahead. As I discussed in the beginning of the call, we face intense competition amidst a challenging macroeconomic climate. As a result, for the remainder of 2023, the entire team at Wish will collectively sharpen our focus on our key initiatives that we expect will drive improvements in customer experiences and sustainable growth.
Our plan is to improve the shopping experience for our users through the app features, improved product quality and delivery time, more responsive customer support and competitive pricing. Going forward, we intend to leverage generative AI as well as other technologies to provide differentiated shopping experiences to engage, delight, and drive basket-building opportunities for our users. Meanwhile, we are dedicated to the 3 foundational pillars, and we are focused on the goal of returning shareholder value over the long term.
At this time, operator, could you please open the call for Q&A?
Question and Answer Session
Operator
(Operator Instructions) And our first question comes from the line of Kunal Madhukar from UBS.
Kunal Madhukar
A quick one on -- you talked about macro and competitive challenges out there. Macro is whatever macro is. But as far as the competitive challenges are concerned, what are you doing there to kind of improve and maybe change stuff? And are you seeing any change? What I'm trying to figure out is, is there a chance that revenue can actually grow from current levels?
Jun Yan
Yes. Thanks for the question. This is Joe Yan. So I think the competition is always there, right? So we did see quite a few players in the space increase the investment level, especially in the past 2 quarters. So it also signaled very strong demand in the cross-border e-commerce sector, so which we, as a company -- so we kind of keep focusing on the sustainable growth because we believe the sustainability is the key to an e-commerce company as the e-commerce is going to be a long run for everyone in this space.
So what we have done here is that we keep focusing on actually what we can do. So I think, first of all, I think it's about the supply quality as we said. So (inaudible) something has been the pain point for our customer -- from the customer experience perspective. We have been doing a lot of things on improving our [list]. This is something really can help us to grow the organic and also the retention in the longer run.
And in addition to that, I think the competition also give the force to every player in the market, including ourselves, the force to really think about how we can accelerate reinvention of the shopping experience. So that's the thing actually why our product team have been focusing a lot on improving a lot of product features like what I shared in the earnings earlier. So this is something definitely can really help us to differentiate ourselves in the market -- in this competitive market, right? So still a lot of work to do.
And we think actually there's something on the shopping experience, the innovation can help us to build actually the moat, the differentiation compared to the other players. So --yes, so I think there's still a lot of work to do, but it's something we'll focus on in the future.
And on the growth side, definitely we believe with those kind of shopping experience improvements and also including the supply quality improvement, that can really give us a chance to stabilize the traffic and to kind of back to the growth track again.
Ying Liu
If I may add to Joe's point, we may not be able to outspend all our competitors in terms of marketing dollars, but what we can do to drive sustainable growth, as Joe shared in the prepared remarks, number one, user acquisition through the high-touch categories, fashion refurb electronics, home essentials and beauty and health. And those are the areas where we are -- you can build a lot of differentiated vertical experiences for user acquisition as well as user retention. As Joe also mentioned, the generative AI technology will play a very important role in creating those vertical experiences.
And as the second piece of sustainable growth is user conversion through removing frictions in the user journey. And the third piece is increasing the average transaction value through the flat rate shipping and other basket-building initiatives. So I think when we think about growth, it's more than just acquiring users. It's about converting the users into buyer and retaining the buyers more effectively and helping the buyers building bigger baskets (inaudible). So all that collectively will help us build a path towards a system of growth and eventually reverting the trend in the top line.
Kunal Madhukar
Great. A quick follow-up, if I could. One of the things you mentioned, Vivian, was -- and you discussed it in the opening remarks also is the highest-touch categories, health and beauty fashion, refurb and home essentials. What percentage of your GMV comes from these 4 categories?
Ying Liu
Yes. So we don't report GMV on like a category level, but those are very major categories already on the platform. So they are -- in general, they account for more than 50% of the total GMV on the platform. What we highlighted as the 4 high-touch category, they are subset of the bigger home and garden category or fashion. So there are subsets under the bigger categories where we see additional growth opportunity. If we double down and then manage the subcategories properly, we can drive a lot more growth, right? So to answer your question, those 4 major categories are accounted for a very large portion for GMV. What we selected are the subcategories under the 4 bigger categories to drive additional growth, again, women's fashion, refurb electronics, home essential, and beauty and health.
Operator
(Operator Instructions) Our next question comes from the line of Laura Champine from Loop Capital.
Laura Allyson Champine
It's really about the restructuring. I know that the -- there was a significant number of staff laid off. I think it's 34% of the total. But are there certain areas where that was concentrated, certain functions? And are there certain things that you did not touch? Maybe just a little more visibility into what you did there.
Jun Yan
Yes. Thanks, Laura. This is Joe. So looking ahead to the remainder of this year, 2023, we recognize the macroeconomic uncertainties and the competitive pressure will likely persist. So in response to this dynamic environment and to position Wish to thrive over the longer term, so we are taking aggressive action, as you mentioned, to significantly lower our cost structure and improve our operational efficiency. So as part of these efforts, we are restructuring our workforce and optimizing for top strategic priorities, so it can make us more laser focused on executing the top priority things within the company.
So we are able to maintain the major investment that we have with what we have planned for this year and the loss cut was taken into account. So that's your question, right? So this reduction didn't cut across -- did cut across different areas of the company, and there are a number of factors that were included in the decision-making process. However, our priority was really making sure that we have the full funding for what we consider are the key strategic priorities, both on the product and operations side.
Laura Allyson Champine
Got it. And then a second question. How do you expect to trend your own advertising expense, which I know is dwarfed right now by some competitors? But how do you expect it? Do you expect to increase? Or does it not make sense to grow ad spend at this time?
Ying Liu
Yes. Thank you for the question. So our ad spend will fluctuate based on the seasonality. For during the holiday season, we tend to spend a little bit more to capture the purchase power from the customers. But generally speaking, we will be more focused -- we will take a very disciplined approach with our ad spend, meaning we set a threshold for the ROAS, the return on the ad spend, and we won't spend additional dollars until -- unless we see the threshold requirement being met. So I think the -- between spending a lot of dollars trying to compete head-to-head with deeper pockets and just for user acquisition versus spending wisely and in a disciplined manner to make sure we get the proper investment on the ad dollars, which is the second path.
And we are -- like I mentioned in the prepared remarks and financially we are very focused on optimizing for cash flow, returns and EBITDA. So I think it's probably fair to say compared to last year, the year before, ad spend will continue to stay at a very disciplined level and as we continue to focus on the ROAS and the return threshold.
Jun Yan
Yes. And I can add a little bit of color here. So in the past few quarters, we have been spending a lot of effort on optimizing the return on ad spend, especially in the existing customer segments. So we have seen a very, quite good improvement from the existing customer segment. That actually can allow us to really kind of allocate a little bit more budget into the new user acquisition in the upcoming quarters. But it doesn't mean that we will increase the marketing spend drastically, but it's something just like more the approach or the campaign structure change, and really help us to optimize the ROAS at a more holistic view.
So I think this is the overall approach we are doing now. And Q2, definitely, it's transitioning quarter, right? So we have started some of the campaign approach change. And we do hope they can really help us to build on the top funnel. But at the end of the day, just like what I said, organic still is the biggest bet for us. So the marketing still will remain a very key driver approach for us for the DAU, the growth. But I think the organic still is the biggest bet. So this is something we still will rely on the customer experience improvement, product feature improvement, just like what we shared earlier, including reducing the customer friction during the shopping journey, the more innovative way for exploration and discovery, and also the continuing improvement on the shipping experience.
All of these things are coming together, so we can really offer a customer much better experience on which. And this is something, I think, can really help us grow on the organic side. So, yes, having said, with all this combined effort, we do hope actually the marketing and the product efforts can really kind of work together to generate more kind of a user for Wish.
Operator
And our final question for today comes from the line of Kunal Madhukar from UBS.
Kunal Madhukar
Another question popped in my mind and that was with regard to the marketing spend. So Vivian, you talked about having a high ROI threshold on the marketing spend. And when I look at like your marketing spend as a percentage of Core Marketplace revenue, that increased from about 130% in 1Q '23 to 160% in 2Q '23. And the marketing -- the aggregate marketing spend actually increased Q-o-Q in the second quarter when revenue declined. So can you talk about how much of your marketing spend is performance based versus brand? And where the ROI equation may be breaking down?
Ying Liu
Thank you. Thank you for the question. So I think a couple of things if we compare year-over-year. First of all, our ROAS on the performance marketing spend has been improving pretty steadily. But I understand that the dynamic you are describing, our total marketplace revenue is declining from a year-over-year standpoint. So 2 things to keep in mind. Number one is the fact that we moved a change on the pricing practices, right? And from last year to -- sorry, we implemented the new pricing changes by end of Q2 last year, which means when you compare this Q2 to the last Q2, it was -- this year is answerable because we implemented the changes to remove premium on certain item prices which directly impact our marketplace revenue and the margin. So that's a very big portion why the marketplace revenue declined from year-over-year standpoint. Now keep in mind, going to Q3 this year, the comparison will be apples-to-apples because that change was completed by end of Q2 last year and Q3 onward is clean. So that's number one.
Number two, I think the -- I would say, despite the fact that we improved ROAS, ROI on the marketing and we're being really careful in terms of how we're allocating the budget dollar, as Joe mentioned, we focus on the existing buyers. When we see upside in the ROAS, we move additional dollars into new user acquisition. So we have done all the right things in terms of optimizing the returns on the marketing. However, the actual competition and the market general macro has been a much bigger factor in driving down the total revenue, particularly on the marketplace side. So I think that's not a reflection of the efficiency of our marketing spend. It's probably more a reflection of the pricing changes from a year-over-year standpoint as well as we intensify the competition.
Jun Yan
For overall marketing spend, performance now is still the majority of our spend. But starting Q2 and coming into Q3, gradually, now actually we start some of the new brand marketing campaign. So the idea here is we want to have some of the always on evergreen brand marketing campaign in some of the diversified channels and see how actually the brand marketing can really play the role to help us to improve the top funnel conversion, to help us to build the top funnel, right? So this is something we do expect to see the synergy between the performance and brand marketing can really help us to kind of improve the marketing efficiency holistically, yes.
Operator
Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Joe Yan for any further remarks.
Jun Yan
Thanks, everyone, for joining our earnings conference call, and we look forward to talking to you throughout the quarter.
Operator
Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.
