Ladies and gentlemen thank you for standing by. Welcome to Fourth Quarter and Full Year 2017 Momo Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions]. Please note this conference is being recorded today. I would now like to hand the conference over to your first speaker today Ms. Cathy Peng. Thank you. Please go-ahead ma’am.

Thank you, operator. Hello everyone and thank for joining us today for Momo’s fourth quarter and fiscal 2017 earnings conference call. The company’s results were released earlier today and are available on the company’s IR website. On the call today from Momo are Mr. Tang Yan, Co-Founder, Chairman and Chief Executive Officer; Mr. Wang Li, Co-President and Chief Operating Officer; and Mr. Jonathan Zhang, Chief Financial Officer. Mr. Tang and Mr. Wang will discuss Momo’s business operations and company highlights followed by Mr. Jon, who will go through the financials and guidance. They will all be available to answer your questions during the Q&A session that follows. Before we begin, I would like to remind you that this call may contain forward-looking statements made under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based on management’s current expectations and current market and operating conditions and relate to the events that involve known or unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond the company’s control, which may cause the company’s actual results, performance, or achievements to differ materially from those in the forward-looking statements. Furthermore I would like to remind you that the company’s proposed acquisition of Tantan Limited has not been completed and is subject to course and conditions. While we expect to close that acquisition in the second quarter of 2018, we cannot assure you that such closing will take place during such quarter or at all. For the information regarding these and other risks, uncertainties, and factors is included in the company’s filings with the US Securities and Exchange Commission. The company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law. I will now pass the call over to Mr. Tang. I will translate for him. Mr. Tang, please.

[Foreign Language] Good morning and good evening everyone. Thanks for joining our conference call today. Q4 was a good quarter closing out a remarkable year of 2017. Some of the initiatives that we took in prior quarters started to bear early fruits in Q4. At today’s call, our Co-President, Wang Li and I will review these progresses and achievements with you and lay out our plans for the future. [Foreign Language] Firstly from a high level, total revenues reached $1.318 billion for the year 2017, up a 138% from last year. Adjusted net income for the year was $368.2 million up a 108% from the year 2016. I’m glad to see that we achieved a 28% adjusted net profit margin for the year, showing our commitment and ability to not only drive topline growth, but also maintain a healthy rate of profitability growth, while making significant investment for our future. [Foreign Language] Now a deeper dive in to the quarter, firstly our community continued to grow. Total MAUs on Momo platform reached 99.1 million for the quarter, up 22% year-over-year and representing a 4.7 million net addition from the previous quarter. On the engagement side, per user time spent continued to see steady improvement during the quarter. Average per user time spent per day in Q4 was up 14% from the same period last year. [Foreign Language] The improvement in the quarterly net addition to MAU and the engagement metric can be attributed to two key factors. Number one is the continuous product and content enrichment on the platform, which we will elaborate a bit later and number two is the contribution from the new user acquisition system. At last earnings call, I mentioned that we had a new user growth team in place and they have been reshuffling our…

[Foreign Language] Thanks. Now let me take you through the key things that we’ve done as well as the future directions for our major business lines. [Foreign Language] First of all on live streaming, at our last earnings call I mentioned that we will drive further growth from the live streaming business and increase our market share by expanding towards two key directions. Number one is to improve the constant offerings both in terms of quality and in terms of diversity. The other focus is that for the large amount of the long-tail chatroom users who take live streaming simply as a better way to socialize, we will keep rolling out new form of interaction beyond the broadcasting models. [Foreign Language] On the content improvement front, we believe that the most crucial thing for us as the platform operator is to set up the right policy and effective incentive system so that increasing number of quality agencies and professional performers can feel motivated and driven enough to offer higher quality and more differentiated content through our platform. In November, we rolled out a trial incentive fund and started to work more closely with the professional talent agencies on talent development and management front. In addition, as part of our effort to drive diversification of content offerings, we introduced a new competition mechanism that separates the performers to different talent verticals so we can service and promote more diversified performing talent. Furthermore, we brought in additional ramification in to the showroom to increase the interactivities between the performers and the viewers. Not just the high-paying ones but also the long-tail talents to enhance their interactive experience. As a result of all these efforts our year-end tournament event turned out to be a great success. We are seeing plenty of agencies willing…

Thanks Tang Yan, Wang Li and Cathey. Hello everyone, thank you for joining our conference call today. We are very pleased to conclude fiscal year 2017 with a strong fourth quarter performance both operationally and financially. As Tang Yan mentioned, our MAU reaccelerated in the past quarter and achieved 99.1 million at the end of 2017, up 22% from a year ago. This demonstrated that the initiatives we took to enrich product and content offerings are heading to the right direction. And the new user acquisition approach is proven to be effective. Now turning to the financial highlights; total net revenues for the fourth quarter reached $386.4 million, up 57% year-over-year exceeding the high end of our revenue guidance. Non-GAAP net income attributable to Momo was $110 million, up 20% from the same period last year. With a solid fourth quarter financial performance, our total revenues for the fiscal year 2017 was 1.318 billion compared to 553 million for 2016, a 138% growth year-over-year. Non-GAAP net income attributable to Momo for 2017 was 368 million compared to a 177 million for 2016, an increase of 108% year-over-year. Looking to the key revenue items; in the fourth quarter of 2017, revenue from live video services reached $328 million up 68% year-over-year. The number of live streaming paying users for the quarter was 4.3 million, 26% higher from the same period last year. The quarterly ARPPU was RMB539 before excluding value added tax in the fourth quarter 2017, compared to the RMB408 from a year ago. Moving on to VAS and mobile games revenues; revenue from VAS which includes membership subscriptions and virtual gifting services together was $29.4 million, an increase of 54% from the same period last year, largely driven by the continued strengthening in our virtual gifting business. The number…

Just a quick reminder before the Q&A. For the Chinese speakers please ask the question in Chinese first and followed by English translation by yourself. Operator we are ready for the first question.

[Operator Instructions] We have the first question from the line of Jialong Shi. Please ask you question.

[Foreign Language] First of all congratulations on a very solid quarter, I have three questions. My first question is about your 1Q revenue guidance. You 1Q revenue guidance implies a flattish to 4% sequential growth. So I just wonder if there were any particular drivers for this impressive 1Q revenue growth, did you see any negative or positive seasonality impact on your live broadcasting business in 1Q. My second question is about the paying users for your live broadcasting business, can you give you give us some colors why the live broadcasting paying users resume to growth in Q4 after remaining stable for the two preceding quarters. How should we look at the trend for this metric over the next few quarters? Lastly, I was wondering what is the trend of Momo’s gross and operating margins in 2018. Thank you.

[Foreign Language] First question on our Q1 guidance, I think the strength showing by our Q1 guidance still mainly comes from the live streaming business. After some adjustments in Q4, we are currently seeing pretty healthy and strong growth trends from the live streaming service and that to a large extent offset the negative seasonality around the Lunar Year holiday. If you look at the underlying driving forces for that strength from live streaming business, basically we are looking at several key reasons here. [Foreign Language] Number one is that because of our incentive plan to the agencies as well as our collaborations with them on the talent upon the management side and also the show case impact from the year-end (inaudible) experience, we are now in a much better position in terms of having a developed and mature content costing them to drive the growth of the live streaming business and that is directly reflected in the increased number of professional broadcaster from the entry level, mid-level towards the top grossing ones as well as the validation capabilities improvement for each of these cohort as professional broadcasters. [Foreign Language] And number two is that we have been taking initiatives to improve the non-tournament days revenues and that could provide new stimulations to the paying activities from our users. Things that we’ve done included the introduction of routine knockout matches between the performers as well as the introduction of new features and gamifications in to the showrooms. For some of these initiatives, we are already seeing them taking effect in Q1. So far, although we had the negative impact from the Lunar Year holiday, if you look at the revenue trend from the non-tournament days so far, there has been very, very strong. I think that’s the fundamental reason why…

Hi Jialong, this is Jonathan. Regarding your margin question, actually as I mentioned earlier in the prepared remarks, our cost of revenue as a percentage of total net revenue trended up by 1.7% during the fourth quarter 2017. That’s mainly because of the additional incentives that we provided to certain qualified professional agencies. Tang Yan and Wang Li reported based on the actual results, we have seen a big success not only for the Q4, but also it helped us to build a healthy ecosystem in our live streaming business. And so we are going to continue to – based on the Q4 trial plan to further optimize on a quarterly basis, we are going to continue to rollout new incentive programs to motivate agencies to work with us even more closely to achieve our business target. But based on the financial performance, the actual cost level, we don’t feel like we have a significant margin pressure away from further down from the Q4 level, that’s the gross margin aspect. And also we do see we have operating leverages in other cost components in our cost of revenue category. And secondly on the operating margin, net margin perspective, you can see from Q4 we experienced a leveraged benefit from selling and marketing expenses, even though we are going to step up our investments in the R&D area and we would be able to balance the investments by leveraging the scale efficiency business model mainly from the selling and marketing area, because based on our current outlook in terms of the dollar amount we would like to invest higher dollar amount compared to 2017 in terms of branding, user acquisition and promotional events for our various business units. But however as a percentage of revenue, it’s going to be further lower comparing to 2017 levels. So we’d like to achieve a balanced growth strategy to leverage the scale efficiency to absorb most of the cost and expenses ramp. So that’s the general direction and however, because we do have seasonal factors that will impact us quarterly depending on the timing we’ll make the investments. There will be margin fluctuations on a quarterly basis. So in summary, as I said, we will balance our investments versus our revenue and profit profile.

Operator before taking the question, I’d like to remind everyone that please limit the number of question that you ask so we can take in more people to want to our maximum. Operator ready for the next.

We have the next question from the line of Greg Zhu. Please ask you question.

[Foreign Language] I have two question, the first question is I noticed there has been a sudden increase in different revenues on balance sheet this quarter which is up 40% quarter-over-quarter, is there any specific reason for that. The second question is that, I noticed that Quick Chat feature was taken out around the Chinese New Year, any particular reasons behind it, any relations towards the recent (inaudible) changes in live streaming. And also what’s the plan for Quick Chat as well as other social products in 2018.

This is Jonathan Greg, let me address your first question and Tang Yan will answer your second question. Regarding the deferred revenue increase in Q4 on a sequential basis, actually under the deferred revenue category, there are three major components. One is the membership subscription revenue particularly for quarterly, semi-annual, annual playing members. Actually we defer, we amortize the membership fees based on the period each paying user subscribes. So that’s number one. Number two is, a deposit made by the advertising agencies and also a regional distributor to us in advance of the placements that really takes place. And then the third piece is from the live streaming business. Normally a paying user pays certain dollar amount to purchase Momo currency and then they will during the - when they purchase a virtual – when they stand up at the virtual gifts and then they will consume the Momo currency. So before the Momo currency is actually consumed that payment was reported as a deferred revenue for Q4. Actually a large portion of the increase was from the live streaming business. So, during the future period once the paying user consumes the Momo currency they purchase, the revenue will get recognized.

[Foreign Language] On the question about managing the regulatory risk, I think basically there are three considerations that we would generally point investors towards here. Number one is that we have acquired all the licenses and relevant permits required by respective regulatory bodies including staffs and Ministry of Culture. And number two is that we’ve also build up a very comprehensive customer monitoring system as well as professional risk management team. And thirdly, we have also built up an open dialog window as well as a pretty much kind of communication mechanism with various government agencies to manage the regulatory risk. On those three fronts, we are – wanted that very few companies out there in this industry that have really been doing pretty well and that’s also the reason why during the past two years, we have been navigating pretty smoothly in several round of policy changes as well as government inspections. I think going forward, we will continue to do well on all those trade front. With regards to what happened to Quick Chat, Quick Chat is actually a product that is still at an exploration phase. Currently we are making some changes in terms of product format as well as user interface and we’ve also made some adjustments in terms of the entry point on home page. Our plan is that we will put it back on after these adjustments are done.

We have the next question from the line of Daniel Chang. Please ask your question.

[Foreign Language] My question is regarding the Tantan acquisition. Could the management share some color on the strategic reason for the acquisition and what do we expect to see the synergy between the Momo and the Tantan platform in the future in both the user and the monetization front?

[Foreign Language] First of all, we are in the business of connecting people in an open environment. In that specific territory, Tantan is very complimentary to our user base. The complimentary nature is actually much greater than the overlapping of our user base. First of all the user tend to be younger and second of all Tantan is very focused on the one-to-one matching for romantic relationships, while we are more focused on connecting on helping people build social relationship over a variety of different social used cases. So the acquisition of Tantan, where hope is to unleash our product line and increase our penetration in the open social territory and strengthen our leadership in that specific space. [Foreign Language] And the secondary reason is that we have high level of recognition of Tantan management teams’ capabilities as well as the achievements it made during the past three years, and we also believe that there is great potential for them to keep driving the user world through product improvement as well as the optimization of their matching algorithm. [Foreign Language] After the acquisition process, Tantan will maintain its separate sets of strategies and product development, operations, branding as well as business development under the leadership of their existing management, and we will be providing full support and expertise in areas including human resources, technology as well as monetization. [Foreign Language] At the same time, I think both of us would have many opportunities down the road to work and explore together in areas including new acquisition and potentially on the advertising side somewhere down the road. I think in the future we would have other kinds of potential to have synergies in terms of business as well as monetization. But short term wise, we are not in a hurry do anything specific yet.

Probably in consideration of time we are ready to take the last one and you can come back to me for closing after this one.

We have the last question from the line of Tian Hou. Please ask you question.

[Foreign Language] With one section of the cash to invest or to buy Tantan, almost a management buyout, so how do you incentivize the funding management team to continue to work partly, that’s number one. Number two is Tantan working dependently, how is the potential synergy between Momo and Tantan can be realized? Third is, as we are going to invest in Tantan for 2018, what’s the potential impact to the Momo’s financials in 2018?

[Foreign Language] On your first question about the structure of the deal, I think the structure of the deal was based on mutual understanding and negotiation between the multiple parties. The reason why the deal was structured with the majority of consideration being cash was mainly because we didn’t want to dilute our shareholders by this price level. [Foreign Language] I think I’ve compared with other financial shareholders, Tantan’s management team actually voluntarily chose higher stock to cash ratio in terms of consideration and that shows the firm confidence from Tantan’s management in the process of the collaboration between the two entities. [Foreign Language] We’ve also kept the original option for Tantan. So in the future we will continue to provide incentives through share based compensation. We believe that the above mentioned initiative that we’re taking as well as the fact that Tantan’s management team chose higher stock to cash ratio as the consideration with guarantee that the team would have a very short commitment to the future development of the combined entity. [Foreign Language] I’ll be answering the second question as well. First of all, although Tantan has only started to monetize from the beginning of 2018, it has already achieved some very impressive progresses. And before going to the deal, we’ve actually conducted a very comprehensive and detailed business and financial due diligence, and we fully considered the impact of both near term and major longer term financial impact. We do believe that this is very valuable asset for us to go in both from strategic level and from financial consideration. However for further details we’re not yet in a position make any further disclosure. [Foreign Language] I think a business model such as Tantan has a very clear roadmap to monetization. No matter if you look at Tinder-like model or the past that we’ve gone through in the past, such kind of model has very established and proven predecessor to follow and make reference to. And we know such kind of model has very strong operating leverage. So in the future once the monetization reaches a matured level, we are really optimistic about the growth potential for its profitability level.

I think operator that is going to be the last question for this conference call. We are ready to close.

Thank you, ma’am. I’d like to hand the call back to you for any closing remarks.