Online advertising services revenue was RMB1.5 billion (US$206.2 million), increasing 25% year over
year. The increase was primarily driven by the growth of performance-based advertising business and, to a lesser extent, the growth in the brand advertising business.
Content distribution revenue was RMB553.3 million (US$76.3 million), increasing 15% year over year, primarily driven by the increase in average unit
price of barter transactions.
Other revenues were RMB807.0 million (US$111.3 million), increasing 16% year over year, primarily driven by the
revenue derived from third-party cooperation, partially offset by the deconsolidation of live broadcasting business.
Cost of revenues was
RMB5.8 billion (US$796.3 million), increasing 10% year over year, primarily driven by higher content costs. Content costs as a component of cost of revenues were RMB4.1 billion (US$571.2 million), increasing 7% year over year. The increase
in content cost was primarily driven by higher number of original dramas and variety shows launched during the quarter.
Selling, general and
administrative expenses were RMB979.0 million (US$135.0 million), increasing 22% year over year, primarily due to higher marketing spending.
Research and development expenses were RMB439.0 million (US$60.5 million), decreasing 9% year over year, primarily due to the decrease in
personnel-related compensation expenses.
Operating income was RMB610.4 million (US$84.2 million), compared to operating income of
RMB125.8 million in the same period in 2022. Operating income margin was 8%, compared to operating income margin of 2% in the same period in 2022. Non-GAAP operating income was RMB786.4 million (US$108.4 million) and non-GAAP operating income margin was 10%, compared to non-GAAP operating income of RMB343.8 million and non-GAAP operating income
margin of 5% in the same period in 2022.
Total other expense was RMB234.6 million (US$32.4 million), compared to total other expense of
RMB291.0 million during the same period of 2022. The year over year variance was primarily due to increased interest expenses and the foreign exchange loss due to the fluctuation of exchange rate between Renminbi and the U.S. dollar, partially
offset by higher interest income and less loss from equity method investment.
Income before income taxes was RMB375.8 million (US$51.8 million),
compared to loss before income taxes of RMB165.2 million in the same period in 2022.
Income tax expense was RMB7.9 million (US$1.1 million),
compared to income tax expense of RMB36.2 million in the same period in 2022.