The content prime amount of content marketing overstatement has been driven by topnotch drama and variety shows and there have been a strong preference and acceptance from advertising for advertisers for our innovative ad products. Under the current macro environment, the advertisers from different factors are formulating corresponding advertising strategies based on the strategic vision, also the long-term market view among which certain brand advertisers with forward-looking strategic vision may increase their app spending, seizing marketing opportunities by opening the market. Looking at the specific sectors, we are optimistic for the food and beverage industry, cosmetic and personal care industries as well as the transportation industry, which also includes the new energy vehicle.
Operator: Our next question today will come from Lincoln Kong of Goldman Sachs. Please go ahead.
Lincoln Kong: So, thank you management for taking my question. So my question is about performance at a pricing here. We have been seeing continued [indiscernible] for performance as in the first half, how do we think about the second half outlook of this set of business?
Chang You: Thank you, Lincoln. I will invite our CTO, Wenfeng to answer this question.
Wenfeng Liu: For performance ad revenue has maintained its annual growth for five consecutive quarters, with the growth rate continues with actually the growth rate that continuously accelerating and its contribution in total ad revenue has continued to increase, reaching a historical high in Q2. It is expected that the performance ad structure will continue to experience strong growth in second half of this year, benefiting from our improved market capability, attracting more advertising budget from key industries such as internet services, e-commerce and gaming. Now also, we believe with the algorithm optimization and the support of generated AI performance app results will bring the outperformance and also monetization efficiency to improve.
In the future, we think the performance app advertisers will pay more attention to cost effectiveness and also the advertising performance striving to achieve additional conversion and also to maximize returns on investment. Going forward, we will continue to strengthen app creativity, content personalization and interactivity. We will also leverage new technologies like generated AI to lower app production costs and also enhance and add delivery efficiency, adapting to the averaging market and user demand. From the ad sectors perspective, for the second half of this year, we think we have a positive outlook different sector, for example, the traditional e-commerce platform, live streaming e-commerce, culture and entertainment, harbor and tourism and also the lifestyle food industry.
Operator: Our next question will come from Maggie Ye of CLSA. Please go ahead.
Maggie Ye: Thank you management for taking my question. Noted the Company has generated very strong operating cash flow and free cash flow this quarter and has also repurchased convertible notes. Please, could you share with us more about your thoughts on the Company’s debt level management and plans for financial resources in the coming quarters?
Chang You: We will invite Mr. Jun, our CFO, to answer this question.
Jun Wang: I think for the interest of time, I’ll just answer the question English directly. So, I think this is a question that we constantly receive and the inquiry that we continue received from the investor community as well and our answer is very straightforward. First and foremost, we are in a productive continuously improving our capital structure. We are still making, trying every effort to make our balance sheet more healthier and more robust and this is what we do. And secondly, I think within our framework, doing that, there are two things that really matters. The first and the most important thing is actually to continuously generate sizable free cash flow. Just to remember, generating sizable cash flow means natural deleverage regardless of whether we will contact the debt buyback or not.
And this is really a key and this is what we have been very proud to see our progress in the past couple of quarters. And the second thing is to develop a serious and comprehensive set of the choices to see what we can do to benefit our shareholders best. And these set of choices won’t include, for example, the debt buyback, but it will also include to explore the opportunity to invest for safe returns. And as we all know, the external environment has been extremely dynamic with a rise in interest rate and actually provide return opportunities for the Company with free cash flow. So with that being said, I think our overall principle revenues remains the same. We explore every opportunity to create value for our stakeholders, including our shareholders and our supporting debt holders but without compromising the safety of our business for sure.
Operator: This will conclude our question-and-answer session. At this time, I’d like to hand back to management for closing remarks.
Chang You: Thank you, everyone, for participating in the call today, and please do not hesitate to ask us if you have any further questions. Thank you and we will see you next quarter.
Operator: The conference has now concluded. Thank you for attending today’s presentation, and you may now disconnect your lines.