HUYA Inc. Reports Second Quarter 2024 Unaudited Financial Results and Announces Share Repurchase Program Extension and Special Cash Dividend

GUANGZHOU, China, Aug. 13, 2024 /PRNewswire/ -- HUYA Inc. ("Huya" or the "Company") (NYSE: HUYA), a leading game live streaming platform in China, today announced its unaudited financial results for the second quarter ended June 30, 2024.

Second Quarter 2024 Highlights^[1]

• Total net revenues for the second quarter of 2024 were RMB1,541.6 million (US$212.1 million), compared with RMB1,837.8 million for the same period of 2023.
• Net income attributable to HUYA Inc. was RMB29.6 million (US$4.1 million) for the second quarter of 2024, compared with RMB20.3 million for the same period of 2023.
• Non-GAAP net income attributable to HUYA Inc.^[2] was RMB97.0 million (US$13.3 million) for the second quarter of 2024, compared with RMB117.0 million for the same period of 2023.
• Average mobile MAUs^[3] of Huya Live for the second quarter of 2024 was 83.5 million, compared with 82.9 million for the same period of 2023.

"Huya Live's average mobile MAUs increased to 83.5 million for the second quarter of 2024, mainly driven by the success of several e-sports events that we organized. While we continue to enrich our content and improve user experience, we are also enhancing our platform ecology by strengthening our cooperation with various content platforms. We have begun selectively offering our live-streaming and video content on other content platforms to increase the Huya platform's influence and reach a wider range of users," said Mr. Junhong Huang, Acting Co-Chief Executive Officer and Senior Vice President of Huya. "Our strategic transformation initiatives to expand our game industry presence with more game-related services also continued to advance. As we increased collaboration on game promotion, distribution, and in-game item sales with a growing roster of game titles, revenues from our game-related services, advertising and other businesses increased by 152.7% year over year and 26.6% quarter over quarter to RMB308.5 million in the second quarter, accounting for 20.0% of total net revenues. Furthermore, the expansion of our game-related services contributed to a sequential increase in paying users^[4] on Huya Live, reaching 4.5 million in the quarter. Looking ahead, we will continue to consolidate our foundation as we explore long-term possibilities across the game industry chain, driving development through content and platform ecology upgrades, technology advancement and product innovation."

Ms. Ashley Xin Wu, Huya's Acting Co-Chief Executive Officer and Vice President of Finance, continued, "Despite ongoing uncertainties in the macro environment and industry landscape, our second quarter total net revenues returned to growth quarter over quarter to reach RMB1.54 billion, driven by game-related services, advertising, and other businesses. The increased contribution of the higher-margin game-related services business to total net revenues and our continued operational efficiency improvements, highlighted by a 26.3% year-over-year reduction in total operating expenses, further enhanced our overall operating results. In terms of shareholder returns, we have repurchased 17.1 million Huya shares with a total aggregate consideration of US$56.7 million as of the end of June 2024. Upon review of our financials, business plans, capital requirements, and cash position, we are also pleased to declare a special cash dividend totaling approximately US$250 million for our shareholders. We believe that Huya's solid balance sheet and improving financial fundamentals will continue to support our ability to deliver shareholder returns going forward."

Second Quarter 2024 Financial Results

Total net revenues for the second quarter of 2024 were RMB1,541.6 million (US$212.1 million), compared with RMB1,837.8 million for the same period of 2023.

Live streaming revenues were RMB1,233.1 million (US$169.7 million) for the second quarter of 2024, compared with RMB1,715.7 million for the same period of 2023, primarily due to the continued soft macroeconomic and industry environment and the Company's proactive business adjustments in support of its strategic transformation and prudent operations.

Game-related services, advertising and other revenues (formerly known as advertising and other revenues) were RMB308.5 million (US$42.5 million) for the second quarter of 2024, compared with RMB122.1 million for the same period of 2023, primarily due to increased revenues from game distribution and advertising services and in-game item sales.

Cost of revenues decreased by 14.4% to RMB1,326.7 million (US$182.6 million) for the second quarter of 2024 from RMB1,549.7 million for the same period of 2023, primarily due to decreased revenue sharing fees and content costs, as well as bandwidth costs.

Revenue sharing fees and content costs decreased by 12.6% to RMB1,170.2 million (US$161.0 million) for the second quarter of 2024 from RMB1,338.4 million for the same period of 2023, primarily due to decreased live streaming revenue sharing fees associated with the decline in live streaming revenues, partially offset by increased game-related services, advertising and other revenue sharing fees, as well as content costs for in-house produced content.

Bandwidth costs decreased by 40.2% to RMB60.9 million (US$8.4 million) for the second quarter of 2024 from RMB101.8 million for the same period of 2023, primarily due to improved bandwidth cost management, favorable pricing terms and continued technology enhancement efforts.

Gross profit was RMB214.9 million (US$29.6 million) for the second quarter of 2024, compared with RMB288.1 million for the same period of 2023. Gross margin was 13.9% for the second quarter of 2024, compared with 15.7% for the same period of 2023. This change was primarily attributable to increased revenue sharing fees and content costs as a percentage of total net revenues, which rose partially due to higher content costs incurred for in-house produced content.

Research and development expenses decreased by 11.5% to RMB128.7 million (US$17.7 million) for the second quarter of 2024 from RMB145.4 million for the same period of 2023, primarily due to decreased personnel-related expenses and share-based compensation expenses.

Sales and marketing expenses decreased by 48.0% to RMB61.7 million (US$8.5 million) for the second quarter of 2024 from RMB118.6 million for the same period of 2023, primarily due to decreased marketing and promotion fees, as well as personnel-related expenses.

General and administrative expenses decreased by 21.0% to RMB63.7 million (US$8.8 million) for the second quarter of 2024 from RMB80.7 million for the same period of 2023, primarily due to decreased professional service fees, personnel-related expenses and share-based compensation expenses.

Other income was RMB13.2 million (US$1.8 million) for the second quarter of 2024, compared with RMB23.8 million for the same period of 2023, primarily due to decreased government subsidies.

Operating loss was RMB26.0 million (US$3.6 million) for the second quarter of 2024, compared with RMB32.9 million for the same period of 2023.

Interest income was RMB102.5 million (US$14.1 million) for the second quarter of 2024, compared with RMB125.3 million for the same period of 2023.

Net income attributable to HUYA Inc. was RMB29.6 million (US$4.1 million) for the second quarter of 2024, compared with RMB20.3 million for the same period of 2023.

Non-GAAP net income attributable to HUYA Inc. was RMB97.0 million (US$13.3 million) for the second quarter of 2024, compared with RMB117.0 million for the same period of 2023.

Basic and diluted net income per American depositary share ("ADS") were each RMB0.13 (US$0.02) for the second quarter of 2024. Basic and diluted net income per ADS were each RMB0.08 for the second quarter of 2023. Each ADS represents one Class A ordinary share of the Company.

Non-GAAP basic and diluted net income per ADS were RMB0.42 (US$0.06) and RMB0.41 (US$0.06), respectively, for the second quarter of 2024. Non-GAAP basic and diluted net income per ADS were each RMB0.48 and RMB0.47, respectively, for the second quarter of 2023.

As of June 30, 2024, the Company had cash and cash equivalents, short-term deposits, short-term investment and long-term deposits of RMB8,193.3 million (US$1,127.4 million), compared with RMB9,419.8 million as of March 31, 2024.

Share Repurchase Program 

On August 15, 2023, the board of directors of the Company authorized a share repurchase program under which the Company may repurchase up to US$100 million of its ADSs or ordinary shares over a 12-month period. As of June 30, 2024, the Company had repurchased 17.1 million ADSs with a total aggregate consideration of US$56.7 million under this program.

In August 2024, the board of directors of the Company authorized the renewal and continued use of the unutilized quota under the existing share repurchase program of US$43.3 million, which is effective through March 31, 2025.

Declaration of Special Cash Dividend

The board of directors of the Company has declared a special cash dividend of US$1.08 per ordinary share, or US$1.08 per ADS, to holders of ordinary shares and holders of ADSs of record as of the close of business on October 9, 2024, payable in U.S. dollars. The total amount of cash to be distributed for the special cash dividend is expected to be approximately US$250 million, which will be funded by surplus cash on the Company's balance sheet. The payment date for holders of ordinary shares and holders of ADSs is expected to be on or around October 25, 2024. Holders of the Company's ADSs will receive the cash dividend through the depositary bank, subject to the terms of the deposit agreement.

Earnings Webinar

The Company's management will host a Tencent Meeting Webinar at 8:00 a.m. U.S. Eastern Time on August 13, 2024 (8:00 p.m. Beijing/Hong Kong time on August 13, 2024), to review and discuss the Company's business and financial performance.

For participants who wish to join the webinar, please complete the online registration in advance using the links provided below. Upon registration, participants will receive an email with webinar access information, including meeting ID, meeting link, dial-in numbers, and a unique attendee ID to join the webinar.

Participant Online Registration:

Chinese Mainland^[5]:        https://meeting.tencent.com/dw/r34tNk4Y7eOs
International:                    https://voovmeeting.com/dw/r34tNk4Y7eOs

A live webcast of the webinar will be accessible at https://ir.huya.com, and a replay of the webcast will be available following the session.

About HUYA Inc.

HUYA Inc. is a leading game live streaming platform in China. As a technology-driven company, Huya offers rich and dynamic content across games, e-sports, and other entertainment genres where it has cultivated a large, highly engaged, interactive, immersive community of game enthusiasts. Building on its success in game live streaming and through close collaboration with game companies, e-sports tournament organizers, broadcasters and talent agencies, Huya is expanding its presence in the game industry, both domestically and internationally. By providing more innovative game-related services, the Company is committed to meeting the evolving needs of game enthusiasts, content creators, and industry partners.

Use of Non-GAAP Financial Measures

The unaudited condensed consolidated financial information is prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"), except that the consolidated statement of changes in shareholders' equity, consolidated statements of cash flows, and the detailed notes have not been presented. Huya uses non-GAAP gross profit, non-GAAP operating loss, non-GAAP net income attributable to HUYA Inc., non-GAAP net income attributable to ordinary shareholders, non-GAAP basic and diluted net income per ordinary shares, and non-GAAP basic and diluted net income per ADS, which are non-GAAP financial measures. Non-GAAP gross profit is gross profit excluding share-based compensation expenses allocated in cost of revenues. Non-GAAP operating loss is operating loss excluding share-based compensation expenses and amortization of intangible assets from business acquisitions. Non-GAAP net income attributable to HUYA Inc. is net income attributable to HUYA Inc. excluding share-based compensation expenses, impairment loss of investments, and amortization of intangible assets from business acquisitions, net of income taxes, to the extent applicable. Non-GAAP net income attributable to ordinary shareholders is net income attributable to ordinary shareholders excluding share-based compensation expenses, impairment loss of investments, and amortization of intangible assets from business acquisitions, net of income taxes, to the extent applicable. Non-GAAP basic and diluted net income per ADS is non-GAAP net income attributable to ordinary shareholders divided by weighted average number of ADS used in the calculation of non-GAAP basic and diluted net income per ADS. The Company believes that separate analysis and exclusion of the impact of (i) share-based compensation expenses, (ii) impairment loss of investments, and (iii) amortization of intangible assets from business acquisitions (net of income taxes), add clarity to the constituent parts of its performance. The Company reviews these non-GAAP financial measures together with GAAP financial measures to obtain a better understanding of its operating performance. It uses the non-GAAP financial measures for planning, forecasting and measuring results against the forecast. The Company believes that non-GAAP financial measures represent useful supplemental information for investors and analysts to assess its operating performance without the effect of (i) share-based compensation expenses, and (ii) amortization of intangible assets from business acquisitions (net of income taxes), which have been and will continue to be significant recurring expenses in its business, and (iii) impairment loss of investments, which may recur when there is observable price change in the future. However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact the Company's net income for the period. In addition, because non-GAAP financial measures are not measured in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. In light of the foregoing limitations, you should not consider a non-GAAP financial measure in isolation from or as an alternative to the financial measures prepared in accordance with U.S. GAAP.

The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned "HUYA Inc. Unaudited Reconciliations of GAAP and Non-GAAP Results" at the end of this announcement.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB7.2672 to US$1.00, the noon buying rate in effect on June 28, 2024, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the Renminbi or U.S. dollar amounts referred to in this announcement could have been or could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the quotations from management in this announcement, as well as Huya's strategic and operational plans, contain forward-looking statements. Huya may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission ("SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Huya's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Huya's goals and strategies; Huya's future business development, results of operations and financial condition; the expected growth of the live streaming market and game market; the expectation regarding the rate at which to gain active users, especially paying users; Huya's ability to monetize the user base; Huya's efforts in complying with applicable data privacy and security regulations; fluctuations in general economic and business conditions in China; the economy in China and elsewhere generally; any regulatory developments in laws, regulations, rules, policies or guidelines applicable to Huya; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Huya's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Huya does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

For investor and media inquiries, please contact: 

In China:

HUYA Inc.
Investor Relations
Tel: +86-20-2290-7829
E-mail: ir@huya.com 

Piacente Financial Communications
Jenny Cai
Tel: +86-10-6508-0677
E-mail: huya@tpg-ir.com 

In the United States:

Piacente Financial Communications 
Brandi Piacente
Tel: +1-212-481-2050
E-mail: huya@tpg-ir.com