HUYA (HUYA) 12 Nov 242024 Q3 Earnings call transcript

Please be advised that today's webinar is being recorded. The company's financial and operational results were issued earlier today and are posted online.

You can also view the earnings press release by visiting the IR website at ir.huya.com. A replay of the call will be available on the IR website soon. Participants of management on today's call will be Mr. Junhong Huang, our Acting Co-CEO and Senior Vice President; and Mr. acting CFO. our Lei, Peng Co-CEO and Raymond Management will conclude with prepared the call remarks, and with will begin a Q&A session.

please on provisions continue, forward-looking of XXXX. Securities we note discussion Act today's Before will Litigation statements Reform made the the of harbor safe U.S. Private that contain

Forward-looking inherent uncertainties. risks statements involve and

of financial as comparable financial SVP, unaudited included be other that, As regarding non-GAAP applicable risks other update unaudited well law. Please Please this to also may from as note with as the in HUYA's company's except reconciliation views and materially filed unaudited is measures. and as prospectus most the the GAAP directly Huang. required GAAP to filings Securities forward-looking our this any that HUYA's not such, earnings discussions Commission. release information results expressed non-GAAP ahead. press release to U.S. the public and go Co-CEO the company Mr. and different unaudited under and statements, turn The to company's of over measures. With contains press measures assume and today. the a information the uncertainties call Further obligation pleased any Exchange include conference I'm call does

quarter. this high, new our revenues. content net progress, reach RMB new service, despite everyone. expand partnerships Thank year-over-year a of in operating third improve million. growth to of you platform, to experience stable achieved challenges business non-GAAP advertising and we drive conference upgrade and relatively and user XX Okay. reached the a the in and ongoing unlock a opportunities strides business Moreover, Hello, pleased macroeconomic XX.X% to and revenues record industry our for maintained our earnings exploring Game-related performance while we income make potential. services our enhance our net on features were the To environment, product during users' significant joining other and to today. We developing contributing game-related continue total our

strategic achievements. Now look let's take detailed a recent operational and at our

engagement the third quarter high-quality First, million. base to users. improving our XX remained The user our across with MAUs sequentially slightly mobile stable during

our service our well cooperation features joining While partners we users' our as approach hands engagement. and platforms, as also and to cross-platform and content streaming premium maintained disciplined continue promotion to to enriched these offerings reinforce we content professional product spending, with we our marketing content. with to conduct Furthermore, co-produce various strengthen

us our Thanks ecosystem other empowering our taking among selectively our our video other to gamer content users own streaming platform in users, over comparing channels. initiatives, million We into users more a collaborations services we estimate HUYA's We live commercialization total to that opportunities continue and live users. also explore to and productive XXX within platforms of September, around content game-related lines well game mobile reach account as reached as these Tencent's distributed broaden product believe and will to streaming. content

game-related on Moving to services.

RMB and Our to Revenues year-over-year XXX.X by game-related XXXX, and up quarter-over-quarter. million advertising from advertising continued distribution item reached robustly. the grow game of services, sales others XX.X% in game quarter for third game and business XXX.X%

Semi-Devils Demi-Gods than the QQ the distribution Honor top to quarter's third that Speed quarter, Mobile, Mobile more total broadcasters game our growth For updates The Peacekeeper promoted activities XXx summer effectively new Kings, growth ago in we version and on efforts generated year closely and game titles HUYA's to game of These related incentivized release, studios received distribution. work game and and Mobile, D&F in channel Elite. distribution, operational game rising our through this included with of period. with participate

additional including distribution for initiatives both distributed our in tailored the drive mobile them more are market of We services for targeted to to platform. titles, users' to and the enable vast game What's we with games via by wider of game our implement provide developing with distribution our plan expand PC and user reach game games and engaging confident and offering broadcasters collaborating further studios. interest range as we more, service in a exploring

We in-game of have customized exclusive our also coverage strengthened we broadening with game initial events holding this of in our platform titles for items in-game sales sales, area. and were item collaboration for broadcasters items. promoting the particular, major release and scope new or our In in-game

well-known third platform, Both Weapon a For great garnered broadcasters the as sales co-branded validating workshop growth the RMB users. held a release initial offering on outfit that outfit via on of skins we skins well of Skins co-branded quarter, the interest XX on an our value from initial sold cross-fire Notably, release instance, exclusive channel as channel. our sold broadcaster million, the featuring during exclusive the total item exceeded our business. initiatives this potential activity in-game during broadcasters of

to we with number new increasing Breakout, game of Warcraft comparing and anniversary In collaborated Arena responded advertising, marketing launch a and demand with terms existing promotions for game game popular World the companies promoting third as events game Summer's such we In quarter, Naruto the of games. Mobile. of the games

marketing will through created content events. forward, produced we in-house our Going enhance and advertiser our diversify HUYA to game and and base capabilities continue promotion streamer

content. the World LPL, enrichment over content broadcasted Esports on on watched we and licensed most our and e-sports during events third Veterans licensed including Cup [PPL, in-house XX were among Moving quarter, the Champions] the tournaments. our In quarter. efforts to platform, professional The

to tournament compared on game's popular to year's have last previous the Champions year. by of increased boosting its attract China This game's popularity game the approximately the XXX% further In our to proven edition, in Veterans launch continue Veterans the increasingly platform. tournament viewership more addition attention, since the titles, e-sports of which become user content

of technology and a viewing street positive to devices our event, hard various quality year's options quality recently experiences. Worlds are tournament We for HDR image and video audio see users the We drive e-sports our LoL brought important we broadcast also concluded broadcasted environments, for which work video effects comprehensively variety one outcomes. network XXXX, the events. users' to providing Worlds, the prepare optimized and We industry-leading of and LoL pleased most our

introduced analysis each instantly with also a visual data a popular allowing broadcasters to created capture our rates while secondary We real-time market into changes watch win viewership this initial commentary ahead increased year-over-year, of event professional this event's Based tournament platforms. competition. Also, diverse live point that further official presentation, data we see platform data event, and teams the converted and on statistics, our players viewers share users players with to system competition share the to market the providing and and streams, streaming in they in entertaining addition for our our HUYA. on experience leading other maintained unique and our more live significantly viewing for our of

In entertainment terms quarter. and PGC the of e-sports in-house tournaments in content, we over XX shows third broadcasted self-organized

hosted platforms. successfully live in example, collaboration Streamers other X we For HoK major to review with the League across streaming platforms

Games continued community also of the hosted for our We and Games Honor [Zhejiang] for participation Kings. Village Village series

Additionally, which we and Streamer collaborated entertainment produce show with our user well-known strong reality TV program broadcasters, featuring interest. a Rush attracted to game Forward,

we our that covered integrates quarter, HoK's end, the show New interactive content, promotion variety [indiscernible] play entertainment such this and game Mobile. to in new game Mode as games Naruto more competing hot and For

valuable to performance, strengthening delivers Given IPs. create we our are and area commercially influential that in ROI this our more event in-house content investment generally good

range diverse, expands professional also programs our of seamlessly scheduling As licensed to will enrich integrate we and focus and our content these library. content our in-house become complement events to on with more better

success Worlds of LoL in we Legend of conclusion XXXX, of the following inaugural example, its For season LoL our Season on X building May. the commenced Cup,

we leading while HUYA's to game users titles. product features Finally, enhance live and with innovative differentiating experiences, to streaming including cooperation continue explore engage interaction

Honor both in exclusive became to quarter, developed using by native chatting live Honor situation in in the live the of mode can streaming third the of by example, the that broadcast, game In viewers Kings chats gameplay this the HUYA Kings feature or and creating tools. live platform For bullet HUYA unique cards platform gifts gameplay integrate that special visual drive channel, modification content. of bullet sending impact first to industry more adding interesting activate skill mode,

creating to exclusive to users. streaming features live promise, in Given these game features expertise HUYA's and we to entertaining leverage bring will streamers our content continue engaging

in-house will Looking on initiatives. focused we ahead, our fostering content remain

forward especially are excited X amplifying this We look success about to Season series and self-produced influence. and Legend of Cup our

and We publishers presence explore will to content platform with developers deepen our our to with content collaboration also creators industry extend and expand HUYA reach game the game more cooperation market. the in broader partners beyond and

few months. go new Lei, on Co-CEO been long-term propelling confident opportunities, will now that, our more and call has share over are development. With commercialization Raymond, efforts Raymond the these please for I will business ahead. us with a We results. who will to our acting unleash turn CFO, details He our

and you, you Thank everyone. team an to I'm delighted first and to financial management with hello, Huang, our performance. speak will overview HUYA's part start I with for time. of be the of

proactively and services, advertising soft Our to continued quarter increased environment, total business our which strategic streaming weigh more we from businesses live in and and XX.X% to our for line, to and services adjusted increasing RMB to in-game and our the momentum pay transformation distribution contribution revenue structure revenues other net and macro to due advertising primarily prudent billion top and live XXXX, users' were on the strong sales. operations. year-over-year of industry meaningful Meanwhile, XXX.X% X.XX impacted a third revenues. made Game-related willingness game maintained showed support our quarter-over-quarter, item streaming by

XX.X% our more to recent paying like million in are in quarter. off users operational to efforts X.X% our total our We optimizing see for in by pleased expenses year-over-year services, growth to review operating also content. Also, users efficiency our paid decreasing with driving third the game-related continuous progress to reach paying improve of year-over-year. I'd X.X

for We continue for terms. our better strategy to procurement striving commercial content, refine licensed strict

the a we disclosed Legends license overall license supplemental we series of and license agreement into will help reduce of As further matches a this believe year in decreased League e-sports which for costs in our us second that we September, fee, XXXX. entered

more QX Let's move on our results. details to of financial

to in the primarily revenue bandwidth live licensed million and live to as well and fees by increased revenue sharing for revenue e-sports streaming lower RMB technology XX.X% XX X% QX compared primarily streaming with revenues the fees. to content QX, to year. due the which RMB decreased margin X.XX net for of a costs Cost profit outpaced decreased favorable because for net total compared increased total revenue X.XX XXX streaming fees. and were primarily billion X.XX offset related by of period advertising game-related to due and for same compared to other revenues year. was X% as mainly for for decrease the and RMB last continued custody well RMB and total to Gross was RMB period of services, by net the live for X.XX services, other content billion decreased QX and costs decrease decreased for sharing was content custody by million advertising year. Gross rose were the costs in sharing and fees last costs and XX% fees same attributable QX, with XXX revenue year-over-year associated RMB Revenue Bandwidth as and well RMB The X.XX for same QX, pricing content with terms. which game-related other server billion costs. RMB XXX content, QX, decline sharing RMB as revenues change partially the as streaming percentage fees were million fees sharing with efforts period revenues as of live as to billion server revenues, XX.X% billion revenues last enhancement management revenues due in year-over-year million decreased Our primarily business year-over-year

professional well to decreased and General million non-GAAP to with by XX.X% Excluding year-over-year was XX% primarily service personnel-related gross decreased decreased and year-over-year million expenses. for Other to RMB administrative income same as year, the last and to was QX, QX profit expenses. as RMB QX. Research personnel-related for expenses Sales development third outcome lower promotion marketing received XX year-over-year for expenses due primarily XXXX to personnel-related from primarily decreased expenses and to lawsuit the XX% QX, to primarily decreased expenses. RMB favorable was million, XX compensation and share-based and XX a damages decreased fees the in and expenses marketing for million for subsidies. million XXX in RMB RMB RMB share-based non-GAAP for and million of by compensation by compared QX, a due quarter XXX XX% realized broadcaster-related due XX due fees government period expenses, margin gross

the was for QX same with As period a year. result, operating million XX compared last RMB loss at stable

for business operating XX RMB in income million same HUYA for compared the which XXXX. Net XX of operating loss May million with primarily RMB QX. and million assets expenses XXX was with compared XX period million RMB for was acquisition, paid from amortization attributable year, compensation RMB XX the year. with QX last RMB same to for QX RMB to Non-GAAP intangible for share-based negative dividends same attributable million special year. million Inc. for cash X.X% Excluding October last Interest was was QX was and compared the margin period period for non-GAAP last income the XX

Inc. million non-GAAP income X.X% loss RMB RMB impairment with RMB diluted HUYA for profit of margin and compensation Diluted income period assets Non-GAAP RMB amortization million was compared the to X.X Non-GAAP XX was investments XXX QX for taxes, same net share-based of was business Excluding of ADS per was for attributable ADS intangible from net for X.XX net net QX. acquisitions, income year. for net QX. QX. per last expenses,

short-term the XX, X.X company cash June XX, compared billion long-term and of RMB deposits investments September XXXX, and XXXX. of short-term X.X cash RMB of deposits, As with had as billion equivalents,

update our shareholder Finally, on an returns.

financial value September an had X XX.X our repurchased we of the performance creating this of we cash through HUYA operating repurchase returned and end remain of that, shareholders. questions. our for call approximately I'd the We program. million also consolidating open XXXX, dividends share to our to to more of like As paid value shares special to and USD shareholders. With your committed XXX The aggregate year USD million

Instructions]. Thank you, from first question Cheung comes Today's from Citibank. [Operator Raymond. Nelson

game-related fourth And if quarter latest [Interpreted] business to development what My Wondering the advantage question update we right XXXX? in So any can now? new services. how share be HUYA? And and the the the third upcoming this related question of the competitive perceive let me in services would quarter is game-related for myself. the translate do management on plans into updates

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our others XX.X%. increase growth third continued achieve quarter-over-quarter. advertising accounted a the quarter, to for revenue record XXX.X% business game-related our year-over-year and reaching game-related revenues and percentage services, an total XXX In This from with [Interpreted] XX.X% of RMB at rapid million, of high

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distribution version developers to [Interpreted] distribution to collaborated distribution With broadcasters distribution, new is in on operational worth quarter, third business game-related that updates activities, closely the the on the significantly distribution related Therefore, game are It we that we growth continue amount of revenue for providing services and distributed games portion regard the going channel game and participate users' to our over gross deepen Furthermore, broadcasters period customized And games, XXx the including and and to to for with existing game platform. year. mobile additional last PC receipts in exploring forward, with new from targeted user more plan through interest HUYA's the collaboration games, and our our incentivizing we is volume services. basis and game with currently, largest services game services, launches, larger. provide to But revenue is revenue through sharing games titles with developers. plan increased the them game revenue. net noting distributed a of initiatives total encourage distribution engaging recognized same enhancing the more developers. actual the In after

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promoting cooperation and well our events for major by initial in-game with sales, these as our for in-game items. strengthened particularly and also broadcasters have items We [Interpreted] platform release the launching and customized games item exclusive as

HUYA third exclusive event the we schemes. game cross-fire offering For held in instance, quarter, a

sold created in-house marketing initial responded users, well-known existing marketing garnered existed activities and the potential from in-game with continuing Both anniversary demand events a new event co-branded an had exclusive value games, the game sales game to launches of item advertising, validating our initiatives total we game the while in through game in co-branded advertiser produced response and the business. base. also enthusiastic of and terms during million sold broadcaster, increased growth to release initial the streamer our summer our stream. enhancing and during especially that of expand broadcaster's capabilities for content of XX promotion RMB And for promotional schemes We featuring where skins release our

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[Interpreted] key has services. Overall, game-related in of we development continued several believe advantages HUYA the

a gaming have commercial the market, gaming where gaming we for user the HUYA's than on high-quality First, user overall our potential base platform, value distribute or several the per ARPU higher revenue for average we users. indicating is games

Second, our which HUYA item long-term game in foundation business, services, partnerships benefits. on participating third, through down mutual our and various achieve has in-game gaming live-stream collaboration and sales. active laying deeper users' sharing, developers broadcasters play promoting role distribution game with And good for game-related revenue needs an helps understanding established in a

multiple over distributing Additionally, content streams strengthening that other other grow. platforms, across users, those live year, own content of we XXX platforms. HUYA's million our reached ecosystem are Tencent platforms selectively September collaboration estimated and content and we to and with HUYA's content our including expect game this scale ecosystem from continue users We as to and the and mobile video

to game broader explore can effectively As we opportunities. we more collaborate commercialization cover audience, a

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this of I by the Finally, especially game-related business, as income the from to linked that distribution be is its gaming from want gaming industry. to closely may since we seasonal revenue revenue somewhat services, the mention itself, gradually [Interpreted] nature expand affected

the billion market revenue example, And According is HUYA gaming vary between during still the fluctuations XXX seasons XXXX. sales exceeded statistics, to enormous. overall, quarters. occurred public for domestic can in space For peak market holidays and RMB

business achieve will growth. diverse to explore with game continue to more cooperation developers We of forms

Thomas Jefferies. And question next our from Chong comes from

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influenced spend with willingness and on our proactively third we transformation, [Interpreted] Meanwhile, maintained weak. continued adjusted the by during structure revenue operational industry live tipping users' current quarter, streaming and to business strategy. our a remained macroeconomic In prudent to our be the strategic environment

growth game revenues live to stable. engagement relatively remained advertising. From that user behavior, of streaming core our see also have However, the we in related users observed in rapid we

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external factors, Due revenue [Interpreted] face short-term to to streaming currently live expect we pressure.

However, future, for economic we happen conditions accordingly. activities still closely to the some flexibility. market that monitor adjust we will one in On believe external have business the will improvement the operational hand, room and our will environment

the user user live broadcaster improve ecosystem we content, hand, a maintain create will In the other the the forms and stable engagement to in development. a to optimize of with HUYA that On the to continue game-related run, prepare for commercialization revenue invest differentiated future. enhance streaming to hope business expansion constantly and achieve relatively streaming a expect experience. We live diversified sales, and and overall products the more we in and services, will the technology other advertising long

will Now of question. It's we from next our Lei Zhang take from Bank America.

change? [Interpreted] on at driver we color going how give And margin more Can forward? margin of should you trend us QX's look the our

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third our profit down the the last from period of same was In year. quarter, [Interpreted] margin slightly the and second gross quarter XX.X%,

This strict we costs. our and continue quarter, reducing content licensed content further commercial costs better terms, improved content signing to optimize year-over-year, which costs, our saved we unlicensed to broadcaster procurement secure strategy

the However, still live declining the quarter the to of of revenue. cost offset was insufficient impact this savings streaming

million. operational Therefore, remained a non-GAAP expenses overall operating XX.X% year-over-year. through our stable in RMB efforts net In to particularly terms sales relatively expenses, operational our efficiency, performance decreased total profit XX controlling by of of with expenses operating continued better enhance

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believe consider scale, the businesses. trends, need factors hand, fluctuations we will to revenue in including future different significant. On be one seasonal in following overall the Regarding the [Interpreted] changes profit we

the to hand, other between and the cost we'll broadcaster revenue. to our adjust structure costs On continue enhance collaboration

of which believe a for licensed in content second of and We September the series in e-sports costs licensing related help in this the this this year, in On XXXX. Legend professional League will matches, signed that optimize reduced fees. a events year and further side, year agreement licensing supplemental overall we

mainly SXX expected to licensing events quarter, take are place than in the the since fourth fourth the quarter the third However, be quarter-to-quarter, will costs major the in higher event quarter.

influential to such strengthen and investment month, with good the Legends the season of this to we in as valuable this we holding content investment self-produced season. IPs have area returns, For success second building event League plan on the in create Cup inauguration commercially its a of in more

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the margin non-GAAP Nevertheless, a a in compared we anticipate the relatively last low expect [Interpreted] noticeable results period profit year. from show will Therefore, that base year the noticeable the year-over-year and the this that same fourth show will growth. we gross entire quarter for improvement relatively QX also to

will take last today Now from from we [indiscernible] question CICC. our

shareholder strategy in plan [Interpreted] and management allocation strategy. capital update help future? My Could return the question the about is our shareholder our return

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June, USD rate. still dollar half [Interpreted] debt. In cash USD XXX has we September, in influenced As to of equivalents, the dividend X.XX X.X partially special of the USD paid approximately RMB a million. end the approximately billion, overseas remained has in no and by with of cash and cash stable it billion company U.S. company Currently, cash of held end deposits the held XXX about October, the exchange HUYA which cash the in compared fluctuations about million of and

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The last overall cash call. similar usage in is earnings the for strategy what mentioned to we [Interpreted]

fund cash development. have We to daily operations and our business sufficient

as company for a While reserve external some conditions. financial the under and fundamentals, allocate potential business to development continue consolidating funds uncertain our will

open to industry so related opportunities. development the to remain also as suitable investment will to We projects industry and opportunities seize chain,

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[Interpreted] on At importance to the returns. time, we continue shareholder will place same

company's shareholders and including surplus of of In USD through with our Board our Future cash we company's the special dividends, cash share have approximately intend review million the dividend terms and amounts plans, In timing depend by approval XXX this to future, year, Directors. to on and we will further the the returned shareholders. dividend. profits

when based the HUYA's strategies. had XX.X repurchased million of consider our comprehensively million will In formulating share stock as shares. repurchases, conditions end the our to repurchase we we USD XXX of market of worth plan USD liquidity up future, on and execution Regarding September,

us joining Thank today. once again you for

to on contact we HUYA's information Investor Thank quarter. through and or concludes Financial Communications. today's please contact free call, feel website speaking the next Piacente look you our to further you provided This with forward If have again questions, Relations you.