HUYA Earnings

 

 

HUYA Inc. (NYSE: HUYA), a leading game live streaming platform in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2020.

Fourth Quarter 2020 Highlights

  • Total net revenues for the fourth quarter of 2020 increased by 21.2% to RMB2,990.3 million (US$458.3 million), from RMB2,467.5 million for the same period of 2019.
  • Net income attributable to HUYA Inc. was RMB253.2 million (US$38.8 million) for the fourth quarter of 2020, representing an increase of 58.6% from RMB159.7 million for the same period of 2019.
  • Non-GAAP net income attributable to HUYA Inc. was RMB305.9 million (US$46.9 million) for the fourth quarter of 2020, representing an increase of 26.5% from RMB241.9 million for the same period of 2019.
  • Average mobile MAUs of Huya Live in the fourth quarter of 2020 reached 79.5 million, representing an increase of 29.1% from 61.6 million in the fourth quarter of 2019.
  • Average MAUs of Huya Live in the fourth quarter of 2020 reached 178.5 million, representing an increase of 18.8% from 150.2 million in the fourth quarter of 2019.
  • Total number of paying users of Huya Live in the fourth quarter of 2020 reached 6.0 million, representing an increase of 17.6% from 5.1 million in the fourth quarter of 2019.

“Throughout 2020 we have continuously invested in high-quality broadcasters, e-sports tournaments, and entertainment programs to enrich our content offerings, and have thus seen significant user growth and high level of user engagement, despite the challenges presented by the global COVID-19 pandemic,” said Mr. Rongjie Dong, Chief Executive Officer of Huya. “Our mobile MAUs reached 79.5 million in the fourth quarter, an increase of 29.1% year-over-year. Moving through 2021, we will continue to make investments into our content offerings, improve our products, and extend the breadth and diversity of our platform, to provide users with more enjoyable experience.”

Ms. Catherine Liu, Chief Financial Officer of Huya, commented, “We are pleased to deliver solid financial results in 2020. For the full year, our total net revenues were up 30.3%, reaching RMB10.9 billion and our net income increased by 88.9% to RMB884.2 million. The year 2020 ended on a strong note, with total net revenues and gross profit for the fourth quarter up 21.2% and 28.1%, respectively, year-over-year. With continued top-line expansion and our ability to drive operating leverage, our operating margin improved to 6.3% in the fourth quarter from 4.1%, and our non-GAAP operating margin increased to 9.0% from 7.4%, both compared with the same quarter of 2019. Leveraging our team’s strong execution capabilities, we will continue to capture growth opportunities to drive value for our users and shareholders.”

[1] “Non-GAAP net income attributable to HUYA Inc.” is defined as net income attributable to HUYA Inc. before share-based compensation expenses, gain on fair value change of investments and equity investee’s investments, and equity investee’s partial disposal of its investment, net of income taxes. For more information, refer to “Use of Non-GAAP Financial Measures” and “Reconciliations of GAAP and Non-GAAP Results” at the end of this press release.

[2] Refers to average monthly active users on mobile apps. Average mobile MAUs for any period is calculated by dividing (i) the sum of active users on the mobile apps for each month during such relevant period, by (ii) the number of months during such relevant period.

[3] Refers to average monthly active users on our platform. Average MAUs for any period is calculated by dividing (i) the sum of active users on our platform for each month during such relevant period, by (ii) the number of months during such relevant period.

[4] Refers to the sum of user accounts that purchased various products and services on our platform at least once during such relevant period.

Fourth Quarter 2020 Financial Results

Total net revenues for the fourth quarter of 2020 increased by 21.2% to RMB2,990.3 million (US$458.3 million), from RMB2,467.5 million for the same period of 2019.

Live streaming revenues increased by 20.0% to RMB2,814.9 million (US$431.4 million) for the fourth quarter of 2020, from RMB2,346.1 million for the same period of 2019, primarily due to the increase in the number of paying users and the average spending per paying user on Huya Live. The increase in the number of paying users was primarily driven by the Company’s overall user growth. The increase in the average spending per paying user was primarily driven by the year-end promotional activities and the enrichment and enhancement of content, products and services.

Advertising and other revenues increased by 44.6% to RMB175.5 million (US$26.9 million) for the fourth quarter of 2020, from RMB121.3 million for the same period of 2019, primarily driven by the increasing and diversifying advertiser base, mainly attributable to strengthened recognition of Huya’s brand name in China’s online advertising market.

Cost of revenues increased by 19.6% to RMB2,392.7 million (US$366.7 million) for the fourth quarter of 2020 from RMB2,000.9 million for the same period of 2019, primarily attributable to the increase in revenue sharing fees and content costs.

Revenue sharing fees and content costs increased by 29.8% to RMB2,044.6 million (US$313.3 million) for the fourth quarter of 2020 from RMB1,575.1 million for the same period of 2019, primarily due to the increase in revenue sharing fees in relation to higher live streaming revenues, and the increase in spending in e-sports and self-produced content, as well as on content creators.

Bandwidth costs decreased by 26.1% to RMB166.7 million (US$25.5 million) for the fourth quarter of 2020 from RMB225.6 million for the same period of 2019, primarily due to improved management in bandwidth costs and continued technology enhancement efforts.

Gross profit increased by 28.1% to RMB597.7 million (US$91.6 million) for the fourth quarter of 2020 from RMB466.6 million for the same period of 2019. Gross margin increased to 20.0% for the fourth quarter of 2020 from 18.9% for the same period of 2019.

Research and development expenses increased by 21.0% to RMB215.7 million (US$33.1 million) for the fourth quarter of 2020 from RMB178.3 million for the same period of 2019, mainly attributable to increased personnel-related expenses.

Sales and marketing expenses increased by 63.2% to RMB193.1 million (US$29.6 million) for the fourth quarter of 2020 from RMB118.3 million for the same period of 2019, primarily attributable to the increased marketing expenses to promote the Company’s content, products, services and brand name, as well as increased personnel-related expenses.

General and administrative expenses decreased by 0.3% to RMB96.1 million (US$14.7 million) for the fourth quarter of 2020 from RMB96.4 million for the same period of 2019, mainly due to improved management efficiency.

Operating income increased by 84.4% to RMB187.4 million (US$28.7 million) for the fourth quarter of 2020 from RMB101.6 million for the same period of 2019. Operating margin increased to 6.3% for the fourth quarter of 2020 from 4.1% for the same period of 2019.

Non-GAAP operating income, which excludes share-based compensation expenses, increased by 46.5% to RMB269.3 million (US$41.3 million) for the fourth quarter of 2020 from RMB183.8 million for the same period of 2019. Non-GAAP operating margin increased to 9.0% for the fourth quarter of 2020 from 7.4% for the same period of 2019.

Income tax expenses increased by 35.1% to RMB37.3 million (US$5.7 million) for the fourth quarter of 2020 from RMB27.6 million for the same period of 2019.

Net income attributable to HUYA Inc. for the fourth quarter of 2020 increased by 58.6% to RMB253.2 million (US$38.8 million), from RMB159.7 million for the same period of 2019.

Non-GAAP net income attributable to HUYA Inc. for the fourth quarter of 2020, which excludes share-based compensation expenses, gain on fair value change of investments and equity investee’s investments, and equity investee’s partial disposal of its investment, net of income taxes, increased by 26.5% to RMB305.9 million (US$46.9 million), from RMB241.9 million for the same period of 2019.

Diluted net income per American depositary share (“ADS”) was RMB1.05 (US$0.16) for the fourth quarter of 2020, compared with RMB0.68 for the same period of 2019. Each ADS represents one Class A ordinary share of the Company.

Non-GAAP diluted net income per ADS was RMB1.27 (US$0.19) for the fourth quarter of 2020, compared with RMB1.02 for the same period of 2019.

Balance Sheets and Cash Flow

As of December 31, 2020, the Company had cash and cash equivalents, short-term deposits and short-term investments of RMB10,474.9 million (US$1,605.3 million), compared with RMB10,798.3 million as of September 30, 2020. The decrease was primarily attributable to the land use right acquisition of approximately RMB310 million in Foshan City in November 2020.

Net cash provided by operating activities was RMB458.9 million (US$70.3 million) for the fourth quarter of 2020.

Fiscal Year 2020 Financial Results

Total net revenues in fiscal year 2020 increased by 30.3% to RMB10,914.4 million (US$1,672.7 million), from RMB8,374.5 million in the prior year.

Live streaming revenues increased by 29.3% to RMB10,311.6 million (US$1,580.3 million) in fiscal year 2020, from RMB7,976.2 million in the prior year, primarily due to the increase in the number of paying users and the average spending per paying user on Huya Live. The increase in the number of paying users was primarily driven by the Company’s overall user growth. The increase in the average spending per paying user was primarily driven by the enrichment and enhancement of content, products and services.

Advertising and other revenues increased by 51.3% to RMB602.8 million (US$92.4 million) in fiscal year 2020, from RMB398.3 million in the prior year, primarily driven by the increasing and diversifying advertiser base, mainly attributable to strengthened recognition of Huya’s brand name in China’s online advertising market.

Cost of revenues increased by 25.4% to RMB8,646.3 million (US$1,325.1 million) in fiscal year 2020 from RMB6,892.6 million in the prior year, primarily attributable to the increase in revenue sharing fees and content costs, bandwidth costs and personnel-related costs.

Revenue sharing fees and content costs increased by 27.6% to RMB7,086.8 million (US$1,086.1 million) in fiscal year 2020 from RMB5,552.7 million in the prior year, primarily due to the increase in revenue sharing fees in relation to higher live streaming revenues, and the increase in spending in e-sports and self-produced content, as well as on content creators.

Bandwidth costs increased by 9.8% to RMB879.2 million (US$134.7 million) in fiscal year 2020 from RMB800.8 million in the prior year, primarily due to an increase in bandwidth usage as a result of the Company’s larger user base, partially offset by improved management in bandwidth costs and continuous technology enhancement efforts.

Gross profit increased by 53.0% to RMB2,268.1 million (US$347.6 million) in fiscal year 2020 from RMB1,481.9 million in the prior year. Gross margin increased to 20.8% in fiscal year 2020 from 17.7% in fiscal year 2019.

Research and development expenses increased by 44.3% to RMB734.3 million (US$112.5 million) in fiscal year 2020 from RMB508.7 million in the prior year, mainly attributable to increases in personnel-related expenses.

Sales and marketing expenses increased by 27.3% to RMB558.0 million (US$85.5 million) in fiscal year 2020 from RMB438.4 million in the prior year, primarily attributable to the increased marketing expenses to promote the Company’s content, products, services and brand name, as well as increased personnel-related expenses.

General and administrative expenses increased by 26.1% to RMB445.0 million (US$68.2 million) in fiscal year 2020 from RMB352.8 million in the prior year, mainly due to increase in personnel-related expenses.

Operating income increased by 177.4% to RMB725.0 million (US$111.1 million) in fiscal year 2020 from RMB261.4 million in the prior year. Operating margin increased to 6.6% in fiscal year 2020 from 3.1% in the prior year.

Non-GAAP operating income, which excludes share-based compensation expenses, increased by 108.6% to RMB1,133.2 million (US$173.7 million) in fiscal year 2020 from RMB543.1 million in the prior year. Non-GAAP operating margin increased to 10.4% in fiscal year 2020 from 6.5% in the prior year.

Income tax expenses increased by 84.0% to RMB176.8 million (US$27.1 million) in fiscal year 2020 from RMB96.1 million in the prior year.

Net income attributable to HUYA Inc. increased by 88.9% to RMB884.2 million (US$135.5 million) in fiscal year 2020 from RMB468.2 million in the prior year.

Non-GAAP net income attributable to HUYA Inc. in fiscal year 2020, which excludes share-based compensation expenses, gain on fair value change of investments and equity investee’s investments, and equity investee’s partial disposal of its investment, net of income taxes, increased by 68.2% to RMB1,261.5 million (US$193.3 million), from RMB749.9 million in the prior year.

Diluted net income per ADS was RMB3.71 (US$0.57) in fiscal year 2020, compared with diluted net income per ADS of RMB2.02 in the prior year.

Non-GAAP diluted net income per ADS was RMB5.29 (US$0.81) in fiscal year 2020, compared with RMB3.23 in the prior year.

Net cash provided by operating activities was RMB1,239.9 million (US$190.0 million) for fiscal year 2020.

Conference Call

The Company’s management will host an earnings conference call at 7:00 a.m. U.S. Eastern Time on March 23, 2021 (7:00 p.m. Beijing/Hong Kong time on March 23, 2021).

For participants who wish to join the call, please complete online registration using the link provided below at least 20 minutes prior to the scheduled call start time. Upon registration, participants will receive the conference call access information, including dial-in numbers, Direct Event passcode, a unique registrant ID and an e-mail with detailed instructions to join the conference call.

Participant Online Registration: http://apac.directeventreg.com/registration/event/2296665

Once complete the registration, please dial-in at least 10 minutes before the scheduled start time of the earnings call and enter the Direct Event passcode and registrant ID as instructed to connect to the call.

Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at http://ir.huya.com.

A replay of the conference call will be accessible approximately two hours after the conclusion of the live call until March 30, 2021, by dialing the following telephone numbers:

United States:

+1-646-254-3697

International:

+61-2-8199-0299

Hong Kong, China:

+852-3051-2780

Replay Access Code:

2296665

About HUYA Inc.

HUYA Inc. is a leading game live streaming platform in China with a large and active game live streaming community. The Company cooperates with e-sports event organizers, as well as major game developers and publishers, and has developed e-sports live streaming as one of the most popular content genres on its platform. The Company has created an engaged, interactive and immersive community for game enthusiasts of China’s young generation. Building on its success in game live streaming, Huya has also extended its content to other entertainment content genres. Huya’s open platform also functions as a marketplace for broadcasters and talent agencies to congregate and closely collaborate with the Company.


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