GUANGZHOU, China, Aug. 15, 2023 /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, 2023.

Second Quarter 2023 Highlights

• Total net revenues for the second quarter of 2023 were RMB1,821.4 million (US$251.2 million), compared with RMB2,275.2 million for the same period of 2022.
• Net income attributable to HUYA Inc. was RMB23.2 million (US$3.2 million) for the second quarter of 2023, compared with a net loss attributable to HUYA Inc. of RMB19.4 million for the same period of 2022.
• Non-GAAP net income attributable to HUYA Inc.^[1] was RMB115.1 million (US$15.9 million) for the second quarter of 2023, compared with RMB5.9 million for the same period of 2022.
• Average mobile MAUs^[2]of Huya Live for the second quarter of 2023 was 82.9 million, compared with 83.6 million for the same period of 2022.

“Although the impact of increasing offline recreational activities among our users continued into the second quarter of 2023, we maintained a stable user base through our ongoing efforts to enrich e-sports, game and entertainment content. We are pleased to report that Huya Live’s average mobile MAUs reached 82.9 million for the second quarter, a slight improvement from 82.1 million for the previous quarter,” said Mr. Junhong Huang, Acting Co-Chief Executive Officer and Senior Vice President of Huya. “As we drive our strategic transformation, we will build on our well-established user community and content ecosystem, striving to expand our role in the game industry. With our commitment to offering more game-related services going forward, we believe Huya is well positioned to serve the interests of more users, content creators and industry partners, underpinning our sustainable business development.”

Ms. Ashley Xin Wu, Acting Co-Chief Executive Officer and Vice President of Finance of Huya, commented, “In the second quarter, we continued to make progress in optimizing costs and expenses. While our second quarter total net revenues were RMB1.8 billion amid the soft industry environment, our gross margin increased to 15.0%, and net income reached RMB23.2 million. Even though our proactive business adjustments enacted for our strategic transformation may cause some near-term volatility in our operating and financial metrics, we are confident about Huya’s long-term prospects as we are forging a more balanced development pathway with a more diverse revenue mix.”

Second Quarter 2023 Financial Results

Total net revenues for the second quarter of 2023 were RMB1,821.4 million (US$251.2 million), compared with RMB2,275.2 million for the same period of 2022.

Live streaming revenues were RMB1,715.7 million (US$236.6 million) for the second quarter of 2023, compared with RMB2,051.9 million for the same period of 2022, primarily due to a decrease in the number of quarterly paying users^[3] on Huya Live to 4.6 million for the second quarter of 2023 from 5.6 million for the same period of 2022. The decline in the number of quarterly paying users was primarily attributable to the soft macro and industry environment, as well as the increase in offline entertainment activities, which adversely affected the time spent by long-tail users on Huya’s platform.

Advertising and other revenues were RMB105.8 million (US$14.6 million) for the second quarter of 2023, compared with RMB223.3 million for the same period of 2022, primarily due to a significant decrease in content sub-licensing revenues.

Cost of revenues decreased by 24.7% to RMB1,548.4 million (US$213.5 million) for the second quarter of 2023 from RMB2,056.1 million for the same period of 2022, primarily due to decreased revenue sharing fees and content costs, as well as bandwidth costs.

Revenue sharing fees and content costs decreased by 24.3% to RMB1,337.7 million (US$184.5 million) for the second quarter of 2023 from RMB1,767.8 million for the same period of 2022, primarily due to the decrease in revenue sharing fees associated with the decline in live streaming revenues, and lower costs related to e-sports content as well as content creators.

Bandwidth costs decreased by 34.3% to RMB101.4 million (US$14.0 million) for the second quarter of 2023 from RMB154.4 million for the same period of 2022, primarily due to improved bandwidth cost management and continued technology enhancement efforts.

Gross profit was RMB273.0 million (US$37.7 million) for the second quarter of 2023, compared with RMB219.1 million for the same period of 2022. Gross margin was 15.0% for the second quarter of 2023, compared with 9.6% for the same period of 2022, primarily due to decreased revenue sharing fees and content costs as a percentage of total net revenues.

Research and development expenses decreased by 14.3% to RMB144.3 million (US$19.9 million) for the second quarter of 2023 from RMB168.4 million for the same period of 2022, primarily due to decreased personnel-related expenses.

Sales and marketing expenses increased by 6.1% to RMB106.4 million (US$14.7 million) for the second quarter of 2023 from RMB100.3 million for the same period of 2022, primarily due to increased promotion fees.

General and administrative expenses decreased by 8.5% to RMB74.9 million (US$10.3 million) for the second quarter of 2023 from RMB81.8 million for the same period of 2022, primarily due to decreased personnel-related expenses and share-based compensation expenses.

Other income was RMB23.8 million (US$3.3 million) for the second quarter of 2023, compared with RMB50.3 million for the same period of 2022, primarily due to lower indirect tax refunds and government subsidies.

Operating loss was RMB28.8 million (US$4.0 million) for the second quarter of 2023, compared with RMB81.1 million for the same period of 2022.

Interest and short-term investments income were RMB125.3 million (US$17.3 million) for the second quarter of 2023, compared with RMB65.6 million for the same period of 2022, primarily due to increased interest rates and improved management of deposit products.

Impairment loss of investments was RMB65.1 million (US$9.0 million) for the second quarter of 2023, compared with nil for the same period of 2022, primarily due to the recognition of impairment charges on several equity investments.

Net income attributable to HUYA Inc. was RMB23.2 million (US$3.2 million) for the second quarter of 2023, compared with a net loss attributable to HUYA Inc. of RMB19.4 million for the same period of 2022.

Non-GAAP net income attributable to HUYA Inc. was RMB115.1 million (US$15.9 million) for the second quarter of 2023, compared with RMB5.9 million for the same period of 2022.

Basic and diluted net income per American depositary share (“ADS”) were RMB0.10 (US$0.01) and RMB0.09 (US$0.01), respectively, for the second quarter of 2023. Basic and diluted net loss per ADS were each RMB0.08 for the second quarter of 2022. Each ADS represents one Class A ordinary share of the Company.

Non-GAAP basic and diluted net income per ADS were RMB0.47 (US$0.07) and RMB0.47 (US$0.06), respectively, for the second quarter of 2023. Non-GAAP basic and diluted net income per ADS were each RMB0.02 for the second quarter of 2022.

As of June 30, 2023, the Company had cash and cash equivalents, short-term deposits and long-term deposits of RMB10,846.4 million (US$1,495.8 million), compared with RMB10,347.6 million as of March 31, 2023.

Share Repurchase Program

On August 15, 2023, the Company’s board of directors authorized a share repurchase program under which the Company may repurchase up to US$100 million of its ADSs or ordinary shares over the next 12 months. The share repurchases may be made from time to time in the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. The Company’s board of directors will review the share repurchase program periodically, and may authorize adjustment of its terms and size. The Company expects to fund repurchases made under this program from its existing funds.

Conference Call

The Company’s management will host an earnings conference call at 8:00 a.m. U.S. Eastern Time on August 15, 2023 (8:00 p.m. Beijing/Hong Kong time on August 15, 2023).

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

Participant Online Registration:

https://register.vevent.com/register/BIcf80892cbf63431d9fde07053cb07bd4

Once registration is complete, please dial in at least 10 minutes before the scheduled start time of the earnings call and enter the personal PIN as instructed to connect to the call.

A live webcast of the earnings call 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 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.

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. Non-GAAP net income attributable to HUYA Inc. is net (loss) income attributable to HUYA Inc. excluding share-based compensation expenses, gain on fair value change of investments, net of income taxes, and impairment loss of investments, to the extent applicable. Non-GAAP net income attributable to ordinary shareholders is net (loss) income attributable to ordinary shareholders excluding share-based compensation expenses, gain on fair value change of investments, net of income taxes, and impairment loss of investments, 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) gain on fair value change of investments, net of income taxes, and (iii) impairment loss of investments, 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, which have been and will continue to be significant recurring expenses in its business, and (ii) gain on fair value change of investments, net of income taxes, 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 (loss) 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 RMB7.2513 to US$1.00, the noon buying rate in effect on June 30, 2023, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the Renminbi or U.S. dollars 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 game live streaming 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 impact of the COVID-19 to Huya’s business operations and 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