Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• HUYA Inc (NYSE:HUYA) achieved a record high in game-related services, advertising, and other revenues, contributing 26.7% to total net revenues.

• The company maintained a stable year-over-year operating performance despite macroeconomic challenges, achieving a non-GAAP net income of RMB78 million.

• User engagement remained stable with mobile MAUs improving slightly to 84 million, supported by enriched content and service offerings.

• Game-related services, advertising, and other revenues grew by 209.3% year-over-year and 32.9% quarter-over-quarter.

• HUYA Inc (NYSE:HUYA) successfully reduced operating expenses by 20.9% year-over-year, reflecting improved operational efficiency.

Negative Points

• Total net revenues decreased to RMB1.54 billion compared to RMB1.66 billion in the same period last year, impacted by a soft macro and industry environment.

• Live streaming revenues declined, continuing to weigh on overall financial performance.

• Gross margin decreased to 13.2% from 14.6% in the same period last year, due to increased revenue sharing fees and content costs.

• Interest income decreased to RMB97 million from RMB128 million in the same period last year, primarily due to special cash dividends paid.

• Operating loss remained stable at RMB32 million, indicating ongoing challenges in achieving profitability.

Q & A Highlights

• Warning! GuruFocus has detected 4 Warning Signs with HUYA.

Q: Can you elaborate on the growth in game-related services and its impact on overall revenue? A: (Acting Co-CEO and CFO, Raymond Lei) Game-related services, advertising, and other revenues reached RMB410.2 million, marking a 209.3% year-over-year increase. This growth was driven by game distribution, in-game item sales, and game advertising, contributing significantly to our top line and offsetting declines in live streaming revenues.

Q: How has user engagement been maintained despite macroeconomic challenges? A: (Acting Co-CEO and SVP, Jun Hong Huang) User engagement remained stable with mobile MAUs slightly improving to 84 million. We achieved this by enhancing content, upgrading product features, and strengthening cooperation with content platforms, which expanded our reach to over 140 million users in September.

Q: What strategic initiatives are being implemented to enhance Huya's content offerings? A: (Acting Co-CEO and SVP, Jun Hong Huang) We are focusing on professional content enrichment, broadcasting over 90 licensed esports tournaments, and producing in-house esports tournaments and entertainment shows. These initiatives aim to diversify our content and increase user engagement.