HUYA - Earnings call transcript Q4 2021

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Operator

Hello, ladies and gentlemen. Thank you for standing by for the Fourth Quarter and Fiscal Year 2021 Earnings Conference Call for Huya, Inc. At this time, all participants are in a listen-only mode. Today's conference call is being recorded.

Now I’ll turn the call over to Ms. Relations. Investor Company Liu, Hanyu Please go ahead.

Hanyu Liu

today welcome Hello, fiscal operational fourth online. earlier and Huya's XXXX everyone results earnings issued and and year financial conference quarter company's posted to call. are and were The

of will You Chief a IR at and will few on the Huya, be hours. can by on Executive the the call replay website also Participants press ir.huya.com. the release be view IR Dong, visiting of available A Officer Mr. call Rongjie earnings website Ms. today's in

Ashley President prepared Finance. a will remarks, Management and with session. Wu, conclude of Vice begin the with call Q&A will

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

and uncertainties. risks, inherent involve statements Forward-looking

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

Rongjie Dong

macro fortify billion. the revenues with and fourth RMB conference pandemic X.X year assumed mobile Huya for as XXXX a landscape, related Amid finished record in evolving live headwinds regulatory everyone. a was of to base you position the the effects today. Hello, call quarter net leadership we game market. for and China's subsiding high to our streaming we Thank joining our the user solid

overall, stably the RMB continued million net we boost advance creators non-GAAP innovative impactive and For self-produced revenues full user income. E-sports features experience Throughout and expanded RMB technology our billion user our and licensed total across generating and content XX.X platform year and content performed to product development XXXX engagement. year XXX investments in further tournaments, we to net enhance launching

broadened values positive and also to users promoted commitment social deeper with we broadcasters, our fostering bonds nationwide. We social corporate our community, as responsibility, our

and new First, QX. our the let's look at driven in game launches user e-sports events by growth,

rolling mobile basis, million momentum Our base sustained are maintained content during MAUs healthy user mails rate about in on MAUs by and with our and compared ramping we XXXX were remained out million XXXX. XX.X XXXX. in our the million mobile we an year-over-year. XX X% up On app annual focused X% growth Live month like average product up next like investment innovations. reached quarter, Huya We on XX.X And user retention in

Next on some and to development. efforts technology updates would recent I advance provide product to our like

is average daily X better users formats. tools And engaged new million the roads. mini broadcasters noteworthy XXXX, of and the of developers, developers the users, enlarging year-over-year. tools mini quarter, XXX and By they application the our rapidly been XXX% is third-party platform with for with than which our and Furthermore and has platform number open our streaming with offered fourth more sales up active created gaining improved year-over-year. than approximately diversifying this Huya users' developers by using of interactions One during force begin end popularity broadcasters more XXXX, Let's by over quarter extensively open in growing December the XXX% alike. example through live

growing gift to their to rooms inactive [indiscernible]. streaming build launch and loyalty few a campaign items game incremental promote utilizing other streaming service including virtual by features sanctions. live when Our visit. doing droppers forces users sales their skins experiences, features, mini e-commerce December, on with to general Earlier the our enticing virtual functions and recently successful live added click further Peacekeeper one innovate in out live live directly sequentially. with campaign featuring On our introduced allows increase joint inviting streaming in campaign our orders the virtual of a game streaming to platform driving to rewards the items top with enhancing for quarter our users the generated game record in-game Also to of for fourth users title instance we broadcasters broadcaster sales on users' features streamers we X-day roll in growth app to gameplay. which broadcaster live XX% of XXXX, for week Notably, on joined streamers they our popular streaming Elite by viewing, help the X during place live more billing in-game

game event So receive enabling by purchases their inventive game virtual immediately included connecting Peacekeeper elite with accounts Huya in-game ID CR their account. users in feature to

While these the chain, also increased potentially income their game content greatly and the benefiting diversifying engagement streamer game's live thus streaming creation value sources. support operations new in like events

growth, the to with of In re-enhance features better benefits. initiative mutual while combine cooperation this value a Huya propel XX in success to a demonstrated concerted and also initial initial broadcasters, above our interactive we're effort our mentioned to the ecosystems and to also mini working Tencent experience delivering studios. enhanced Our users game the the

leverage partners industry an to companies, As mini with and our can as raising leader. and us developers connects interactive game downstream tools platform's us synergies application upstream integrate profile features link those with we

of more control positive performed antifraud, over education, social appropriately social our XX,XXX and upgrading team about campaign efforts for As topics and we promote range create compliance in broadcasters hours read broadcasters to encouraging content platform activities, environment a In by on pursuit covering corporate X,XXX streaming, our as social to live joined risk and cultural more of heritage. such healthier related impact. volunteer volunteer our our a responsibility, expanding wide our system, and a positive social Huya our XXXX, our have and

made an also range providing NIMO's company. product, further wider diversification initiatives past driven as game recorded expansion performance. emerging audience our for significant a our current solid with business NIMO videos in TV year and demographics. We growth, international International by user progress of appealing Furthermore, is a growth the business to driven our revenue encouraging

Last, our to believe and that on offering quarter, bring. are user the elaborate is in efforts but caused key and sustained primarily in environment, just topics first macro a business lower revenue of will our least, a the to continued Ashley strategic slowed higher we not new we growth fourth two margins in development. are Overall, we softer to is drive moment. and growth our sustainable XXXX the although these in ready expand the to content investment the accomplishments embrace our year quarter. proud our to opportunities likely the This and for however challenges cost due

value XXXX, game remain given fundamentals the macroeconomic regulatory massive are our in experiencing for and post leadership in the uncertainties we we the with streaming our changes and start years. in pressure to continue a Nevertheless, strong operational business proposition us previous game compared confident capabilities As and enter our softer position and e-sports industry thus we market.

a off. our sentiment expect to user evens to market in and levels, paying more investments recovery we returns favorable see financials the As our with out

strive as Looking our product of on ahead, will improving a deliver enriching technology we as creators in business stakeholders, strategically operational happier quality further long-term support innovations, diversity to cultivating content, and better order and new value content community. to well to and exploring we efficiency focus as advancing our opportunities and

turn E-sports strengths [ph] opportunities Huya's in see of in brand E-sports our Given VP of leverage our and overall call the to overview, over will titles I development. official the the are Games. With content programs to Asian that We image to promote now that Financial. included industry tremendous medal enhance now

Ashley share details to our and assessment. Wu on financial operating metrics more

Ashley, please ahead. go

Ashley Wu

Mr. on everyone. enrichment our our with you, Professional start expand updates will platform. initiatives. E-sports diversification Mr. content Thank I Dong's on remarks, and Dong, viable remain on To content and hello

event broadcasted over quarter, and achieved high total E-sports million. viewership of XXX concurrent XXXX peak platform League fourth our on season tournaments, of viwership third-party the XXXX During Notably, viewers of record the Championship World XXX our we generating users. among approximately Legends period International addition demonstrated the and broadcasting Autumn XXXX. quite news with some we also compared XXXX this KPL have popular in are Furthermore exciting rights. doubled PEL about of Season E-sports share X to

well exclusive an to TC forming year we media E-sports our which XXXX exclusive Sports down Following organizers. agreement LPL multiyear rights rights LTL for in we variety November, Weekend tournaments event series, of with XXXX and licensed the events as rights LPL, XXXX greater In broadcasting a agreement a E-sports X tournaments ESL for CS:GO ESL are China with enhance we securing our signed II. Tour the its platform. This content AllStar including ESL series and locked by partnerships through, with license last Chinese us ecosystem, for a and the of international as for those help key as well coverage ESL StarCraft games XXXX as Dota high-quality Pro will Gaming to collaboration and E-sports in for Mobile

Season for content for over entertainment Honor Peacekeeper total FX [indiscernible] Huya and which of All million front, in reached for Huya [indiscernible] top-performing X, [indiscernible] XX% we [indiscernible] self-produced in fourth The Elite, Jing's viewership Star quarter Kings our PGC the XX year-over-year: for E-sports Cup and tournaments growing self-organized the broadcasted final for fourth On the Cup season events. quarter, the Huya Cup LoL XXX shows the

our to resources, leveraging investment. with we on content content typically establishing portfolio, retail video traction and return gain we streaming live more E-sports rich forward and generate our further plan enrich Huya-branded user existing Going and to and forces content platform. self-produced By co-broadcasters offerings our proportion creators, continue joining game with programs good on as cooperation in increased content differentiated new content the offerings to self-produced of proactively deliver our are

platform As key already creation. has of a in of majority the content broadcasters retail participated our on now,

both to will in consumption, sequential content the and promote uploaded We a and as video result, well content number our and growth user growth build between efforts synergies of commercialization believe As streaming fourth quarter. the our provide opportunity. recorded double-digit radio more content live viewership, retail as our

leading region. capability. cooperating TV as user Nimo XX genre, local fourth with and by chat content voice than monetization ecosystem, of increased in our quarter, add We in hit helps we position MAUs terms continue that to game Indonesia, more comprehensive average broadcasting a more build such business and in TV E-sports to million studios strong show to Within Nimo international also entertainment its to In solidify particularly enhance highlighted by live growth tournaments. our the which

growth. revenue quarter, year-over-year to fourth future overseas pursue cooperation we Our constantly talent sustainable local in over refine agencies as revenues grew our the and more by XXX% with healthy

walk results. let financial through on the will be basis. rate growth Next, you our are otherwise me I year-over-year QX reviewing specified, all Unless a

RMB quarter the year-over-year. total X.X% by decreasing of XXXX, For fourth are our X.X revenues approximately billion, net

billion to live Our the number for streaming last QX, Live, spending and from million live offset RMB RMB flat paying revenues mainly year. QX revenue. user was The due partially compared streaming but by per for decline growth on were decreased X.X the period users paying average Huya overseas same X.X lower of with in

QX, fees As revenues year provide as Advertising microsoftness we of by million to To to for from nearly in users million in in for other play, sharing revenues last well by margin users QX, the quarters single decrease as two quarter, certain relation quarter this XX.X% the e-sports affected year-over-year X.X primarily adversely increased the Bandwidth on RMB from ARPU. of XXXX RMB it willingness content for licensing. was worth as color to higher spending and zero Live QX, QX. by X.X a more the X approximately Huya XXX saw and QX increased X.X million LoL an cost paying than Gross the lower driven QX whereas RMB increase relation to e-sports incentive to event QX one because the a base gross in Revenue content for broadcaster experience result fluctuation to usage in content of costs. programs. a bandwidth schedule, primarily contribution, rights by in in as increased due our XX.X% QX. for concurrent fees our user impact billion QX, tournament mainly for and during event forecasting e-sports profit are revenues licensing related events revenues to sharing large we licensing costs and years in well and costs to greater this in of last Particularly, million between on this content increased X.X% the was billion RMB category are in million spend quarter. tournament close for booked RMB RMB to in quarters. and content and previous in Cost costs in primarily revenue because content in recognized increase to by often fees occurred licensing usually X.X due past XXX primarily according to to the increase XX.X% we increase QX the on to costs revenue as to sharing was due bandwidth and content of

income compensation share-based and by due was for administrative expenses million Excluding particularly million million Research XX.X% gross XX tax government X.X% professional primarily increased XXX was compared General due expenses Sales response RMB personnel-related QX, marketing marketing with due to of by to to to -- our for Other for service RMB XXX branding events, non-GAAP million products promote margin the for services promotional to expenses. decreased fees. non-GAAP expenses, period XX increased activities X.X% by offset attributable for and decreased RMB and XX by to personnel-related and RMB X.X% and QX, same million in RMB and expenses RMB primarily lower primarily to expenses. for to primarily partially million gross decreased RMB XXXX, million content QX e-sports decreased services. QX, was profit for XX.X development QX. decreased XX expenses

same loss operating operating of income RMB QX, XXX result, XXX for compared million a XXXX. RMB the As of with for million was period

RMB compared XXX Diluted period attributable Inc. for XXX operating HUYA the with was QX. Inc. X.XX QX RMB was HUYA non-GAAP net net diluted Inc. loss for margin million QX. expenses, QX compensation for HUYA XXXX. RMB loss QX. RMB million income for to compared Non-GAAP income to margin operating Inc. the and RMB per per to ADS attributable X.X% same non-GAAP loss million Net negative of to RMB for for was XX.X% of ADS was loss Non-GAAP period XXX XXX loss RMB loss XXX of was attributable net same of was share-based with non-GAAP million attributable for XXXX. net QX. for was million net Excluding HUYA X.XX Non-GAAP net

refer Live XX.X XX, Total by income total of per year other full results I our encourage were gross million As of was to had to Notably, now profit that, cash non-GAAP million RMBXXX gross to the for with XX% for as cash income around like we RMBX.XX XXXX. Non-GAAP Non-GAAP With XXXX. earnings for Move was press XX open year. XXXX. our of million billion XXXX. and on from RMB XX.X advertising release for December prior net listeners call year ADS to for to billion non-GAAP details. RMBXXX the RMBX.X your XX.X revenues billion accounted X.X% would margin net RMB margin margin streaming RMB earnings X.X% the for income full to Advertising compared revenues XX.X event X% XX, for billion questions. and prior others will Non-GAAP XX.X% revenue for with short-term RMB operating net billion deposits and was XXXX attributable to be short-term September investments call further year. was X% equivalents Inc. mindful XXXX RMB Non-GAAP from compared HUYA was year. XXXX. billion approximately increased was for RMB improved results. XX% by from RMB X.X of XXXX to was To net and XXXX our XXXX. billion other for RMB from XXXX financial XXX increased the XXXX for diluted for revenue operating prior the for for I and XX.X and of our XXXX and non-GAAP the billion

Operator

from Thomas Ladies you. the and line session. will question comes we of Jefferies. Our begin gentlemen, now [Operator Thank question-and-answer from first the Chong Instructions]

Thomas Chong

user [Foreign strategic as Thank you. revenue? the taking and share Can trend well is questions. about about question direction overall Language] XXXX Thanks management outlook. My as for the for management the my

Rongjie Dong

for we always core strategy. the growth This [Foreign users Language] Thank CEO that of for believe business Mr. you growth will our to continue long-term are is Dong, of We and user-driven have company. from that our question. development

our reached our with in increased streaming position. XXXX, MAU position cement market game million further and year Huya leading the increase For user to QX streaming XX.X our X.X% continue area. cementing by share our In live game live XXXX, leading in will

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to compliant regulatory to changes to development. and long-term realize continue operation, enhance business adapt trying and our be platform, of to terms to In in will try we

Ashley Wu

[Foreign Language] Ms.

of Ashley Wu, VP Finance.

enhance the holidays numbers As scheduling and is and of pretty of to noticing user year enriching with interactions the changes our user the XXXX, by events the our It has our other seasonality to platforms revenue number user as issues. for is increase the trend to outlook on keep for that worth also growth the and target seasonal our mobile much depending as the in year big users. content well

Ashley Wu

because the the continuing, we to macro half [Foreign economy will of some in by behavior users XXXX, terms somehow of noticed under probably we macro revenue expect for generally impact. revenue our due negative of And that But our that Language] is in economy, changes first mainly affected the regulatory revenue pressure. the QX XXXX and In forces. our impact was still paying are to the external continue be fluctuations this speaking,

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Hanyu Liu

Okay.

Thank please. question you. Next

Operator

Thank you.

Lei ask Please next from your Merrill Bank question. Our America from Lynch. question comes Zhang of

Lei Zhang

for in your then management tournament set. the recently my I taking in you. My tournament Thanks Thank strategy, and also question. E-sports will Yes. adjustment Language] here? [Foreign share your mainly E-sports question competitors on your is thought particular, consider content regarding

Rongjie Dong

popular provides well League content for streaming events. as Legends, and more [Foreign IP order we'll our for continue PGC events continue This we content instance LCK, tournaments, including tournaments, be your attractive as the self-produced in continue of to well provide Language] purchase high-quality you the platform as we'll Mr. in have well is games and Thank our users, and In and China establish PCS. for competitiveness only IP CEO that enhance specific to Zhang. content. from programs as mainstream question. to LCS as in to the LEC, terms LPL as of China, provide tournaments To In

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Hanyu Liu

you. Thank please. Next

Operator

you. Thank

Please from question from Gong Citi Our ask next the comes question. Brian Group.

Unidentified Analyst

Thank asking I a behalf cost on share streamer on you Can everyone margin about in Brian. forward? And Nelson [Foreign cost of how taking have for and question your my This content outlook outlook margin is Language] trend and on questions. cost. going XXXX? management view the

Ashley Wu

[Foreign you Thank Language] for that question.

Ashley last year-end Wu, incentives VP for we Finance. to In the higher. our to stable, to the And ratio policy slightly event tried QX provide the market last order streamers to streamers in increase split had split QX was our dynamic. since to maintaining due for while attraction year, more year, the according

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our -- expenses, In lower than operating efficiency, operating to continue but a XXXX. we'll be slightly [Foreign to for year optimize necessary major due macro margin would expenses the to Given whole operating and it try in the Language] gross us believe terms share. and is us lower level because it our will content, increase competitiveness to margin for market to help to continue that industry we increase the economy, challenges of invest the

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So I to able profit. longer we drive are for term, believe a that the

Hanyu Liu

Thank you.

last please. Our question,

Operator

Renaissance. from from China question go ahead. Please Thank Zhang you. Last Yiwen comes

Yiwen Zhang

you Thank management question. Language] my [Foreign for taking

XXXX? question for the overseas Thank and So regarding I a business. Can overseas you. latest have target management of update business our quick share

Ashley Wu

registered with in the business nice those for very XXX revenue the resources XXXX, The company achieved revenue about percentage with our progress overseas Asia give business In growth. our over And year-on-year Southeast our positive in year XX QX, of to overseas allocate areas. key Language] XXXX. XXXX, us the we a an X% In year and million a MAU [Foreign new also high. record

base. While increased optimizing our our costs user we

favorable our of with for are the revenue our content, and Nimo and in XXXX, to our us further loss. content. for popular tournaments experience popular and at a overseas also we increase increased business consolidate platform on also our which ecosystem this make our continue it time in level, also while increase more In Based strategy will goal -- user games base XXXX, our content complete to same and region terms we reduce providing is monetize and on pan-entertainment on optimize in to and the trying had to regional in

Hanyu Liu

the We answer. Okay. finished

Operator

Thank you. Right.

call So the remarks. like now company closing for back I'd the turn to to

Hanyu Liu

joining you Thank for us again Yes. once today.

Thank on have contact the feel please provided through free to you Relations. Relations Investor If our information questions, contact you. further website Huya's Investor TPG or

Operator

this concludes conference This call. you. Thank

now disconnect your may lines. You you. Thank

HUYA (HUYA) 22 Mar 222021 Q4 Earnings call transcript