HUYA - Earnings call transcript Q1 2024

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Hanyu Liu

[indiscernible] Huya's first quarter 2024 earnings webinar. I am Hanyu Liu Huya Investor Relations. At this time, all participants are in listen-only mode. 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.

the ir.huya.com. release view IR visiting also at website can earnings by press the You of call replay in A the a [IR] on few website the hours. will be available on will today's Participants of be management Mr. call co-CEO acting Vice Ms. Huya's Huang, and Junhong President; Senior and

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

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

statements involve and risks inherent uncertainties. Forward-looking

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

Junhong Huang

for our Thank Liu. Okay. Thank conference earnings you, Hanyu today. everyone. joining Hello, you

revenue and deliver growth base a to stable results user overall expansion, We a game-related first featuring quarter trend. are services healthy more in pleased

including RMBXX start, the upgrades net XXXX to non-GAAP some ecology focused I'd million. developments, synergies With our good about to also We off strategic transformation our product commercialization improved with advancements. platform content key recent and technology details income and share and and like and a year's reaching profitability approximately

on with our an me strategic update start Let transformation.

as of commercialization by in of item progress game rapid encouraging growth from making our as the revenues the services driven sales. game-related are We well advertising in-game services, and distribution

services, relative quarter-over-quarter. million high-value quarter, strong for known revenues growth platform formerly XXX.X% and base and and directions XX.X% advertising reflects our our revenues new game first Our other engaged representing a game users and advertising growth reached year-over-year other This and potential. of RMBXXX the as on validates of

are In broadening and include we our games, to terms more game of both titles. coverage distributions, existing upcoming

Our and potential well, distribution game through users to average Huya's performing with spending commercial SLG value categories. channel MMO the tend in have level high users' particularly

our develop their to refining are as on also capitalize value services. we operations We game distribution

in-game item number sales, games. a game For growing range for of diverse we a props popular of offer

Additionally, to offering more services, help of with broadcaster activities we to advertising and promotion their campaigns. are companies connections game fans. our and game items customized broadcasters working in-game between With strengthen broadcaster regard carrying are we and expanding virtual innovative out

We upcoming of opportunities distribution are related mobile seize also D&F actively the promotion. and game to game launch [indiscernible] in preparing

game services more rich studio, revenues. game-related game users grow our we to [lease] our providing addition In the streaming leverage to for to and and comprehensive live game will [lease] content related service

is scale companies. and services In actual In item basis. as term, and Game-related its also confidence enhance not addition, in-game tend sharing transaction total revenue. mix sales and much rapid as after overall that services' to revenue that Also, point game business the gross from revenue only revenues net levels. will than we to quarter its the margin distribution [lease] our with game-related this would means long should game-related services continue I to typically profit offer scale. strong business increase. but margins, That higher recognize gross higher our profitability accelerate want this our this revenues to improvements will game revenue in enhance revenue is and growth out total reinforces transformation our That value on contribution

ecology Turning us viral partners, to the XXXX. quarter, our to with opportunities cooperation live With benefit other first more for key for content streaming platform create products time and Year's from strategy Elite and open deep a the Legends, an popular the multiple event platform major believe Year game in celebrities Kings New game of broadcast content ecology. major period Strengthening content. array first was success on streaming mutually Honor is competitions vast barriers Through of in beyond all-star content win-win in we users co-creation. our complementary platforms In various Its also and our the audience. to all broadcasters New League the well each cooperation kinds. for marked featuring participating, industry received we streaming from event with our platforms. of X during live the e-sports and the a enhance offers with overcame for hosted e-sports platform for of platforms to Chinese by live outcomes went of terms Peacekeeper breakthrough cooperation and We this platform we platforms environment and

industry hub an barrier-breaking become leader and central pioneer, our ecosystem. As to within a is open more goal content a

production, by platforms. streaming video streaming streaming content live our with the embracing sector content platform working these commercialization. several bringing on We also and class video and are live broadcaster platforms We're to form [indiscernible] currently professional-generated great

are as our and e-sports operations on and initiatives believe extensive is In Tencent our opportunities. event the in various channels, tier the resource, The capabilities. Tencent Group, professional of Tencent more we our and range wider we content Strategically, a third game licensed leveraging within Video, content. our more our player high-quality and professional user licensed are such Huya's is market better events being influence offering and increase programs, as abundant needs we building of create our and products these, with broadcaster platforms like self-produced helping touching premium future addition, at tournament, middle cooperation ecosystem event Thus, while we leading featured self-produced can our and us WeChat our QQ enhance content tier pyramid content e-sports lines influence product we meet top-tier further the a top, array users. tournaments position the of improve tournaments e-sports coverage our showcases of quality

the audience bottom Finally, we to which tier comprise the local e-sports from event communities, targeting also broaden content. massive participation e-sports recognize helped for

our activities provide will more details later. content Ashley on QX

service terms channels. Live In product a XX application enhanced game in advancements, This to we new information game-related and interactive as Huya well e-sport live release upgraded of the as and February. on mobile community functions features content Version features technology

[Audio and [indiscernible] the upgraded section, comprehensive and information integration with live e-sport and report. encyclopedia [tab] new strategies a events, information and In the [indiscernible] Gap] game event for example, data community on e-sports' games edit of of and players. various For we optimized teams

professional we and users experiences and replays all continue summary, became interactive strength of value On with In also platform, status data delivery of designed commentary, industry different in cooperation AI-powered game meet editing and e-sports will real highlight in our deepen users' All age as several and game in for and propel available information industry commercialization remain our creation. presence related technology, for turn, streaming fortify needs game to will advancement, demand and to technology we moat. We and the real embrace user aim AI we iteration. enhancements partners live growth and as as in changes dedicated call, as content. ecology, experience mentioned terms differentiated and well our business watching playing better unique bring game these super content to the industry including innovation competitive real-time products new the In a market product last with note, time features we market content, involved to content interaction, while a dynamics position customized through intelligent creators, [lease] game are Huya's leveraging come chain. these in across on leading and our expand this to Huya's

turn industries. our details call future VP co-CEO I the Ashley streaming will the also the to game over our We drive of and that, more acting share to of will results. development With Wu, now on live Finance, and

ahead. please Ashley, go

Ashley Xin Wu

everyone. and on [indiscernible], financials. you, updates I'll metrics hello, some provide operating and our Thank

the side, contributed user Huya to the user first Huya RMBXX.X average being million RMBXX.X in-game Live, services a quarter, first the operational users an APP, Live last continue same cross-platform paying of for paying to reaching mobile in usual from and live Also, activities, expansion Live's base slight year. game-related despite the our for season and the sequential for items the increase on million. virtual for users period we streaming innovative solidify RMBX.X million up to MAUs events the low e-sports On quarter our Upgrades Huya to drove activities.

Moving on initiatives. to professional our content

in KPL and we the [indiscernible] LPL, the professional our attracting over On platform. XXXX XX and Counter-Strike of licensed for also Masters front, first tournaments of quarter hits the with X licensed as Major broadcasted emerged content viewers. [indiscernible] on [spring e-sports speed] it Copenhagen most for the CFPL,

over these our quarter, further popular the of spent licensed enhanced e-sports our During coverage tournaments the and titles XX games content broad competitiveness.

entertainment though the Many for we In during self-organized well, events. the addition of off-season PGC large even content, to traditionally e-sports shows tournaments first is e-sports performed broadcasted quarter. and licensed these XX quite the quarter

event for in Youth the and mentioned, Huya revitalization. promoting expand the program and the all-star our big Honor of Mobile local success, we event Year's Games, was Major New just efforts while attention. of [stop] [indiscernible] advancing Copehagen Kings In commentary addition hosted series, we content capture [indiscernible] also for our also Furthermore, the real e-sports e-sports to Village for cross-platform of that to a Cup This event the Champions CrossFire second influence game village Province. culture village

game-related revenues. for ago from and of QX, and in XX% a due our partially other X% and year of segments up to increasing from game-related our quarter performance, XX% live decline last terms The other accounted financial rapidly, In in offsetting revenues streaming services, total advertising a increased revenues services, game-related contribution. services, businesses advertising

their quarter, optimization a margin in also efforts. combination services to our XX.X% increased contributed higher driving margin this gross gross total our margin, game-related enjoyed As to to revenues cost contribution with gross improvement

this benefit grow, our revenue overall to further. continues gross expect As margin segment's to we

first X expenses We pleased were a in savings OpEx achieve also the line to in improvement reduced with items. We total XX.X% profitability meaningful operating year-over-year double-digit all quarter. by

QX to details. move Let's our on financial

for revenues with billion for RMBX.X cost in and continued our Live were well same as advertising compared RMBXXX for QX streaming XX% costs billion improved our the to by as RMBX.XX terms live decreased continued item year, year-over-year RMBX.XX and management, cost million fees due fees as QX, XX.X% for primarily RMBXXX to RMBX.XX distribution the XX% and revenues macroeconomic to to and by revenues billion and primarily QX, the year. environment well profit In sharing Gross revenue Revenue and this period due were bandwidth as to proactive primarily industry billion million for decreased due [indiscernible] net related costs gross QX. same QX decreased costs million RMBXXX total billion RMBX.XX fees streaming of the million, adjustments costs. with business well as last as revenues margin prudent billion compared RMBXXX QX, bandwidth for same were operations. for QX period enhancement to due pricing decreased year-over-year services and was with to in was content XX% related was revenues last the strategic e-sports RMBX.XX associated revenues Our by primarily with for due revenue to lower to last decline period content primarily soft other services, year, for sharing efforts. in-game favorable advertising year-over-year and support Cost technology and content. from transformation decrease to increased sales. for sharing compared the game

was QX, million expenses, share-based marketing margin XX% non-GAAP and compensation primarily decreased non-GAAP due for RMBXXX compensation promotion same fees subsidies. to development administrative due gross expenses. million year-over-year income share-based to last and and marketing expenses by for QX million the million decreased as primarily RMBXX to was by to Sales for million to primarily due RMBXXX year-over-year XX.X% year, as to for Other and was Excluding million due RMBXX compared government QX. and share-based expenses. General for decreased QX, decreased by with decreased gross year-over-year period for to Research XX% higher expenses decreased compensation expenses well personnel-related RMBX primarily RMBXX XX% expenses. profit QX,

last RMBXX was operating year. same QX same Net period last RMBXX As million a for RMBXX compared year. result, million year. income compared the period for for same with for million compared was to was for with with RMBXX period the Huya QX loss QX the million RMBXXX income last Inc. million Interest million for RMBXX attributable

and expenses Inc. of income million million for assets intangible compensation the Non-GAAP same net QX ADS share-based Non-GAAP year. QX. was net margin Diluted attributable net RMBXX income acquisition, net to HUYA with income the net per tax. diluted Excluding per was income from RMBX.X of amortization RMBX.XX period X.X% business ADS last compared RMBXX was for for Non-GAAP for QX. QX. was for

As XX, with had of cash XX, RMBX.X short-term long-term December short-term of RMBX.X billion, March of company the investment equivalents, and XXXX. XXXX, and cash billion compared deposits, as deposits

million a repurchase we me total of let update XXXX. on March an have million shareholder returns. to of as of in USD USD million XXX provide upgrade XX.X that August Under repurchased XX.X our end up with USD Huya XXXX share Finally, our consideration ADS the program began

announced in March XXX value XXX of approximately These our are million also and special to to declaration, a dividend initiatives return million cash USD nearly shareholders. XXXX. expected We totaling aggregate USD

continue our will to the your We performance call while I to operational shareholder focus value. building that, like to With on now open financial would and long-term questions. improving

Hanyu Liu

Ashley, you, hello and Thank everyone.

[Operator in instructions]. dialing you're If

the on For call, if question to wish in of Bank today's from please of management all ask repeat comes your the first from America. to question you Today's English. participants in immediately benefit Zhang Lei your Chinese, question

Please line Your go open. is ahead.

Lei Zhang

mobile some will question [Foreign they us game such some here? launch can more and the has And also you we as Language] to D&F opportunity add? regarding noticed My bring to update give business, game-related been new

Junhong Huang

high-quality services on started by services, year-on-year our item also Huya August, user present, focusing the but development At advertising reached growth rapid We XX.X% our and advertising game-related business last in-game potential through other and the validates game-related new positive [Interpreted]. the services. XXX.X% made This only the revenue have upgrading revenue transformation gamer progress in game-related up in growth base segments not on RMBXXX providing quarter-over-quarter. commercialization strategic commercialization QX of and million, services reflects game and more our of distribution we sales, the of from and platform, of direction.

terms of to games, we performed the we Golden of titles. King, constantly well. coverage year, Spatula include expanding games existing of more Battle the distribution, of Specifically, including popular This game and have very are in of distribution and covered new Honor

leading have Dream as which games Star, such For channels order have we ARPU especially the our broadcasters between At by before, of this new the provide participated cooperating the props constantly props commercial of and regard, make present. for results, we the in which users users popular customize to props, Huya distribution fans. time, companies sales operations games, [indiscernible] strengthen of more terms in helps Huya at games optimizing the game the use to mobile of achieved have for also we of relationship also potential. better In platform variety of game to and are high covered this dozens in advantage.In are which broadcasters, the game, we proves that same a with on

our For example, XX achieved million model. JPY previous game when in of customized streaming selling just more a session, transaction reflecting potential one personal one of the value of broadcasters this business scenes than

more This license games new also In us opportunity titles to to companies innovative bring terms opportunities game with develop cooperating only out activities but the more permits game-related normally we game the present, promotion services. new in seize content, rich in more the live more and for At games appear released promotion are not can and market. bring of with services, carrying market. are broadcast the game of different advertising mini

for preparing Studio the D&F GM For example, are ]. with upcoming the closely [ working mobile, actively we now

the recruiting gifts. streaming promotion and also for doing are exclusive live work We and broadcasters for of launch props

games game have popular hope of the D&F and audience pre-download growth center be our would Huya mobile platform D&F up a the the of special platform, Live. that services set game-related long-term in We help large-scale we also Based also area on section content revenue. of in on Huya

item distribution I a and from with after typically Finally, companies to that the game revenues revenue net recognize in-game we want in game basis. sales addition, on out point sharing

profitability In also total higher its that revenue means long rapid services rapidly. this quarter to more only offer will enhance scale business revenues as is growing total should and transaction our as than This Game-related confidence improvements gross our its margins. services and but business gross margin to this our growth and in increases. value to enhance revenue actual revenue scan-related levels. mix tend profit and services will transformation overall continue the So the much term, that strong higher reinforces scale Also, up. our contribution accelerate revenue this in not game-related

Hanyu Liu

And question from you. Thank China Renaissance. comes Zhang next our Yiwen from

Yiwen Zhang

of give this made on second X-year profitability XXXX year Language] road we year, us [Foreign outlook. And the update early. out had map So you our can revenue and an

Ashley Xin Wu

[Interpreted] advertising first off-season rapid In is Therefore, quarter, the billion, in JPY partially holidays and of revenue X.X growth the large-scale was festival decline from to total the spring usually live services, and others broadcast more for QX broadcasters. of for the the game-related and revenue although our revenue. an business broadcast influence offset during events due live

compared tends and quite Our year, the revenue only QX with by to total decreased overall revenue last stable. be X.X%

year. and from quarter XX% In terms others QX, of same in revenue advertising the total mix, X% in accounted last of previous for the the and game-related services, XX% up period

profit last gross up year. game-related this contribution optimization, the revenue our from the pushed the XX.X% services, profit, With continuous advertising and XX.X% their total cost increased efforts the in increase to margin same of also in in period margin due QX's quarter. other On segments, to high margin to gross gross of

other double-digit X operating reduced items expenses We the and decline. year-on-year line year-over-year OpEx achieved also by total XX.X%

whole, the an On increased QX improvement, level profit which GAAP of net XX%. about profit the achieved effective by in

revenue year's continue As of point year's and strategic view expect to will revenue, operation. prudent for we be a this in transformation QX life allocation internal year-over-year by resources more last of that from affected

quarter, to following to continue the be so compared quarters. is the with However, and revenue first the expected level stable more in

Game-related quarters growth, lead gradual the see we our relatively ] and revenues will of As others, year the for [ following recovery of the the fast to overall previous quarter. a a that which will expect services from averting

mentioned as net the revenue revenue As just revenue. recognized of the companies as game sharing of is the now, most game-related after -- just services with from

gross So despite level much. rapid And not of value about the the revenue we higher full given new by proportion to nature margin growth, brought increase. business, in the growth scale, margins. business gross From margin, the would perspective, of our revenue gross higher a of of and due time, as lead business a to that same the gradually recognized mix business profit that we year changes it think the the will total at

event optimize continue costs We broadcasters will to our and content costs.

XXXX, So greater that margin now an Gross will we the to improve. are year we placing indicator gross the emphasis compared is expect on. continue profit for to margin also

profitability profit operational side, maintain to Overall, continue to year labor we'll we'll of costs. spending, On and selling a the XXXX. full in over particularly our in be XXXX expenses expectation and more growth on prudent our continue

Hanyu Liu

comes Ritchie from next Our HSBC. from Sun question

Ritchie Sun

[Foreign Language] cash a question I usage. have about

the hand, buyback program. had We we have have cash through $X.X and billion on

the any as terms of, the it for say, even extend or So plans road? plans well dividend to buyback down annual the quarter as in updated program any increase

Ashley Xin Wu

up of we million share We quarter $XXX of a repurchase this announced And stock. first repurchased the $XX mid-August in last worth nearly million our year. year, to program in of

March, had approximately a totaling million. the $XX.X special As announced cash March, And $XXX of repurchased in total a we of million. end dividend we of

a payment initiatives cash nearly cash, to shareholders. March So in these the equivalents operations. in and will carry the of totaling last approximately completion company expenses XXXX, billion $X.X Huya's over we manner order deposits. for key have and cash, is returned At a in and result out and and to expect to our equivalents $XXX management, deposits focus of initiatives conditions operations that efficient compared cash. Shareholder we dividend change their the end reward of total, The repurchase in have the of the returns shareholders to the with end cash of the the billion. return company's million payments to $X.X held After continue shareholder aligns use of current of from are number a the million, company's December enhance cash support $XXX and the market share at the

Hanyu Liu

you. Thank

Thomas Now last our take Jefferies. from from today we will question Chong

Thomas Chong

[Foreign well or to about question should the is landscape live live relationship competitive the as How these affect about the trend. Language] think host. about should think industry platforms? users we among streaming different changes our streaming how And we My as

Junhong Huang

open, linkage another or share more as overall game win-win and one that From and and the complement point new the other. it a competitive upgrading that one growth each broadcasting this live Strengthening also various of to industry is ecology that in we business platforms has is paradigm isolated products down believe opportunities. needs resources, platform platforms and meet become with year. longer possibilities. platform seize are leader thus Huya we industry's features entered break the and of view, to of environment, has users environment a this In barriers industry the to purely this also no more striving the of and The the believe into competition. important creating and and Therefore, market to cooperation strategies brings new broader both cooperation opportunities multiple growing content and our platforms

this Huya year hand, first we breakthrough the events which production, event other for more and by platforms. barriers. we as players a on preparation have to broken the marks them platforms At with platforms a signed events we have will in broadcasting platform, to these cross-platform participate some on invite industry. commercialization. in content and -- corporation cooperation activities also content live February to so It in is down are incorporating major in players broadcasting in S present, of Huya all-star multiple events The achieve new the hosted in-depth from cross-platform live broadcasters and also the professional eSports events one in game in eSports all-star industry number the On addition self-made

and for selection example, competition. upcoming teams will players retired Cup forming widespread For bring LOL the active outstanding players Legend in The e-sports the together from have of network Huya whole interest tournament has from operation. e-sports players platforms. legal which as Huya's pledges enthusiastic, production and brand in multiple this And as viewers been and very its response on strength influence demonstrates players well attracted

we of introduce At as are the various strengthening video further Tencent the Tencent a product Tencent groups. the larger Video, opportunities reach game also content Based with to reach for within addition, broadcast are our QQ in Group, and cooperation lines we broadcasters and on user we with high-quality In embracing so multiple experiences, resources field helping commercialization. delivering these such broadcasters short and into as ecosystem to same time, to products Huya Huya video. content obtain operational more our platforms, will the live

platform so hope hub that with live of limited to CPM ecology, to new network and a companies. in industry and terms the video revolution and cooperation strengthening ecological open by In broadcasters business platforms become the market. for model, larger the Under not we Life, promote wider platforms only on game a more participate also throughout to user the the a service users larger Huya will on group but we can in be more our also

conducive on loyalty they which enhancing more For exciting will activity. and content, is user users get to Huya, existing

platform in taking user our opportunity expand will efforts and Through also we are a our of revenue. technology product addition, capabilities upgrading, game sources create and wider Huya in advantage popularity differentiated games and the Huya's of live enjoy through on advantages their interaction capabilities. ecological experience broadcasters to AI have and In data

broadcasters cooperation help as attraction and diversified revenue cement with so channels game-related Huya more relationship broadcasters to innovative their Our will the community and expand game the broadcasters. of the services between to to also platform enhance and companies initiatives Huya

Hanyu Liu

today. joining again Thank you once for us

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

HUYA (HUYA) 13 May 242024 Q1 Earnings call transcript