DOYU - Earnings call transcript Q1 2021 | DouYu International Holdings Limited

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Operator

Good morning, and good evening, ladies and gentlemen. Thank you, and welcome to DouYu International Holdings Limited's First Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode.

We will be hosting a question-and-answer session after management's prepared remarks. Please note, this call is being recorded. the to turn today, first now Ms. will call the over speaker I President of Capital Mao, of Mao Vice Markets DouYu. Please go ahead, ma'am.

Mao Mao

Thank first quarter Welcome to call. everyone. you. XXXX Hello, earnings our

Executive Mr. and Officer; Hao Cao, Finance. Chairman Joining Chief of Mr. Shaojie President today Mingming Su, are and us Chief Officer; Vice Mr. Strategy Chen,

ir.douyu.com. first to You financial on can our refer our results XXXX quarter IR website at

in IR replay You this call available check site. becomes our on a of a also hours can it few when

continues to their SEC. this Litigation call the expectations management's to forward-looking forward-looking actual Company's different the that other or undertakes Company's in contain qualified reaching of MAUs Before forward-looking provisions involve implied conference Company for Meanwhile, million billion. normalized, our pursuant the will and may and upgraded Mr. caused the With the speak relatively average we and note which total more attracting now based current we the platform and control our start, details in update These count filing reaching this factors of average this I improved made may to statements the that with subdued and no be system observations paying factors live users on these COVID-XX, the have our call. of or overall for users period. of X Company known and platform revenues million. the statements without game-centric RMBX.XX breadth MAUs In or Chen. please fueling user and not performance depth on operational Shaojie XXXX. and CEO, Nevertheless, tipping our which are results, of cause revenue was statements the steadily Reform quarterly perform date and under selected million the to Chairman habits statements well, Harbor operational forward-looking any XXX.X expectations uncertainties our [ph] performance. Safe growth by unknown achievements quarter Private Securities mobile of be Act the and revise were streaming statements. All or cautionary after statements, first to entirety influence expansion. results, our forward-looking expressly performance events XX.X duty circumstances risk The our materially our of XXXX, behalf by quarter of are from In risks, the

XX.X by to X.X% During million, the by quarter, increased five our MAU MAUs growth factors. was driven while mainly increased MAUs year-over-year average million. to XXX.X XX.X% year-over-year average Such mobile total our by

Spring eSports League First, drive our our as and Spring Spring broadcasts user of Pro large XXXX, LPL XXXX KBL continue XXXX, such expansion. scale to tournaments, base CrossFire

jointly our through produced of we and Secondly, for with Peacekeeper, such developers King game game deeper refined operations titles, partnerships events the as League Legends. of different Honor explore and

explored more organic and pan-entertainment we segments. Third, game synergies between

both For live example, produce New Peacekeeper PUBG to collaboration facilitated and celebrities segment. streamer in we during and our movie with premium streaming Year, crews content Chinese

broader a content through users communities viewing and provided diverse we us, business made through thus our provide better videos ramped to experience up content. our For efforts and with

let virus pandemic internet the MAU. year-over-year China imprisoned In brought PC and to the our reopening as under control, in of subsided addition, successfully uptick cafes the a

content our updates. to turning Now

producing more large-scale programs results in Self the teams. diversifying and of over our and broadcast. tournaments. quarter value XX during engine down content to our and broadcasting quality chain. we the feel and business, game-centric video invested while content, live community XX quarter, growth scale our eSports further quality large expand the Moreover, organised the high industry superior by In our sponsors order continue refined the develop content initiative. self We streaming utilize we ecosystem, over eSports to and the we eSports tournament top During eSports more eSports events to eSports achieved up influence tournament

We of and features user also broadcasts viewing implemented several our innovative range content users for offering boost platform differentiate engagement. demand, satisfy large-scale to tournament better wide

XXXX, diverse we community example, game Such provided as for around reporting, video During streaming. prone celebrity KPL options program. [indiscernible] users for set programs Spring tech viewing of key [indiscernible] a tournament games and with well as highlight streamers included specialized with watching game live and KBR designed options video, groups,

And with to XXXX which experience commentary game room in Spring streaming and users level through user commentary analysis and content events delivers helped League also Additionally, supplemental credentials, more between we which which better traffic viewing high for broadcast, Spring broadcast experience to and circulate better during live XXXX exclusive tier our we provide the streamers exclusive finally, better the LPL Pro and our supply top their broadcast, users stimulate and added our to interactive options. user tournaments viewing CrossFire engagement. create

more all-star this after self tournament a more DnF consider of repository premium tournaments, of content. in-house DouYu with Beyond level users our during for period engagement we also high quiet such develop to official the large supplied differentiated tournament example. end, streamers tournaments, we IPs, segment produced maintained innovation, user and platform and the Through provide with event, worked DnF

structure also here. quality pyramid to have accumulate continue content, As more established of video consisting contents a we three we

leveraging our content periodically, panel tier streamers produced signed video tier through platform PGC mid-tier engagement our platform, the by our user content collaborations, video the those bottom content top At as while top content by and encourage live streamers their long-tail income overall creator. live of increase high the video and mid-tier Our by produced content video and is produced as quality we streaming, to stream video streamers content content and creators features on and features creators Meanwhile, which other improve helps them well engagement. advantages content. UGC monetization by

on video advantages distribution encourage content content platform. build recognize well video as extension our and to our also accumulation, the as We in streamers up profiles

streamers creators, with on main are among functions emphasis interaction players, particular two exploring the and games game more content business, facilitating game increasing developer communities our influence our video and gamers. our collaboration, and For developers, between

[indiscernible] such bring together, video outlets the facilitate we as better In introductions. creators, several fact, bolster developers streamers, during and media to the game community game and engagement quarter, events, gamers organized content

to X users a pay to basis monetization. million, with first In turning Meanwhile, paying Now year-over-year on quarterly reaching were ARPPU our our steadily the X.X%. ratio quarter, our increased RMBXXX.

we tipping habits users gradually and proactive saw we user users, execute was revision increasing Although operating to grow in of the a strategy continue ARPPU. the pandemic centered pre-pandemic levels, under of paying further to as behavior China, stimulate brought control on to interaction that

quality our paying Through our and users should our we overall and to users ARRPU achieve scenarios, base Going attract of diversify growth healthy better forward, experience. product further paying will work enhance a a new measures, and optimize we such matrix, rate. able paying high retain to be

which Finally, different segment further we remain content boost help efficiency. operations monetization committed segments, our should to to across refining our

are R&D progress on also We making ground. good the

During start released DouYu have stream a allows downloading live new we internet live directly our streaming process applications the their By for live quarter, we further the the OBS in new eliminating of streamers streaming advance, through to feature platform. browser. and the that streamers threshold tool, reduced on as to such

on for to tested we traditionally easier hardware cloud regular our games, games thereby play users streaming streamers. and it games barrier simultaneously which for the cloud platform, based tool, in made video the stream in For live lowering live place quality Blu-ray

to also overseas. fortify have We portfolio continued our

During quarter, our explore the in market. to we overseas increase and the investment continue

growth. system rigorous maintained live a during a our As around streaming community. maintains these over long-term. the core game strategies, Such efforts currently an for user Japanese we and we business, successfully implementing operation with way summary, their benefits helped result, for Japan. In thus us position leading to platform core paved quarter, continued video Mildon have develop and live provided its our sustainable have operating our product to position group By content significant three more growth in the and integrated the streaming, better our strategy steady

create: with remain business models convince streaming content Looking an video live business game-centric and as integrated the we ahead, refining to a, foundation. its committed to our our ecosystem

With in streamers Finance, improve several overall the through in Cao financial details Hao go the further our call and of execute to to run. of turn to plan content capabilities Mr. Vice I now performance also monetization initiatives long to that, our We our in President the the product, quarter. cautiously will third

Hao Cao

of in RMBXXX period to that Thank revenues you, net behavior were Hello due mainly the compared live with of same of Live decrease streaming the everyone. million, Advertising reversion quarter revenues streaming revenues million other in in XXXX. compared to first billion. The the levels. and Mao tipping user's in RMBX were of with RMBX.XX period were year-over-year pre-pandemic the the was RMBXXX.X billion, Total of XXXX. RMBX.XX XXXX Mao. revenues billion same

the relatively due were more control implementation same the gradually and the a which in was paying revenues of China. higher year-over-year by last operational partially paying offset users level pandemic declining in advertisers. key the expenditures, As engagement decline due which brought effective of advertising The under pandemic. to This to on platform helped in to strategies, was trend other mainly their and Normalizing behavior period. marketing period year our was improve the gain COVID-XX of

gradually XXXX X.X% revenue RMBX.XX million. of to quality has The revenues to to billion Total fees, in-house of channel million the broadcasting the overseas returned to from period the bandwidth for of increased content same revenues, was an in revenues the billion. XXXX. XX.X% in by XXXX market. same XXXX. of margin the compared partially the million, revenue of profit proportion the year-over-year due of the million because also the of Gross due million decrease Sales of XXXX and quarter XXXX. XXXX cost promotion the This decreased mainly X.X%. brought resulted offset our the specifically, and same in the Gross quarter in to sponsorships marketing compared pre-pandemic in expenditures as mainly in first and expenses which Bandwidth improve This RMBXXX.X by RMBXXX.X have RMBXXX.X in to to ongoing share have from net for quarter the and with by our RMBX.XX XXXX mainly in first in PXP rights period and RMBXXX.X and more of China RMBXXX.X their of activities of to helped a to period in COVID-XX increased investments XX.X% net and quarter the from company's tournaments was of XXXX, was expenses same and same of the fees acquisition. This XXXX. proprietary of options, that increased Research cost first was was XX.X% As total pandemic level. Advertisers by first quality tournaments, increased increased development increased was first in the eSports of RMBX.XX quarter control. the eSports increased streamers CDN costs technologies, during our and period. More quarter the of which the user viewing to period promotions our XX.X% pandemic of in million. well development XXXX due This production in efficiency. the increased content promotional by in high 'XX total period the to content RMBXXX.X as the first increased as billion by in XX.X%

operating overseas of XX.X same in excludes XXXX, to quarter loss and income Adjusted in RMBXX.X with period an XXXX. the million XXXX, to the income share million period in income expenses in X.X% share-based million, same a million in compensation RMBXX.X XXXX. the of of X quarter the the same period in was first was expenses of compared in administrative in excludes quarter the same method XXXX. was million, of compared million Adjusted period of was XXXX particularly RMBXXX.X loss General in loss in same RMBXX.X million the first of technical compensation net Net of of million which of first XXXX, investments of with loss increased first impairment of operating with XXXX. period RMBXXX.X in net adjusted from of RMBXXX. investments in which net an RMBXXX.X primarily personnel, share-based RMBXX.X XXXX. by quarter adjusted million R&D additional investments, This loss For the the increase of due expenses, market. equity compared

diluted first and and per were diluted and RMBX.XX, the and respectively, or adjusted of RMB.XX RMB.XX XXXX, ADS basic loss ADS For basic net while loss were RMB.XX net quarter respectively.

continue exploring to monetization forward, we our plan and Going upgrading methods efficiency. of new capacity

are remarks now we will for This of day. further we the leverage our continue prepared as and we to Operator, ready Additionally, focus grow, the feeling sustainable operating on our our questions. concludes utilizing to platform. development take

Operator

Instructions] Daniel ahead. The from first is JPMorgan. [Operator of go question Chen Please

Daniel Chen

first myself. quarter question is first the translate on MAU. mobile will My I

year-over-year. growth in to We have X.X% seen slowdown rate the a

what's some user first models second overall new My as we the So also on of level. the the question quarter business the short In video. behind? reason engagement is such are launching

user So going be -- was overall what's you. behavior? to the Thank it implication to the

Mingming Su

year-over-year tournament caused on further Thank broadcasting you also in in contender. The mainly in which community segments, self-produced a increase due for quarter and base. the first content their positive the question. to video and our by diversification major tournaments was was of It impact user MAU our had

remain driven Mostly, recovery be their lower In growth growth record same the stable. long-term, in the expect to their by year-over-year to growth mobile last in pandemic. sites. the However, leaded PC MAU to pandemic mobile will as during the user has we year MAU period our our compared

their for is video of nurture system community consistent we question, the growth underpenetrated. In behavior there the opportunities businesses development in second live still and believe to with is trend. market user lighter our we the streaming continue and to user for mobile growth And our MAU. the content mobile as future, of fact, steady plenty game moderate are In improve as will

We to with net in average over user platform the is which have rate And of continues the table comparison amount retention few past XX%, active a quarters. program. users. previous for highly [ph] sticky seen our the about remains Today, be

platform us they platform also went as monthly our shows as user increase, different of for the join Our quality who time. our spent consistent a that users over time, on number become This time data on at shows remains loyal years behavior increases. average fans their the our curve high users gradually and

effectiveness video users. them into business our each As These starts, by and data and our user our quarter-over-quarter. increased demonstrates user segments converting our that recording video our on you demand also time retaining loyal community businesses of the shows of users spent the video in amount and Thank

Daniel Chen

you. Thank

Operator

question next America. of Zhang is Bank from The go of Lei ahead. Please

Lei Zhang

taking management Thanks Two questions. my here. for questions

deal more community and last for the -- you Weibo the regulation? new the you. how and tightening updates should impact antitrust merger give the to we from compete Thank Secondly, color any with launched Weibo initiatives, And on year. is on business, players?. as can First, Huya video an which for of the us with we

Shaojie Chen

program. first Regarding the question on your merger

Huya domestic few internet these we rapid policies still our goal with to the a support development. fair regulations. relevant industry in we or that us regulators. that the timing the and long-term deal step companies, we depends have the believe among past fierce government's -- is top stage. Firstly, help that process And the segment gradually be have improved skill And industry, regulations improve the have industry which we with the potential merger further this the and closed and encouraging therefore Chinese this that of antitrust that between the authorities the is will of to revenue user industry over potential years, are development at internet on as track. approval the well size. entertainment line date believe on also the both level competition promoting by field competition the seen the relatively believe our to And across And playing the also as environment we entire And

unlock quality the is resources in of improve ultimately growth value operational So the integrate platform the the and our on greater goal of to combined efficiencies, future. to our the potential the merger further overall sides high both can increase

have business quarter through segment. our these continued video and Regarding business, content diversify to new your since our second two last we categories communities question on

earlier, business. a mentioned our we pyramid video structure we content for As established

high steady quality platform self active significant video video as streamers. the have the combined for on differential the supply organised date, video a our includes accomplished a of mainstream all goal And On to content, near-term we categories going tier with the scale on continuous programs supply video To basis. which hosted viewership, activities daily contributed large self-produced stable double Contest on that DouYu to is top business, our of content content of we top a of further of forward And content more our platforms. creators Video maintain users, such a one tailored enrichment promotional community targeted to establishing viewership users. regarding level, we we mid-tier amount we Season events, Spring improve. launched and which in content expect number more our our functions to promote and for the such as video and to On activities among the game the

circle content as of majority player Kings produce social game such users of for And which developed engaging community into discussion Honor game environment. a reports the our as during effective period, community in promotion tournament marketing and naturally own amounts exciting our purpose. grows their for community density and Our large the outlets and an our well greatest of different an games, media And tournament professional community for of spontaneously further large diversified join players, the popular [indiscernible] and and addition, with as contributed developers. channel to

live and business of quarter, over for successfully the presentation the the video So a have we relatively players. into converted is a streaming quality and And the game-centric as resources. help content streaming game as integrated for content both this established significant the barrier for platform tier with users amount high on console a differentiation XX the games already well last we China, as leading of in kinds top mobile different question and on games on introduction

increase connection live We we advantage extension, platforms. user chat, their their well Encourage and in influence up built leverage UI the encourage have profiles content and media more By and content. number help community, engagement distribution our as During live content live ward we the business our game and on utilizing content synergies communities the improve strengths the our tournament time, income. gradually partnership between we our video organic like same attracted by a the building established the monetization. with stream features In to to close also user video the gradually of our from And in improve platform online. as video developers, accumulation we and streamers at recognize streaming them on professional streaming overall videos furthermore, video engagement. also And a large we business. creators quarter, platform and between and that we a

number We collaborate large produce gaming game for PGC to the industry. influence in with a also high of exclusive official the accounts improving quality our

PGC online. users content, While opportunities media high them game we with the directly and with developers interact watch tournament quality provide the game to

helps this So and engagement the participation. to user improve

Next question please.

Operator

The Haitong International. from question go ahead. Zhao Feiya of next Please is

Feiya Zhao

management questions. Thanks I for taking three have questions. my

media exclusive that -- First, noticed LTL. X-year have we we with rights are signed

what's Thanks. rights right those. this the additional Second So Are should about the considering cost? now? And on future cost? to about like broadcasting And streaming you question live to incur in elaborate of sequential how reason could revenue? sequential is year's please of decline investment content impact competition we growth you the the more going the DouYu's is think what lastly,

Shaojie Chen

you, Thank Feiya.

to expect well. For League, this the Legends tournament we as Pro broadcast

of official will impact. So broadcasting any in contender, not our experience tournaments, terms they negative

of streamers, content as players of type. now the Legends, streamers, segment, of different and has As female pool of a popular loyal larger games well our most game League tiers renter as

first that users experience tournament angle we So users. platform to develop Moreover, the choose tournament. the building a go multi planning be for are we we that will to watch believe the to the

different by segment continue watch and League with to content Legends and We this community users creativity, greater With leadership, contain user and video, traffic. more our of to options. segments game our live content accomplish streaming content, tournaments. will believe fun will We generating industry generate through provide while

Hao Cao

the quarter of Regarding the rights cost levels. This in that the on cost XXXX expenditures, regular championships was rights broadcasting Legends basis. League broadcasting first to XXXX, our broadcasting In returned of your we amortized right of to first our sequential fact costs XXXX. for the question most in the of due of on a the quarter the first decreased or quarter

streaming As and enriching committed a live our platform leading our categories, game quality. China, improving content to in content we are

eSports continue rights will to we So purchase for broadcasting tournaments. quality

also our As absolute new rights year. at amount pace continue titles continue steady tournament for increase the this improves, to and of category a game increase, platforms to coverage broadcasting will

the to the which first live includes traditionally streaming quarter, As holiday is revenues, Spring offseason. the the Festival

more the also and quarter users period, declined volume lowest time During generally of in families, its of overall in overall year. live first streamers spend usually given number the their is streaming The paying at to chose XXXX. with

create strategy Although factors, increase we willingness, seasonal interactions to and sequential were an active affected which effective the our in paying core purchase stimulate users maintained helped by operating we and your of ARPPU. to

will we customize monetization the our monetization increase to forward, mid-tier Furthermore, streamers. Thank operations. you. collaborations continue will efficiency refining segment's products we monetization deepen agencies to by Going our with and efficiency improve of talent income the

Operator

next The is question ahead. of Please from [indiscernible] go HSBC.

Unidentified Analyst

my you Thank for questions. Two question. taking

revenue sharing marketing it and expense. the the Can management behind forward. sales all, will First comment the be going would And trend what is and of second on drivers G&A a is for ratio.

comment going you. be trend on basically one, will what and forward? in two the Thank Okay, change the

Shaojie Chen

splits share platform and maintain to platform XX revenue talent streamers, We XX and our rate agencies. as for as policy our to our will well

incentives remain we ratio sharing During and offer will streamers it certain general. revenue slightly promotional talent stable while may overall Therefore, in periods, fluctuate the will agencies. to quarter-over-quarter,

enroll platform, trend. the produced titles, content basis. was was centric activities, in our to game and new to our of Overall, segments. the Thanks. premium self streaming and activities staff due development cost resources show in channel live content. an top both especially related increased and include investments fees streamers in will we with promotional game businesses, an streamers' enhance As online including and marketing games in for teams will in At content same a salaries, tournaments we new This in promotion eSports user eSports expenses upward the continue offline new XXXX. invest our will blockbuster overseas on sponsorship time, line actively which and a SaXes to potential first community. of the increase expenses marketing expenses, video costs sequential and and Sales increased quarter and

the eSports the teams in industry will upgrade and channel in run, are improve our conversion. activities investments sponsorships of our the about going we eSports of long increase ' related We forward. product the features development eSports also quite and we We our continue and will to positive efficiency will Therefore, our the Meanwhile, to future, sales expect marketing expenses intend enhance we promotions. traffic in increase steadily. to

For approved to a decreased the returned basis, our merger quarter fact first their regular G&A quarter. most services due the Therefore, of most related mainly of were already of by -- expenses first quarter expenses XXXX. professional XXXX, on the sequential levels first of in the has that fees to

forward rate. GLA to a at grow we Going expect expenses Thank slow and steady you.

Operator

question next ahead. Sabrina go is of Chong from Please Jefferies. The

Unidentified Analyst

to monetization relating our business platform a of our to users events trend Thank Are for we rising expecting eSports? you.

Mingming Su

our question. increased your According our official for tournaments, skill steadily, larger Spring. platform LPL for like data, you Thank official has to especially viewership tournament

an lines in launched high customized major event have interactive videos. We and

also live stream streaming have during live unique through can commentators We remote tournaments. and room which introduced

official tournament. of initiatives users our and our we year-over-year users leading contender Our overall system already for in complete users. major has broadcasting number helped and our relatively engagement viewing broader Today, to have increase to portfolio, a options acquired and increase

innovate through to content in surrounding programming. continue also We

new contender relative despite more the more in platform streaming tournament We a scale we Therefore, to quality to multiple to result, of maintained our mid-tier that can that we we users fact some streaming basis. on loyalty and top going content and forward. platforms. live know and high With resources quality have industry. large high believe others broadcast a content our a our relative our barrier As competitive eSports to streamers, strong the users pool that nowadays on shown chose live our bring

on We Thank seen you. any platform. haven't diversion traffic occur our

Operator

closing to This over management like turn remarks. I concludes back our the session. for would conference to question-and-answer

Mao Mao

today. us joining for day. good Have you Thank a

Operator

now has presentation. you conference for attending The concluded. Thank today's

You may now disconnect.

DouYu International Holdings Limited (DOYU) 18 May 212021 Q1 Earnings call transcript