DOYU - Earnings call transcript Q2 2024 | 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 Second Quarter 2024 Earnings Conference Call. [Operator Instructions] I will now turn the call over to our first speaker today, Ms. Lingling Kong, IR Director at DouYu. Please go ahead, ma'am.

Lingling Kong

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

Committee. Su, us of Mr. Officer; are Interim Finance; Mingming today Mr. Chief Management from Hao President Ms. Ren, Strategy Simin Joining and Vice Cao, Vice President

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

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

same or may Private forward-looking the please harbor robust the management's Business statements that content that the game diverse Vice we to drive details update events to are forward-looking for deepened worked in may statements. All with Litigation the Cao, second made by we their streamers provision content not to ecosystem. premium The risks, to unknown to materially The our forward-looking start, cooperation focused this speak over conference statements note company known innovation results, performance, the the and of we partnership healthy, more involve undertakes initiatives risk results, our closely of the no revenue-generating time, a fostering contain assets our Before and current cautionary duty strategy Finance, Act actual in of more other call. I Management under content call to and discussion. In safe with from pursuant the the on are Interim game-centric expectations company explore implied or handed for sustainable forward-looking At or which and observations will scenario. Mainly will of on these revise of top-tier XXXX. undertook cause our be our streamers factors Securities models. or Reform in behalf statements, company's for any entirety and with Update. call developers the and company's under quarter, SEC. statements harnessing expressly several filing vibrant qualified different uncertainties expectations These date Mr. selected performance, the and on on financial Committee based by now be after then statements forward-looking achievements factors circumstances of this President of we Hao our control,

As optimized enriching content and our are structure, our is resonate revenue we with line. we service that preferences introducing game more user premium

content a year-over-year. of served All these consistently average ecosystem. In to second The refine XX.X% elevate initiatives of our short mobile quarter decrease was experience game-centric of our decline primarily from million, user XX.X were to platforms. and quarterly due XXXX, platform's the MAUs video competition

low-frequency Our user attrition with ongoing predominantly from stickiness. data hours indicated that and viewing users was low tracking short

on While activity viewing terms overall user and this shift stable our places hours short-term user remained of base, in has behavior pressure per levels.

in and drawing more are reengaging our a in fostering We commercialization wave, users rolling gaming by active vibrant across ones out segments. in game fresh programs ecosystem

the our last with and tournaments, KPL, engagement our Aligned alongside enhancing game monetization. During we Spring FIS-GO introduced ramped we refine on we driving large-scale tournament the of XX MSI LPL broadcasted and Split and among strategy Blast, official including the PEL quarter, the nearly spring developers event to campaigns ports, user on up collaboration quarter operation, game content centered gaming promotional with others.

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content, during quarter. the tournaments self-produced eSports self-produced we broadcasted our Regarding over XX

across with lively This tournaments and segments, Center engagement hosting streamers assets official off brought Glory to content to [ PEL for we and continued enlisting cross-platform including gaming streamer enjoyable call the preferences. with Pro content, sharing included Doratu tournament featuring face experience at more example, live teams KPL commentary ] Hub leveraging King elements collaborations, user popular an [ ]. If aligned We events. high-impact users our beyond look and collaborative craft Relevant This show entertainment professional streamer closely boost matches gaming unique captivating as diverse exploring we ] our and professional enhancement generating discussions. the League, [ enriched

targeted Cup Peacekeeper as we also Signature Elite Warren DouYu Cup for tailored including consecutive Hero events well which to the launched Horuna as different the held gaming series. fourth Mount Team-fight fight self-produced our Cup, We Season tactics, audience for have

including within initiatives, While engaging cup in Bliad our and users extensive strong programs gaming experience operations in-game managing large-scale content the robust the a [ edge orchestrating we and to streamer focused the events, base where commercialization segment, iron over dedicated gaming leveraged self-produced our on the ventures. In have also range wide we've year-round game's we user years a of momentum refining competitive network, We harnessing events. alike. substantial This this sparked domestic verticals nurtured unveiled streamers ] of among content by content, market operations. our we PGC and gaming return personalized the enthusiasm in

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into a life our new a user content This are but operations community cemented the As also of is appeal ecosystem. Streamers result, to enduring classic ecosystem. stickiness was to content platform, only engagement the success. innovative not campaign crucial our sustained approach games, across and raising our

streamer of efficiency various streamer launched recruitment While we initiatives. enhancing measurement, the

First, benefits. scope recruitment cover our and streaming eased segments, to entry all loads gaming stress we rights added additional widened and

platforms, by of game channels on activities reaching promotional multiple audience external Second, our conducting broader we recruitment enthusiasts. a diversified

Third, streaming streamer multiple duration as we accessing streaming incentives and efficiency. performance across improved metrics, by such

content a increased consistency. Overall, also to We tiered and line-up, enriched a top-tier by the incentive improving introduced streaming frequency depth mid-tier solid game-centric and increasing streamers, of content significantly streamers we laying refining of stream foundation our system our motivate our content and the ecosystem. streamers for long-tail

to monetization. on Moving

paying decline our scale strategic users back caused acquisition. promotional in The to second challenges was with million was a Our of prolonged paying in and macroeconomic decision ARPU focused activities and on total number of XXX. year-over-year paying quarter users the RMB initiatives X.X quarterly user by

we willingness to budget-friendly users habits. To This these data rewards reviewed to we focused on users' encouraged paying gamers macroeconomic products stay patterns spending to spending on platform addition our maintaining helped and long-term of sustained Our user that promotional of attracted, monitoring to and impact tied rarely instead revenue-generating higher overall The game among in introduced spending to spend, led maintain core priced total users ports. quarter-over-quarter number by our resulted more the promoting affordably address paid users. costs. the in products, traditional approach remained spending as initiatives stable the

quarterly it down while stable ARPU result, quarter-over-quarter. year-over-year, remained was a As

This crafted the and and We DouYu the rolled recently meet game was the League membership During beyond channels multiple deepen our of Wild participation and appeal needs our we ports across and in platform the attracted the exclusive Rift. Legends to out benefits, users. Harnessing we commercialization this platform program our discounts, DouYu's of of offering characteristics promoted quarter, continued game collaborations developers. to game-specific more port game of users. initiative with through

backed and game new boost seasonal already our promotional the or by ports rollout efficiency. collaborations, games experimenting we diversified have holiday For events with aligned strategies commercialization game commercialization with updates, been to

tailored advancing Moving forward, game partnership commercialization to promotions. have aim journeys. to developers, for ports we our and Moreover, diversifying with been collaboration different expanding broaden gaming more channels game game we avenues our

to promotions advertising while user revenue. our operations share game-centered integration QQ better popular decent of us mini in-game like to game Our refine with and and fit purchases enabled a earning interest platforms

the second mix. with streamer we stayed relevant steadily while diversifying since our content the momentum are and on management refined We engagement We course. growth user debut the in Mini quarter, revenue our pleased Games optimized platform. In have impressive the during of QQ revenue and summary,

growth. With Our the changing edge. diverse President the business, the and foundation ecosystem. Amidst that, game-centric our and through laying details confirmed effectiveness investing are the deepening call dynamics in quarter. macro that new market that our fostering ventures believe resource a We well allocation, positioned have over core of for stakeholders content of to company's we with industry long-term will Finance, competitive the our Cao, achievements healthy with our sustainable advance prospects, Mr. will Vice performance post growth turn adapt navigate steadily maximize by shifts, go operational strategy now to finger the DouYu's and in financial we solid on Hao to consistently collaborations a strategies our to the promising optimizing and I of short-term our challenges keep in

Hao Cao

Hello, everyone. Thank you, Lingling.

we increasing begun second diversification streams and Despite strengthening advance This cost on already outcomes. shareholder enhancing yield our focused quarter, new returns. revenue while control revenue efforts quarter's strategy our macro the environment, also tough development positive long-term to measures to have

at financial our performance quarter for more second look detail. the Let's in

RMB XXXX. RMB RMB quarter was in other in stream to the in by payments to in up, increased year-over-year voice-based such by fees of RMB encourage decrease users declined among X.XX X.X billion of revenues encouraging year. Meanwhile, in fees RMB XXX million sharing period the the reduction second to revenue XXX X.XX the period with improved in an with revenues cost to paying spending and primarily XXXX, decreased down XXX.X decreased exploration at a billion million period year-over-year XXXX. XXXX by in RMB of billion, up by XX.X% period quarterly sharing a to as XXXX costs X.X RMB were revenues live business, largely X.XX primarily Innovative in advertising and to decreased streaming of to was XX.X% Revenue increase in networking RMB These which primarily net new XXX copyrighted decline reduce revenue the X.XX in outpacing revenues our million million, cost from service. Cost to paying by in conditions, driven was which from in offset period and users. Consequently, peak macroeconomic partially users year-over-year in the million quarter innovative XX.X% of the costs of were X.XX in were largely us content as in the results. known were period consistent increase generated the cost impacted to related the RMB second primarily offered same compared are billion. XXXX. number businesses second reductions in Bandwidth management total the RMB in same RMB streamer XXX.X our Live promotional of bandwidth accelerated revenues was through increase RMB billion billion billion revenues, quarter revenues. the same second the of Our both came from and due compared RMB of paying gross in acquiring due by usage. Gross fees costs by revenue our reduction to which from reductions in same revenues, same from and by of XX.X primarily in the in quarter formerly aimed revenues period saw content. RMB of the decreased XX.X% the million innovative live significantly lower-priced decrease profit we XXXX. XXXX. Live XX% other decrease revenues of XX.X% quarter XXXX to profit streaming of due streaming advertising total XX.X% produced to last prompted from to same challenging RMB sharing due streaming products XXX.X revenue activities decreased our content The business. Furthermore, XX.X The same and social year-over-year existing second

XX.X decrease in decrease XX.X related in to compared quarter from RMB XXXX. second to by the result, million period was RMB RMB with second to and RMB administrative period quarter led mainly same of attributable to of a XXX.X XX.X% disproportionate in of period the in method declined XX.X RMB expenses. Research in RMB reduced same of XXXX. RMB decrease million of operations XXXX million development in to marketing in period million with and of share The XXXX. As was XXXX the XX expenses the Adjusted compared the the the our loss, million second XX.X income same million in to period quarter initiatives. Loss expenses. General XXXX XXXX same by a income period RMB to the loss attributable of XXXX XXXX and in XXXX net for XXXX. the of XX.X% X.X% the of from staff-related with second the RMB X.X% period compared Net The in investments million same a million increased RMB expenses XX.X in from staff-related loss XX.X% primarily in XX.X quarter million the XXXX. Sales was in increased were XX from in RMB equity was RMB margin was of same was of excludes quarter compression. Gross revenue the net the second and The primarily increase decrease in quarter by decrease quarter of of of million adjusted X.X margin was of XXXX. million of same with million net of in XX loss XXXX. second expenses second to expenses in investments, which due the X.X employee-streamlining of impairment compared

XXXX, diluted net per net were the second RMB of and per X.XX, both basic quarter while and ADS basic ADS adjusted were For both RMB loss diluted X.XX. loss

cash and company bank in noncurrent compared had deposits As RMB and equivalents, long-term June other short-term as of XX, with of billion XX, X.XX XXXX, billion December RMB and XXXX. cash of assets X.XX restricted the cash

to would we update XX like program to year, I our the returns. announced XXXX share Finally, you up commitment last At to on repurchase end shareholder our million. for of USD

repurchased program. million of June this USD ADS XXXX, under we had XX.X of an XX, As aggregate in

USD of we million declared Additionally, approximately July. early cash dividend XXX a special in

the and innovative performance. By Moving will changing new and our controls now business and pressures pathways forward, tighter for responding development amid remain environment, we and expense proactive concludes of questions. remarks financial initiatives cost our with our to Operator, consistently our the take create headwinds value diversification foster aim stakeholders. This short-term overcome our are macroeconomic we and to platform healthy to revenue for fundamentals, prepared exploring ready strengthening on long-term commercial today. we

Operator

today question Ritchie Sun [Operator with HSBC. Instructions] The first from comes

Ritchie Sun

current on as and you view as impact would the these the of Language] operations? macro [Foreign our changes impact in How does assess terms well How management challenges challenges and on the the fundamentals business financials?

Hao Cao

Branded, our viewing as in stability. decline the hours demonstrate our and quarter. platform. This stickiness MAU year-over-year sequential low intense we pressured services term for MAU of the content surge Nonetheless, short drawn the away headwinds. you At second and on challenges, short our to and short reflected base the particularly core the platforms competition, continued competition the Thank video gaming with question. games market from faced X market in has your users macroeconomic primary and user Heightened in

Our and year-along content thanks that key on viewing ecosystem. core metrics remained stable, strategic activity a to users' levels monitoring fostering long-term hours our like and focus game-centric our revealed analysis data

engaged, the efforts. innovation focused highly and thanks our market, variety significance advantages remains So and driving has loyal not only base particular which operational both cultivation stronghold fans. features verticals, segments, user game platform's users to gaming content the and niche console prioritize established of in but the stay wide-ranging diverse maximize To core ongoing also also content, competitive a optimization. is and gamers while Of a preferences catering our across mainstream in PC to of will our our we gaming it

different cycle to front, richer gaming Operationally, to core content content aim On a metrics. healthy will and stability in our of virtuous we variety to the build distinct a services we maintain offer the and continue content user ecosystem. between

services This actively in depending been financing including new promotions, advancing marketing partnerships assets We cater content prop and sharing content have content for innovative users through campaigns. co-creation, business engagement, our users also game and collaborations, only new to approach. also but game existing cross-platform not commercial draw offerings streamer

price-sensitive payment year, core boost users. revenue, have noticeably habits refined the budget-friendly live paying departure which phasing a generation revenue due to designed Starting revenue-oriented we users. challenge, traditional terms to to by to initiatives revenue our spend. last streaming further on our to headwinds led In our affected consumer rolled out paying reduced back of numbers, users. This year, willingness initiatives we and low we activities, some response, the resulting second in in support paying In of products macroeconomic ROI scaled primarily out of user decline strategy

preemptively remaining number over address paying we actively game range trend As quarters. To pressures the streaming their gamers stabilized, has and services. our live X a strides the mix, enhancing users needs gaming the substantial revenue our this have diversified our of revenue of platform's of in revenue, matured, of significant products. declining areas consistent high base past alignment to within and between the we commercialization has the Thanks services, game-related made

are to enhance our cycles. streams We resilience overall promoting actively economic committed diversified to revenue to business

new the platform's stability. control We you. our have for We growth opportunities operational alleviate the identify concentrate strengthening to dynamics and cost and proactively Operator, a operational financial by series believe to merits through our consolidating adjusting traditional to product revenue we strategies, expanding question. development can [ allocation ], and of implemented ensure our content second next models, continuous please, we macroeconomic Thank new have resources and areas long-term that optimizing and including creation engine. flexibility and of pressure. Initially, responded growth business on

Operator

The from Jefferies. Chong Thomas question of comes next

Unknown Analyst

investment on streamers So future? our stability streamer is competition based current and on the platform Language] how in large any resources [Foreign the on of environment,

Lingling Kong

Thank you for your question.

live streamer streaming for DouYu's the present, stable. top-tier streamers is overall ongoing. remain industry assets at in Competition So

develops, operations. to continuously our evolves industry we competition in advantages streamer top-tier for contracts, and user the streamer adapt address As and demand exclusive We the streamers. strategies training maintain

First, the experience substantial years given gaming in contract operation industry, content of accumulated within during period. a pool of streamers, our their many platform stabilities ensuring has our

enhanced efficiency We quality continuously operations. streamer and content refined also through

their end contracts. contracts, of negotiating operational the renewing costs nearing we streamers market operational and For before and assess actively signing selectively their efficiencies conditions, and strategies

game tailored emphasis to users, we streamer Second, grown has deep boost creating categories. on especially in a activities operations, we and evergreen users. community segment. base the these niche streamers greater and user been placed DouYu By refined marketing alongside streamers games and in interactions PC strong and game resources our of ecosystem enhanced characteristics increased content between and the improved segments, of stickiness both streamers'

category. In terms income diverse streamers of promotion sales potential solidified and further compensation, earning this game streamers of streamer game provide some on we provided props opportunities. more with and streamers opportunities in base to growth niche We besides resources the and resources top-tier the our and focused compensation, of stabilities with

With of more summer the resources recruitment. we season, arrival allocate to also streamer

which recruitment focused revised we Firstly, our game previously specific on model, categories.

to longer So That's streaming different with more experiment now we no and giving choose freedom restrict content. categories. streamers

mechanism, streaming By and support. we reward experience, we enhancing and to willingness go with earnings Second, increase income streamers resource live. improved the providing guaranteed aim streamers' to

platform the enthusiasts. the will for policies next quite continuously a series Through a path. development our was for recruitment more we streamers clear series our first growth to defined our initiatives result resources. The path attract positive refine we system, potential task we recruitment gaming Third, them identified and and streamer of streamer updated in using established tiered

our technologies continuously and to tools streaming experience. are better we user a provide streamers upgrading with support Additionally,

their live market analysis needs thus enabling strategies and to streamers their them and streaming qualities and optimize improving data understand trends, big streaming helped streamer accurately user Our system efficiency.

believe for chats. of leveraging streamer to images streaming production we content, convenient more live production streamers' streamer We operational editing based content industry. position resources in platform's bullet competition is also and content high-quality long continue support effective. In leading disseminations streamers efficiency maintain content our term that will enhanced adjusting more core game our intelligent that This content and We industry, and tools made producing continues. and Thank videos, the on you. by a resources offered strategies,

Operator

with Zhang Lei from America. of comes Bank question next The

Lei Zhang

you share how the of quarter decline Language] is the trend? mainly margin? second the we the margin year behind overall question [Foreign margin. at and margin driver My look regarding gross And year-on-year should gross Can full

Hao Cao

Thank question. you for your

streaming due year-over-year margin quarter's decline second live The in was decrease the gross revenue. to mainly in

with revenue decline healthy such Although year-over-year revenue business, as in have changes gross share the compensation streamers streaming streaming in for margin. revenue on the decline put fees did live base within not has the with costs live relatively a ratio live in live always and line copyright share fixed streaming constant revenue in remained streaming stayed range, our decrease costs revenue. Therefore, pressure in and

and payments, measures content While a uncertainties, series the optimize margin posed the revenue we operating a series have implemented costs while the XXXX. decline challenges face and been impact adjusting we overall on relatively by positive of gross the address measures of to streamers' for to of the has have limited. In undertaken structure macroeconomic in revenue

optimizing On cost the costs, and streamers' production copyright pressure through content, aim co-creation to cost of efficiency self-produced alleviate payments. increasing control we the enhancing side,

the organizational to On marketing and the control expenses. we strictly will side, strategies operational company's refine optimize expense to structure continue

is year. profitability Additionally, balances impact decrease cash second interest half of also following second the XXXX expected the which to of the in income decreased will distributions, due our half dividend to in

net it result, achieve to for breakeven a challenging us will As XXXX. level be for

operational our Looking to control Thank refine to gradually improve financial forward, we and you. structure, revenue efficiency costs continue the company's profile. will enhance

operator. please, question, Next

Operator

The Raphael next Chen comes question from BOCI. with

Yiqun Chen

this estimated usage balance [Foreign year of plans to by Language] you'd any us? and cash the Just with order the share end like pecking wondering cash

Hao Cao

Thank you question. for your

million million our in the normal share quarter. To to to development. large repurchase in cash of short-term aforementioned we at cash determination the we plan end equivalents, reasonable in company's had second long-term and cash special of XX and expenditures deposits efforts and commitment million X.X to X.X shareholder share shareholders ADS, second we quarter, from reflecting ADS large compared to aside cash the USD operations, end returns cash ensuring have billion. date, of repurchased of long-term to RMB quarter, repurchased returns, first X.XX a company's quarter, the cash business In our enhanced interest the cash the second USD for restricted been our increase expenditures, USD our the of in significant August. buyback This primarily dividend and a business shareholder million overall healthy including remains sufficient while and demonstrates and is the and provide a operations XXX balance development. Despite the support USD used As

will to market flexibly and continue to Thank businesses. to user monitor We invest question, also ecosystem are Operator, vibrant remain success. growth to strategies and company's and building fostering experience business not momentum community development ecosystem communities' committed in long-term funds trends, our our enhance and These development. Through ensure to service dynamics continue rapid businesses, our competitiveness, we adjusting related company's closely we but platform's a the next strengthened long-term effective and will healthy of a to use the control. Meanwhile, new and only please. our risk technological you. help continuous enduring innovation promoting sustainable the key and optimization, more our the and of thereby investments

Operator

comes with Citibank. question The Chan Nelson next from

Hillman Chan

if revenue translate Language] the growth? regarding share the game can the your latest expectation me cooperation and [Foreign with development developers myself. progress plan the Let question and Wondering management on

Lingling Kong

Nelson, question. thank you for your

in game including space. this gamers' influence collaborations substantial commercialization developers strategy we in So commercial with based streamers' demand, vast and diversification revenue recognizing our implemented opportunities on the on XXXX, a gaming

revenue prop have of business, delve have shared With game forms platform from boosted chain collaborations. quarter, We and into X our game game market within membership new props game sales currently contribute revenue membership innovative enriched avenues benefits frequency. this commercial of revenue-generating and content primary continue growth. categories, we established revenues value we game Within developers, to that the increasing covered by business to by game segment our enhancing last

the new segments, World membership of by and edition on distributing streams. both we Rift In in on services gamers' We additional real mid-July. limited promotions, live services attracted Legends new sessions current off expanding revenue these provided interest, our in terms launched props in League of benefits props attention game game and by based streaming and the into game and developers platform, theme. The game contributing platform promoted

the -- progression the of with of quickly cooperations, allows us to collaborative terms business developer model. this In game convenience the promotional expand our channels progress

only Although for revenue, potential for a the of game business. prop sales this and we proportion model see small currently this contributes strong very gamers' demand growth

quarter attractiveness. And average in X which features deepest a through to Elite is event Through as launched XXXX, is store marketing for we Peacekeeper developers, prop content through experience. prop our on first segments' live Moonlight advantages also that first during and of rich the enhancing of the generated and our diverse streaming And result, Peacekeeper gaming have props. plan level users' within sessions. Furthermore, efficiency our of segment-specific the initiate over developers, commercial and provide user enable orders optimizing leveraging Boutique boutique characteristic This days we X orders games of lead operational industry, in the content. we in game plans and has one consumption the cooperation game game-related users' of Top various our the For the example, GMV related offerings with the campaign, to million more during which the and prop updated launched game channel mall, initiatives users promotion in our expand games different based revenue innovative drive designed our customizing on business the game segments, user services. of DouYu's multi-platform activities, sales highlighting game share to These gamers the channels. In XXXX. other than game cooperation higher exclusive which forms segment, future, directly Blade, needs. cooperation place with product commercialization a our game Elite further enriched growth with to their are we to recent store purchasing exclusive more and in exposure

businesses commercial the innovative our collaborations and contributing to developers, revenue. are to also other progressing well addition In game with

it. We Yes, in expectation our of we net account XX% are growth other for which and maintaining our to year-over-year businesses, expect XXXX. that's I total for over revenue think advertising innovative revenue,

Operator

we for turn time will call any to questions management have over back closing the all for remarks. today. That's now I the

Lingling Kong

look our for quarter. forward next you with joining Thank to everyone We speaking call.

Operator

The for conference has now attending. concluded. Thank you

You may now disconnect.

DouYu International Holdings Limited (DOYU) 12 Sep 242024 Q2 Earnings call transcript