Q1 2021 HUYA Inc Earnings Call
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Hello, ladies and gentlemen, thank you for standing by for the first quarter 2021 earnings conference. Call for who. You think at this time, all participants are in listen-only mode. Today's conference call is being recorded. I will not turn the call over to Dana Chen. Company investor relations, please go ahead.
Well, I for one and welcome to the 2021 earnings conference. Call the company's financial and operational results were issued earlier today. And our price online is the number will be earnings. Press release by visiting our website. At us, a call will be available on the website of your life. Depends on today's call will be the services officer of Korea and moved to financial officers. Management will begin with their remarks and the car will conclude with the Q&A session. Before we continue, please note, that today's discussion will contain forward-looking statements made under the Safe Harbor. Provisions of the US Securities, litigation Reform, Act of 1995, forward-looking statements involving children. Raised the company's results may be materially different job.
I'm confused Express today, further information regarding views and off other channels included in the company's prospects and other public showing as well as the, um, the company does not assume any obligation to update any forward-looking statements, except as required under applicable laws. Please also note that we are Thursday and this conference call and call discussion have some updated. Get financial information as well. As another Vietnam. Financial measures. We have press release. Contains free cancellation of the. I know, they did not get measures to the most directly comparable, gaap measures.
I won't have time to call over to our CEO. Mr. Go ahead.
Hello. And thank you for joining us. Today we are pleased with continue the momentum. We saw across our business office. Do that first quarter which is on solid passes to begins and the new year, total net revenues for increased wage. I'm be two point. Six player is stating grows 80% despite the higher comparable Revenue associated with the pandemic law lockdown. In q1 2017. We continue to see new growth and Dead Leaves that our Relentless Relentless. Contents. English moment, and product Innovation, will drive the future closed.
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And the crisis more valuable for our users.
User close that. We enjoyed. During the pandemic lockdown, has persisted and we continue to both the bulb, use the community in q1 Mobile Mao, we are like seventy-five million off the same time, that's the Year Edition. The next month retention rate of our, we our life app, the main, the table over 70% in q1 mobile users have a Bean's tellers of our business and our primary focus in the Box, the quarter this year mobile users contributed to over 80% of Our Lives live streaming revenues.
And if they also get you close to eight 8:10 daily active users, we are Life. One mobile phone strategy has enabled us to become the industry leader and we plan to further emphasize and close this month you and say focusing on mobile users as our primary use metric.
We believe our investments in content and products will gradually payoff. Accumulate content has an engine driving us for what attracting new users and for selling more online. He's has used as a fact that form to be pro-active. A more comprehensive attractive and convenient into what we continue to lean for our product offerings and the Content Library with a number of successful initiatives.
Yue much, we launched the open platform for interactive features. Do offer more Innovative game play and I ask who's that. You'll need to can schedule and the viewers choice is helping developers, including dropping you to drop the food until bar close to both of you. Are you are leather interactive game super off when collector to join. Broadcasters gameplay, easy, one-click, human and typos and real-time Monday Thursday.
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We believe the new vehicles will not only extensive available position in the industry oil change. But also help save a new model for gaming operations and improve our capabilities in monetization diversity. And the first month, most of the step we cooperated with Peacekeeper, a light and in theater, sir, interactive gameplay features with it again, live streaming and our Peacekeeper a slight channel. For example, when again, for pastor Strikers are checking for the living room.
Will be, should I got to send to send out an award for the hours to claim? Such a new features has access to his keeper, a life to both new traffic and they retain existing users. And can I do for wider viewers? And the broadcasters with more friends and emotive? If parents are open platform for a job application. Developers also continued to expand into one by the end of you.
Sea. I will close to two hundred and ten to twelve, twelve and over 600,000. The broadcasters has a used C 12-month, quarter-over-quarter business, the daily active users. And Dale are cable, broadcasters both our who have used as a Thursday locations, from the open platform rule over 100 and and the Ford eight percent respectively.
In April, we stand licensed a appointment with tenting spot and lock the door. Seal brought the car off, right in China for legal, our Legends, for all legal legal, legal LVL, and the LTE bar weekend salaries, as well as related license. A price from 4,000. Same thing went to to Thursday 10:35 exclusive broadcasting life will enrich our content offerings and extensive, Our God, like never a she was hunting Sports, who explore opportunities.
When's that I will now turn the call.
Apple canceling, insights on the operating metrics and the financial details. Canceling, please go ahead. Thank you mr. And hello everyone. Following mr. Jones remarks, I will start from the updates on content, enrichment and diversification in q1, we broadcasted 92 third-party Esports tournaments among which the top tournaments included. LPL, spring PG is pubg game. You would seasonal s and kpl three total viewership for these tournaments reached around five hundred thirty-five million in q1. Representing a 31% year-over-year grows on the front of our self-produced to content. We organize the 36 Esports tournaments and Interfaith
And shows and generated a total viewership of $195 million representing 73% year-over-year growth recall. That in fact, last year, COVID-19 impacted the schedule of third-party is for tournaments and the hosting of our own online events. We're glad that tournaments and events are back, which is also reflected in the higher viewership, we asking for events.
I usually I'm not be the top-performing self-produced event into one that has leveraged the same hours of we are celebrity broadcasters to compete with professional Gamers. Additionally, we organize that the regional tournament for team site tactical losing gas community and help that the writing game accomplish another Signature Events on the entertainment shows a side note, I'm The Styling Xin. I I'm transport should turn down and fashion styling competition show and last winter I role playing detective, show off the leading examples of q1.
Moving on to our overseas business, the use of our overseas business was around 25 million in the first quarter slightly higher than the same period last year. Our strategy has be shifted to focus on regions and countries with higher monetization potential. And as a result, our overseas Revenue off most doubled year-over-year and our policy is lost. Also, narrowed down next, I will walk you through our financial highlights.
Thank you 1 hour to 2 9 Avenue School by 8% year-over-year to over our MB, 2.6 billion or live streaming revenues increased by 5% year-over-year close to R&B 2.4 billion in q1. The growth was primarily due to the increase Revenue paying user. The number of paying users. Do y'all live in q1, which the 5.9 million compared with 6.1 million for the same period last year? Mainly, because the user is spent more time for day, and I'm more willing to pay on our platform during the pandemic lockdown. Last year.
For tithing and other revenues increased by 55% year-over-year to close to RMB 230 million. In q1, primarily driven by Revenue, stream content licensing. A profit continue to improve things. You want our non-gaap gross profit increased by 8% to RMB 531 million. Non-cash, gross margin was 20.4%. Our non-gaap operating profit increased by 7% to RMB, 242 million thoughts on Camp. Operating margin was 9.3% our non-gaap net profit, increased by 1% to RMB 266 million.
And our non-gaap. Net margin was 10.2%.
Now, let me move on trial Financial details, not specified or growth rates are on year-over-year. Terms cost of revenues increased by 7.9% to RMB, 2.1 billion for q1. I'm really attributable to the increase in Revenue, sharing fees, and content costs, revenue-sharing feeds and Fountain cost increased by 14.1% to RMB. 1.7 billion for q1, primarily due to the increase in Revenue, sharing fee relation to hire live, streaming revenues and the increase in spending the esport conference.
And who's cost decreased by 24.4% to R&B 182 million 41, primarily due to improved Management in bandwidth and continue technology. Husband's efforts proof profit increased by 8.2%, to RMB, 540041000. Gross margin was 19.7% 421, research and development expenses increased by 27.6% to earn a $199 balance 41, mainly attributable to increase the Personnel related expenses,
South and marketing expenses increased by 35.7% to RMB, 145 million, 4 to 1, primarily attributable, to increase the marketing expenses month, to promote the companies content products, services and branding General, and administrative expenses decreased by 6.8% off the 84 million for q1. Let me do to lower share-based compensation expenses.
Operating income increased by Twenty 1.6% foreign be 162 million for q1. And operating margin was 6.2%. Off non-gaap operating income which exclude share-based compensation expenses increased by 6.7% to R&B $242 off coupon. And non-gaap operating margin was 1.3%. 421 income tax expenses increased by 4.9% to about 39 million, for q1 that income attributable. To think what you want increased by 8.4% to RMB 186,000. Let me
None.
Net income attributable to link for q1, which exclude share-based compensation expenses in all fair value, change of Investments and Equity, Investments, and Equity must teach partial disposal of his investment. Not of income tax has increased by 0.9% to RMB, 266 saluted, not income for a DS. Was R&B, 0.77 41, and non-gaap diluted net income or radius was 51.1 or if she wants
As of March, 31st 2021, the company had cash and cash equivalents short-term deposits and short-term Investments of our MB 10.7 month compared with R&B 10.5 billion as of December 31st 2020. The increase was primarily due to net cash provided by operating activities off of R&B $166 for q1 with that. I would now like to open the call to your questions.
Thank you as a reminder to ask a question. Please press star one on your telephone, wait for your name, to be announced to withdraw your question. Please. Press the pound key for the benefit of all four disciplines from today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English.
Your first question comes from the line of Legend from Bank of America Merrill Lynch reflection.
Hi. My name is. How are you? Sure can't wait for my own kids your brother. You go back and I have yet to find out more mention, of course, are that you could just bought a 2000 driver job.
Europe. Can you give us some updates real competitive landscape? Especially the conversation with very busy, which is a good thing. Actually, in recent culture change any color on the Pro Shop, our advertising and other revenue of what's the major driver here. Thank you.
All right, well, when I play that.
Money. It's a good Punky too dense. It depends. If you can take a while I am seeing that you can do. And this month to do, this would be sent me a month to month.
What? She sends an email. We must write soon then we have and he has
All right, I will transfer you to where Mister John regarding our first question for the industry. It's just natural for you to being a relatively higher. The other way across. As it's still in the world safe for them. Especially thinking about that in the old days, both j. O y, y or whole also enjoy a an outstanding you are closed as well. So often it's Financial thing to happen and from our internal perspective, we don't really feel pressured or threatened by the entrance of what we're gonna do the attitude and talking from the perspective of competition Landscapes, there's almost a month
Change computer from the situation in the last quarter and what we can do is to strengthen our own capabilities facing the current competitive landscape and we see more opportunities in the second half of this year. Cuz if you lose, if you look back at the past one, one and a half years, there weren't really many of the victims is like in the industry which is why we are more optimistic expecting more opportunities from the new game launches in the second half of this year and has been will procure. Next question, question of the fast growth of advertising and other Revenue. This is mainly driven driven by revenues from licensing of content birth.
I hope this answers your question.
And next.
Representative, the next question, from Vincent view of Needham & Company. Please ask your question.
Hi, Google home. Okay, so I'm going to report you to begin with I think we're taking my question. I have few questions about what these charges for international market for this year. How much tough one competition will be in this market wage?
Will be implemented in one and will we be up even on the Standalone basis and Twenty-One seconds is convention. Help us understand you on the strategy around $0.20 investment. Give me 1. So we focus on quite enlightened or east terminal for in-house development, complex and can we shift share the size of investment to be aware of the same question, is how we think about it this way for any truck struck by The Regulators can imagine share any process that we have our current month. So I think regarding the first question for the international business, we're still at the investment, the stage and we still expect, we probably will continue to invest in overseas business for the next couple of years. But the good news is that, you know, this year, our strategy has been dead.
Online, improve on one condition. So the first quarter, our overseas Revenue has doubled year-over-year and we also offer back to that the overseas business Revenue contribution will be increasing this year. At the same time, the loss of overseas business has also narrowed down most in terms of absolute dollar or as percentage of Revenue. We think in some country, we we will be able to make Break Even point. But overall, the overseas business is still going to be at the investment State this year. And then for the next question, I will speak to a mr. To answer this phone number
I'm not hear you $1. So you take
I thought you said for you, so, you know, just just, just have it off and it's a good name for today, Thursday, Thursday.
I I want to transfer me to someone regarding your question for the company, and we have already asked about the progress of birth calling Uncle being marginally still. And from what we can see right now, it is quite likely that in the first quarter this year, the deal will regain some sort of conclusion and see some problems in future engineer in the future. And given these circumstances, we think they might adjust the current strategy in terms of investment and
In terms of the Bowers Play Between the self-produced, the content and purchasing these third-party leads was tournaments, and do you think has been doing quite well, in terms of producing its own branded content? Whether in the form of a non-gaming or change the form of payment? For example, we just we have just recently closed, the receiver new series of options to Carnival and it has been off of Attraction among the amount, the internet users, which is why we will not only focus, purchasing the quality of life from the third parties, or we will also solidify our capabilities to produce our own branding, the content hub.
How much is the next question please? Your next question is from Jeffery dead dead behind her. She sent that particular question is I could buy some updates about to the corporation would take. The second one is on the list and getting and maintaining broadcast. Thank you.
Regarding to your first question this quarter, we have continued the collaboration with tencent, for example in March we also noticed that we had some problems or connected features to offer more Innovative. You know, just the first game that we have cooperated with them and then the results was in terms of increasing the user users and also offer the interactive features interaction interaction between the, the, the users, and then the platforms at the same time, you know, we continue to collaborate with tencent in various ways such as games and also some of the major tencent products as well.
We we expect the collaboration with tencent will continue to go on and in the future it will also bring us more users and also my transition opportunities.
Hello, I would like to make sure you get these have one size. Women, do the ticket to the to the whole 360 took off. You'll you'll holiday today
Money to take the, the ten-month-old made it. So I take your milk and milk.
And half after the question regarding the strategy first. I would like to strengthen that sucks. Yeah, it's actually, one is actually the platform in the game live streaming industry that has changed the vast majority of the same rights that is for the useless coordinates and for the professional regenerated. And we also have the Leading Edge Productions. Have abilities among the emails trip to use Amazon, currently homeless gaming, Place back to. We have to say that I don't see it. You opportunities will be there for the new games in the second half of this year that some of the new potential wage.
will be released that you were setting up the year and it's quite an
It's exactly. The by the users to be interactions and thinking about that has a natural along page and a strong possibility to prove me again, and operate. The new game live streaming sessions on our platform. We will say the opportunities are about the operator in the second half of this year. With my, we're going to invite some of our resources until the promotions of new beans and all the facts not seeing content looking at the data in the past, the grocery store, the number in content is actually higher than as well. Stay home and our hometown pool. For the next inning taxes are actually enjoying it Health Services well over the past few years.
For example traditional Sports is actually quite outstanding in the past and that makes just think whether we do need to talk unless the entertaining the third-party non-gaming content in future. That is also quite, that is also called potential for life. So bizarre, our content strategy for the rest of the year and we can take the next question.
Yes. So for the next question is from Richie fond of HSBC, ask your question 626 lockdown. I'm sorry. June 20th. I have a question that follow gave me those strategy. So how is the traction strategies? But any operating metrics update us, and, with more and more game video, username?
Okay, okay, paying Rachel and going forward if we assume game videos, users left hard core and hence the Ping ratio and apple will be lower. Thank you. Hey, can you suck you? Suck you suck, you suck.
Sometimes I will meet you.
And each of those all day long, I'm kind of Life. Yeah, we found out about this is Thursday.
I will transfer you for calling regarding a question for our video business. Our business office and running for orders already and it has already some new place in terms of how to develop the new strategy for the video business. As I said before, previously, we're having focusing only on demand videos to be involved with acquiring usage for the video business. That actually requires a longer time. I was thinking about the nature of who we are as of live streaming platform, they feel like the power to like rolling a training sessions, will be more natural forms working to engage in the video business.
Richard Sligh we have already passed. He does this new form of video business, the chorus win streaming business in the first, in the first quarter.
Ravine while to content categories of our gaming sectors and we have received a positive. See that letter from the data off of war from the figures of the industry level change? And in the second quarter we will extend the content category coverage from those ones with the inspectors to more than titles in the second quarter and we will leave with the receipt. Well, so far off, that will actually help us strengthen our attractiveness as the actually, a platform to attract advertisers. And that will also help to strengthen our monetization of the advertising business.
That's it. Thank you.
And we will take the final question from John who, uh tactical please ask your question.
Toon Zone, Catherine. I need to something else I can do for Life, Nathan speak of latent to be online. And also, once that gets started, what is the potential impact to our life? That's Jeannie business? Thank you. Well, I've done in a meeting time, sir. There's a woman to the finance associate so you can't able to log
It's a good team behind the liner and then take it to get women. Take to finish it off, just to get something we can I kind of knew what was happening. I can come in, they say they don't know how we can call you.
Thank you for legal, Legends, move over there. We actually started appointment for that. Took me from earlier this year and we have already twenty doubt, only potential professional leagues. And the block has seen is that we can get in Chrome and we also quite emphasized the communication with the relating to use. And we create the figures of the new game hopefully, and it's not likely that the legal items mobile version will be released in the second half of this year from our own perspective managing about personality. It is inconsistent quite favorable for us 8:50 and can be launched during the holiday season.
Thank you.
There are no further questions now, I'd like to turn the call back over to the company for closing remarks.
All right. Thank you all for joining our conference call today. If you have further questions, feel free to contact IRS and we look forward to speaking with you in the next. Thank you.
Thank you. This concludes this conference call. You may now disconnect your line. Thank you.
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