Q1 2025 HUYA Inc Earnings Call
Unknown Executive: and T-Median. This segment accounted for 24.6% of total net revenue. Up from 16.2% in the same period last year, we were also pleased to deliver a net profit this quarter. Meanwhile, we continue to strengthen our live streaming content ecosystem, deepen collaborations with game companies and content platforms, and explore the integration of AI capabilities in our eSports experiences, laying a solid foundation for future development.
<unk> accounted for 24, 6% of total net revenues.
Up from 16.
2% in the same period last year, we were also pleased to deliver.
Net profit for this quarter.
Meanwhile, we continue to strengthen our live streaming content ecosystem deepened collaborations with game companies and content platforms and explore Lee integration of AI capabilities in our esports experiences.
A solid foundation for future development.
Unknown Executive: Now, let me share the details of our recent business progress, starting with our business transformation. As I just mentioned, our game related services, advertising and other revenues, which are RMB three hundred seventy billion this quarter. is worth noting that revenues from game distribution and in-game item sales are primarily recognized on net basis after revenue sharing with game companies. As such, the total transaction value of our game-related services, mainly comprised of the gross receipts generated through our game distribution channel and the GMV for our in-game item sales is actually much higher than our reported revenue.
Now, let me share the details of our recent business progress.
Starting with our business transformation as I, just mentioned our game related services advertising and other revenues reached RMB 370 billion last quarter.
It's worth noting that revenues from game distribution and in game item sales up primary memory recognized on net basis. After a revenue sharing was again companies as such the total transaction value of our game related services, mainly comprised of the <unk>.
<unk> generated through our game distribution channel and the <unk> for our in game item sales is actually much higher than our reported revenue.
Unknown Executive: Let's begin with a closer look at our domestic game related services and advertising business. In terms of game distribution, we proactively deepen our engagement with existing game games, despite a quarter with few major new game launches. By working with game studios, refining operational strategy, and unlocking the consumption potential of high commercial value user groups that have naturally congregated within our game live streaming ecosystem, we achieve a solid and more balanced game distribution performance. Total gross receipts generated through HUYA's game distribution channel in the first quarter more than doubled year over year and increased sequentially. In particular, thanks to various game events during the Spring Festival, several titles including QQ Speed Mobile, Peacekeeper Elite, Delta Force, and League of Legends Mobile recorded significant increase in gross receipts through the HUYA channel, which is growing more than 50% compared to the fourth quarter of last year.
Let's begin with a closer look at our domestic gambling related services and advertising businesses.
In terms of game distribution.
Proactively deepen our engagement with existing game games, despite a quarter with few major new game launches by.
By working with game studios refining operational synergy and unlocking the consumption potential of high commercial value user groups that have naturally congregated within our game live streaming ecosystem will achieve.
Solid and more balanced game distribution performance.
Total gross receipts generated through who we ask game distribution channel in the first quarter more than doubled year over year and increased sequentially.
In particular, thanks to various game events during the spring festival several titles, including QQ speed Mobile Peacekeeper Elite Delta Force and league of legend mobile recorded significant increase in gross receipts store that we our channel.
With each growing more than 50% compared to the fourth quarter of last year.
Unknown Executive: Several games we distributed from new partners also performed well as we continue to collaborate with additional game companies. These results underscore our extensive capabilities in operations and game promotions. As we continue to expand our role as game distribution and promotion channel, we plan to deepen our exploration of distribution service, such as the inclusive distribution model to advance our progress. For in-game item sales, we are consistently expanding our in-game item SKU offering while enhancing our platform sales channel and purchasing experience. Leading to a record GMV for in-game item sales in the first quarter, as in-game item sales scale up, 75 events including popular competitions such as League of Legends, LPL, and Oh, sorry.
Several games.
<unk> distributed from New partners also performed well as we continue to collaborate with additional game companies.
These results underscore our extensive capabilities in operations and game promotions as we continue to expand our role as game distribution and promotion channel we plan to deepen our exploration of distribution service such as the corrosive distribution model.
Two advanced.
Our progress.
For in game item sales, we are consistently expanding our in game items SKU offerings.
We are enhancing our platform sales channel and purchasing experience.
Leading to a record <unk> for in game item sales in the first quarter as in game item sales scale up 75 events, including popular.
Competitions, such as league of Legends LPL and.
Speaker Change: Oh, sorry.
Unknown Executive: Okay. Yeah, so benefiting our broadcaster ecosystem was again, broadcaster generating more income from in-game item sales. In addition to live channels and more section, our community section has emerged as an access point for in-game item sales. In early April, we successfully showed an inclusive game skin for popular esports players from Unknown of Kings beyond the bars generated by the skin's initial release live streaming section. These players' continued engagement within the community led users to purchase the skins through this channel, making it the second largest scale channel for this skin on our platform, with the number of purchasers more than 60% higher than other similar inclusive skin activities.
Okay.
Speaker Change: They also benefiting our broadcast.
Speaker Change: Ecosystem was again broadcaster generating more income from.
Speaker Change: In game item sales in addition to live channels and more section our commune community section has emerged as an.
Speaker Change: <unk> access point for in game item sales.
Speaker Change: In early April we successfully showed an inclusive <unk> scanner for popular esports players from honour of Kings. The young the vast generated by the skins initial release lives Jim being section.
Prayers continue engagement, we're seeing the the community let users to purchase the scheme. So this channel, making it the second largest retail channel for <unk> on our platform with the number of purchaser more than 60% higher than other similar across a skin <unk>.
Speaker Change: Activities.
Unknown Executive: As users who are active in our community section tend to be more hardcore gamers. We believe that there is there is great potential within this section to expand our customer base for in-game item purchase and improve repeat purchase rate.
Speaker Change: As users who are active in our community section tend to be more hardcore gamers. We believe there is.
Speaker Change: There is great potential we're seeing the friction to expand our customer base for in game item purchase and improved repeat purchase rate.
Unknown Executive: On the advertising side, lower brand advertising revenue due to fewer tournaments and promotions, as well as the high base contributed by some large-scale new games in the first quarter of last year, caused our advertising revenue to decline year over year and quarter over quarter. On the other hand, at the end of last year, we upgraded the presentation format for live channels on the HUYA live apps, creating more efficient performance-based advertising scenarios to strengthen our advertising business. While maintaining a strong focus on our domestic market, we have begun to actively explore and enhance our game-related commercialization capabilities in overseas markets, particularly through our global mobile application service platform to better leverage the commercial value of our content and user traffic.
Speaker Change: On the advertising side lower brand advertising revenue due to fewer tournament and promotions as well as the high base contributed by some large scale new games in the first quarter of last year caused our advertising revenue to decline year over year.
And quarter over quarter.
Speaker Change: Only other hand at the end of last year, we upgraded the presentation format for large channels on that we allow apps for adding more efficient performance based advertising scenario to strengthen our advertising business.
Speaker Change: While maintaining a strong focus on our domestic market, we have begun to actively explore and enhance our game related commercial lasers.
Speaker Change: Capabilities in overseas market, particularly through our global mobile applications service platform through better leverage the commercial value of our content and user traffic.
Unknown Executive: In addition to our existing app promotion and live streaming service, we are developing diverse business models targeting overseas markets. including game distribution, in-game item sales, regional inclusive distribution, and game advertising services. We are strengthening our partnership with Chinese game companies that are expanding overseas, as well as local firms. As of the first quarter, we have partnered with multiple game companies to distribute. or sell in-game items for approximately 50 games including PUBG Mobile, Honor of Kings, Arena Breakout, Delta Force, and Devil May Cry. We have also launched operational activities tailored to each game's characteristic and key events, such as brand challenge feature and enhanced localized game promotion by collaborating with local broadcasters on our overseas game live streaming platform.
Speaker Change: In addition to our existing App promotion and live streaming services, we are developing diverse business models targeting overseas market.
Speaker Change: Including game distribution in game item sales regional across distribution and game advertising services.
Speaker Change: We are strengthening our partnership with Chinese companies are expanding overseas as well as local firms.
Speaker Change: As of the first two quarter, we have partnered with multiple game companies.
Speaker Change: Tribute.
Speaker Change: Our sales in game items for approximately 50 games, including <unk> mobile honour of Kings Arena breakout David have pause and Diebold may cry.
Speaker Change: We have also launched operational activities tailored to each guest characteristic and key events such as brand challenge feature and enhanced localized game promotion by collaborating with local broadcasters on our overseas game live streaming platform.
Unknown Executive: These initiatives are demonstrating Promising growth with our overseas game-related services, delivering a multi-fold sequential revenue growth in the first quarter, given current development and market trends, we are confident that they will continue to help expand our overseas user base and scale up our business.
Speaker Change: These initiatives.
Speaker Change: They are demonstrating.
Speaker Change: Promising growth with our overseas game related services delivering multi for sequential revenue growth in the first quarter given current development and market changes. We are confident that they will continue to help expand our overseas user base and scale up our business.
Unknown Executive: We believe Overseas Game Relatives Commercialization Initiative holds significant potential, making them a key growth engine for our company going forward.
Speaker Change: We believe the overseas game related commercialization initiative.
Speaker Change: Significant potential making them a key growth engine for our company going forward.
Unknown Executive: Next, our professional content enrichment effort. We continue to solidify our leading position in licensed esports tournaments in the first quarter. We broadcast approximately monthly. 75 events including popular competitions such as League of Legends LPL, First Stand Tournament, Honor of Kings KPL, Crossfire CFPL, Counter-Strike 2 EPL Season 21, Valorant VCT Bangkok Masters, and Peacekeeper Alice EPEL. These diverse line-up caters to the viewing needs of a wide range of esports in Suji, Asia. Our internal data indicates that HUYA's market share in esports broadcasting continues to improve this quarter, reinforcing our position as the top game live streaming platform for watching esports tournaments.
Speaker Change: Next our professional content enrichment efforts.
Speaker Change: We continued to solidify our leading position in license esports tournament in the first quarter, we broadcast a proxy monthly.
Speaker Change: 75 events, including popular competitions, such as league of Legends LPL first extend tournament honour of Kings Quay P. L plus buyers see FPL counterstrike choose EPL season, 'twenty, one better rent DCT Bangkok Masters.
Speaker Change: And peacekeeper elite <unk>.
Speaker Change: This diverse lineup caters to the viewing needs of a wide range of east path in <unk>.
Speaker Change: Our internal data indicates that we add market share in esports broadcasting continue to improve this quarter reinforcing our position at a top.
Speaker Change: Top game live streaming platform for watching esports tournament.
Unknown Executive: We are also consistently innovating diverse in-house produced content and broadcast approximately 25 self-organized esports tournaments and entertainment PGC shows this quarter. Our highly anticipated HUYA League of Legends, Legends Cup Season 3 commenced at the end of March and is still underway. Building on the success of the previous two editions, we upgraded this event with the establishment of dual competition zones in China and South Korea, enhancing the competitive pace and match excitement. The Legend Cup Season 3 has also partnered with the comprehensive international esports event serving as the Asia Championship League's LOL2 tournament, a key cooperation that underscores we are professional influence in esports.
Speaker Change: We are also consistently innovating divest in house produced content and broadcast proxy monthly 25 sales organized esports tournament.
Speaker Change: Entertainment Ggg's show this quarter.
Speaker Change: Our highly anticipated who we are league of legend legend pop Cedar spree commenced at the end of March and is still underway.
Speaker Change: Building on the success of the previous two Edison we upgraded.
Speaker Change: <unk> was 30.
Speaker Change: S.
Speaker Change: Tablet instrument of deal competition jobs in China.
Speaker Change: South Korea, enhancing the competitive pace and mesh excitement.
Speaker Change: The legend carbon steel industry has also partnered with comprehensive Internet International esports event severe.
Speaker Change: The Asia Championship leaks.
Speaker Change: <unk> a key corporation that underscores we have professional influenced in his part.
Unknown Executive: During the first quarter Lantern Festival, we launched our pig and chicken cage catcher swimming challenges developed in collaboration with a well-known television network. Through offline activities integrated with online interaction and a blend of scenes across agricultural products, folk traditions, shopping, and entertainment. This entertainment program attracted viewership comparable to some top-tier esports content. In addition, we introduced Competitive Truly End Singles Season, an esports music crossover program featuring professional singers and popular broadcasters, which received positive audience feedback and expanded our content reach.
Speaker Change: During the first quarter Lenten Festival were launched.
Speaker Change: Our peak and chicken.
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Julia: Julia challenges developed in collaboration with a well known television network.
Julia: So offline activities integrated with online into action and a brand of screens across agricultural products Bulks Gen transitions shopping entertainment based entertainment program attracted viewership are comparable to some top tier.
Julia: Esports content.
Julia: In addition to reduced compacting truly and distinguish children and is bought music cross over program featuring professional shingles, and popular broadcasters, which received positive audience feedback and expanded our content reach.
Unknown Executive: As we enter the second quarter, we kick off our self-organized Dota 2 tournament, the Immortal Cup, in early May. This event featuring top retired professional Dota 2 players has already attracted great attention. We will also introduce several large-scale events produced in-house in the coming months, including an offline esports music festival and a top-tier Valorant tournament.
Julia: As we entered the second quarter, we kick off our self organized Dota two tournament.
Julia: In model copper in early May.
Julia: Event, featuring top retire professional dota two players as well.
Julia: Already attracted great attention. We will also introduce several large scale events produced in house in the coming months, including an offline esports music festival and a top tier veteran tournament.
Unknown Executive: Tending to product upgrades and our AI plus live streaming strategy. We are exploring the integration of AI capabilities in our eSports experience. At the Legend Cup Season 3, we leverage end-to-end AI solution to transform the viewing experience and introduce HUYA, Hu Xiao Ai, a pioneering or scenario AI agent for esports viewing as a smart viewing companion for our users. Wu Xiao'ai X-strategy microscope in the pre-match team formatting phase analyzing team's champion pool capability with data-driven insights, which transforms team captains' decision-making from experience-based to visual strategy, simulation-based. During the match fan and pick phase, Wu Xiao'ai becomes a tactical prophet, generating real-time counter-strategy hit maps that offer viewers a deep dive into...
Julia: Turning to product upgrades.
Julia: And our AI product live streaming strategy, we are exploring the integration of AI capabilities in our <unk> <unk>.
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Julia: <unk> added legend carpets Cedar story, we leverage end to end AI solution to transform the viewing experience and introduce Korea push out.
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Julia: Analyzing tim's champing pool capability with data driven insights, which transforms team captains decision making from.
Julia: Peer experience base to visual strategy simulation base during the match Ven and peak faced Boucher eye becomes tactical profit generating real time counter strategy heat maps that offer viewers a deeper dive into.
Julia: Two.
Unknown Executive: Professional Players Tactical Decision In post-match analysis and engagement, Hu Xiao'ai acts as a professional esports coach, rapidly producing highlights reels and injecting humor into post-match analysis with meme-filled MVP reveals in elevating the entertainment value of esports content. Hu Xiao'ai can understand the game, raise esports dynamics, and provide live commentary throughout tournaments, engaging users with a viewing companion that is both tactical and entertaining. Our statistics show that as of early May, over 300,000 bullet chat were generated during the Legion Cup season three, with approximately 17% of them related to interactive discussions initiated by Wu Xiao'ai. This demonstrates a substantial, substantial leap in the viewing experience, with fans actively engaging with the content in a more immersive and interactive way.
Julia: Professional <unk> technical decision.
Julia: In post match analyses and engagement OCI.
Julia: Professional esports coach rapidly producing highlight reels and injecting Schumer, Inc. <unk> posted a matched analysis with MIM field MVP reveals in elevating the entertainment value of esports content.
Julia: Boucher I can understand again, grace esport dynamic and provide live incremental rates throughout <unk>.
Julia: Engaging users with a viewing companion that is both tactical and entertaining.
Julia: Our statistics show that.
Julia: Early may over 300000.
Julia: Alright, Chet were generated during the vision top students III with approximately 17% of them related to into active discussions initiative by OCI.
Julia: Demonstrate substantial substantial lift in the viewing experience was been actively engaging with the content in a more immersive and interactive way.
Unknown Executive: We are encouraged by this initial result and will continue to advance our AI driven initiatives under our AI plus live streaming strategy. By applying AI models throughout the entire cycle of live streaming content production, distribution and consumption, we aim to create long term value for HUYA in live streaming, esports and other areas.
Julia: We are in courage by these initial results and we'll continue to advance our AI driven initiatives under our AI plus live streaming strategy.
Julia: By applying AI models drill out the entire cycle of live streaming content production distribution and consumption.
Julia: We aim to create long term value for we are in large Jimmy esports and other areas.
Unknown Executive: In summary, We believe that our positive progress across various business segments in the first quarter has laid a solid foundation for our development throughout the year. We will continue to enhance and expand our game content and service platform and explore new commercial opportunities moving towards a more diversified and sustainable business model that delivers values to our users and stakeholders alike.
Julia: In summary.
Julia: We believe that our positive progress across various business segments in the first quarter has laid a solid foundation for our development.
Julia: That year.
Julia: We will continue to enhance and expand our game content and service platform and explore new commercial opportunities moving towards a more diversified and sustainable business model that deliver value to our users and stake holders alike with that.
Raymond Lei: With that, I will now turn the call over to our acting co-CEO and CFO, Raymond Lei. He will share more details on our results. Raymond, please go ahead. Thank you, Vincent, and hello everyone. I'll start with an overview of our financial performance. In the first quarter of this year, our total net revenues stabilized year-over-year after previous declines, driven by the year-over-year growth in gaming-related services, advertising, and other business. Notably, live streaming revenues saw a slight sequential increase this quarter, contributing to a marginal sequential improvement in our total net revenue. The number of paying users in the first quarter remained flat year-over-year, standing at 4.4 million.
Speaker Change: I will now turn the call over to our acting CEO and CFO Raymond day, he will share more.
Raymond Day: More details on our results Raymond Please go ahead. Thank.
Speaker Change: Thank you Vince and Hello, everyone.
Speaker Change: Start with an overview of our financial performance.
Speaker Change: In the first quarter of this year.
Speaker Change: Our total net revenues stabilized year over year after previous declines.
Speaker Change: To impact the year over year growth in gaming related services advertising and the other businesses.
Speaker Change: Thirdly live streaming revenues saw a slight sequential increase this quarter contributing to a master no sequential improvement in our total net revenues.
Speaker Change: The number of paying users in the first quarter remained flat year over year.
Speaker Change: <unk> added $4 4 million.
Unknown Executive: Executing those who made in-game purchases through our game distribution business, but didn't pay via our platform or related services.
Speaker Change: Recruiting post who maintain Kim petras through our game distribution business Didnt pay via our platform or related services.
Unknown Executive: on the cost side. We continued to optimize content costs, particularly those related to esports tournaments, but increased incentives for broadcasters to participate in live streaming and provide game-related services during the live streaming industry's off-season around Chinese New Year. resulting in a gross margin of 12.5% for the quarter. Furthermore, Despite a substantial decrease in interest income compared with the previous period. Primarily due to our dividend payments, we still achieved a positive net income for the quarter. with non-GAAP income of RMB24 million.
Speaker Change: On the cost side.
Speaker Change: Sure.
Speaker Change: We continued to optimize funding costs, particularly those related to esports tournaments, but the increased incentives for broadcasters to participate in live streaming and the proactive payment related services during the live streaming industries off season around Chinese new year.
Speaker Change: Resulting in a gross margin of 12, 5% for the quarter.
Speaker Change: Furthermore.
Speaker Change: Despite a substantial decrease in interest income compared with the previous periods.
Speaker Change: Primarily due to our dividend payments, we still achieved a positive net income for the quarter.
Speaker Change: With lung cap income of RMB $24 million.
Raymond Lei: Let's move on to more details of our Q1 financial results. Our total net revenues were RMB 1.51 billion for Q1 compared with RMB 1.5 billion for the same period last year. Live streaming revenues were RMB 1.14 billion for Q1 compared with RMB 1.26 billion for the same period last year, primarily due to the continued impact of the macroeconomic and the industry environment. Game-related services, advertising, and other revenues were RMB370 million for Q1, compared with RMB244 million for the same period last year. The increase was primarily due to higher revenues from game related services, which were mainly attributable to our deepened cooperation with Tencent and other game companies, partially offset by decreased spend or advertising revenues.
Speaker Change: Let's move on to more details of our Q1 financial results.
Speaker Change: Our total net revenues were RMB, one 1 billion for Q1 compared with RMB, one five opinion for the same period last year.
Speaker Change: Live streaming revenues were RMB, one <unk> billion for Q1, compared with RMB, One 2 billion for the same period last year.
Remember need due to the continued impact of the macroeconomic and industry environment.
Speaker Change: Payment related services advertising and <unk>.
Speaker Change: Other revenues were RMB 317 million for Q1, compared with RMB $244 million for the same period last year the.
Speaker Change: The increase was primarily due to higher revenues from gaming related services, which were mainly attributable to our deepen cooperation with Tencent and the other game companies.
Speaker Change: Actually offset by a decrease our advertising revenues.
Raymond Lei: Cost of revenues increased by 3% to RMB 1.32 billion for Q1, primarily due to increased revenue sharing fees and the content cost. Partially offset by decreased bandwidth and server custody fees. Revenue sharing fees and the content costs, a key component of a cost of revenues increased by 4% to RMB 1.17 billion for Q1, primarily due to increased broad Customers Related Costs partially offset by lower costs related to licensed eSports content and the in-house produced content. Gross profit was RMB188 million for Q1 compared with RMB221 million for the same period last year. Gross margin was 12.5% for Q1 compared with 14.7% for the same period last year, primarily attributable to increased revenue sharing fees and the content cost as a percentage of total net revenue.
Speaker Change: Cost of revenues increased by 3% to RMB 132 opinion for Q1, primarily due to increased revenue sharing fees and content costs.
Speaker Change: <unk> offset by decreased <unk> and the server custody fees.
Speaker Change: <unk> fees and the content cost a key component of our cost of revenues increased by 4% to RMB. One 7 billion for Q1, primarily due to increased product.
Speaker Change: <unk> related costs.
Speaker Change: Partially offset by lower costs related to licensed esports content and the in house produced content.
Speaker Change: Yes.
Speaker Change: Gross profit was RMB 188 million for Q1, compared with RMB 221 million for the same period last year.
Speaker Change: Gross margin was 12, 5% for Q1 compared with <unk>.
Speaker Change: 14, 7% for the same period last year, primarily attributable to increased revenue sharing fees and content costs.
Speaker Change: <unk> of the total net revenues.
Raymond Lei: Excluding share-based conversations is expensive. non-gap gross profit was RMB 192 million and the non-gap gross margin was 12.7% for Q1. Research and development expenses decreased by 4% year-over-year to RMB 130 million for Q1. Primarily due to decreased personal related expenses and share-based compensation expenses. Sales and marketing expenses decreased by 20% year-over-year to RMB61 million for Q1, primarily due to decreased marketing and promotion fees, as well as personal related expenses. General and administrative expenses increased by 2% year-over-year to RMB61 million for Q1. primarily due to higher share base compensation expenses. Other income was RMB 4 million for Q1 compared with RMB 12 million for the same period last year, primarily due to lower government subsidies.
Speaker Change: Excluding share based compensation expenses non.
Speaker Change: non-GAAP gross profit was RMB 192 million and non-GAAP gross margin was 12, 7% for Q1.
Speaker Change: Research and development expenses decreased by 4% year over year to RMB 130 million for Q1.
Speaker Change: Primarily due to decreased personnel related expenses and share based compensation expenses.
Speaker Change: Sales and marketing expenses decreased by 20% year over year to RMB 61 million for Q1.
Speaker Change: Primarily due to decreased marketing and promotion fees.
Speaker Change: Personnel related expenses.
Speaker Change: General and administrative expenses increased by 2% year over year to RMB 61 million for Q1.
Speaker Change: Primarily due to higher share based compensation expenses.
Speaker Change: Other income was RMB 4 million for Q1, compared with <unk> million for the same period last year.
Speaker Change: Primarily due to lower government subsidies.
Raymond Lei: That's the result. Operating loss was RMB 60 million for Q1, compared with a loss of RMB 39 million for the same period last year. Executing share-based compensation expenses and amortization of intangible assets from business acquisition. Long gap operating loss was RMB 36 million for Q1, compared with a loss of RMB 16 million for the same period last year. Long gap operating margin was negative 2.4% for Q1. Interest income was RMB65 million for Q1 compared with RMB170 million for the same period last year. primarily due to a lower time deposit balance, which was primarily attributable to the special cash dividend paid in May and October 2024.
Speaker Change: As a result.
Speaker Change: Operating loss was RMB 50 million for Q1, compared with a loss of RMB 39 million for the same period last year.
Speaker Change: Executing share based compensation expenses and amortization of intangible assets from business acquisitions.
Speaker Change: non-GAAP operating loss was <unk> <unk>.
<unk> million for Q1, compared with a loss of RMB 16 million for the same period last year non-GAAP operating margin was negative two 4% for Q1.
Speaker Change: Interest income was RMB 65 million for Q1, compared with RMB 117.
Speaker Change: 17 million for the same period last year.
Speaker Change: Primarily due to a lower time deposit balance, which was primarily attributable to the special cash dividend paid in May and October 2024.
Raymond Lei: Net income attributable to HUYA, Inc. was RMB 1 million for Q1, compared with RMB 71 million for the same period last year. Excluding share-based compensation expenses and the arbitration of intangible assets from business acquisition, net of income taxes. Long gap net income attributable to HUYA, Inc. was RMB 24 million for Q1, compared with RMB 92 million for the same period last year. Long gap net margin was 1.6% for Q1. Diluted net loss per ADS was approximately 0 RMB for Q1. Now get diluted net income per ADS was RMB 10 cents for Q1. As of March 31, 2025, the company had cash and cash equivalents, short-term deposit and the long-term deposit of RMB 6.25 billion compared with RMB 6.73 billion as of December 31, 2024.
Speaker Change: Net income attributable to <unk>, Inc.
Speaker Change: And <unk> 1 million for Q1, compared with RMB 71 million for same period last year.
Speaker Change: Excluding share based compensation expenses and the amortization of intangible assets.
Speaker Change: Business acquisition net of income taxes.
Speaker Change: non-GAAP net income attributable to <unk>, Inc. Was RMB 24 million for Q1, compared with RMB $92 million for the same period last year.
Speaker Change: GAAP net margin was one 6% for Q1.
Speaker Change: Diluted net loss per ads was approximately zero ambition for Q1, non-GAAP diluted net income per eds.
Speaker Change: The RMB 10 cents for Q1.
Speaker Change: Sure.
Speaker Change: As of March 31, 2025, the company had cash and cash equivalents short term deposit at the long term deposit.
Speaker Change: Be safe, two 5 billion compared with RMB 673 billion as of December 31.
Speaker Change: 1024.
Raymond Lei: Finally, let me provide an update on our shareholder returns. through our up to U.S. dollar 100 million share repurchase program. We had repurchased 21 million HUYA shares with a total aggregate consideration of US$69.8 million as of the end of March. 2025.
Speaker Change: Finally, let me provide an update on our shareholder returns.
Speaker Change: Our up to U S dollar 100 million share repurchase program.
Speaker Change: We had to repurchase 1 million shares with a total aggregate consideration of U S. Dollar.
Speaker Change: 69 eight.
Speaker Change: $8 million as of the end of March.
Raymond Lei: Looking ahead, we will remain, we will remain committed to reinforce our business and operational foundation. and returning value to our shareholders through dividends and share repatriation.
Speaker Change: Could you quantify.
Speaker Change: Looking ahead.
Speaker Change: We remain committed to reinforce our business and operational foundations.
Speaker Change: Returning value to our shareholders through dividends and share repurchase.
Unknown Executive: Mr. I'd like to open the call to your questions. Thank you, Raymond. And hello, everyone. If you are dialing in by phone, please press 5 to ask the question. Then press 6 to unmute yourself. If you are accessing the call from the Tencent meeting or Vogue meeting application, please click the Raise Hand button at the bottom left.
Speaker Change: Mr. <unk> I'd like to open the call to your questions.
Speaker Change: And Hello, everyone Youre dialing in by phone Please press <unk>.
Speaker Change: Fantastic.
Speaker Change: Now.
Speaker Change: Setting a compound that Tencent meeting, although meeting applications. Please click may 10 platinum.
Speaker Change: Bottom left.
Unknown Executive: For the benefit of all participants on today's call, if you wish to ask your question to the management in Chinese, please immediately repeat your question in English.
Speaker Change: The benefit for all participants on today's call.
Speaker Change: I wish to ask a question to the management in Chinese based immediately repeat your question in English.
nelson chong: Today's first question comes from Nelson Chong from Citibank. Nelson, your line is open. Please go ahead. Thank you, Mr. Huang, Mr. Lei, and Mr. Hanyu for accepting my question. Congratulations on your good results in EG2. As for the relative income in the game, after the relatively long-term growth of EG2, I wonder if the management can explain the current business progress and outlook in the game's relative income. So let me translate myself into English. Thanks management for taking my questions and congratulations. for HUYA with a solid quarter in first quarter and with a solid year-on-year growth for game.
Speaker Change: First question comes from Nelson Cheung from Citibank.
Speaker Change: Your line is open.
Speaker Change: Go ahead.
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Speaker Change: So let me translate myself into English first.
Speaker Change: Thanks for taking my questions and congratulations offered account with.
Speaker Change: It was a solid quarter in first quarter and with the solid year on year growth for game related revenues in the first quarter wondering if management can elaborate more on that.
Unknown Executive: Revenues in First Quarter, wondering if management could elaborate more on the business outlook and the prospects for this segment. Thank you. Thank you for your question.
Speaker Change: This outlook and the prospects for this segment. Thank you.
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Unknown Executive: Let me answer the first question. First of all, in the first quarter, HUYA's game-related services, ads, and other income is currently 3.7 billion yuan, which is 52.1% of the total growth. This growth is mainly due to the growth of game-related services. Some of this growth may be offset by the decline in brand advertising revenue. The decline in brand advertising revenue is mainly due to the relatively low number of tournaments and promotional activities during the Q1 this year, as well as the high-tech impact of the large game launch last year. It is worth noting that most of our game distribution and prop sales are confirmed by game manufacturers after the income is divided into layers.
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Unknown Executive: That is, the income is confirmed based on the amount. Therefore, the total business flow of our game-related services is much larger than our income. In the first quarter, HUYA's game-related services, advertising, and other revenues reached $370 million, representing a year-over-year increase of 52.1%. This growth was primarily driven by the increase in game-related services revenue. Partially offset by a year over year decline in brand advertising revenue. The decrease in brand advertising revenues was primarily due to fewer tournaments and promotional activities during Q1 this year. As well as the high base effect from major new game launches in the same period from last year.
Speaker Change: The shoulder.
Speaker Change: In the first quarter, who you ask scale related services advertising and other revenues reached $378 million, representing a year over year increase of 50 152, 1%. This growth was primarily driven by.
Speaker Change: The increase in gaming related services revenues.
Speaker Change: Really upset by a year over year decline in brand advertising revenues.
Speaker Change: The decrease in brand advertising revenues was primarily due to fewer Thailand and promotional activities. During Q1 this year.
Speaker Change: As far as the high base effect from major new game launches in the same period from last year.
Unknown Executive: It is worth noting that since our game distribution and in game item sales revenue is primarily recognized on a net basis after revenue sharing with game companies. The total transaction value of our game-related services is significantly higher than our reported revenue. Specifically, in terms of domestic game distribution, in this quarter, with the limited amount of new games on the market, we are also very active in deepening our existing game. Through the linkage with the game studio, as well as the detailed operation strategy, we continue to dig into the game live ecology, the natural gathering of games, and the high commercial value of the user group's consumption ability.
Speaker Change: It is worth noting that since our gas distribution and in game item sales revenue is primarily recognized on a net basis.
Speaker Change: Good afternoon sharing with game companies.
Speaker Change: The total transaction value.
Speaker Change: And related services is significantly higher than our reported revenue.
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Unknown Executive: The game distribution business is more stable and balanced. In the first quarter, the total flow of games distributed by HUYA has increased compared to the same period last year. And the return has increased. During the Spring Festival, with the help of game activities, QQ flying mobile game, Peace Elite, Triangle Action, League of Legends, and other mobile games, the distribution of many games on the HUYA platform has achieved a significant increase. And compared to the fourth quarter last year, the return has increased by more than 50%. In addition, we are also cooperating with more game companies to participate in the distribution of this part of the game and have also achieved a good growth pattern.
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Unknown Executive: These results show the depth and breadth of HUYA's operation and promotion in the game. At the same time, with HUYA as a stable game distribution and marketing channel, we plan to further strengthen our exploration of game agent-issued business, including the development of forms such as game-only. We also look forward to more new games on the market, and we hope that HUYA will catch up with these related companies. Specifically, in terms of domestic game distribution, despite limited major new game launches in the market this year, we proactively deepened our engagement with existing games. Through cooperations with GAM studios and refined operational strategies, we continued to unlock the consumption potential of high commercial value user groups that have naturally congregated within our GAM live streaming ecosystem.
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Speaker Change: Specifically in terms of scholastic and dislocation.
Speaker Change: Limited major new game launches in the market. This year, we proactively deepening our engagement with existing games.
Speaker Change: So corporations with Gan studios and refined operational strategies, we continued to unlock the consumption potential of high commercial value.
Speaker Change: That has naturally congregate it within our game live streaming ecosystem.
Unknown Executive: Forming a more stable and balanced foundation for our GAN distribution business. In the first quarter, the total gross revenue generated through HUYA's GAM distribution channel more than doubled year over year and increased quarter over quarter. In particular, thanks to various game events during the Spring Festival, several titles, including QQ Speed Mobile, Peacekeeper Elite, Delta Force, and League of Legends Mobile, recorded significant increases in gross revenue through the HUYA channel. with each growing more than 50% compared to the fourth quarter of last year. Additionally, gains from new partners that we collaborated with also performed well. These results underscore our extensive capabilities in operations and GAN promotion.
Speaker Change: For me, a more stable and balanced foundation for again distribution business.
Speaker Change: In the first quarter. The total gross revenue generated a scam tissue patient channel more than doubled.
Speaker Change: And increased quarter over quarter.
Speaker Change: In particular, thanks to various scan event during the spring festival several titles, including QQ speed mobile Peacekeeper Elite Delta Force and later fledging slowdown.
Speaker Change: Significant increases in gross revenue.
Speaker Change: With each growing more than 60% compared to the fourth quarter of last year.
Speaker Change: Additionally, cash from new partners that we collaborate at work also performed well.
Speaker Change: This results underscore our extensive capabilities and operations and promotion.
Unknown Executive: As we continue to solidify our position as a game distribution and marketing channel, we plan to enhance our exploration of game agency publishing, including exclusive distribution models to further expand our business. We also look forward to capturing opportunities as more new games launch in the market. In terms of product sales, we also continue to enrich the SKU in the category of products and optimize the experience of platform, sales channels and purchases We have also promoted the overall GMV of product sales in the first quarter and created a new high At the same time, with the increase in the size of product sales this is also a good way to counteract the ecosystem of anchors More game anchors have gained better commercial revenue through product sales In addition to the board in the live broadcast room and the board in the mall, the board in the community has also become one of the most effective ways for users to reach out and sell props.
Speaker Change: As we continue to solidify our position as a cam distribution and marketing channel.
Speaker Change: Plan to enhance our exploration of an agency publishing including exclusive distribution models.
Speaker Change: Expand our business.
Speaker Change: We also look forward to capturing opportunities as more new games to launch in the market.
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Unknown Executive: In early April, we successfully sold an exclusive skin of an e-sports player known as the Prince of Glory. Not only did we trigger users' attention by holding the first live skin show, but this player has also attracted a lot of users in the long-term effective operation of Huya Community. Through this channel, it has become the second largest channel for skin sales on our Huya platform. The number of people who bought it exceeded 60% or more of the previous exclusive skin sales activities. Since community users are interested in games, we believe this will also help us to expand our tool-purchasing user group, increase the re-purchasing rate, and stimulate greater potential.
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Unknown Executive: For in-game item sales, we are consistently expanding our in-game item SKU offerings while enhancing our platform's sales channels and also purchasing experiences, leading to a record high in GMB for in-game item sales in the first quarter. As in-game item sales scale up, they are also benefiting our streamer's ecosystem, with more game broadcasters generating better commercial income from in-game item sales. In addition to live channels and the mall session, our community section has emerged as an effective access point for in-game item sales. In early April, we successfully sold an exclusive game skin for renowned Honor of Kings esports player.
Speaker Change: For in game item sales.
Speaker Change: We are consistently expanding our in game item as ku offerings.
Speaker Change: Her thing our platforms shelf channels and also purchasing experiences.
Speaker Change: <unk> to a record high in Dnb for in game item sales in the first quarter.
Speaker Change: As in game item sales scale up they are also benefiting our streamers ecosystem with more ICANN broadcasters generating better commercial income from in game item itself.
Speaker Change: In addition to large channels and more session.
Speaker Change: We are a community section has emerged as and in fact as access point for in game item sales.
Speaker Change: In early April we successfully sold and exclusive scan scan <unk> honour of Kings esports player.
Unknown Executive: Beyond the buzz generated by the Skin's initial relief session, the player continued its effective engagement within the community. It has also attracted many users to purchase through this channel, making it the second largest sales channel for the Skin in our platform. with the number of purchases more than 60% higher than the previous similar exclusive skiing activity. As users who are active in our community section tend to be more hardcore gamers, we believe that there is great potential to expand our customer base for in-game item purchases and improve repeating purchase rates. Overseas, through our international mobile app service platform, we are also actively exploring and improving our commercialization ability in overseas games to better discover the commercial value of platform content and user traffic.
Speaker Change: Beyond the buzz generated by the schemes initial relief session. The player continued.
Speaker Change: It's effective engagement, we think the community. It has also attracted many years is to purchase through this channel.
Speaker Change: It's the second largest sales channel for the scheme in our platform.
Speaker Change: With the numbers purchases more than 60% higher than the previous similar exclusive scheme activities.
Speaker Change: As users who are accessing our community section tend to be more hardcore gamers. We believe there is great potential to expand our consumer base for in game item purchases and improve repeated purchase rate.
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Unknown Executive: In addition to the existing application marketing promotion and live streaming business in the overseas market, we are also trying to develop, including game distribution, game props sales, regional exclusivity and game advertising services, and many other business models. On the one hand, we are deepening our cooperation with domestic overseas game manufacturers and local game manufacturers. At the same time, we are also combining the characteristics of the game and its activity nodes to launch special operations. In addition, we are strengthening the local streamers of overseas live streaming platforms While maintaining a strong focus on our domestic market, we have begun to actively explore and enhance our game related commercialization capabilities in overseas markets.
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Speaker Change: Well, maintaining a strong focus on our domestic market, we have begun to actively explore and enhance our gan related commercialization capabilities in overseas market.
Unknown Executive: Particularly through our global mobile application services platform. to better leverage the commercial value of our content and user traffic. In addition to our existing app promotion and live streaming services in overseas markets, we are developing diverse business models, including game distribution, in-game item sales, regional exclusive distribution, and game advertising services. We're strengthening our partnerships with Chinese game companies that are expanding overseas, as well as local firms. At the same time, we've launched operational activities tailored to each game's characteristics and key events. Furthermore, we're enhancing localized game promotion by collaborating with local broadcasters on our overseas game live streaming platform.
Speaker Change: Particularly through our global mobile application services platform.
Speaker Change: Leverage the commercial value of our content and user traffic.
Speaker Change: In addition to our existing App promotion and live streaming services and overseas markets, we're developing diverse business models, including game distribution in game item sales regional exclusive distribution and can advertising services.
Speaker Change: We're strengthening our partnerships with Chinese game companies Paydown, expanding overseas as well as local firms.
Speaker Change: Some time with launched operational activities tailored to each skanska jurisdiction key events.
Speaker Change: Furthermore, we're enhancing localized and promotion by collaborating with local broadcasters on our overseas scan live streaming platform.
Unknown Executive: We have already started to develop these new businesses rapidly. In the first quarter, the revenue of overseas game-related services has increased several times compared to the fourth quarter. Based on the current business trajectory and market prospects, we are also very confident that by expanding the coverage of overseas users and the scale of business, the commercialization of overseas game-related business is also expected to become one of the important engines for the company's growth. These emerging initiatives are demonstrating promising growth with our overseas game-related services delivering multi-fold revenue growth in the first quarter. Given current business trajectory and market outlook, we are confident that by expanding our overseas user coverage and business scale, our overseas game related commercialization business has the potential to become one of the company's important growth engines.
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Speaker Change: These emerging initiatives, alright, demonstrating promising growth with our overseas game related services de levering.
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Speaker Change: Given current business trajectory and market outlook, we are confident that by expanding our overseas user coverage and business scale. Our overseas game related commercialization business has the potential to become one of the company's important growth engine.
Unknown Executive: Thank you.
Speaker Change: Thank you.
Ritchie Sun: And our next question comes from Ritchie Sun from HSBC. Hi, Ritchie. Please go ahead.
Speaker Change: Our next question.
Speaker Change: I'm from HSBC.
Speaker Change: Please go ahead.
Speaker Change: Yeah.
Unknown Executive: Thank you, management, for taking So I have two questions. So first of all, a commencement comment on the outlook, second quarter outlook, and four-year outlook for the revenue. And second of all is given the geopolitical tensions and there have been some risks around the same commencement comment on how do we plan to address this risk. Thank you for accepting my question. I have two questions. The first question is about the outlook for the second quarter and four-year revenue. The second question is how the management will look at the risk of retirement and how to reduce this risk or respond to this risk.
Speaker Change: Thank you management for taking my questions. So I have two questions. So first of all can management comment on the outlook second quarter and full year outlook for the revenue and second of all is given the geopolitical tensions and tapping some risk around.
Speaker Change: The listing can management comment on how do we plan to address this risk.
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Unknown Executive: Thank you, Ritchie.
Speaker Change: Seizure ratio, particularly I want you to now go into your FY <unk>.
Unknown Executive: I will answer these two questions. The first question is about the trend of subsequent income. The total income of HUYA in the first quarter is slightly increased by 15.1 billion yuan. The total income of game-related services, advertising and other businesses has increased by the same rate. This also reflects the stability of our strategic transformation and the executive power of the company.
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Unknown Executive: Thank you for your questions. With regard to the first question, in the first quarter, HUYA's total net revenue increased slightly, quarter over quarter, to approximately $1.51 billion. Thanks to the year-over-year growth in game-related services, advertising, and other businesses, our total net revenue has stabilized year-over-year after previous declines. This also reflects the steady progress of our strategic business transformation and the company's execution capability. According to the current situation, we expect that the total income is basically at the bottom. On the one hand, with the economic and industrial environment brought about by the same influence of the editor, it is continuously weakening, and we continue to optimize the live operation and strengthen the interaction function of users.
Speaker Change: Thank you for your questions with regard to the first question and the first quarter <unk> total net revenue increased slightly quarter over quarter two at crossing that one point.
Speaker Change: Five 1 billion.
Speaker Change: <unk> year over year growth in game related services advertising and other businesses.
Speaker Change: Total net revenue has stabilized and scale the year after a previous declines.
Speaker Change: This also reflects the steady progress of our strategic business transformation and the company's execution capabilities.
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Unknown Executive: The live income is expected to be stable.
Unknown Executive: 另外一方面,我们预计游戏相关服务,广告和其他收入今年还将实现同比比较快的增长。 On the other hand, we expect that game-related services, advertising and other income will achieve a relatively fast growth this year. 尤其是在国内游戏相关服务和广告业务继续增长的基础上,海外游戏商业化的提升,在未来也有望成为另外一个增长引擎。 Especially on the basis of the continued growth of domestic game-related services and advertising business, the increase in overseas game commercialization is also likely to become another growth engine in the future. 因此,基于目前的业务情况,我们预计今年Huya的总收入将会实现增长。 Therefore, based on the current business situation, we expect that HUYA's total revenue will grow this year. Based on what we are currently seeing, we expect that our total revenue has essentially bottomed out. On one hand, as the marginal year-over-year impact from economic and industry conditions weakens, and as we continue to optimize our live streaming operations and enhance our user interaction features.
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Speaker Change: Based on what we are currently seeing we expect that our total revenue have essentially bottomed out.
Speaker Change: One hand pressed the marginal year over year impact from economic and industry conditions weekend.
Speaker Change: And as we continue to optimize our live streaming operations and enhance our user interaction features.
Unknown Executive: live streaming revenues are expected to stabilize. On the other hand, we anticipate that game-related services, advertising, and other business revenues will achieve relatively fast year-over-year growth this year. particularly on the foundation of continued growth in domestic game-related services and advertising business. The enhancement of overseas game commercialization is also expected to become another future growth engine. Therefore, based on the current business situation, we expect HUYA's total revenue to achieve a growth this year.
Speaker Change: Live streaming revenues are expected to stabilize.
Speaker Change: And we anticipate that gambling related services advertising and other business revenues will achieve relatively fast year over year growth this year.
Speaker Change: Particularly on the foundation of continued growth in domestic game related services and advertising business. The enhancement of overseas scale commercialization is also expected to be common and not a future growth engine.
Speaker Change: And therefore based on the current business situation, we expect total revenue to achieve that growth this year.
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Unknown Executive: 关于公司如何看待潜在退市风险的问题,公司会持续关注在美上市法规及监管相关要求,致力于履行上市公司的责任和义务,面对不断变化的国际形势及全球经济态势,我们密切关注外部环境变化可能对资本市场带来的潜在影响。 如我们一直强调的,古牙一如既往地重视并致力于维护投资者的利益。如果有重大信息,公司将会严格按照相关要求及时进行公告,履行披露义务。 The company continuously monitors U.S. listing regulations and regulatory requirements and is committed to fulfilling the responsibilities and obligations of the public company. Facing the constantly changing international situation and global economic trends, we closely monitor potential impacts that changes in the external environment may have on capital markets. To the company's knowledge regarding the first of big listing risks for US-listed China-based companies recently reported by the media, the US government has not yet issued new formal regulations. We will continue to monitor this situation. Meanwhile, the company is also prudently assessing potential risks and actively exploring corresponding situation, including evaluating opportunities in other capital markets.
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Speaker Change: The company continuously monitors U S listing regulations and regulatory requirements.
Speaker Change: And is committed to fulfilling their responsibilities and obligations of a public company.
Speaker Change: Do you think the constantly changing international situation in global economic trends, we closely monitor potential impact that changes in the external environment, we have on capital markets.
Speaker Change: So the Companys knowledge regarding the <unk> data is thing risks for a U S listed China based companies recently reported by the media.
Speaker Change: The U S government has not yet issued new formal regulations.
Speaker Change: We will continue to monitor this situation.
Speaker Change: Meanwhile, the company is also prudently assessing potential risks and actively exploring corresponding situation, including evaluating opportunities in other capital market.
Unknown Executive: As we have always emphasized, HUYA consistently values and is committed to protecting investors' interests. If there is any material information, the company will make timely announcement in strict accordance with relevant requirements and fulfill its disclosure obligation.
Speaker Change: As we have always emphasized who we are consistently values and is committed to protecting and less interest.
Speaker Change: If there is any material information the company will make timely announcement in strict accordance with relevant requirements and fulfill its disclosure obligations.
Unknown Executive: Okay, thank you.
Speaker Change: Thank you.
Yanyan Xiao: Now we will take next question from Yanyan Xiao from CICC. Hi Yanyan, please go ahead. Okay, thank you, Guan Yucheng, for accepting my question. My question is, how do you see the future trend of the company's profit? and I will translate myself. And thanks management for taking my question. And my question is how should we estimate the company's future profit trend? Thanks.
Speaker Change: We will take next question from Jan shelf bounce the SEC Iam. Please go ahead.
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Speaker Change: And slide myself.
Speaker Change: Thanks management for taking my question and my question.
Speaker Change: How should we estimate the company's future profits.
Speaker Change: Thank you.
Unknown Executive: 谢谢Chloe,这个问题也由我来回答吧 Thank you, Chloe, I will answer this question 本季度公司继续优化赛事内容等成本,但为了激励春节淡季期间主播的开播及参与提供游戏相关服务,平台增加了对主播的激励措施。 此外,毛利率较高的品牌内广告收入,受到季节性较弱和去年高基数的影响,同比和缓比有所下降。因此本季度毛利率较去年同期略有下降,但较去年第四季度缓比有所增长,达12.5%。 Although the interest rate has dropped sharply due to the recession, we have still achieved a positive net profit this season. Runners-up to RMB 24,000,000 This quarter, we continue to optimize costs related to esports content. but increased incentives for broadcasters to encourage the streaming and participation in providing game-related services during the Spring Festival's quiet season. Additionally, we have higher margin brand advertising revenue decline both year-over-year and quarter-over-quarter due to seasonal weakness and the high base effect from last year. As a result, our growth margin this quarter decreased slightly compared to the same period last year, but increased quarter over quarter to 12.5%.
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Speaker Change: This quarter, we continue to optimize costs related to esports content.
Speaker Change: But the increased incentives for broadcasters to encourage the streaming and participation and providing related services. During the spring festival is quiet season.
Speaker Change: Additionally, we have higher margin brand advertising revenue decline.
Speaker Change: Over the year and quarter over quarter due to seasonal weakness and the high base effect from last year.
Speaker Change: As a result, our gross margin this quarter decreased slightly compared to the same period last year.
Speaker Change: Yeah, but increased quarter over quarter to 12, 5%.
Unknown Executive: Despite significantly lower interest income due to dividend payments, we still achieved a positive net income for the quarter with non-gap net income reaching 24 million.
Speaker Change: Despite significantly lower interest income due to dividend payments, we still achieved positive net income for the quarter.
Speaker Change: non-GAAP net income reaching $24 million.
Unknown Executive: In terms of future profit trends, our shareholder repayment measures will lead to a decrease in account cash flows. In addition to the decline in market interest rates, this year's interest rates, especially in the second half of the year, will be significantly lower than the same period in 2024. Therefore, this year's net profit performance will be more dependent on the company's improvement at the level of net profit. Regarding future profit trends, considering that our shareholder return measures will result in reduced cash surplus on our balance sheet, coupled with factors such as declining market interest rate. This year's interest rate income, especially in the second half of the year, will be significantly lower than the same period in 2024.
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Speaker Change: Regarding future profit trends.
Speaker Change: <unk> that our shareholder return measures resulted in reduced cash surplus on our balance sheet.
Speaker Change: Coupled with factors such as declining market interest rates.
Speaker Change: This year's interest income, especially in the second half of the year would be significantly lower than the same period in 2024.
Unknown Executive: Therefore, this year's bottom line performance will rely more on the improvements in the company's operational results.
Speaker Change: Therefore, this year's bottom line performance were relying more on the improvements in the company's operational results.
Unknown Executive: Specifically, we will gradually increase our investment in self-reliant content at the north-western end of the city. This will also be beneficial for the commercialization of game-related services and advertising, etc. At the same time, we expect that the cost of copyright will be improved in the future. Sponsored ADR Class A Specifically, on the cost and expenses side, we will moderately increase investment in self-produced content, which will also benefit the commercialization of development of game-related services, advertising and other business. At the same time, we expect further improvements in copyright content costs in the future. Profit performance will also be affected to some extent by changes in overall revenue scales and structure.
Speaker Change: Future lifetime sets in the field that will move we should do a child updates has enabled a total.
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Speaker Change: Specifically on the cost and expenses side, we will moderately increase investment and self produced content, which will also benefit the commercialization of development and related services advertising and other business.
Speaker Change: At the same time, we expect further improvements in copyright content costs in the future.
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Unknown Executive: Overall, we expect that the company's non-gap operating results will show notable improvement this year. Thank you.
Speaker Change: Although we expect the company's non-GAAP operating results will show notable improvement this year.
Speaker Change: Thank you.
Unknown Executive: That's all for our Q&A session today. Thank you, Wes, again, for joining us today. If you have further questions, please feel free to contact HUYA Investor Relations through the contact information provided on our website or PS&T Financial Communications.
Speaker Change: For our Q&A session today. Thank.
Speaker Change: Thank you Sofia and for joining us today.
Speaker Change: Further questions. Please feel free to contact Investor relations.
Speaker Change: Contact information provided on our last night <unk> financial Communications.
Unknown Executive: This concludes today's call, and we look forward to speaking to you again next quarter. Thank you.
Speaker Change: This concludes today's call and we look forward to speaking to you again next quarter. Thank you.