Dana Cheng IR Officer
Catherine Liu CFO
Rongjie Dong CEO & Director
Thomas Chong Jefferies
Lei Zhang Bank of America Merrill Lynch
Alex Liu China Renaissance Securities
Tian Hou T.H. Capital
Vincent Yu Needham & Company
Call transcript
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Hello, ladies and gentlemen, thank you for standing by for the Fourth Quarter and Full Year 2020 Earnings Conference Call for HUYA Inc. [Operator Instructions]. I'd now like to turn the call over to Ms. Dana Cheng, Company Investor Relations. Please go ahead.

Dana Cheng

to Call. Fourth welcome Year and and Conference Earnings everyone, Huya's Quarter XXXX Full Hello, financial operational company's posted The and online. and earlier are today results were issued

Chief IR press You call the hours. available website by the Participants also IR be ir.huya.com. earnings the the a with Rongjie of can a Huya; visiting will Catherine Liu, replay view call prepared with Officer and will the begin will and in website on of Executive will Financial Dong, be: Q&A Management Chief call on Mr. conclude at A release remarks, Officer. Ms. few session. today's

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

inherent involve statements uncertainties. and risks Forward-looking

different now Mr. GAAP and company's will unaudited will the over of unaudited views release filings assume information other company risks CFO, the Huya's results Rongjie the contains call I ahead. please measures. Further regarding the earnings in turn as filed under most remarks directly of Catherine, go materially that this included the to unaudited prepared other include Please read who GAAP discussions note a with prospectus and on our Catherine not Dong. comparable is Liu, to our behalf be unaudited measures. may as also the Huya's conference Ms. call CEO, except of forward-looking these from as as reconciliation financial well applicable the information financial to non-GAAP The press such, company's non-GAAP measures laws. required press U.S. does public and and today. any statements, update expressed any As SEC. release uncertainties obligation

Catherine Liu

today's for everyone, conference today. to participating behalf pleased Mr. Dong. am deliver remarks you, on of in call opening Thank I our

resilience Strong the and for the by note. quarter our growth our very revenues Huya to to and user of RMBXX year-over-year well. million compared and for in users further paid of XX% fourth XX% the of the quarter. to well to Live million app's by XX% MAUs marketing end. solid mobile us global enhanced first strengthen in for growth Meanwhile, businesses, of close and quarter. RMBX XX% in monetization mobile growth, user the the important was proves increased addition Live our and net engagement finish our to reached the as Notably, on The with We XXXX our move more to of in user the time. foundation content crossed XX% results grow focus results midst increased performance as streaming our e-sports XX% a believe a a pandemic revenue further mobile sets quarter. billion, the content. appeal than XXX.X of and million. quality Huya of the million financial strong Robust year-over-year our growth on MAUs Paying into strong Driven mobile XX% allocate mobile report reinvest across are we the Live as our future. live paying QX, XX.X in for Live mark the to higher average These year-over-year of fourth we a by continued and to milestone next via also quarter, X solid this operating around company devices strategy Total to underline continued represents users forward. We our fourth driven X revenues Mobile increased of users in contributed sound by rate Huya mobile fourth to XXXX business business to our to retention billion improvements while Achieving remained over our programs, such another growth at reinforcing our of fourth full to base. ability continue of a pleased our net us as Huya product year-over-year both month our metrics allowing resources buildup for quarter the endorse quarter validates year mobile especially by entertainment of tournaments leadership position activities. an library, execute capability

for quarter, their to smart platform, continuous fourth now around of our open for used minutes, assistance these officially thanks user In have year, streaming and tools indicating experience, users. last committed has our fourth per during we better experiences of Yowa, the XXX,XXX offering playing been over also more the around tools level sessions. higher XXX an to and end popularity. Yowa We third-party average we spent available By the Since to platform Most users. gaming quarter, game-centric, to have tools to XX to there developers gain our latency our have our the broadcasters technology reduce cloud daily of broadcasters reached are creating application deliver to time engage November in of industry-leading immersive continued across launched platform, advancements able user been engagement. have

better the core broadcasters to efforts gaming We Huya of functions users. in cloud our the with integration Live interact started streaming have for into also

popular platform, with the Tencent. Huya to not counted reported watched collaboration on our WeChat, was streaming with MAUs, XX Tencent's channels. In around from in Live's moving the Now WeGame, LoL remaining average and fourth which quarter, who Game Center are million, as content our most MAUs, games

Huya front, further to communities, influence. their On receive game collaborated increasing Tencent's broadcasters within the greater our exposure help with Tencent broadcaster has

base. broadcaster Voice game game. viewer streaming greater audience on of the community, broadcaster recently cooperated with the in-game to the Kings Huya's the celebrity release, X For a the studio fans the example, After expanding gained in within Honor million assessing broadcaster's over platform release the and potential Packet a

Administration with October last with made on in DouYu we in have merger Market regulatory in will China, we Regulation, for filings the the you our and process. SEC. have with some still State year, of I Declaration DouYu. merger potential the provide of we relevant Next, with And the announced voluntarily is ongoing relevant updates currently, Concentration submitted review the authority, Undertakings After

to growing remarks. breadth product will embrace As of invest technologies and we we This to ecosystem, base. extend our and diversity continue content our upgrades the XXXX, Mr. platform concludes better and serve in Dong's user

growth. we Electronics broadcasted Tournament, these with Sports LoL viewership updates XXX reached PCL and broadcasted Season quarter, Worlds Cup, diversification. enrichment Demacia In among Let's of third-party tournaments SXX, tournaments i.e. in Total start KPL the fourth the XXX Fall for included a content XX% top year-over-year and NEST. QX, which tournaments, e-sports on and National around and exclusively XXXX, representing million

self-produced self-produced the we tournaments and entertainment e-sports as generated content, in and far TMC SXX. long-standing year-over-year our shows organized competition growth. a time total content In viewership XX% The teams the SX, PUBG As event, e-sports commentary TMC and representing also XX and our X include joined fourth of top-performing Season there million, our LoL international the Worlds Huya XXX X, Hushuo Up! will improve are an program for Among global popularity, Season for our first ability the participation an a then stickiness X, to of Wake is to and themed Losers, organize events. competition further have auto-chess Huya, such gained on show; this testament quarter, the reality shows e-sports believe high-quality entertainment Voice to Kungfu of a The mixed talent shows martial PGC Huya success platform. continue Huya's we outdoor Carnival show; arts user this quarter and

was around overseas overseas business our of a The representing quarter, fourth XX increase. MAUs business. to year-over-year Turning the in million XX%

certain position our had successful market localized efforts. leading attempts monetization We also some countries achieved in and operational through

through total close revenues by to financial In RMBX billion. year-over-year to highlights. XX% Next, fourth I will quarter, walk you our grew our net the

user, which driven quarter advertisers. year-over-year XX% of paying Our number in primarily and have RMBX.X Advertising fourth live year-over-year. RMBXXX by million in increasing quarter. primarily per and the to increased The and paying users by XXXX, in number increase the revenue billion both to year-over-year was streaming the the revenues of revenues by of increased fourth other XX% due the growth of to increased expanded diversifying

cost Our profitability quarter, improve leverage in given to our continue bandwidth and have we efficiency. this the operational

compared improved XX.X% non-GAAP with last gross fourth year. the in margin quarter XX.X% Our to

margin X% our with X.X% non-GAAP compared margin in with X.X% XXXX XX.X% was and was QX Our compared net non-GAAP in operating QX XXXX.

Bandwidth name million continued Sales for million. XX% RMBXXX self-produced in management enhancement not XX.X% the million fourth million fourth XX.X% quarter, as HUYA in increased the million the change to quarter gain by fair income non-GAAP operating Diluted investments increased and equity RMBXX diluted content Now promote to and cost to If let cost by by million costs. improved non-GAAP brand and in move bandwidth Revenue which to to sharing the details. General year-over-year Inc. increase taxes, fourth quarter, X% XX.X% personnel-related RMBXXX investee's quarter. by QX, -- marketing specified, net to to million margin revenue fees live net and mainly the HUYA million growth for streaming partial quarter. quarter, expenses and me the fees for primarily equity sharing fourth XX.X% the its attributable efficiency. the fourth due QX. per Research increased share-based mainly to spending fourth fourth for increase the by attributable the to the share to content primarily efforts. increased improved value net attributable Inc. sharing to rates and RMBX.X well expenses management disposal RMBX operating quarter non-GAAP ADS to the Net income to development for income profit to revenue expenses. to to income primarily as was decreased quarter, to for increased by was company's in increased expenses fourth billion administrative expenses by in well the increased and margin compensation for higher increased the operating RMBXXX on XX% quarter, the Gross income, and in quarter, and to XX.X% RMBXXX revenues terms. content compensation fourth content fourth services on by by our by RMBXXX technology XX.X% are and on margin to due all investee's e-sports for by RMBXXX for increased of fourth RMBXXX attributable costs excludes personnel-related and investment, and ADS for for increase XX.X% creators. to in expenses, XX.X% marketing QX net increased as Operating fourth financial which attributable per for primarily quarter X.X% share-based quarter quarter. to on of due to income fourth to gross for to revenues the relation increased content, billion to the XX.X% as fees and Cost income the X.X% which for products, of expenses, million RMBX.XX RMBX.XX and increased investments of excludes expenses. increased and the decreased RMBXXX includes increased Non-GAAP for and increased

XX, in of decrease September XX, had cash for RMBXX.X November short-term December and RMBXXX in of and million Net to right use of of cash attributable RMBXX.X RMBXXX provided billion cash fourth Foshan company compared XXXX. the investments quarter. operating approximately was The City equivalents, primarily XXXX, as As million short-term was activities with the the XXXX. land acquisition deposits by billion

non-GAAP RMBXXX base, enhancement company's and the the of XX.X% increasing million net primarily results. products The other the by revenues spending user The by strengthened increase and was on was content, average increase due paying of in XX.X% users revenues paying overall and RMBXX.X diversifying Huya's Moving increased to XXXX, revenues by by Net revenue-sharing investments Net XXXX, XXXX, bandwidth content user expenses fees of name increased in increased in in primarily sharing in XXXX, XXX.X% by increased costs by expenses. Research and billion promote operating creators. the XXXX, XX.X% XX.X% services. offset income of XXXX to XX.X% and result fees to increased income number year as of to Inc. China's for attributable by driven XX% expenses and in mainly share-based administrative increase in million XXX.X% Inc. of driven on sharing name to streaming investment, non-GAAP billion investee's costs, to XXXX. in General to RMBX.X now in primarily RMBX.X in Revenue million increases its XXXX equity XXXX, increased to expenses the the number billion. to in Bandwidth excludes and billion XXXX of which advertiser mainly to company's million to paying by costs in the XX.X% increased income, XX.X% as fair net and spending XXXX Sales primarily questions. Operating was products, Gross compensation the XX.X% increased net by compensation Diluted Live in well to brand company's improved XX.X% costs full online to content increased due and primarily attributable call would XXXX. in RMBX.X X.X% Huya marketing our margin marketing management of Total per RMBXX.X the revenues operating provided in of an increased change average your growth. billion HUYA which by live increase on and RMBX.X per XXXX, to XXXX, primarily billion. profit like HUYA income by per in and user XXXX. increased revenues driven equity user the Non-GAAP increase increase value increase margin bandwidth larger investments revenue XXXX. XXXX, to Advertising RMBX.X attributable in to income brand higher in by increased and expenses, to RMBXXX personnel-related income RMBXXX recognition advertising technology to open attributable in full to the and to cash RMBXXX of by and by increased streaming in Live. increased increased XXXX RMBX.XX expenses to as to XXXX market. gain XX.X% in the increased and to and was personnel-related the million RMBXXX RMBXXX by paying in the margin mainly services net RMBX.X partial primarily operating base, in in increased to year diluted and enhancement enrichment users RMBX.XX share-based activities content, XXXX. to taxes, ADS attributable to to and by million costs XX.X% a excludes million increased XXXX and continuous due in personnel-related With operating I billion gross then and partially expenses, in bandwidth investee's by usage in as RMBXXX spending income development X.X% relation net fees by in costs. per content to the e-sports self-produced efforts. to primarily in the to by and and ADS XX.X% in attributable in billion as Cost increased content increase well due the of non-GAAP expenses. to that, was personnel-related disposal expenses. to


Instructions]. [Operator

Jefferies. from Thomas comes question from Chong Your first

Thomas Chong

management year? the about the My the about about for think how the also other question game management On should revenue can user hand, our comment this gaming trend growth comment is XXXX long we and segments? outlook. strategies our about for the and Can

Rongjie Dong

Regarding Mr. strategic has focus. your question, Dong the first answered

So focus. for year XXXX, we business some on have the the strategic several actually side,

on is so that the focus launch opportunity strengthen advantage. to on strategically shows will some competitive see that on by the meanwhile, this to new on a enriched provide and so that we try put also provided the earlier diverse the live e-sports the self-produced and games self-produced Meanwhile, potential blowback platform. will can tournaments we can e-sports with tournament licensing to Firstly, enjoy better e-sports tournament viewers PGC we way that streaming content a content users our the library. the business, And efforts to will our line just year potential we

In for next, business, our the ambitions talk streaming addition video I about to live the will business.

promising a business potentially we that actually the have quarters, previously have And monetize. past we users a to the relatively in is routine out those actually experience for actually of viewing video have is already results year-over-year actually, seen long we the manage some put a XX% to time on now. the of And part do the that communicated, for shop the growth video us as users. viewership is few the business provided video business business endeavor longer the right to requires through on on-demand As video get business for

business Going try other to forward, together business. we strategic And streaming better we is the and would effects. advantage our like tried that video actually community. the it's the to sectors about have we'll already the with for And good making talk on, game them some live will on-demand I business. business the we Meanwhile, of which maintain integrate will next, actually focus put

and services can On side, that the game-related to to gaming so side, to all game knowhow, all, shopping on what All integrate the in one-stop users are plan that knowledge platform, similar we do have game-related information those we integrate the actually community of -- past. experiences. to viewers the used kind our in

We market. continue share the and next market. those on I And domestic as to new genres said traditional outdoor, content and on users ACG common on the market, and sports some acquire about from will strengthen enough our color having will the focus the genres quality strategic such overseas the try

for focus countries and try -- each making. those the are which downsize we to are on that in of business the operate who in to the point actually we this position to only on leading construct but we comprehensive Meanwhile, NIMO a For countries our TV, existing the try what will strengthen year, in ecosystem. loss breakeven not will countries the focus is also

we in countries. Asian strengthen So Middle Southeastern leading and countries some with East position that just being our will said,

Catherine TV. other will our questions, the course. leader's outlook of these So for take are And NIMO

Catherine Liu

Thomas. you, Thank

remarks Mr. XXXX, users and increase the our with to revenues will this the strategies growth think Dong's I we in year. continue on believe

terms is Mr. game our course, important non-game content, our Dong as of non-game In on just still monetization. obviously, content game strategies, versus but part is also of for focus mentioned, an

those more to in will monetization. them of new scale, for to to we in to for game more categories, large So cultivate your categories Hope grow invest content to future also categories. the a from us content invest continue try some this will certain potentially answers invest grow users users of questions. in non-game course, if But we also us to those content help improve non-game see and we the we will for the content content in and


from comes Merrill question Next Lei of Lynch. from America Zhang Bank

Lei Zhang

questions here. Two

First is, especially since some mentioned can you content more you can in the game-streaming give in us content, your in us you e-sports in outlook is, space? on your competitive investments on give investment plan XXXX? related Second weekly color landscape so XXXX,

Rongjie Dong

right. All

VTubers like streaming benefit As last end, users video business live to your translation, with we the streaming platforms, and users, to period those to a an that would competitive like entrants and say. is live landscape the what we Kuaishou, come converting broadcasters for for the But say regarding dropped conversion in new the their and by streaming video Bilibili respectively. would especially been have live I existing to question, those already video has those platforms doing

to platforms, superior construct platforms, acquisition those streaming compared quality our say. business. would the position those are monetization I broadcasters and with games, are areas an to the the we Those And for broadcasters, will and capabilities. especially into we I industrial on all forward calculate quality at for a content DouYu would we better enter video to [ph] the video of and we try are the leading especially, the believe Going live pool quality say period, have

really will think live much. questions. hasn't we the the your for landscape And basically, changed Catherine take business streaming competitive So other

Catherine Liu

Lei. you, Thank

investments, focus the one factor of year, obviously, content, is terms e-sports In we this on still will as, game content the such tournament. important

And further. the have We self-made will much content e-sports all users also the are comprehensive -- increase most going to pretty grow we tournament. pretty much and important to our help of

a And this monetization growth video, we future for not only in be to investments way that of opportunity video future. terms business, video In additional a add it user answers will if the successful plan growth. we the also we question. this your year, pave game could can for believe this have do Hope user future into but


from Alex China Our next Liu comes question from Renaissance.

Alex Liu

of And introduced this not the there management further management think is share the on some we from how users? remarks, about grow really the In group the that MAU. and monetization monetization the a users? color of our how now, potential users of prepared property to come reported that right these should group in is Tencent for sizable this map road and Could group

Rongjie Dong

All right.

have for holidays. rights a signed side summer those contributed with first League relatively quarter, the MAUs, MAUs QX, the school ours. Tencent content wins in the and is In of Professional include we festival, League [indiscernible] I actually almost in WeGame, Tencent is the as of the translation, the Cross Pro just short. not external connected festival. a League school platform collaborated Tencent of agreement of with Tencent, have compared teams, about across collaboration is spring brought year, licensing -- which during the and [indiscernible] ongoing the As holidays Tencent updates game includes via Tencent. Currently, of to live we XX quarterly with By with streaming the WeChat have this with of League, with LPL the traffic terms also Fire gaming of center. in year-end during QX PG That products. wins that gaming of products we live terms will lower the some Tencent broadcasting on and spring provide And them QQ XX mobile have X-year Legends earlier million XXXX, games Sports Legends we actually of reported And actually by mini external program, contained we leading streaming still the collaboration collaborated around

Sports monetize Specifically more stated of in the in to opportunities tournaments. terms agreement, with PG we discussed e-sports better actually exploring the have

actually lot engaged better is experience we're for to e-sports arm to as tournament major provide be users why but Tencent are monetization, can little contributed which tournaments engine And to in is days, users, with more traffic e-sports it's old the trying serving work take opportunities of Sports, on a to Tencent, monetization PG e-sports side. to the in terms the As a of with Tencent can their recommendations users, provide with user bridge cross-functional precise improved. to them better to their targeting work of cross-platform just for so those through that or account that we integrate i.e., users at trying on Huya we so experience personalized


Our Tian next Hou T.H. Capital. question from from comes

Tian Hou


So whatever two, for the and two XXXX? one. and is us to us over Tencent possible and user questions. vendors One area is and pretty is, further In Huya our past grew users games its I grow Huya base many growth industry domestically which feel user the rapidly, bring further from from young. in major base? brought peak to internationally still That's other the user number like in last like somehow, the relatively as going games for broadcasting still to Number growth for invest -- however, the the already the paying years, and higher game that

Rongjie Dong

All right.

market, in we're actually performing question there -- specifically the especially in the not, games in future translation, to the broadcast on a are domestic back us your regions. the As because terms first whether regarding games currently Tencent to for it's is Tencent, of

activities our overseas it speaking a the investments this situation year, market. start will of result with current I of the of in of market. So And purpose the more for the rather the is industry than

like because we would we for our day earlier, actually is on always genres, point. hope As now. build can overseas business. specifically to breakeven of video up right or revenue market, And the promising a we the one achieve the we the quite the like do, think it's surge said market overseas strengthen And on the market domestic I growth current

to it video You move moving. more core can new the for prosperous. actually business to whether try the to wide in as video certain it's And we aim or market addition grab an share of the the terms of gaming And business, we in video some defensive other industry. spend or the us make to for consider a in had business effort initiatives, a aggressive

yes, seems issue. like platform So


Vincent question Yu comes & from Needham Your from next Company.

Vincent Yu

is first game by will to flagship be about My in the XXXX comments question with the on several Which the Tencent by some back on is management on releases November business There the the potential think launches release in on share in are regulatory guidelines. will game regards Can Tencent. biggest impact XXXX? question second our models XXXX regulatory have to does scheduled Huya? impact And XXXX. issued company guidelines

Rongjie Dong

All right.

question consider a the games, the several there games For new games are your first blockbuster actually we regarding as that potential for year.

The is first app mobile. one

potentially second license mobile. really for is be And in The one of year. QX probably legal them this to launched

platform to and games the so But other record probably one it's and So promote games, the new promoting we are operate viewers the to also new us the the especially consider way. as picking to and industry platform leading platform, attract quite excelled games. at

of confidence So we launch that the new have games.

as it's acquisitions. industry-leading little early in continue the broadcasters of we games, as late, being period and new our though recruiting new With actually game-related the those we designating but position. the year can launch of terms And last preparation launched even starting a construct

are launching we -- look So new will of forward this your we question. for the first to those year. games That's

Catherine Liu

definitely And regulatory comes it potential the industry, probably Vincent. the a your government's XXXX, Huya government of the we monitoring closely the following the you, out. the have been details attention lot on news currently, and of And there of out. when the changes, for new the follow waiting beginning still and reading regulatory as guidelines and new question been for have been I are we and since, has government come And you guidelines. for will Thank guidelines rules to think,

of potentially moment, be and believe growth healthy guidelines so government's the better the the And industry industry. the for that for regulate the we would long-term

investors the at believe we wait follow might should will for of course, that answers that So some the minimal. impact your Hope time. the if new be short-term this be of long-term questions. really guidelines update details there But the we even and changes to rules,


all you now company questions. the I'd to your to back turn closing call for the Thank remarks. like for

Dana Cheng

for all you Thank joining today. call our conference

free we with in look you. If contact the feel to you further you have speaking forward ir@huya.com, questions, to and quarter. next Thank


This concludes this call. conference

disconnect You line. may you. Thank now your