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HUYA (HUYA)

Participants
Dana Cheng Investor Relations
Rongjie Dong Chief Executive Officer
Catherine Liu Chief Financial Officer
Thomas Chong Jefferies
Lei Zhang Bank of America Securities
Yiwen Zhang China Renaissance
Ritchie Sun HSBC
Tian Hou T.H. Capital
Vincent Yu Needham & Company
Call transcript
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Operator

Hello, ladies and gentlemen. Thank you for standing by for the Second Quarter 2021 Earnings Conference Call for HUYA Inc. At this time, all participants are in a listen-only mode. Today's conference call is being recorded. I will now turn the call over to Ms. Relations. Investor Company Cheng, Dana Please, go ahead.

Dana Cheng

posted welcome Hello, earnings issued XXXX are quarter Huya's call. everyone, earlier The and were and conference results company's second operational to financial online. today and

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

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

involve uncertainties. Forward-looking risks and statements inherent

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

Rongjie Dong

remained we XX.X the efforts to over to line To our advancement growth product you Huya a conference technology streaming rate our joining our deepening Huya million QX and illustrate, providing the relentless with functions, expansion. introduced optimization. amplified XX% upgraded and of at commitment offerings users, enrich along quarter-over-quarter. slightly In up which call Live in have Live's Thank up reached content users top to revenues. today. year-over-year for contribute we month's new which second real-time year-over-year approximately app the stable users highlights In this RMB quarter-over-quarter, over and continued net XX% X.X, With mobile Huya simultaneous been everyone. on mobile we with for base steady live total attract and for quarter, better [Foreign Live and retention our as mobile XX%. increased May, such XX% to and always MAUs user our experience, Language]. app drove In viewing focused the quarter, all efforts revenues to to our editing Hello, while X quarter, Huya late billion, version Live next broadcasters multi-screen

and easier session the video videos quarter MAUs watch clips, the version example, leveraging For at viewing average highlight XX increased a the multi-screen and approximately identify capability, platform who panel a access new towards production our video efficient. AI this, more the momentum generate Besides Huya's streaming automatically broadcasters latest in to version, top same to of time. a In million. making the can has second different now user on

on than broadcasters daily by used grew quarter-over-quarter and those used were active open than been By the Our platform application of developed second in end for had to open the XXX,XXX broadcasters. our quarter. XXX third-party tools applications basis more platform on who our the open third-party also more On platform continued XX%. developers expand over June a tools

year-over-year. viewing around Notably the users number quarter, QQ are average platforms, attracted In Huya in for were not reported Tencent. who live QQ content large MAUs with content million collaboration streaming which our tournament our our of all-star nearly counted streaming a across MAUs on to on related live to second celebrity mobile. doubling the watch Moving the Tencent's XX

applicable Lastly, DouYu we to Regulation between posted regulations. Administration last DouYu would announcement According context the conduct the July will merger I and proposed like comply the of the XX, requirements and all antitrust with was Huya China abide announced prohibited decision our fully to with State SAMR's merger in after Republic following termination provide accordance We by the month. and strategies with by will regulatory around respect laws on and of for the more and our review. Market People's businesses XXXX, the SAMR

our market, we expanding growth to leading effectively game its further in and focused implementing on deliver our position strengthening a As continue content superior strategy. content. quality in remain will attractive the we we Huya for tournaments maintaining obtaining popular developing rights and are optimization to broadcasters user base broadcasting investments and Meanwhile, and endeavor including streaming acquiring, committed e-sports, cultivating experience. live advance will self-generated product our user

cooperation deepen to We also our Tencent. further with expect

metrics industry. I the Catherine, please now to We and are content ahead. the will and streaming fostering retaining competitiveness quality will expertise technology With in product Catherine, talents well our turn enriching CFO the and producing share her on game capabilities our and continue insights confident to our streaming in innovations, underpin to the go that financial that call as live core over in as operating details. Huya's

Catherine Liu

Thank hello you, and everyone. Dong Mr.

we for Total remarks, and included Spring million League which and reached tournaments will around quarter. Invitational third-party e-sports Dong's enrichment In among top KPL tournaments start quarter, second Following tournaments, Summer, diversification. from the PUBG the Spring, in Mid-Season, XXX updates LPL viewership these the Champions Mr. broadcasted Spring. content the XXX LoL I and on

viewership Xth tournaments XXX tournament content, comprehensive Language] [Foreign and China. outstanding quarter, games, Battle of front self-branded the of shows a HMA organized our tournament, game in CODM. popular and XX entertainment has now in the HOK, mobile or On total generated and our CFM, of XX we hit is including Huya mobile covering viewership e-sports Arena, In Game million. particular self-produced Mobile The Balls HMA leading

the for show The commentary traction became produced channel the we a went to the major game Watch to viral Game LPL from during Room, lovers. and following Language] LPL, [Foreign watch game game. a show Huya LPL play for alternative season provide professional Additionally fans analysis

the In a entertainment leading competition playing to Language], the of [Foreign growing Besides our the platform [Foreign capture sectors trend in moments mixed such clear martial videos. sharing shows, Season in Huya action has Since diversification also this in we outdoor categories. terms live to we content of been year, development example and and the Kungfu food by Language], role the particularly as and show arts Carnival was X, God Huya's animation on video last joined a initiatives introduced such there a generation's PGC Player, took video broadcasters introduce more celebrities video, interest younger fun of season. June,

local Moving to on driven up close million, to by MAU our picked XX overseas business, June, events. the to mainly in e-sports overseas

As we have been monetization-driven on focusing we growth. discussed previously,

Our up increased revenues the overseas business from then from with margin by contribution revenue approximately overseas also and year-over-year climbing the declining. drag overseas is XXX%

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

XX.X%. last were quarter, mainly year. up Live same second last other Our close Advertising and increased million than On the the quarter lockdown the to period from in in billion same in setting Huya due to the slightly X.X to XXX% was live almost base. by profitability, was revenues period second for paying second million last year, in non-GAAP RMBX.X gross gross year-over-year million, margin came pandemic a non-GAAP the quarter. profit quarter and the RMBXXX year users higher our at The revenues number of lower streaming RMBXXX

profit operating X.X%. operating RMBXXX margin non-GAAP Our and million was non-GAAP was

Our and non-GAAP our non-GAAP margin net million was RMBXXX profit X.X%. was net

XX.X% to XXX income investments value to non-GAAP the XX.X% HUYA was taxes Bandwidth share-based X.XX content by increased share-based increase by marketing due the improved brand and expenses investee's to expenses the Interest XX.X% HUYA RMB the to for million the gain investment, second efforts. same RMB X.X% for million increased decreased the million the spending increased rates Operating XX.X% the of quarter, second income RMB primarily to mainly RMB are name. mainly for revenues income RMB was to to second the the on was lower to fees decreased XXX per and otherwise tax for attributable was billion on due enhancement specified second revenue development to investments compared second investee's attributable was quarter. income by to net services rates. and million was personnel-related RMB net XXX to second interest to to products, General content quarter, the content, XX.X% net on quarter, ADS expenses, details. quarter, RMB X.X% X.XX the XXX with increased with promote of for ADS increase disposal in sharing XXXX, and the RMB and for and increased sharing costs. second by content investments change XXX and XXXX. which for creators. the quarter, XX sharing for period Inc. expenses. XX.X% increase to RMB RMB content revenue Net technology period XX for second RMBX.X for income all expenses, Income quarter. in quarter, same Non-GAAP on the compensation costs quarter, operating with for quarter costs million short-term billion moving increased million by compared to year-over-year and Sales the compared net for by increased Cost increased diluted decreased XXX fair second Inc. e-sports equity growth income cost financial million attributable to equity fees quarter quarter X.X% company's XXX Diluted Gross quarter, to compensation the XX.X% second and second administrative and in by XX of expenses. continued the per RMB quarter. partial gross the million the the of Revenue attributable Now primarily quarter. for primarily for attributable the for primarily and income of was for to its in fees excludes for XX marketing XX.X% and by Unless our terms. margin to RMBX increased XXX and to second the for for Research profit by due attributable bandwidth quarter million million and million RMB of and RMB management million second the second period expenses, the of XXX XXXX. same second expenses, RMB second primarily million margin RMB

was billion compared XXXX, short-term As RMB as deposits equivalents and short-term the The of XX.X June XX.X billion like cash I operating provided open with for XXXX. cash XX, the of XX, due With second company to your RMB XXX would March and million investments to cash RMB to of primarily had the now questions. call increase net by activities that, of quarter.

Operator

the Certainly. have question-and-answer line from Ladies Please and session. [Operator from begin first ahead. now Thomas We will question Instructions] Chong Jefferies. coming we go the gentlemen, of the

Thomas Chong

[Foreign Language] management have Thanks my two I questions. questions. taking for

terms key The as first And well we question ARPU. the Thank question our well second are we the the come as about second think into half? about at? paying the our we trend you. users my comment about looking is thoughts operating management as as of our in should the half metrics How as about Can spending that content in second is strategies. MAU

Rongjie Dong

right. will Mr. for All translate Dong. I

whether question for content plans strategic this on actually year, beginning this two year management SAMR since the strategy, scenarios of the versions of in so first made your different the Regarding strategy. pass or plan deal the prohibit SAMR of not received content notification merger terms we deal. still to until the in the pass will the of stick Up we to original our

the we that the deal. now to be prohibiting compared before SAMR between won't heard about landscape little the content changed be And the the bit might have there from DouYu, that major news the Huya prohibited SAMR strategy, merger now So the a given with competitive adjustments strategy. deal and especially

the our from And investments question. So of certain will Catherine there might second growth be content for a degree take perspective. the

Catherine Liu

will and trying MAUs. to broadcasters the your regarding content MAU mobile the second second that main our our the mobile reaccelerate key in MAUs questions, for MAUs. is probably we I half. continue grow And will the to half, so still do to the expect and in because still focus – continue rate think probably half in we second goal focus our our invest our growth in in this then is half And grow second And

Operator

you. Thank

next go our This is from of have Bank coming question. America ahead. line Please Lei We Zhang of from Securities. the

Lei Zhang

questions here. questions. for taking the management Thanks Two

First, can the the Secondly, with Thank close you. recently? strategy any color post with share merger the business of with Tencent you on DouYu? integration us more

Rongjie Dong

[Foreign Language]

Dana Cheng

will I translate right, All for, Mr. Dong.

And do feel, for going secondly, to that. for going question up better who, for is are strengthen have the will we on the countries changes, we planning and the strategic in the the we not stick we have merger, first and the be HUYA. to confidence your forward. to the much the I market, a do content with of impact would business of regions like have year ecosystem those strategic forward. a to future. to actually in And are And Regarding roadmap original for position that have plan confidence we especially we going mention in our confidence And performing to And post-termination overseas changed leadership model. brighter and building follow our there

For Tencent, the your with innovative, to working regarding carry collaboration are methods more actually close question, way we regarding play out second out collaborative with conversation Tencent, and to in it. the going so I things with that's carried collaboration, to that answers your hope more be the forward out business play Tencent. models of question. the operational -- out to And more

Catherine Liu

major question. then, we regarding And with our Tencent strengthen there this us to update the on will more some with this the Tencent, I and have be cooperation to we we to fronts. would if investors, between one. your And hope have updates And various cooperation we in And in answers cooperation And that, Tencent. believe future, next? continued add,

Lei Zhang

Okay. Thank you, very helpful.

Operator

is from next of question. coming ahead. This Yiwen China line the have We the from Please Zhang Renaissance. go

Yiwen Zhang

question. my have taking for I questions. Thanks Language] two [Foreign

is business. regarding first The overseas

user this the past you will overseas Could acquisition this Can terms we the user I ramp mentioned, think in on content overseas. Thank You And is and well million. some up secondly the you in reached monetization? color, the discussed content video have the in color build-up the also the more terms how video the content, share MAU and few acquisition engagement you. quarters. investment year, XX of, retention? the share helped And of is

Catherine Liu

you. Thank

business, as we in overseas a our Regarding progress, on seen been have have monetization good we overseas the market. emphasizing pretty

And actually been narrowed the increased seen significant by operating overseas In our has the have approximately We XXX% results. year-over-year. loss second quarter, also revenues also, down.

video the confident for just in and video our app, even the I answers Dong your of So product. And do our And that next watch platform the also new our we question. we sort quarter have terms second increasing. do we business users new much mentioned launching who XX we this overseas a content our second to overseas the revenue half, developing on are consider that to in a will million. we more year. then Mr. contribute pretty actually video noticed content. been average video And specifically business, the have to approximately expect increased MAUs, contribution our video second in also been hope significant in business, in quarter, us of in

Yiwen Zhang

Thank you.

Rongjie Dong

[Foreign Language]

Dana Cheng

prosper live cornerstone, our to the there And in or in form that form color more just video business the your the words and Dong just of videos mentioned Huya's of video other business. video is traditional streaming. a statistics before with question from lying streaming business, see we that high. in provide certain we actually of business Mr. And the between the ongoing make quite Huya's form is sessions platform doing such on in we results of our And are in And that cornerstone think business video we is can or as the the video the think of now the growth future. of video we actually have I category business satisfying. in believe rate the streaming quite

Yiwen Zhang

Thank you.

Operator

you. Thank

question next go Please from We from have Sun ahead. HSBC. the Ritchie

Ritchie Sun

[Foreign Language] questions myself. I translate will the

see heightened game are need of is the also cybersecurity video incur the the management can what for the of regulation. game question first privacy progress regulation about from improve and on the potential And areas live is platform, costs these regulation we question monetization industry. to So and discuss We data loss video, for impact and model the especially further that And as as we are regulations, game side discuss fulfill content? risk And monetization management regulations? second well streaming more the on the to going profit how Thank games online on and Can these regulations? to video? you.

Rongjie Dong

Language] [Foreign

Dana Cheng

monetization business, with business that better to live video video method, video top question, to video regarding priority the the extended. first how the consider for can business be so the your and business streaming business integrate the currently regarding the company is For just the

So probably too little the to a bit business early currently, about model. it's talk

we choice method. from see can now However, probably what the advertising top the business, is for video the right monetization for

Catherine Liu

abide regulatory all question so expecting that the And a and out. far, recent guidelines I come the And now changes we will second will your we Okay. are to probably And I as of in also or for for changes, believe recent some industry the -- company regulatory the details received then, the of definitely think the of regulatory then, guidance. long-term. the help have think changes, we do the

this will some saw of if question. investors for answers so guidelines. potential your we regulatory guidelines And detailed I the with we update hope And

Next?

Ritchie Sun

Thank you.

Operator

Thank you.

go Tian have next the question. is Capital. T.H. Hou We Please from This coming ahead. from

Tian Hou

what school place is going management. less Are regarding game. the Good game in one what about not developing has second major The see while. first does the travel? management out? [Foreign The and second content. a for Two game cloud content to see as come small. much the is platform, half Yes. The activity management been Language] has on the go is about evening, to cloud level the question the one any Company to work and the third students users also there

can the you. the progress future? Thank management color So, for plan the share about some and

Rongjie Dong

Language] [Foreign

Dana Cheng

sure So of for holidays users. Since that question seasonality from school summer that titles much. will your as that we D&F potential we League are the soon. Mobile and far top promoting growth the two that games it's be first -- games other really new the the can have on that two positions. certain be Legends make regarding is the of Actually, our the the for live initiated. regarding holidays in been promoting question a there we and the your sure users block has regarding games mobile Huya a observed the maintain released can seeing our have summer, growth and excelled games preparation -- mentioned, But make that during strength Because factors blockbuster haven't second hoping for seen of coming the summer so usually And and at to been already platform school again, streaming Mobile well. this be those quite mobile we game leading a you the

League since been And year. for XXXX. it's example, D&F been Mobile, in beginning we the for first of the have of started Mobile, the that Legends launch of For last -- preparing since for

that games were we can in hoping half. second be launched blockbuster those really the So potential two

Unidentified Company Speaker

the we since launched the products about is been -- now. our in the your increase focusing of sort fast. are technology regarding to believe the over and level. reduce our And still cloud then yes, of product MAUs And user's the friendliness the growth is per regarding since games and XXX improving currently launched, terms trying And And we our have since currently, right your Actually, and -- we question pretty bandwidth have covering since Yowa, in our user that been to we the then we on cost game. game user DAUs. the platform launch. cloud Yowa to industry-leading Actually,

cloud your to next consider currently, stage. to is still the still users, then year, each at this And cost growing answers and will do on So user. game. our question. trying Hope, focus bandwidth next. probably we then it's trying the improving commercialization But products for And some for currently, reduce early

Operator

you. Thank

from Yu We have the Company. go Please ahead. next Needham question & from Vincent

Vincent Yu

Thanks about question [Foreign And for my plans. taking management first my Language] question. is investment

acquire cash merger of considering the deal rights company companies in now like related other is merger within look to after big question have or Thank off? cost a see overseas purchase you. caught content balance? broadcasting My now So would has other we been increase the will has to caught this second tournaments the been verticals we off

Catherine Liu

cash Regarding question invest needs -- along of, to or sort potential your to first acquisitions in i.e. the, our do market. and or both we the content question investments overseas domestically Dong. in in then your value investments acquisition addition will refer significant chain to operational continue consider to we And broadcasters our currently, done Mr. But haven't to second regarding the really or we yet. will any I

Rongjie Dong

[Foreign Language]

Dana Cheng

the tournaments Regarding broadcasting the important e-sports. in e-sports our think broadcasting from on your rights, quite is acquiring those I question rights of tournaments' perspective for sector the

year. been we As for in exclusive announced know included have has got we professional LPL that broadcasting by the it’s related and before, e-sports all rights. and a game has next we the is as Games Asian become license in broadcasting that -- already And also

going So the believe acquisition way. mild broadcasting rights in of we continue will Huya a forward,

Vincent Yu

you. Thank

Operator

hand company for I to As like conference ending there would the questions, are remarks. no any the to back further

Dana Cheng

our for call joining conference all you Thank today.

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

Operator

call you. our Thank all participation. concludes today. for Thank That you conference for your

lines You may your disconnect now.