Huya's Core Business Struggles: Weak Live Streaming and Uncertain Turnaround

Huya's Q1 2023 financials are characterized by weakness across its key business segments, with live streaming revenue declining due to macro and competitive challenges. The company's fundamentals have deteriorated further, with no clear turnaround in sight.

Title: Huya Inc. Reports Mixed Q1 2025 Financials

Huya Inc. (NYSE: HUYA) reported its first-quarter 2025 financial results, showing a mixed performance with stabilizing revenues but declining profitability. Total net revenues reached RMB1,508.6 million (US$207.9 million), up slightly from RMB1,504.0 million in Q1 2024 [1]. However, net income fell sharply to RMB0.9 million from RMB71.0 million in the same period last year [1].

The company's game-related services, advertising, and other revenues increased significantly by 52.1% year-over-year to RMB370.4 million, accounting for 24.6% of total revenue, up from 16.2% a year ago [1]. Despite this growth, traditional live streaming revenue dropped to RMB1,138.2 million, down from RMB1,260.4 million last year [1].

The gross margin contracted to 12.5% from 14.7% a year ago, primarily due to higher revenue sharing fees and content costs as a percentage of revenue. The operating loss widened to RMB59.6 million compared to RMB38.5 million in Q1 2024 [1]. Interest income, a significant contributor to net profitability, declined substantially to RMB64.9 million from RMB117.1 million [1].

User metrics show minimal growth with average mobile monthly active users (MAUs) at 83.4 million (up 1% year-over-year) and paying users remaining flat at 4.4 million [1]. The stagnant paying user base combined with declining livestreaming revenue suggests decreased monetization per user in the core business.

Huya's strategic pivots toward international markets and AI integration represent attempts to find new growth vectors. The multi-fold sequential growth in overseas game-related services, while starting from a small base, indicates potential in this area. Meanwhile, the company continues returning capital to shareholders, having repurchased US$69.8 million of shares under its US$100 million program [1].

The company's cash position remains substantial at RMB6,254.6 million (US$861.9 million), though down from RMB6,734.0 million at the end of 2024, providing a cushion for continued business transformation efforts [1].

Huya's Q1 2025 results paint a picture of a company in transition with mixed financial signals. While total revenues stabilized year-over-year, the company experienced a dramatic decline in net income and profitability metrics. The company's strategic pivots and international expansion efforts may offer potential growth opportunities, but the immediate financial picture remains challenging.

References
[1] https://www.stocktitan.net/news/HUYA/huya-inc-reports-first-quarter-2025-unaudited-financial-no8t41co3loe.html
[2] https://www.investing.com/news/earnings/huya-shares-edge-higher-despite-earnings-miss-93CH-4041088
[3] https://www.rttnews.com/3538487/huya-inc-q1-earnings-summary.aspx
[4] https://www.gurufocus.com/news/2856841/huya-reports-stable-q1-revenue-amid-expanding-international-presence-huya-stock-news