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HUYA (HUYA) Q2 Earnings call transcript Aug 13, 2024

AInvestTuesday, Aug 13, 2024 10:24 pm ET
2min read

In Huya's recent earnings call for the second quarter of 2024, the company reported a significant milestone with quarter-over-quarter growth in total net revenues, up 2.5% to RMB 1.54 billion. This growth was driven by the rapid expansion of game-related services, advertising, and other businesses, which accounted for 20% of the total net revenues for the first time. Despite the persistent uncertainty in the macro environment and industry landscape, Huya's strategic execution across business, commercialization transformation, content and platform ecology upgrades, and technology advancement supported this quarter's positive outcomes.

User Metrics and Strategic Progress

Huya Live's average mobile MAUs reached 83.5 million in the second quarter of 2024, marking a growth from the previous quarter and the same period last year. This growth was attributed to the success of several self-organized e-sports events and the launch of various new games. Huya's strategic focus on enhancing user engagement and experience, coupled with its collaboration with multiple platforms and products, has further broadened its reach to approximately 120 million mobile users.

The company's strategic transformation, particularly in the game-related services segment, has been a key driver of growth. Revenues from this segment increased by 152.7% year-over-year and 26.6% quarter-over-quarter, reaching RMB 308.5 million. This growth was achieved through collaborations with more game titles, better utilization of live content, and innovative operational approaches. Notably, Huya's game distribution and prop sales have been successful in attracting and retaining users, with in-game spend per user significantly higher than the broader market.

Financial Performance and Capital Allocation

Despite a decline in live streaming revenues, Huya's financial performance has shown signs of improvement, with a close to breakeven non-GAAP operating margin. The company has also declared a special cash dividend of USD 1.08 per ordinary share or ADS, totaling approximately USD 250 million for its shareholders. This dividend, along with a renewed share repurchase program, reflects Huya's commitment to shareholder returns and solid financial fundamentals.

Huya's cash and cash equivalents, short-term deposits, short-term investments, and long-term deposits totaled RMB 8.2 billion as of June 30, 2024. The company's strategic use of cash includes consolidating financial fundamentals, setting aside funds for potential business development, and maintaining a reserve fund for external uncertainties. Huya remains open to investment projects related to the industry chain to seize development opportunities and continues to attach importance to shareholder returns, especially cash returns.

Looking Ahead

Looking forward, Huya is confident in its ability to expand its game-related services business, with expectations of achieving double-digit growth in the third quarter. The company's strategic focus on game distribution, advertising, and prop sales has shown promising results, particularly in attracting and retaining high-value users. Huya's continued investment in self-made content and optimization of sales expenses further positions the company for operational efficiency and improved profitability.

In conclusion, Huya's second quarter 2024 earnings call highlights the company's resilience in navigating the challenging macro environment and its strategic progress in expanding its game-related services business. With a solid financial position and a focus on user engagement and platform expansion, Huya is well-positioned for continued growth and innovation in the e-sports and gaming industry.

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