JOYY's 2024: Steady Profits, Big Buybacks

In the ever-evolving landscape of social media and entertainment, JOYY Inc. (NASDAQ: YY) has carved out a niche for itself as a global technology powerhouse. The company's recent financial results for the fourth quarter and full year of 2024 paint a picture of steady profit growth and aggressive shareholder returns. Let's dive into the numbers and explore what this means for income-seeking investors.

A Year of Steady Profits

JOYY reported a net revenue of US$549.4 million for the fourth quarter of 2024, a slight decrease from US$569.8 million in the corresponding period of 2023. However, the full-year revenue of US$2,237.8 million was only marginally down from US$2,267.9 million in 2023. The company's non-GAAP net income for 2024 increased to US$298.5 million, marking the fourth consecutive year of profitability growth.



The Dividend and Buyback Story

One of the most striking aspects of JOYY's 2024 performance is its aggressive capital return program. The company repurchased 9.21 million ADS for a total of US$309.2 million during the year, representing 15.1% of its total shares outstanding as of the end of 2023. Additionally, JOYY announced a new US$300 million share repurchase program and a quarterly dividend program, distributing US$600 million over three years. This commitment to returning value to shareholders is a clear signal of the company's financial strength and confidence in its future prospects.

Diversification and Growth

JOYY's strategic shift towards non-livestreaming revenues has been a key driver of its financial stability. Non-livestreaming revenues grew by 55.9% year-over-year to US$449.8 million for the full year of 2024. This diversification is crucial as it provides a hedge against the declining core livestreaming revenue, which fell to US$422.4 million in the fourth quarter of 2024 from US$486.2 million in the corresponding period of 2023.



The YY Live Divestiture

The divestiture of YY Live to Baidu for US$2.1 billion and the subsequent addition of US$240 million in cash has provided JOYY with the financial flexibility to pursue strategic initiatives. This transaction allows JOYY to reallocate resources and refocus its efforts on other core platforms and markets. The additional cash from the divestiture provides JOYY with the financial flexibility to invest in growth opportunities, enhance operational efficiency, and return value to shareholders.

Looking Ahead

As JOYY embarks on a new chapter following the divestiture of YY Live, the company remains deeply committed to driving diversified growth across its global operations. Through AI-driven innovation, JOYY is comprehensively enhancing its operational efficiency and cultivating meaningful experiences for its users. Based on its solid operational execution, JOYY remains confident in continuously driving sustainable growth of its global business and creating long-term value for its shareholders.

Red Flags to Watch

While JOYY's financial performance and capital return program are impressive, there are a few red flags to watch. The decline in user engagement metrics, such as MAUs and paying users, raises questions about long-term growth potential in highly competitive social media markets. Additionally, the significant amount of capital returned to shareholders may limit JOYY's ability to invest in growth opportunities.

Conclusion

JOYY's 2024 financial results reveal a complex transformation story beneath headline numbers. The company's strategic shift towards non-livestreaming revenues, aggressive capital return program, and divestiture of YY Live position it for sustainable growth in the competitive social media landscape. However, investors should keep an eye on user engagement metrics and the company's ability to invest in growth opportunities. For income-seeking investors, JOYY's robust dividend and buyback program make it an attractive option in the current market environment.