Categories Earnings, Technology

Huya Q1 profit soars 102%, meets estimates

Huya Inc. (HUYA) reported a 102% jump in earnings for the first quarter of 2019 helped by higher interest and short-term investments income. The bottom line came in line with the analysts’ expectations while the top line exceeded consensus estimates. The company guided second-quarter revenue growth above the Street’s view.

Net income soared 102.1% to $9.5 million. On a per American Depositary Share basis, the results swung to a profit of $0.04 from a loss of $0.79 a year ago. Adjusted earnings advanced 50% to $0.09 per share.

Net revenues climbed by 93.4% year-over-year to $243.1 million, helped by higher live streaming revenues and an increase in advertising and other revenues.

Looking ahead into the second quarter of 2019, Huya expects net revenues to grow by 66.6% to 72.4% year-over-year to a range of RMB1,730 million to RMB1,790 million.

For the first quarter, the company saw a 33.3% growth in average monthly active users (MAUs) driven by major events broadcasted on Huya’s website and mobile apps. Average mobile MAUs rose 29.8% as the company benefited from its mobile strategy with promising results.

Live streaming revenue for the first quarter jumped by 95.8% primarily due to the increases in both the number of paying users on Huya’s platform and average spending per paying user. The total number of paying users increased by 57.4%. This was primarily driven by the company’s mobile strategy, diversification of content offerings and continued efforts in converting active users into paying users.

Advertising and other revenues increased by 55.5% year-over-year. This growth was primarily driven by increased demand from gaming advertisers and further recognition of Huya’s brand name in China’s online advertising market.

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Revenue sharing fees and content costs rose by 116.7% due to the increase in virtual item revenue sharing, which was in line with its live streaming revenue growth, and continued spending in e-sports content and content creators in both domestic and overseas markets. Bandwidth costs inched up 8.3% due to a rise in bandwidth usage as a result of the increased user base on Huya’s platform and enhanced live streaming video quality improvement.

During April 2019, Huya completed a registered follow-on public offering of 13.6 million ADS by the company and of 4.8 million ADS by a selling shareholder. The company raised about $314.8 million in net proceeds after deducting underwriting commissions and the offering expenses payable.

Shares of Huya ended Thursday’s regular session down 2.51% at $20.97 on the NYSE. Following the earnings release, the stock inched up over 4% in the after-market session.

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