Benefitting from the steady expansion of its user base, earnings of China-based esports streaming platform Huya, Inc. (NYSE: HUYA) increased and beat the estimates in the second quarter. Revenues nearly doubled and topped the Street view, driving the stock sharply higher during Tuesday’s after-hours session.
On an adjusted basis, net income attributable to shareholders moved up to RMB 0.73 per share (US$0.11 per share) from RMB 0.37 per share a year earlier. Analysts had forecast slower growth. Unadjusted profit was RMB 121.8 million (US$17.7 million) or RMB 0.52 per share (US$0.08 per share), compared to a loss of RMB 2.12 billion or RMB 13.7 per share in the second quarter of 2018.
Driving the earnings growth, net revenues advanced 94% annually to RMB 2.01 billion (US$292.9 million), aided by broad-based growth. The top-line also surpassed Wall Street’s prediction. During the quarter, live-streaming revenues almost doubled to RMB 1.92 billion, while advertising and other revenues rose 91% to RMB 89 million.
At the end of the quarter, there were 143.9 million monthly active users, on average, up 57% from the same period of last year. The average number of mobile monthly active users rose 31% to 55.9 million. The number of paying users reached 4.9 million, representing a 47% annual growth.
For the third quarter of 2019, Huya expects net revenues to grow between 66.1% and 72.3% year-over-year to the range of RMB 2.12 billion to RMB 2.20 billion.
“Looking ahead, we will remain dedicated to strengthening our leadership in China game live streaming industry and enhancing our presence across the globe,” said Rongjie Dong, chief executive officer of Huya, said.
The steady adoption of esports across all the key markets, with China witnessing explosive growth, bodes well for the company as far as long-term growth is concerned. Experts believe that the e-sports sector is still at a nascent stage.
The performance of Huya shares has been mixed since they debuted on the New York Stock Exchange last year. The stock gained 27% since the beginning of the year. It closed Tuesday’s regular trading higher and gained sharply during the extended hours.