Chinese social media giant YY Inc. (NASDAQ: YY) reported first-quarter adjusted earnings of $1.38 per share, in line with the street view. Revenues for the quarter, meanwhile, improved 47% to $705.3 million, surpassing the average analysts’ expectation of $603.78 million.
YY shares gained 5.2% closely following the announcement of the results. The stock has increased 16% since late December when it touched a 52-week low of $55.55. However, in the last 12 months, YY’s stock price is down 40% hurt by trade wars, slowing Chinese economy and pressure on margins.
In Q2, the Chinese firm expects net revenues to grow in the range of 59.0% to 64.3%.
YY has seen steady growth in the top line, but margins are under pressure as the company is currently investing in beefing up its platform to attract more users, adding more content and expanding through acquisitions.
Global video and live streaming average mobile MAU reached over 400 million in Q1, among which over 75% were from outside of China. Average mobile MAU increased by 65.6% to 59.8 million, primarily driven by the user growth of Hago.
Paid user base expanded 17.1% year-over-year to 4.1 million.
The company, which acquired Singapore-based Bigo in March, faces stiff competition in China from the likes of Momo, TikTok, Tencent Music Entertainment, Kuaishou, Douyin, Huoshan, DouyuTV and Live.me.
Earlier today, rival Momo Inc. (NASDAQ: MOMO) reported a 65% decline in earnings for the first quarter of 2019 due to an increase in share-based compensation expense including that related to certain share options granted to Tantan’s founders. The results exceeded analysts’ expectations.
Meanwhile, game streaming company Huya (NYSE: HUYA), which was spun off from YY as a separate company last year, reported solid first-quarter results last week where revenues rose 93.4% while profits jumped 102%. It may be noted that YY still holds a majority stake in Huya.