HUYA Posted Quarter-on-Quarter Revenue Growth in Q2 2024, Declaring $250 Million Special Cash Dividend
Amid challenging macro environment and evolving game live streaming landscape, HUYA Inc., a leading player in the sector in China has posted encouraging performance for the second quarter of 2024.
During this period, Huya resumed quarter-on-quarter revenue growth of 2.5 percent to 1.54 billion yuan ($212.1 million), among which game-related services, advertising and other revenues grew by 152.7 percent to 308.5 million yuan, reaching 20 percent of Huya’s total net revenues for the first time, signaling the positive progress of the company’s strategic transformation. The company’s operating efficiency also enhanced, with total operating expenses reduced by 26.3 percent year-on-year, and non-GAAP operating margin close to breakeven.
Along with this quarter’s positive results, Huya’s board of directors have made another move to reward its shareholders by offering a special cash dividend of $1.08 per ordinary share or per ADS, totaling approximately $250 million. Additionally, Huya has decided to extend its previous $100 million share repurchase program, with unutilized quota of $43.3 million, starting from August 2024 effective through March 31, 2025. Huya shares soared after the company announcement, and increased by more than 14 percent at the market close on August 13. Wu Xin, Huya’s Co-CEO and Vice President of Finance, commented at the earnings conference call, that “we believe Huya‘s solid balance sheet and improving financial fundamentals will continue to support our ability to deliver shareholder returns going forward.”
In the second quarter of 2024, Huya also sustained its profitability with a Non-GAAP net income of nearly 97 million yuan. On user metrics, according to Huang Junhong, Co-CEO and Senior Vice President of Huya, “mainly driven by the success of several self-organized e-sports events, Huya Live’s average mobile MAUs have increased to 83.5 million.” He believed “solid strategic execution across business and commercialization transformation, content and platform ecology upgrades, and technology and product advancements supported this quarter’s positive outcomes.”
On platform ecology upgrades, it can be seen that Huya has been strengthening cooperation with a series of platforms and products, which ranges from professionally generated content co-production, broadcaster cross-platform streaming and joint promotion initiatives. These barrier-breaking moves, as pointed out by Huang, “can further increase Huya platform’s influence within this more open content ecosystem.” In addition, Huya has already started to selectively bring video and live-streaming content to other content platforms and various product lines within Tencent’s ecosystem. At the earnings conference call, Huya management offered specific data that, in June, Huya content reached a total of 120 million mobile users, and they believed that this widened reach of users will generate more commercialization opportunities.
What’s more, Huya’s strategic transformation moves have played a significant role in solidifying the second quarter’s financial performance.
In terms of game distribution, in the second quarter, apart from expanding evergreen games’ coverage and making improvements in user return rates, Huya also participated in the promotion and distribution of the newly launched DNF Mobile, including setting up a special pre-download area for this game in the “Game Center” section of Huya Live app, and specially designed programs and exclusive props and gifts to promote the game, among others. These moves to increase the game’s exposure and popularity on Huya platform has not only helped DNF mobile rank top among this year’s new games in live-streaming viewership indicators, but also achieved better-than expected distribution results. The company also highlighted that the in-game spend per user of Huya distribution channel for DNF mobile was significantly higher than that of broader game channels, demonstrating the platform’s deeply engaged base of high-value gamer users.
By innovatively combining game prop sales with big game titles’ rich e-sports content, including League of Legends, LoL Wild Rift and Valorant, Huya’s in-game item sales have generated great purchase interest of users on its platform. On game advertising, Huya produced an interactive game-play variety show to integrate game promotion and entertainment content for different games, proving to be effective in driving active users to the respective games.
Encouragingly, Huya’s game-related services have helped thousands of broadcasters to receive revenue sharing fees and commissions from game distribution and prop sales, opening up new income sources for its platform content creators.
In the second quarter, Huya also steadily advanced its three-tiered pyramid of e-sports tournament and event content, with a focus on refining self-organized e-sports events.
In terms of licensed content, the top tier, Huya broadcasted more than 80 licensed professional e-sports tournaments during the quarter, and expanded the portfolio of international e-sports content, such as the inaugural Esports World Cup in Saudi Arabia this July.
On premium in-house produced content, the middle tier, among which Huya’s Legend Cup proved to be a perfect example of its progress in upgrading tournaments, products, and operational strategies. Legend Cup is Huya’s premium self-organized tournament in cooperation with the League of Legends (LoL) game, which brought together outstanding retired and active professional players and introduced bold innovations in the competition format and schedule, attracting widespread attention not only from LoL gamers but also e-sports viewers both within and outside the Huya platform.
A number of product and technology advancements were also introduced to improve users’ immersive viewing experience, including a designated event discussion area to aggregate event hot topics, player news, short videos and official tournament information; a new rating card function to allow viewers to comment on multiple aspects of players’ performance; and a voice-captioned live broadcast room for this tournament powered by cutting-edge automatic speech recognition technology and an e-sports professional vocabulary library.
In Huang’s eyes, the successful launch of Legend Cup “seamlessly integrated into LoL’s professional leagues’ schedules to complement and enriched the LoL e-sports content ecosystem”. And it turned out this event set a record for Huya‘s in-house produced content in viewership and was even comparable to top-tier licensed professional events in terms of popularity index on Huya platform. He also emphasized at the earnings conference call that through events like the Legend Cup, “we hope to enhance the influence and monetization of e-sports event IPs and promote the e-sports industry’s sustainable development….and will continue to develop self-produced content and create more influential and commercially valuable event IPs.”
For e-sports events targeting community participation, which is the bottom tier of Huya’s e-sports content pyramid, Huya successfully launched Village Games for Honor of Kings and PeaceKeeper Elite in China’s Shandong and Guangxi provinces in the second quarter, bringing the immersive cultural experiences to a wider audience while promoting e-sports’ popularity.
It can be concluded that despite the challenging external environment, Huya’s strategic moves to diversify business have made positive progress over the second quarter, which was also reflected financially. The company is expected to further expand its influence in the game value chain through measures of content and platform ecology upgrades, product and technology advancement to push forward game-related services, while maintaining its core competitiveness in game live steaming.
