DouYu International Holdings Limited Reports Second Quarter 2021 Unaudited Financial Results
DouYu International Holdings Limited (“DouYu” or the “Company”) (Nasdaq: DOYU), a leading game-centric live streaming platform in China and a pioneer in the eSports value chain, today announced its unaudited financial results for the second quarter ended June 30, 2021.
Second Quarter 2021 Financial and Operational Highlights
- Total net revenues in the second quarter of 2021 were RMB2,336.8 million (US$361.9 million), compared with RMB2,508.2 million in the same period of 2020.
- Gross profit in the second quarter of 2021 was RMB306.5 million (US$47.5 million), compared with RMB522.9 million in the same period of 2020.
- Net loss in the second quarter of 2021 was RMB181.7 million (US$28.1 million), compared with a net income of RMB319.3 million in the same period of 2020.
- Adjusted net loss in the second quarter of 2021 was RMB145.1 million (US$22.5 million), compared with an adjusted net income of RMB322.9 million in the same period of 2020.
- Average mobile MAUs in the second quarter of 2021 increased by 3.9% to 60.7 million from 58.4 million in the same period of 2020.
- Quarterly average paying user count in the second quarter of 2021 was 7.2 million, compared with 7.6 million in the same period of 2020.
Mr. Shaojie Chen, Chief Executive Officer of DouYu, commented, “Our core operating metric continued to grow at a steady pace in the second quarter of 2021, with our quarterly average mobile MAUs increased by 3.9% year over year to 60.7 million. Looking ahead, we plan to continue expanding our content ecosystem both upstream and downstream to cover each link of the game industry value chain. We will also bolster our industry leadership through the continuous execution of our live streaming, video, content, and community strategies.”
Mr. Hao Cao, Vice President of DouYu, commented, “In the second quarter of 2021, our total revenues were RMB2.34 billion and gross profit was RMB307 million, representing a gross margin of 13.1%. During the quarter, we continued to increase our investments in proprietary content production while further upgrading the functions and content of our video and community related products. Going forward, we will continue exploring new methods to improve our monetization capabilities and generate long-term shareholder value.”
Second Quarter 2021 Financial Results
Total net revenues in the second quarter of 2021 were RMB2,336.8 million (US$361.9 million), compared with RMB2,508.2 million in the same period of 2020.
Live streaming revenues in the second quarter of 2021 were RMB2,178.1 million (US$337.3 million), compared with RMB2,319.9 million in the same period of 2020. The decrease in year-over-year comparison was mostly due to the decrease in user time as a result of the recovery from the COVID-19 pandemic and less stay-at-home time. This decline was partially offset by increased mobile MAU and improvements in user engagement as a result of the Company’s increased sales and marketing initiatives.
Advertising and other revenues in the second quarter of 2021 were RMB158.7 million (US$24.6 million), compared with RMB188.3 million in the same period of 2020. The year-over-year decrease was primarily attributable to the trend of game advertisers normalizing their marketing expenditures, which were relatively higher in the same period last year due to the COVID-19 pandemic.
Cost of revenues in the second quarter of 2021 was RMB2,030.2 million (US$314.4 million), compared with RMB1,985.3 million in the same period of 2020. This increase was primarily due to revenue sharing fees and content costs increased by RMB51.9 million, partially offset by bandwidth costs decreased by RMB6.6 million.
Revenue sharing fees and content costs in the second quarter of 2021 increased by 3.0% to RMB1,806.8 million (US$279.8 million) from RMB1,754.9 million in the same period of 2020. This increase was due to the Company’s increased investments in the broadcasting rights for eSports tournaments, in-house production of PGC contents, and quality streamers in the overseas market.
Bandwidth costs in the second quarter of 2021 decreased by 3.9% to RMB161.8 million (US$25.1 million) from RMB168.4 million in the same period of 2020. This decrease was mainly due to continuous in-house technology upgrades, which led to higher bandwidth efficiency and lower bandwidth usage costs.
Gross profit in the second quarter of 2021 was RMB306.5 million (US$47.5 million), compared with RMB522.9 million in the same period of 2020. Gross margin in the second quarter of 2021 was 13.1%, compared with 20.8% in the same period of 2020. This decrease was primarily due to the increase in content costs and the decrease in revenues, partially offset by the decrease in bandwidth costs.
Sales and marketing expenses in the second quarter of 2021 were RMB295.0 million (US$45.7 million), compared with RMB142.1 million in the same period of 2020. This increase was mainly attributable to the increased promotional channels for user acquisition and increased promotions and branding activities.
Research and development expenses in the second quarter of 2021 were RMB123.0 million (US$19.1 million), compared with RMB94.9 million in the same period of 2020. This increase was primarily attributable to additional investments in technical personnel due to Company’s further overseas expansion and technology infrastructure upgrade to enhance user experience.
General and administrative expenses in the second quarter of 2021 were RMB102.6 million (US$15.9 million), compared with RMB79.5 million in the same period of 2020. This increase was primarily due to the increase in professional service fees during the quarter.
Other operating income, net in the second quarter of 2021 was RMB16.7 million (US$2.6 million), compared with RMB32.5 million in the same period of 2020.
Loss from operations in the second quarter of 2021 was RMB197.4 million (US$30.6 million), compared with a profit from operations of RMB238.9 million in the same period of 2020.
Adjusted operating loss in the second quarter of 2021, which adds back share-based compensation expenses, was RMB165.1 million (US$25.6 million), compared with an adjusted operating income of RMB272.7 million in the same period of 2020.
Income tax expenses in the second quarter of 2021 and 2020 were nil due to the Company’s cumulative net losses and the resulting tax loss carry forward.
Net loss in the second quarter of 2021 was RMB181.7 million (US$28.1 million), compared with a net income of RMB319.3 million in the same period of 2020.
Adjusted net loss in the second quarter of 2021, which excludes share-based compensation expenses, share of income in equity method investments, and impairment loss of investments, was RMB145.1 million (US$22.5 million), compared with an adjusted net income of RMB322.9 million in the same period of 2020.2
Basic and diluted net loss per ADS[1] in the second quarter of 2021 were RMB0.45 (US$0.07) and RMB0.45 (US$0.07) respectively. Adjusted basic and diluted net loss per ADS in the second quarter of 2021 were RMB0.35 (US$0.05) and RMB0.35 (US$0.05) respectively.
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