HUYA Inc. Reports Fourth Quarter and Fiscal Year 2021 Unaudited Financial Results
HUYA Inc. (“Huya” or the “Company”) (NYSE: HUYA), a leading game live streaming platform in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2021.
Fourth Quarter 2021 Highlights
- Total net revenues for the fourth quarter of 2021 were RMB2,808.7 million (US$440.8 million), compared with RMB2,990.3 million for the same period of 2020.
- Net loss attributable to HUYA Inc. was RMB312.7 million (US$49.1 million) for the fourth quarter of 2021, compared with a net income attributable to HUYA Inc. of RMB253.2 million for the same period of 2020.
- Non-GAAP net loss attributable to HUYA Inc.[1] was RMB241.7 million (US$37.9 million) for the fourth quarter of 2021, compared with a non-GAAP net income attributable to HUYA Inc. of RMB305.9 million for the same period of 2020.
- Average mobile MAUs[2]of Huya Live in the fourth quarter of 2021 increased by 7.4% to 85.4 million from 79.5 million in the same period of 2020.
- Total number of paying users[3]of Huya Live in the fourth quarter of 2021 was 5.6 million, compared with 6.0 million in the same period of 2020.
Fiscal Year 2021 Highlights
- Total net revenues in fiscal year 2021 were RMB11,351.4 million (US$1,781.3 million), an increase of 4.0% from RMB10,914.4 million in the prior year.
- Net income attributable to HUYA Inc. in fiscal year 2021 was RMB583.5 million (US$91.6 million), compared with RMB884.2 million in 2020.
- Non-GAAP net income attributable to HUYA Inc. in fiscal year 2021 was RMB454.4 million (US$71.3 million), compared with RMB1,261.5 million in 2020.
“Amid the macro headwinds of the subsiding pandemic effects and evolving market landscape, we sustained healthy user growth in the fourth quarter and closed 2021 with an increase in revenues for the full year. Specifically, Huya Live’s mobile MAUs grew by 7.4% year-over-year and reached 85.4 million in the fourth quarter, mainly driven by e-sports events and new game launches during the period,” said Mr. Rongjie Dong, Chief Executive Officer of Huya. “Throughout the year, our primary focus remained on increasing investments in quality content and content creators, advancing our technology and enhancing our products. By propelling these initiatives forward, we received positive feedback from our broadcasters and users, further solidifying our market leadership and strengthening our path to sustainable business development. Moving into 2022, we will continue to provide more meaningful content and experience to users as we grow our user community and enhance Huya’s value proposition in the massive game and e-sports market.”
Ms. Ashley Xin Wu, Vice President of Finance of Huya, commented, “Despite volatility in the operating environment, we reported full-year total net revenues of RMB11.4 billion and our non-GAAP net income reached RMB454.4 million for 2021. Our revenue growth slowed in the fourth quarter, primarily due to a soft macro environment. At the same time, we sustained our strategic efforts in content investment and e-sports to expand our offering and drive continued user growth, which caused higher costs and lower margins for the fourth quarter. Nevertheless, we remain optimistic about our future business outlook with solid financial fundamentals and operational capabilities. Embracing the challenges and opportunities ahead of us, we are committed to growing our user base, enhancing operational efficiency and exploring business diversification to deliver long-term value to all of our stakeholders.”
Fourth Quarter 2021 Financial Results
Total net revenues for the fourth quarter of 2021 were RMB2,808.7 million (US$440.8 million), compared with RMB2,990.3 million for the same period of 2020.
Live streaming revenues were RMB2,612.9 million (US$410.0 million) for the fourth quarter of 2021, compared with RMB2,814.9 million for the same period of 2020, primarily due to decreased number of paying users and average spending per paying user on Huya Live, as the recent macro environment adversely affected the paying users’ sentiment.
Advertising and other revenues increased by 11.6% to RMB195.8 million (US$30.7 million) for the fourth quarter of 2021 from RMB175.5 million for the same period of 2020, primarily driven by revenues from content licensing.
Cost of revenues increased by 17.3% to RMB2,807.7 million (US$440.6 million) for the fourth quarter of 2021 from RMB2,392.7 million for the same period of 2020, primarily due to the increase in revenue sharing fees and content costs, as well as bandwidth costs.
Revenue sharing fees and content costs increased by 20.5% to RMB2,463.1 million (US$386.5 million) for the fourth quarter of 2021 from RMB2,044.6 million for the same period of 2020, primarily due to the increase in spending on e-sports content, which was mainly related to the higher content cost booked for a large e-sports event occurred in the fourth quarter of 2021, and the increase in revenue sharing fees in relation to certain broadcaster incentive programs.
Bandwidth costs increased by 9.6% to RMB182.7 million (US$28.7 million) for the fourth quarter of 2021 from RMB166.7 million for the same period of 2020, primarily due to an increase in bandwidth usage as a result of the Company’s higher concurrent user base during large e-sports events in the fourth quarter of 2021.
Gross profit was RMB1.1 million (US$0.2 million) for the fourth quarter of 2021, compared with RMB597.7 million for the same period of 2020, primarily due to lower revenues and increased cost of revenues primarily driven by higher revenue sharing fees and content costs and bandwidth costs. Gross margin was approximately zero for the fourth quarter of 2021, compared with 20.0% for the same period of 2020.
Research and development expenses decreased by 4.6% to RMB205.7 million (US$32.3 million) for the fourth quarter of 2021 from RMB215.7 million for the same period of 2020, primarily due to decreased personnel-related expenses.
Sales and marketing expenses increased by 13.1% to RMB218.5 million (US$34.3 million) for the fourth quarter of 2021 from RMB193.1 million for the same period of 2020, primarily due to increased marketing expenses to promote the Company’s content, products, services and brand name, particularly including promotional activities for e-sports events, partially offset by decreased personnel-related expenses.
General and administrative expenses decreased by 5.8% to RMB90.5 million (US$14.2 million) for the fourth quarter of 2021 from RMB96.1 million for the same period of 2020, primarily due to decreased professional service fees.
Other income was RMB56.3 million (US$8.8 million) for the fourth quarter of 2021, compared with RMB94.5 million for the same period of 2020, primarily attributable to lower tax refunds and government subsidies.
Operating loss was RMB457.3 million (US$71.8 million) for the fourth quarter of 2021, compared with an operating income of RMB187.4 million for the same period of 2020.
Interest and short-term investments income were RMB61.6 million (US$9.7 million) for the fourth quarter of 2021, compared with RMB74.0 million for the same period of 2020, primarily due to decreased interest rates.
Income tax benefits were RMB83.1 million (US$13.0 million) for the fourth quarter of 2021, compared with income tax expenses of RMB37.3 million for the same period of 2020. The income tax benefits resulted primarily from the net loss incurred in the fourth quarter of 2021.
Net loss attributable to HUYA Inc. was RMB312.7 million (US$49.1 million) for the fourth quarter of 2021, compared with a net income attributable to HUYA Inc. of RMB253.2 million for the same period of 2020.
Non-GAAP net loss attributable to HUYA Inc., which excludes share-based compensation expenses, was RMB241.7 million (US$37.9 million) for the fourth quarter of 2021, compared with a non-GAAP net income attributable to HUYA Inc. of RMB305.9 million for the same period of 2020, which excludes share-based compensation expenses, gains on fair value change of investments and equity investee’s investments, and gain arising from partial disposal of an investment owned by an equity investee, net of income taxes.
Diluted net loss per American depositary share (“ADS”) was RMB1.31 (US$0.21) for the fourth quarter of 2021, compared with diluted net income per ADS of RMB1.05 for the same period of 2020. Each ADS represents one Class A ordinary share of the Company.
Non-GAAP diluted net loss per ADS was RMB1.01 (US$0.16) for the fourth quarter of 2021, compared with non-GAAP diluted net income per ADS of RMB1.27 for the same period of 2020.
As of December 31, 2021, the Company had cash and cash equivalents, short-term deposits and short-term investments of RMB10,959.1 million (US$1,719.7 million), compared with RMB11,119.6 million as of September 30, 2021.
Fiscal Year 2021 Financial Results
Total net revenues in fiscal year 2021 increased by 4.0% to RMB11,351.4 million (US$1,781.3 million), from RMB10,914.4 million in the prior year.
Live streaming revenues were RMB10,186.2 million (US$1,598.4 million) in fiscal year 2021, compared with RMB10,311.6 million in the prior year, primarily due to decreased number of average quarterly paying users of Huya Live, partially offset by the increase in the overseas live streaming revenues.
Advertising and other revenues increased by 93.3% to RMB1,165.2 million (US$182.9 million) in fiscal year 2021 from RMB602.8 million in the prior year, primarily driven by revenues from content licensing.
Cost of revenues increased by 12.8% to RMB9,751.2 million (US$1,530.2 million) in fiscal year 2021 from RMB8,646.3 million in the prior year, primarily attributable to the increase in revenue sharing fees and content costs, partially offset by the decrease in bandwidth costs.
Revenue sharing fees and content costs increased by 18.2% to RMB8,374.6 million (US$1,314.2 million) in fiscal year 2021 from RMB7,086.8 million in the prior year, primarily due to the increase in spending on e-sports and self-produced content, as well as on content creators, and the increase in revenue sharing fees in relation to certain broadcaster incentive programs.
Bandwidth costs decreased by 18.8% to RMB713.7 million (US$112.0 million) in fiscal year 2021 from RMB879.2 million in the prior year, primarily due to improved management in bandwidth costs and continuous technology enhancement efforts.
Gross profit decreased by 29.4% to RMB1,600.3 million (US$251.1 million) in fiscal year 2021 from RMB2,268.1 million in the prior year, primarily due to increased cost of revenues driven by higher revenue sharing fees and content costs. Gross margin was 14.1% in fiscal year 2021, compared with 20.8% in fiscal year 2020.
Research and development expenses increased by 11.5% to RMB818.9 million (US$128.5 million) in fiscal year 2021 from RMB734.3 million in the prior year, primarily due to increased personnel-related expenses.
Sales and marketing expenses increased by 36.1% to RMB759.5 million (US$119.2 million) in fiscal year 2021 from RMB558.0 million in the prior year, primarily due to the increased marketing expenses to promote the Company’s content, products, services and brand name.
General and administrative expenses decreased by 26.6% to RMB326.8 million (US$51.3 million) in fiscal year 2021 from RMB445.0 million in the prior year, primarily due to decreased share-based compensation expenses.
Other income was RMB274.7 million (US$43.1 million) in fiscal year 2021, compared with RMB194.2 million in the prior year, primarily attributable to higher tax refunds and government subsidies.
Operating loss was RMB30.2 million (US$4.7 million) in fiscal year 2021, compared with an operating income of RMB725.0 million in the prior year.
Interest and short-term investments income were RMB247.0 million (US$38.8 million) in fiscal year 2021, compared with RMB313.4 million in the prior year, primarily due to decreased interest rates.
Income tax expenses decreased by 68.8% to RMB55.2 million (US$8.7 million) in fiscal year 2021 from RMB176.8 million in the prior year, primarily due to lower taxable income in fiscal year 2021.
Share of income in equity method investments, net of income taxes was RMB379.2 million (US$59.5 million) in fiscal year 2021, compared with RMB28.4 million in the prior year, primarily due to the investment gain related to a disposal of equity investment in the third quarter of 2021, as disclosed in a Form 6-K filed on July 6, 2021.
Net income attributable to HUYA Inc. was RMB583.5 million (US$91.6 million) in fiscal year 2021, compared with RMB884.2 million in the prior year.
Non-GAAP net income attributable to HUYA Inc., which excludes share-based compensation expenses, gains on fair value change of investments and equity investee’s investments, gain arising from partial disposal of an investment owned by an investee, net of income taxes, and gain arising from disposal of an equity investment, was RMB454.4 million (US$71.3 million) in fiscal year 2021, compared with RMB1,261.5 million in the prior year, which excludes share-based compensation expenses, gains on fair value change of investments and equity investee’s investments, and gain arising from partial disposal of an investment owned by an equity investee, net of income taxes.
Diluted net income per ADS was RMB2.41 (US$0.38) in fiscal year 2021, compared with RMB3.71 in the prior year.
Non-GAAP diluted net income per ADS was RMB1.88 (US$0.29) in fiscal year 2021, compared with RMB5.29 in the prior year.
Net cash provided by operating activities was RMB327.5 million (US$51.4 million) for fiscal year 2021.
Conference Call
The Company’s management will host an earnings conference call at 7:00 a.m. U.S. Eastern Time on March 22, 2022 (7:00 p.m. Beijing/Hong Kong time on March 22, 2022).
For participants who wish to join the call, please complete online registration using the link provided below 20 minutes prior to the scheduled call start time. Upon registration, participants will receive the conference call access information, including dial-in numbers, Direct Event passcode, a unique registrant ID and an e-mail with detailed instructions to join the conference call.
Participant Online Registration: http://apac.directeventreg.com/registration/event/5387135
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