GUANGZHOU, China, May 13, 2024 /PRNewswire/ -- HUYA Inc. ("Huya" or the "Company") (NYSE:HUYA), a leading game live streaming platform in China, today announced its unaudited financial results for the first quarter ended March 31, 2024. First Quarter 2024 Highlights[1] Total net revenues for the first quarter of 2024 were RMB1,504.0 million (US$208.3 million), compared with RMB1,962.5 million for the same period of 2023. Net income attributable to HUYA Inc. was RMB71.0 million (US$9.8 million) for the first quarter of 2024, compared with RMB39.6 million for the same period of 2023. Non-GAAP net income attributable to HUYA Inc.[2] was RMB92.5 million (US$12.8 million) for the first quarter of 2024, compared with RMB85.1 million for the same period of 2023. Average mobile MAUs[3] of Huya Live for the first quarter of 2024 was 82.6 million, compared with 82.1 million for the same period of 2023. Mr. Junhong Huang, Acting Co-Chief Executive Officer and Senior Vice President of Huya, commented, "In the first quarter of 2024, strong strategic execution delivered advancements across the board as we navigated an evolving industry environment. We upgraded the Huya Live mobile application and held an array of innovative cross-platform e-sports events and operational activities, further enhancing our content influence and brand awareness. As a result, Huya Live's average mobile MAUs grew marginally year-over-year to 82.6 million in the first quarter. Furthermore, we made encouraging progress in the commercialization of our game-related services. Rapid growth in revenues from game distribution and advertising services, as well as in-game item sales, drove our game-related services, advertising and other revenues for the first quarter to RMB243.6 million, a year-over-year increase of 137.6% and a quarter-over-quarter increase of 30.7%. Moreover, paying users[4] on Huya Live increased sequentially to 4.4 million in the quarter. These improvements reflect a strong base of high-value gamer users and a potential validation of our new direction. More importantly, we are seeing that our game-related services business tends to have a higher gross margin, driving an overall profitability enhancement. As we move through 2024, we will continue to address changes in user demand and industry dynamics with upgrades across content, platform ecology, technology, products and commercialization methods, as well as deepened cooperation with industry partners and content creators. We remain dedicated to seizing opportunities and delivering future business growth." Ms. Ashley Xin Wu, Huya's Acting Co-Chief Executive Officer and Vice President of Finance, continued, "Our total net revenues for the first quarter were approximately RMB1.5 billion, with revenues from our game-related services, advertising and other businesses accounting for 16.2% of total net revenues, up from 5.2% for the same period last year. The growing revenue contribution from businesses with higher gross margins and our continued cost optimization efforts drove an increase in our gross margin to 14.7% for the first quarter. We also reduced total operating expenses by 17.8% year-over-year through further operational efficiency enhancements. Furthermore, we continued to return value to shareholders. As of the end of March 2024, we had repurchased US$48.5 million of Huya shares through our share repurchase program. We also announced a special cash dividend declaration totaling approximately US$150 million in March 2024. These initiatives are expected to return an aggregate value of nearly US$200 million to our shareholders. Going forward, we will remain focused on enhancing our financial and operational performance while building long-term shareholder value." [1] In December 2023, the Company acquired a global mobile application service provider from Tencent Holdings Limited for an aggregate cash consideration of US$81 million, the principal terms of which were previously disclosed. As a result of this business combination under common control, in accordance with ASC 805, Business Combinations, the Company has consolidated the financial results of this mobile application service provider on a retrospective basis since the first quarter of 2022. Accordingly, retrospective adjustments have been made to the Company's consolidated historical financial information presented herein, reflecting the consolidation of this mobile application service provider. The Company does not believe the retrospective adjustments to the Company's results to be material, as compared to the historical financial information previously presented. Given that this was a transaction that involved entities under common control of Tencent Holdings Limited, all assets and assumed liabilities transferred have been recognized at the historical cost of the parent. [2] "Non-GAAP net income attributable to HUYA Inc." is defined as net income attributable to HUYA Inc. excluding share-based compensation expenses and amortization of intangible assets from business acquisitions, net of income taxes, to the extent applicable. For more information, please refer to the section titled "Use of Non-GAAP Financial Measures" and the table captioned "HUYA Inc. Unaudited Reconciliations of GAAP and Non-GAAP Results" at the end of this press release. [3] Refers to average monthly active users on mobile apps. Average mobile MAUs for any period is calculated by dividing (i) the sum of active users on the mobile apps for each month during such relevant period, by (ii) the number of months during such relevant period. [4] Refers to the sum of user accounts that purchased various products and services on the Company's platform at least once during such relevant period. First Quarter 2024 Financial Results Total net revenues for the first quarter of 2024 were RMB1,504.0 million (US$208.3 million), compared with RMB1,962.5 million for the same period of 2023. Live streaming revenues were RMB1,260.4 million (US$174.6 million) for the first quarter of 2024, compared with RMB1,859.9 million for the same period of 2023, primarily due to the continued soft macroeconomic and industry environment and the Company's proactive business adjustments in support of its strategic transformation and prudent operations. Game-related services, advertising and other revenues (formerly known as advertising and other revenues) were RMB243.6 million (US$33.7 million) for the first quarter of 2024, compared with RMB102.5 million for the same period of 2023, primarily due to increased revenues from game distribution and advertising services and in-game item sales. Cost of revenues decreased by 24.2% to RMB1,283.5 million (US$177.8 million) for the first quarter of 2024 from RMB1,693.4 million for the same period of 2023, primarily due to decreased revenue sharing fees and content costs, as well as bandwidth costs. Revenue sharing fees and content costs decreased by 24.7% to RMB1,123.0 million (US$155.5 million) for the first quarter of 2024 from RMB1,490.4 million for the same period of 2023, primarily due to the decrease in revenue sharing fees associated with the decline in live streaming revenues, as well as lower costs related to e-sports content. Bandwidth costs decreased by 35.8% to RMB60.3 million (US$8.3 million) for the first quarter of 2024 from RMB93.9 million for the same period of 2023, primarily due to improved bandwidth cost management, favorable pricing terms and continued technology enhancement efforts. Gross profit was RMB220.5 million (US$30.5 million) for the first quarter of 2024, compared with RMB269.1 million for the same period of 2023. Gross margin was 14.7% for the first quarter of 2024, compared with 13.7% for the same period of 2023, primarily due to decreased revenue sharing fees and content costs as a percentage of total net revenues. Research and development expenses decreased by 11.9% to RMB135.1 million (US$18.7 million) for the first quarter of 2024 from RMB153.4 million for the same period of 2023, primarily due to decreased share-based compensation expenses. Sales and marketing expenses decreased by 26.2% to RMB76.2 million (US$10.6 million) for the first quarter of 2024 from RMB103.3 million for the same period of 2023, primarily due to decreased marketing and promotion fees, as well as personnel-related expenses. General and administrative expenses decreased by 18.3% to RMB60.0 million (US$8.3 million) for the first quarter of 2024 from RMB73.5 million for the same period of 2023, primarily due to decreased share-based compensation expenses. Other income was RMB12.3 million (US$1.7 million) for the first quarter of 2024, compared with RMB4.2 million for the same period of 2023, primarily due to higher government subsidies. Operating loss was RMB38.5 million (US$5.3 million) for the first quarter of 2024, compared with RMB56.9 million for the same period of 2023. Interest income was RMB117.1 million (US$16.2 million) for the first quarter of 2024, compared with RMB96.4 million for the same period of 2023. Net income attributable to HUYA Inc. was RMB71.0 million (US$9.8 million) for the first quarter of 2024, compared with RMB39.6 million for the same period of 2023. Non-GAAP net income attributable to HUYA Inc. was RMB92.5 million (US$12.8 million) for the first quarter of 2024, compared with RMB85.1 million for the same period of 2023. Basic and diluted net income per American depositary share ("ADS") were each RMB0.30 (US$0.04) for the first quarter of 2024. Basic and diluted net income per ADS were each RMB0.16 for the first quarter of 2023. Each ADS represents one Class A ordinary share of the Company. Non-GAAP basic and diluted net income per ADS were RMB0.40 (US$0.05) and RMB0.39 (US$0.05), respectively, for the first quarter of 2024. Non-GAAP basic and diluted net income per ADS were each RMB0.35 for the first quarter of 2023. As of March 31, 2024, the Company had cash and cash equivalents, short-term deposits, short-term investment and long-term deposits of RMB9,419.8 million (US$1,304.6 million), compared with RMB9,916.4 million as of December 31, 2023. Share Repurchase Program On August 15, 2023, the board of directors of the Company authorized a share repurchase program under which the Company may repurchase up to US$100 million of its ADSs or ordinary shares over a 12-month period. As of March 31, 2024, the Company had repurchased 15.2 million ADSs with a total aggregate consideration of US$48.5 million under this program. Earnings Webinar The Company's management will host a Tencent Meeting Webinar at 8:00 a.m. U.S. Eastern Time on May 13, 2024 (8:00 p.m. Beijing/Hong Kong time on May 13, 2024), to review and discuss the Company's business and financial performance. For participants who wish to join the webinar, please complete the online registration in advance using the links provided below. Upon registration, participants will receive an email with webinar access information, including meeting ID, meeting link, dial-in numbers, and a unique attendee ID to join the webinar. Participant Online Registration: Chinese Mainland[5]: https://meeting.tencent.com/dw/HQ2A15tcVgld International: https://voovmeeting.com/dw/HQ2A15tcVgld A live webcast of the webinar will be accessible at https://ir.huya.com, and a replay of the webcast will be available following the session. [5] For the purpose of this announcement only, Chinese Mainland excludes the Hong Kong Special Administrative Region, the Macao Special Administrative Region of the People's Republic of China, and Taiwan.   About HUYA Inc. HUYA Inc. is a leading game live streaming platform in China. As a technology-driven company, Huya offers rich and dynamic content across games, e-sports, and other entertainment genres where it has cultivated a large, highly engaged, interactive, immersive community of game enthusiasts. Building on its success in game live streaming and through close collaboration with game companies, e-sports tournament organizers, broadcasters and talent agencies, Huya is expanding its presence in the game industry, both domestically and internationally. By providing more innovative game-related services, the Company is committed to meeting the evolving needs of game enthusiasts, content creators, and industry partners. Use of Non-GAAP Financial Measures The unaudited condensed consolidated financial information is prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"), except that the consolidated statement of changes in shareholders' equity, consolidated statements of cash flows, and the detailed notes have not been presented. Huya uses non-GAAP gross profit, non-GAAP operating loss, non-GAAP net income (loss) attributable to HUYA Inc., non-GAAP net income (loss) attributable to ordinary shareholders, non-GAAP basic and diluted net income (loss) per ordinary shares, and non-GAAP basic and diluted net income (loss) per ADS, which are non-GAAP financial measures. Non-GAAP gross profit is gross profit excluding share-based compensation expenses allocated in cost of revenues. Non-GAAP operating loss is operating loss excluding share-based compensation expenses and amortization of intangible assets from business acquisitions. Non-GAAP net income (loss) attributable to HUYA Inc. is net income (loss) attributable to HUYA Inc. excluding share-based compensation expenses, impairment of goodwill and investments, and amortization of intangible assets from business acquisitions, net of income taxes, to the extent applicable. Non-GAAP net income (loss) attributable to ordinary shareholders is net income (loss) attributable to ordinary shareholders excluding share-based compensation expenses, impairment of goodwill and investments, and amortization of intangible assets from business acquisitions, net of income taxes, to the extent applicable. Non-GAAP basic and diluted net income (loss) per ADS is non-GAAP net income (loss) attributable to ordinary shareholders divided by weighted average number of ADS used in the calculation of non-GAAP basic and diluted net income (loss) per ADS. The Company believes that separate analysis and exclusion of the impact of (i) share-based compensation expenses, (ii) impairment of goodwill and investments, and (iii) amortization of intangible assets from business acquisitions (net of income taxes), add clarity to the constituent parts of its performance. The Company reviews these non-GAAP financial measures together with GAAP financial measures to obtain a better understanding of its operating performance. It uses the non-GAAP financial measures for planning, forecasting and measuring results against the forecast. The Company believes that non-GAAP financial measures represent useful supplemental information for investors and analysts to assess its operating performance without the effect of (i) share-based compensation expenses, and (ii) amortization of intangible assets from business acquisitions (net of income taxes), which have been and will continue to be significant recurring expenses in its business, and (iii) impairment of goodwill and investments, which may recur when there is observable price change in the future. However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact the Company's net income for the period. In addition, because non-GAAP financial measures are not measured in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. In light of the foregoing limitations, you should not consider a non-GAAP financial measure in isolation from or as an alternative to the financial measures prepared in accordance with U.S. GAAP. The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned "HUYA Inc. Unaudited Reconciliations of GAAP and Non-GAAP Results" at the end of this announcement. Exchange Rate Information This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB7.2203 to US$1.00, the noon buying rate in effect on March 29, 2024, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the Renminbi or U.S. dollars amounts referred to in this announcement could have been or could be converted into U.S. dollars or Renminbi, as the case may be, at any particular rate or at all. Safe Harbor Statement This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the quotations from management in this announcement, as well as Huya's strategic and operational plans, contain forward-looking statements. Huya may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission ("SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Huya's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Huya's goals and strategies; Huya's future business development, results of operations and financial condition; the expected growth of the live streaming market and game market; the expectation regarding the rate at which to gain active users, especially paying users; Huya's ability to monetize the user base; Huya's efforts in complying with applicable data privacy and security regulations; fluctuations in general economic and business conditions in China; the economy in China and elsewhere generally; any regulatory developments in laws, regulations, rules, policies or guidelines applicable to Huya; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Huya's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Huya does not undertake any obligation to update any forward-looking statement, except as required under applicable law. For investor and media inquiries, please contact:  In China: HUYA Inc.Investor RelationsTel: +86-20-2290-7829E-mail: Piacente Financial CommunicationsJenny CaiTel: +86-10-6508-0677E-mail: In the United States: Piacente Financial Communications   Brandi PiacenteTel: +1-212-481-2050E-mail:   HUYA INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (All amounts in thousands, except share, ADS, per share data and per ADS data) As of December 31, As of March 31, 2023 2024 2024 RMB RMB US$ Assets Current assets Cash and cash equivalents 511,973 542,122 75,083 Restricted cash 18,137 19,632 2,719 Short-term deposits 6,851,160 6,624,848 917,531 Short-term investment - 10,000 1,385 Accounts receivable, net 64,258 74,365 10,299 Prepaid assets and amounts due from related      parties, net 148,648 158,902 22,008 Prepayments and other current assets, net 556,435 645,010 89,333 Total current assets 8,150,611 8,074,879 1,118,358 Non-current assets Long-term deposits 2,553,293 2,242,850 310,631 Investments 751,844 751,890 104,136 Goodwill 456,976 457,771 63,401 Property and equipment, net 326,765 376,244 52,109 Intangible assets, net 161,739 151,978 21,049