GUANGZHOU - HUYA Inc . (NYSE: HUYA), a prominent game live streaming platform in China, disclosed its financial outcomes for the second quarter ending June 30, 2024, observing an increase in mobile monthly active users (MAUs) and a significant rise in revenues from game-related services.
The company's total net revenues reached RMB1.54 billion (US$212.1 million), a decline from the previous year's RMB1.83 billion. However, game-related services, advertising, and other businesses surged by 152.7% year-over-year to RMB308.5 million, contributing to 20% of total net revenues.
The quarter saw a 26.3% year-over-year reduction in total operating expenses, contributing to a net income of RMB29.6 million (US$4.1 million), up from RMB20.3 million in the same period of 2023. Non-GAAP net income, which excludes certain expenses, stood at RMB97.0 million (US$13.3 million), although this marked a decrease from RMB117.0 million from the previous year.
Huya (NYSE:HUYA)'s average mobile MAUs increased slightly to 83.5 million, up from 82.9 million in 2023, attributed to the success of e-sports events. The company also expanded its game industry presence through enhanced collaboration on game promotion, distribution, and in-game item sales, which helped increase its paying user base to 4.5 million for the quarter.
In line with its financial strategy, Huya has repurchased 17.1 million of its shares for US$56.7 million as of the end of June 2024 and declared a special cash dividend of approximately US$250 million for shareholders, showcasing the company's robust balance sheet and commitment to shareholder returns.
The board of directors has also authorized the renewal and continued use of the unutilized quota under the existing share repurchase program, which is effective through March 31, 2025.
This financial report is based on a press release statement from HUYA Inc. and reflects the company's performance amidst ongoing uncertainties in the macro environment and industry landscape.
In other recent news, HUYA Inc. has been the focus of several analyst upgrades, reflecting a positive outlook on the company's strategic realignment and growth potential. JPMorgan upgraded HUYA's stock from Neutral to Overweight, citing the company's shift from live streaming to game promotion and a projected fivefold growth in non-live streaming revenue from 2023 to 2026.
Similarly, Morgan Stanley upgraded HUYA from Underweight to Equalweight, recognizing the company's strategic progress and initiatives to enhance shareholder value. Additionally, HSBC upgraded HUYA from Hold to Buy, forecasting the company to become free cash flow positive in 2024.
These developments follow HUYA's strong first quarter of 2024. The company reported a 137.6% year-over-year surge in game-related services, advertising, and other revenues, and a net income of approximately RMB 92 million on a non-GAAP basis. Despite a decline in live streaming revenues, HUYA demonstrated a commitment to shareholder returns through a combination of buybacks and dividends.
Given these recent developments, investors may want to keep an eye on HUYA as it continues to navigate its strategic shift and looks to capitalize on its growth potential.
InvestingPro Insights
As HUYA Inc. navigates through the complexities of the gaming industry, the latest financial figures reflect a mixed picture of the company's health. According to InvestingPro data, HUYA's market capitalization stands at $1.02 billion, indicating a significant presence in the market.
Despite experiencing a decline in revenue over the last twelve months as of Q1 2024, with a decrease of approximately 25.41%, the company's strategic initiatives in game-related services and shareholder returns paint a proactive approach to growth and financial management.
InvestingPro Tips highlight that HUYA is trading at a low revenue valuation multiple, which could attract investors looking for undervalued opportunities. Moreover, the company holds more cash than debt on its balance sheet, suggesting a solid financial position that can support its operations and investment strategies.
Analysts predict that the company will be profitable this year, which is a positive turnaround from not being profitable over the last twelve months. It's worth noting that there are 11 additional tips listed in InvestingPro for HUYA, which could provide further insights into the company's potential.
Investors may also find the company's recent price performance intriguing. HUYA has seen a large price uptick over the last six months, with a 73.39% return, and a year-to-date price total return of 41.65%. This momentum could signal growing investor confidence in the company's prospects.
For those interested in deeper analysis and additional metrics that could influence investment decisions, more InvestingPro Tips can be found at https://www.investing.com/pro/HUYA.
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