Douyu’s Earnings Call: Mixed Sentiments and Strategic Shifts

Douyu International Holdings ((DOYU)) has held its Q4 earnings call. Read on for the main highlights of the call.

The recent earnings call for Douyu International Holdings presented a mixed sentiment, highlighting both significant achievements and ongoing challenges. While the company has made strides in revenue diversification and cost optimization, it continues to grapple with declining revenues and paying user metrics. The management is actively refining strategies to ensure long-term stability.

Revenue Diversification Success

Douyu International Holdings has successfully diversified its revenue streams, with innovative business, advertising, and other segments contributing to 28% of total revenues in 2024. This marks an impressive 63.6% increase year-over-year, showcasing the company’s efforts to broaden its income sources beyond traditional livestreaming.

Cost Optimization Achievements

The company has made notable progress in cost optimization, reducing content costs by 19% year-over-year. Additionally, expenses in sales and marketing, research and development, and general and administrative areas have decreased by 17% year-over-year, reflecting a strategic focus on operational efficiency.

Special Cash Dividends

In a move that underscores confidence in its growth potential, Douyu declared two special cash dividends totaling USD 600 million. This decision highlights the company’s commitment to returning value to shareholders despite current challenges.

Quarterly Mobile MAUs Increase

Douyu reported an increase in mobile monthly active users (MAUs), reaching 44.5 million in Q4 2024, which is a 5.9% rise quarter-over-quarter. This growth indicates a positive trend in user engagement on mobile platforms.

Innovative Business Growth

The innovative business segment has shown robust growth, with revenue increasing by 47.2% in Q4 2024. This segment now accounts for 35.7% of Douyu’s total revenue, highlighting its importance in the company’s overall strategy.

Year-over-Year Revenue Decline

Despite diversification efforts, Douyu experienced a 12.3% decline in total net revenues year-over-year in Q4 2024. Livestreaming revenues were particularly affected, dropping by 28.4%, which remains a significant concern for the company.

Decline in Paying Users and ARPPU

The company faced challenges with a decline in paying users and a decrease in average revenue per paying user (ARPPU) by 11.5% to RMB 246 in Q4 2024 compared to the previous year. This trend poses a challenge to revenue growth.

Gross Margin and Net Loss Challenges

Douyu’s gross margin fell to 6.1% in Q4 2024 from 9.7% in the same period of 2023, coupled with a net loss of RMB 163.7 million. These figures reflect the financial pressures the company is currently facing.

User Base and Revenue Pressure

Adjustments in streamer resources and content costs may lead to noticeable declines in the user base and revenue in the short term. This strategic shift is part of Douyu’s efforts to stabilize its financial performance.

Forward-Looking Guidance

Looking ahead to 2025, Douyu is focusing on cost reduction and efficiency improvements. The company aims to advance monetization within its niche game ecosystem and enhance AI capabilities. These strategic initiatives are expected to drive future growth and stability.

In summary, Douyu International Holdings’ earnings call reflects a company in transition, balancing between leveraging new growth opportunities and addressing existing challenges. While the sentiment is mixed, the company’s commitment to diversification and cost optimization offers a promising outlook for the future.