Huya Inc ((HUYA)) has held its Q4 earnings call. Read on for the main highlights of the call.
Huya Inc’s Latest Earnings Call: A Mixed Bag of Growth and Challenges
The recent earnings call of Huya Inc. painted a picture of both optimism and caution. The company reported significant growth in non-live streaming revenue and improved profitability, largely attributed to strategic transformations and AI integration. However, the call also highlighted challenges, such as declining live streaming revenues and impairment losses on investments. Despite these hurdles, positive developments in game distribution and e-sports tournaments provide a promising outlook for future growth.
Significant Growth in Non-Live Streaming Revenue
Huya Inc. reported a remarkable increase in revenues from game-related services, advertising, and other segments, which surged by 145.4% year-over-year to RMB1.33 billion. This growth signifies a shift in the company’s revenue streams, with non-live streaming now accounting for 21.9% of total net revenues, up from 7.8% in the previous year.
Improved Profitability
The company achieved a significant milestone in profitability, with non-GAAP net income reaching RMB269 million, marking a 125.6% increase year-over-year. Additionally, net cash provided by operating activities turned positive at RMB94 million, indicating a stronger financial position.
Expansion in Game Distribution
Huya’s platform has become a key player in game distribution, collaborating with more game developers and publishers. This expansion has positioned Huya as a primary distribution channel for several games, enhancing its market presence and potential for future growth.
Successful In-House E-Sports Tournaments
The company’s in-house e-sports tournaments, particularly the LOL Legend Cup Season 2, have been a success, doubling sponsorship revenue compared to the inaugural event. This achievement has attracted a wider range of well-known sponsors, showcasing Huya’s growing influence in the e-sports arena.
AI Integration and Technology Advancements
Huya has implemented AI technologies, such as the DeepSeek-R1 model and an AI-powered streamer assistant, to enhance live streaming content and user services. These advancements are expected to improve user experience and streamline operations.
Decline in Live Streaming Revenues
Despite positive developments, Huya faced a decline in live streaming revenues, which fell to RMB4.75 billion for 2024 from RMB6.45 billion the previous year. This decrease is attributed to macroeconomic and industry environment challenges.
Gross Margin Pressure
The company experienced pressure on its gross margin due to the seasonal nature of major e-sports events and related cost allocation. Despite improvements, this remains a challenge for Huya’s financial performance.
Impairment Loss on Investments
Huya recognized an impairment loss of RMB151 million for Q4, due to the weak financial performance of certain investees. This highlights the risks associated with the company’s investment strategy.
Forward-Looking Guidance
Looking ahead, Huya remains optimistic about its growth prospects. The company reported significant growth in certain segments despite external challenges, with revenues from game-related services, advertising, and others increasing by 145.4% year-over-year. Huya also announced a 2025-2027 dividend plan to distribute at least $400 million over three years, including a special 2025 cash dividend of $1.47 per ADS.
In conclusion, Huya Inc.’s latest earnings call reflects a company navigating through both growth opportunities and challenges. While non-live streaming revenue and profitability have seen significant improvements, the decline in live streaming revenues and investment impairments pose challenges. Nonetheless, the company’s strategic focus on game distribution, e-sports, and AI integration offers a promising path forward.