HUYA Inc. (NYSE:HUYA) Q2 2019 Earnings Conference Call - Final Transcript

Aug 13, 2019 • 08:00 pm ET


HUYA Inc. (NYSE:HUYA) Q2 2019 Earnings Conference Call - Final Transcript


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Rongjie Dong

operational and financial performance for the second quarter of 2019. Regardless of negative seasonality, the second quarter is a standout with accelerating MAU expansion, significant revenue beat and better-than-expected profitability, which demonstrated the healthiness of our growth.

To illustrate, revenue in quarter two grew 93.6% year-over-year, surpassing the RMB2 billion mark for the first time. The surge in revenue exceeded the high-end of our guidance range by more than 12%. The MAUs in domestic market also grew faster than our expectation, reaching 143.9 million, with 57.3% growth year-over-year. Content [Phonetic] in MAU of our overseas business unit, Nimo TV, I'm encouraged to announce that we have already achieved the user growth target set previously for fiscal year 2019 by reaching approximately 160 million global MAU on the corporate level. The better-than-expected growth further showcased, both the effectiveness and the efficiency of our strategies, including e-sports market penetration, content diversification and technology improvement. Those strategies increasingly boost the participation and the engagement of both users and the broadcasters on our domestic platform.

Mobile MAUs remain a robust driver behind our strong quarter two performance and grew to 56 million, up 31% year-over-year and 4% quarter-over-quarter, still contributing more than 80% of live streaming revenues. By engaging with a vast number of Tier 1 broadcasters from mobile game sector, especially in Honor of Kings and Peacekeeper Elite, Huya has established, or dominate position over the major competitor in Chinese mobile game broadcasting since first half of 2019.

It is also worth noticing that non-mobile MAUs, which include both PC and the web active users, achieved an 80% year-over-year increase and 26% sequential increase, attributable to our cooperating with several leading gaming studios, especially to the pop-up streaming feature built in CrossFire and the QQ Speed in this period. The growth of non-mobile MAUs has shown the improved PC and web user experiences and the traction gained by e-sports tournaments broadcasted on our platform in quarter two.

In this quarter, our paying user number grew 46.7% year-over-year to 4.9 million, but experienced certain degree of sequential volatility due to three factors. First, seasonal variations in user activities and user growth traditionally exist between quarter one and quarter two. Compared with quarter two, quarter one usually celebrates spikes in user numbers due to Spring Festival campaigns and school holidays. If we exclude quarter one 2019 and examine the growth trend between quarter four 2018 and quarter two 2019, we can find that the paying user base maintains its growth volatility.

Secondly, while our platform acquired a large number of new users in quarter two, this incoming traffic had not yet been fully monetized. Thirdly, in quarter two, we were making product upgrade to concentrate more resources to support the new commercialization initiatives, which can drive long-term sustainable growth. We have achieved noteworthy progress in product strategy to monetize the new traffic gained from the prior periods, as we have been seeing reaccelerated growth of the paying user base in quarter three so far.