HUYA Inc (HUYA) 2024 Q2 法說會逐字稿

Good day and good evening and thank you for standing bye. Welcome to HUYA's second-quarter 2024 earnings webinar. I am Hanyu Liu from HUYA's Investor Relations. (Operator Instructions) Please be advised that today's webinar is being recorded.

早安，晚安，感謝您的光臨。歡迎參加虎牙2024年第二季財報網路研討會。我是虎牙投資者關係部的劉瀚宇。（操作員說明）請注意，今天的網路研討會正在錄製中。

The company's financial and operational results were issued earlier today and are posted online. You can also view the earnings press release by visiting the IR website at ir.huya.com. A replay of the call will be available on the IR website in a few hours.

該公司的財務和營運業績於今天稍早發布並發佈在網路上。您也可以造訪 IR 網站 ir.huya.com 查看收益新聞稿。幾個小時後，IR 網站將提供此次電話會議的重播。

Participants of management on today's call will be Mr. Junhong Huang, Acting Co-CEO and Senior Vice President of HUYA; and Ms. Ashley Xin Wu, Acting Co-CEO and Vice President of Finance. Management will begin with prepared remarks and the call will conclude with a Q&A session.

出席今天電話會議的管理階層包括虎牙代理聯席執行長兼高級副總裁黃俊宏先生；以及代理聯合執行長兼財務副總裁 Ashley Xin Wu 女士。管理階層將以準備好的發言開始，電話會議將以問答環節結束。

Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today.

在我們繼續之前，請注意，今天的討論將包含根據 1995 年美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述。前瞻性陳述涉及固有風險和不確定性。因此，該公司的業績可能與今天表達的觀點有重大差異。

Further information regarding these and other risks and uncertainties is included in the company's prospectus and other public filings as filed with the US Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements except as required under applicable law.

有關這些以及其他風險和不確定性的更多資訊包含在該公司向美國證券交易委員會提交的招股說明書和其他公開文件中。除適用法律要求外，本公司不承擔更新任何前瞻性聲明的義務。

Please also note that HUYA's earnings press release and this conference call include discussions of unaudited GAAP financial information as well as unaudited non-GAAP financial measures. HUYA's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. With that, I'm pleased to turn the call over to our Co-CEO and SVP, Mr. Huang. Please go ahead.

另請注意，虎牙的收益新聞稿和本次電話會議包括對未經審計的 GAAP 財務資訊以及未經審計的非 GAAP 財務指標的討論。HUYA 的新聞稿包含未經審計的非 GAAP 衡量標準與未經審計的最直接可比較的 GAAP 衡量標準的調整表。至此，我很高興將電話轉給我們的聯合執行長兼高級副總裁黃先生。請繼續。

Okay. Hello, everyone. Thank you for joining our earning conference today. Against the backdrop of persistent uncertainty in the macro environment and industry landscape, we were pleased to resume quarter-over-quarter growth in total net revenues in the second quarter, up 2.5% from the previous quarter to reach RMB1.54 billion, driven by the rapid revenue growth of our game-related services, advertising, and other businesses.

好的。大家好。感謝您今天參加我們的獲利會議。在宏觀環境和產業格局持續不確定的背景下，我們很高興第二季淨收入總額恢復較上季成長，季增2.5%，達到人民幣15.4億元，這主要得益於我們的遊戲相關服務、廣告和其他業務的收入快速成長。

Notably, game-related services, advertising, and other revenues reached a milestone, contributing 20% of our total net revenues for the first time. We also sustained our profitability, with non-GAAP net income of approximately RMB97 million. Solid strategic execution across business and commercialization transformation, content and platform ecology upgrades, and technology and product advancement supported this quarter's positive outcomes.

值得注意的是，遊戲相關服務、廣告和其他收入達到了一個里程碑，首次占我們總淨收入的20%。我們也維持了獲利能力，非美國通用會計準則淨利潤約為人民幣 9,700 萬元。業務和商業化轉型、內容和平台生態升級、技術和產品進步等方面紮實的策略執行支撐了本季的積極成果。

Now, let's take a detailed look at our recent operational and strategic progress. First, some user metrics for the second quarter of 2024. Huya Live's average mobile MAUs reached 82.5 million -- 83.5 million, up from 82.6 million for the previous quarter and 82.9 million for the same period last year. The growth was mainly driven by the success of several self-organized e-sports events. Various recent new game launches and our continuous user experience improvement also contributed to enhanced user engagement.

現在，讓我們詳細了解我們最近的營運和策略進展。首先是 2024 年第二季的一些使用者指標。虎牙直播的平均移動月活躍用戶數達到 8,250 萬至 8,350 萬，高於上一季的 8,260 萬和去年同期的 8,290 萬。這項成長主要得益於多項自辦電競賽事的成功。最近推出的各種新遊戲以及我們不斷改進的用戶體驗也有助於提高用戶參與度。

As we mentioned on our last call, we are strengthening our cooperation with various platforms and products to enhance our platform ecology and reach a wider range of users. This includes professionally generated content co-production, broadcaster across platform streaming, and joint promotion in niche initiatives.

正如我們在上次電話會議中所提到的，我們正在加強與各個平台和產品的合作，以增強我們的平台生態並覆蓋更廣泛的用戶。這包括專業生成的內容聯合製作、跨平台串流廣播以及利基計劃的聯合推廣。

As a barrier-breaking industry pioneer, we believe we can further increase the HUYA platform's influence within this more open content ecosystem. We have already started to selectively bring our live streaming and video content to other content platform as well as various product line within the Tencent ecosystem.

作為打破障礙的產業先鋒，我們相信我們能夠在這個更開放的內容生態系統中進一步提高虎牙平台的影響力。我們已經開始有選擇地將我們的直播和視訊內容引入其他內容平台以及騰訊生態系統內的各種產品線。

In June, HUYA content reached a total of approximately 120 million mobile users. We are confident this broadened reach will facilitate the creation of more commercialization opportunities.

6月，虎牙內容總計覆蓋約1.2億個行動用戶。我們相信，這種擴大的覆蓋範圍將有助於創造更多的商業化機會。

Moving on to our strategic transformation. Our game-related services continue to expand rapidly as we collaborated with more game titles, leverage our live-streaming content and PGC programs, and employed innovative operational approaches to drive business development.

繼續我們的策略轉型。隨著我們與更多遊戲合作，利用直播內容和PGC項目，並採用創新的營運方法來推動業務發展，我們的遊戲相關服務持續快速擴張。

In the second quarter, revenues from our game-related services, advertising and other segment increased by 152.7% year over year and 26.6% quarter over quarter to RMB308.5 million. In terms of game distribution, we continue to expand evergreen games coverage and drive improvement in the user return rates. We also participated in the promotion and distribution of newly launched DnF Mobile in the second quarter.

第二季度，遊戲相關服務、廣告及其他業務收入年增152.7%，較上季成長26.6%至人民幣3.085億元。遊戲發行方面，我們持續擴大常青遊戲覆蓋範圍，推動用戶回頭率提升。我們也參與了第二季新推出的DnF Mobile的推廣和發行。

Specifically, we set up a special pre-download area for list game being the game center section of Huya Live app, promoted the game with specially designed programs and exclusive props and gifts and recruited broadcasters for the game's live streaming, all of which help to increase the game's exposure and popularity on our platform.

具體來說，我們在虎牙直播遊戲中心版塊專門設立了榜單遊戲預下載區，透過專門設計的節目和專屬道具禮品進行遊戲宣傳，並招募主播進行遊戲直播，這些都有助於增加遊戲在我們平台上的曝光度和受歡迎程度。

DnF Mobile not only ranked top among this year's new games in live streaming viewership indicators but also achieved better-than-expected result in game distribution. In particular, early data shows that in-game spend per user of HUYA distribution channel user for this game was significantly higher than that of broader game channels, highlighting our platform's deeply engaged base of high-value gamer users.

《DnF手遊》不僅在直播收視指標上位居今年新遊戲榜首，在遊戲發行方面也取得了好於預期的成績。特別是，早期數據顯示，虎牙分銷管道用戶在該遊戲中的每位用戶的遊戲內支出顯著高於更廣泛的遊戲管道，凸顯了我們平台的高價值遊戲玩家用戶基礎的深度參與。

We also commenced in-game item sales for League of Legends, LoL; Wild Rift; and VALORANT in the second quarter, innovatively combining game prop sales with corresponding tournaments to fully leverage this game's rich e-sports content. For example, we sold LoL champion skins through our LoL Legend Cup live-streaming channel, which generated great purchase interest.

我們也開始了《英雄聯盟》、《英雄聯盟》的遊戲內物品銷售；狂野裂谷；第二季的《VALORANT》，將遊戲道具銷售創新與對應賽事結合起來，充分發揮遊戲豐富的電競內容。例如，我們透過英雄聯盟傳奇杯直播管道銷售英雄聯盟冠軍皮膚，產生了極大的購買興趣。

In terms of game advertising, in addition to gearing up for the promotion of this summer's upcoming games, we recently produced [Yijing Daoudi] competing till the end, an interactive gameplay variety show that integrates game promotion and entertainment content under different game theme in each episode.

遊戲廣告方面，除了為今年暑期即將上市的遊戲做好宣傳外，近期我們還製作了《一競到地》，這是一檔將各遊戲主題下的遊戲宣傳和娛樂內容融為一體的互動玩法綜藝節目。

The program successfully engage users on our platform and prove effective in driving active players to corresponding games. It is worth mentioning that our game-related services have also opened up new income sources for our content creators, gradually improving their income levels.

該計劃成功地吸引了我們平台上的用戶，並證明可以有效地推動活躍玩家進入相應的遊戲。值得一提的是，我們的遊戲相關服務也為我們的內容創作者開闢了新的收入來源，逐步提高了他們的收入水準。

In the first half of this year, several thousand of our broadcasters received revenue sharing and commissions from game distribution and prop sales. As e-sports content represent one of our core offerings, we continuously refine via self-organized e-sports events.

今年上半年，我們的數千家主播獲得了遊戲發行和道具銷售的收入分成和佣金。由於電競內容是我們的核心產品之一，我們透過自組織的電競賽事不斷精進。

Our Legend Cup held in the second quarter is a perfect example of our progress in upgrading tournaments, products, and operational strategies. Legend Cup is our premium self-organized tournament in cooperation with League of Legends game. This event brought together outstanding retired and active professional players and introduced bold innovations in the competition format and schedule.

第二季度舉辦的傳奇杯，是我們在賽事、產品、營運策略上不斷升級的一個很好的例子。傳奇盃是我們與英雄聯盟遊戲合作自辦的優質賽事。本次賽事匯集了退役和現役的優秀職業選手，並在比賽形式和賽程上進行了大膽創新。

We livestreamed the entire event beginning with player selection and team formation and distributed highlight videos across multiple platforms. This enhancement help attract widespread interest from League of Legends gamers and e-sports viewers, both within and outside HUYA's platform.

我們從選手選擇和團隊組建開始對整個活動進行了直播，並在多個平台上分發了精彩影片。這項增強功能有助於吸引虎牙平台內外的英雄聯盟遊戲玩家和電競觀眾的廣泛興趣。

We also introduced a number of special features for the Legend Cup on our HUYA Live app. For example, we set up designated event's discussion area to aggregate event hot topics, player news, short videos, and official tournament information. In addition, a new rating card function allowed viewers to comment on multiple aspects of players' performance, showcasing players' diverse characteristics and increasing users' interaction and enjoyment.

我們也在虎牙直播應用程式上推出了傳奇杯的一些特殊功能。例如，我們設立指定賽事討論區，聚合賽事熱點、選手動態、短片、賽事官方資訊等。此外，全新的評分卡功能可以讓觀眾對選手的表現進行多方面的評價，展現選手的多元化特點，增加用戶的互動性和觀賞性。

In terms of event presentation, we created a voice capture live broadcast room for this tournament. Powered by cutting-edge automatic speech recognition technology and an e-sport professional vocabulary library, this feature instantly convert oral communication between players into text, immersing the audience in the player's game experience.

在賽事呈現方面，我們為本次賽事打造了語音捕捉直播間。該功能基於尖端的自動語音識別技術和電子競技專業詞彙庫，可將玩家之間的口頭交流即時轉換為文本，讓觀眾沉浸在玩家的遊戲體驗中。

Furthermore, our Legend Cup was seamlessly integrated into LoL's professional league schedules to complement and enrich the LoL e-sports content ecosystem. Legend Cup also provided opportunities for retired professional players to return to the top arena and quickly attract attention, while its entertaining elements drew a diverse crowd of fresh viewers, expanding the e-sports and the audience.

此外，我們的傳奇盃無縫融入了英雄聯盟職業聯賽賽程，補充和豐富了英雄聯盟電競內容生態。傳奇盃也為退休職業選手提供了重返頂級賽場並迅速引起關注的機會，同時其娛樂性元素也吸引了多元化的新鮮觀眾，擴大了電子競技的規模和受眾群體。

We were pleased to see this event's viewership set a new record for HUYA's in-house produced content. Its popularity index on our platform was also comparable to that of top-tier licensed professional events. More importantly, through events like this one, we hope to enhance the influence and monetization of e-sports event IPs and promote the e-sports industry sustainable development.

我們很高興看到本次活動的收視率創下了虎牙自製內容的新紀錄。它在我們平台上的受歡迎程度指數也與頂級授權專業賽事相當。更重要的是，我們希望透過這樣的活動，提升電競賽事IP的影響力與變現能力，推動電競產業的永續發展。

Our successful sale of League of Legends champion skins at the Legend Cup demonstrated HUYA's prowess in e-sports event monetization. Legend Cup's high popularity across platforms and sold-out of live finals also underscore our self-organized events commercial value. Inspired by this success, we will continue to develop self-produced content and create more influential and commercially valuable event IPs.

這次英雄聯盟冠軍造型在英雄盃的成功發售，展現了虎牙在電競賽事變現的實力。傳奇盃跨平台的高人氣以及現場決賽的場場爆滿也凸顯了我們自辦賽事的商業價值。受此成功的啟發，我們將繼續開發自製內容，打造更具影響力和商業價值的活動IP。

In summary, we have made solid progress despite some external challenges. We will continue to consolidate our foundation and actively develop our business as we explore the industry's long-term possibilities. While maintaining our core competitiveness in game livestreaming, we will drive game-related services development with content and platform ecology, upgrade technology advancement, and product innovation, expanding HUYA's presence in the game industry value chain.

總而言之，儘管面臨一些外部挑戰，我們還是取得了紮實進展。我們將繼續夯實基礎，積極發展業務，探索產業的長期可能性。在維持遊戲直播核心競爭力的同時，以內容與平台生態帶動遊戲相關服務發展，提昇技術進步與產品創新，擴大虎牙在遊戲產業價值鏈的影響力。

With that, I will turn the call over to our acting Co-CEO and VP of Finance, Ashley Wu, to share more details on our results. Ashley, please go ahead.

接下來，我將把電話轉給我們的代理聯席執行長兼財務副總裁 Ashley Wu，分享更多有關我們業績的詳細資訊。阿什利，請繼續。

Thank you, Vincent, and hello, everyone. I'll start with an update on our professional content enrichment. In terms of licensed content, we broadcasted over 80 licensed professional e-sports tournaments in the second quarter of 2024. The LoL Mid-Season Invitational attracted great attention, and the LPL, KPL, and CFPL professional leagues remain among our most popular events. The VALORANT Champions, [Chou Siyen] and ESL Pro League Season 19 for Counter-Strike 2 were also welcomed by our users.

謝謝你，文森特，大家好。我將首先介紹我們專業內容豐富的最新情況。在授權內容方面，2024年第二季我們轉播了超過80場授權職業電競賽事。LoL季中邀請賽備受關注，LPL、KPL、CFPL職業聯賽依然是我們最受歡迎的賽事之一。《VALORANT》冠軍、[Chou Siyen] 和《反恐精英 2》的 ESL 職業聯賽第 19 季也受到了我們用戶的歡迎。

In addition to covering extensive leading licensed e-sports events in China, we are expanding the range of international e-sports content available on our platform. For instance, we are broadcasting the inaugural Esports World Cup in Saudi Arabia starting in July, further enriching our high-quality e-sports content library.

除了涵蓋中國廣泛的領先授權電競賽事外，我們還在擴大我們平台上提供的國際電競內容的範圍。例如，我們將於7月開始直播沙烏地阿拉伯首屆電競世界杯，進一步豐富我們的優質電競內容庫。

On the in-house content front, we broadcasted over 20 self-organized e-sports tournaments and entertainment PGC shows during the quarter. In addition to the LoL Legend Cup and the Yijing Daoudi program that we mentioned earlier, we also co-hosted the first Thunder Honor Cup for Honor of Kings with another game live-streaming platform in the second quarter. This event brought together professional teams from KPL to participate, capture massive viewer attention, and demonstrated HUYA's increased cooperation with other game players, with other industry players in professional content co-creation.

在內部內容方面，我們在本季度播放了 20 多場自組織的電子競技比賽和娛樂 PGC 節目。除了我們之前提到的英雄聯盟傳奇杯和易經道地節目之外，第二季度我們還與另一家遊戲直播平台聯合舉辦了王者榮耀首屆雷霆榮譽杯。本次活動匯集了KPL職業戰隊參與，吸引了海量觀眾關注，也展現了虎牙與其他遊戲玩家、業界玩家在專業內容共創上的加強合作。

For e-sports events targeting community participation, we successfully hosted the Lianghe village game for Honor of Kings, in the Shandong village game for Peacekeeper Elite in the second quarter. By combining these e-sports event with local cultural elements, such as traditional costume and food themes, we brought more immersive cultural experiences to a broader audience, while also promoting e-sports popularity.

針對社區參與的電競賽事，我們成功承辦了《王者榮耀》梁河村賽、《和平精英》第二季山東村賽。透過將這些電競賽事與當地傳統服飾、美食等文化元素結合，我們為更廣泛的觀眾帶來了更沉浸式的文化體驗，同時也促進了電子競技的普及。

Furthermore, we held our annual gala event, HUYA Boom Night, in April to recognize and reward our broadcasters. The year's event featured on-stage performances by renowned singers and our popular streamers as well as an all-star e-sports competition.

此外，我們於四月舉辦了年度盛會“虎牙繁榮之夜”，以表彰和獎勵我們的主播。今年的活動包括著名歌手和熱門主播的舞台表演以及全明星電競比賽。

We also introduced upgrading interactive features for this event to engage both online and offline audience. The number of viewers for this event on our platform once again set a new record.

我們也為本次活動推出了升級的互動功能，以吸引線上和線下的觀眾。本次活動在我們平台的觀看人數再次創下新紀錄。

Turning to our financial performance. Despite the decline in live-streaming revenues, rapid growth in game-related services, advertising, and other business revenues drove a quarter-over-quarter increase in our total revenues for the second quarter. This marks our first quarter of sequential revenue growth since the fourth quarter of 2022. Also, with more users paying for in-game items and other services as the game-related services business expanded, HUYA Live paying users continued to grow in the second quarter, up quarter-over-quarter to 4.5 million.

轉向我們的財務表現。儘管直播收入有所下降，但遊戲相關服務、廣告等業務收入的快速成長帶動了第二季總收入的環比成長。這標誌著我們自 2022 年第四季以來營收連續成長的第一個季度。此外，隨著遊戲相關服務業務的擴大，越來越多的用戶為遊戲內物品和其他服務付費，虎牙直播付費用戶在第二季度持續成長，季增至450萬。

Our second quarter gross profit was affected by lower live-streaming revenues and higher content spending. However, with the increased contribution from our higher-margin game-related services business to total revenues as well as our continued operational efficiency improvements, we further enhanced our operating results and achieved a close to breakeven non-GAAP operating margin. Specifically, we effectively drove savings in sales and marketing expenses and labor costs, reducing our total operating expenses by 26.3% year over year.

我們第二季的毛利受到直播收入下降和內容支出增加的影響。然而，隨著利潤率較高的遊戲相關服務業務對總收入的貢獻不斷增加，以及營運效率的持續提高，我們的營運績效進一步增強，非公認會計原則營運利潤率接近收支平衡。具體來說，我們有效節省了行銷費用和人力成本，總營運費用較去年同期下降了26.3%。

Let's move on to our Q2 financial details. Our total net revenues were RMB1.54 billion for Q2 compared with RMB1.84 billion for the same period last year. Live-streaming revenues were RMB1.23 billion for Q2 compared with RMB1.72 billion for the same period last year, primarily due to the continued soft macroeconomic and industry environment as well as our proactive business adjustments to support our strategic transformation and prudent operations.

讓我們繼續了解第二季的財務細節。第二季我們的總淨收入為人民幣 15.4 億元，去年同期為 18.4 億元。第二季直播收入為人民幣12.3億元，去年同期為人民幣17.2億元，主要是由於宏觀經濟和產業環境持續疲軟，以及我們積極進行業務調整以支持策略轉型和審慎經營。

Game-related services, advertising, and other revenues were RMB309 million for Q2 compared with RMB122 million for the same period last year, primarily due to increased revenues from game distribution and advertising services and in-game item sales.

第二季遊戲相關服務、廣告和其他收入為人民幣 3.09 億元，而去年同期為 1.22 億元，主要是因為遊戲發行和廣告服務以及遊戲內物品銷售收入增加。

Cost of revenues decreased by 14% year over year to RMB1.33 billion for Q2, primarily due to decreased revenue-sharing fees and content costs as well as bandwidth costs. Revenue-sharing fees and content costs decreased by 13% year over year to RMB1.17 billion for Q2, primarily due to decreased live-streaming revenue sharing fees associated with the decline in live-streaming revenues, partially offset by increased game-related services, advertising, and other revenue-sharing fees as well as content costs for in-house produced content.

第二季營收成本年減 14% 至 13.3 億元，主要是因為收入分成費用、內容成本以及頻寬成本下降。第二季收入分成費用和內容成本年減 13% 至人民幣 11.7 億元，主要是由於直播收入下降導致直播收入分成費用減少，但部分被遊戲相關服務的增加所抵消、廣告和其他收入分享費用以及內部製作內容的內容成本。

Bandwidth cost decreased by 40% year over year to RMB61 million for Q2. This was primarily due to improved bandwidth cost management, favorable pricing terms, and continued technology enhancement efforts.

第二季頻寬成本較去年同期下降40%至人民幣6,100萬元。這主要歸功於改進的頻寬成本管理、優惠的定價條款以及持續的技術增強工作。

Gross profit was RMB215 million, and gross margin was 13.9% for Q2. Excluding share-based compensation expenses, non-GAAP gross profit was RMB219 million, and non-GAAP gross margin was 14.2% for Q2.

第二季毛利為人民幣2.15億元，毛利率為13.9%。不計入股權激勵費用，第二季非公認會計準則毛利為人民幣 2.19 億元，非公認會計準則毛利率為 14.2%。

Research and development expenses decreased by 11% year over year to RMB129 million for Q2, primarily due to decreased personnel-related expenses and share-based compensation expenses. Sales and marketing expenses decreased by 48% year-over-year to RMB62 million for Q2, primarily due to decreased marketing and promotion fees, as well as personnel-related expenses.

第二季研發費用年減11%至人民幣1.29億元，主要是因為人員相關費用和股權激勵費用減少。第二季銷售和行銷費用年減 48% 至人民幣 6,200 萬元，主要是因為行銷和促銷費用以及人員相關費用減少。

General and administrative expenses decreased by 21% year over year to RMB64 million for Q2, primarily due to decreased professional service fees, personnel-related expenses and share-based compensation expenses.

第二季一般及行政費用年減 21% 至人民幣 6,400 萬元，主要是因為專業服務費、人員相關費用和股權激勵費用減少。

Other income was RMB13 million for Q2 compared with RMB24 million for the same period last year, primarily due to lower government subsidies. As a result, operating loss was RMB26 million for Q2 compared with RMB33 million for the same period last year.

第二季其他收入為人民幣 1,300 萬元，而去年同期為 2,400 萬元，主要是由於政府補貼減少。因此，第二季經營虧損為 2,600 萬元，去年同期為 3,300 萬元。

Excluding share-based compensation expenses and amortization of intangible assets from business acquisitions, non-GAAP operating loss was RMB3 million for Q2 and non-GAAP operating margin was negative 0.2% for Q2, close to breakeven.

不計入股權激勵費用和業務收購帶來的無形資產攤銷，第二季非美國通用會計準則營運虧損為人民幣300 萬元，第二季非美國通用會計準則營運利潤率為負0.2%，接近損益平衡。

Interest income was RMB103 million for Q2 compared with RMB125 million for the same period last year. Net income attributable to HUYA Inc. was RMB30 million for Q2 compared with RMB20 million for the same period last year.

第二季利息收入為人民幣1.03億元，去年同期為人民幣1.25億元。第二季歸屬於虎牙的淨利為人民幣3,000萬元，而去年同期為人民幣2,000萬元。

Excluding share-based compensation expenses, impairment loss of investments and amortization of intangible assets from business acquisitions, net of income taxes, non-GAAP net income attributable to HUYA Inc. was RMB97 million for Q2 compared with RMB117 million for the same period last year.

剔除股權激勵費用、投資減損損失及業務收購無形資產攤銷，扣除所得稅後，虎亞公司第二季非公認會計準則淨利為人民幣 9,700 萬元，去年同期為 1.17 億元。

Non-GAAP net margin was 6.3% for Q2. Diluted net income per ADS was RMB0.13 for Q2. Non-GAAP diluted net income per ADS was RMB0.42 for Q2. As of June 30, 2024, the company had cash and cash equivalents, short-term deposits, short-term investments, and long-term deposits of RMB8.2 billion compared with RMB9.4 billion as of March 31, 2024.

第二季非 GAAP 淨利率為 6.3%。第二季稀釋後每股美國存託股淨利為人民幣0.13元。第二季非美國通用會計準則稀釋後每股美國存託股淨利為人民幣 0.42 元。截至2024年6月30日，該公司的現金及現金等價物、短期存款、短期投資和長期存款為人民幣82億元，而截至2024年3月31日為人民幣94億元。

Finally, let me provide an update on our shareholder returns. Upon review of our financials, business plan, capital requirements, and cash position, we are pleased to declare a special cash dividend of USD1.08 per ordinary shares or per ADS, totaling approximately USD250 million for our shareholders.

最後，讓我提供有關股東回報的最新資訊。在審查我們的財務狀況、業務計劃、資本要求和現金狀況後，我們很高興宣布向股東派發每股普通股或每份美國存託股 1.08 美元的特別現金股息，總計約 2.5 億美元。

Furthermore, under our up to USD100 million share repurchase program that began in August 2023, we have repurchased 17.1 million HUYA shares with a total aggregate consideration of USD56.7 million as of the end of June 2024. HUYA's Board of Directors has also authorized the renewal and continued usage of the unutilized quota under the existing share repurchase program of USD43.3 million until March 31, 2025.

此外，根據自 2023 年 8 月開始的高達 1 億美元的股票回購計劃，截至 2024 年 6 月，我們已回購 1,710 萬股滬亞股票，總代價為 5,670 萬美元。HUYA 董事會也授權續展並繼續使用現有股份回購計畫下未使用的 4,330 萬美元配額，直至 2025 年 3 月 31 日。

We believe that HUYA's solid balance sheet and improving financial fundamentals will continue to support our ability to deliver shareholder returns going forward. With that, I'd like to open the call to your questions.

我們相信，虎牙穩健的資產負債表和不斷改善的財務基本面將繼續支持我們未來實現股東回報的能力。接下來，我想開始回答大家的問題。

(Conference Instructions) Thomas Chong, Jefferies.

（會議說明）Thomas Chong，Jefferies。

(spoken in foreign language)

（用外語說）

(interpreted) Thanks, management, for taking my question. My question is, our current user strategies as we saw this quarter year over year and sequential growth of mobile MAU and also sequential growth of paying user? Thanks.

（解釋）謝謝管理層提出我的問題。我的問題是，我們目前的用戶策略，正如我們本季看到的同比和行動月活躍用戶的環比增長以及付費用戶的環比增長？謝謝。

(spoken in foreign language)

（用外語說）

(interpreted) Thank you for your question. In the second quarter of this year, HUYA's mobile MAU was 83.5 million, mainly due to the excellent performance of many self-made e-sports events this quarter. In addition, the launch of new games and the continuous improvement of user experience are also conducive to enhancing user activity. Therefore, while we continue to adopt a cautious channel promotion strategy, the number of users has increased compared with Q1 and with the same period last year.

（翻譯）謝謝你的提問。今年第二季度，虎牙移動MAU為8,350萬，主要得益於本季眾多自製電競賽事的優異表現。此外，新遊戲的推出以及用戶體驗的不斷提升也有利於提升用戶活躍度。因此，在我們持續採取謹慎的管道推廣策略的同時，用戶數量較Q1和去年同期有所成長。

(spoken in foreign language)

（用外語說）

(interpreted) In terms of user strategy, we plan to continue to attract and consolidate users through high-quality streamer content and professional content, including our pyramid-shaped e-sports event system that is a complete copyright e-sports event with self-organized events and increasing influence as well as mass participation events.

（解讀）在用戶策略方面，我們計劃繼續透過優質主播內容和專業內容來吸引和鞏固用戶，包括我們的金字塔型電競賽事體系，是一個完全版權的電競賽事，具有自主知識產權。 、影響力不斷擴大以及群眾參與活動。

In addition, we will carry the interaction of game users through the games and events communities on our platform to improve the user retention of HUYA and corresponding other game projects. Based on the live broadcast and game data that we have, combined with AI capabilities, we can better promote the output of high-quality content and the launch of interactive live broadcast gameplay, so as to improve our user participation as a whole.

此外，我們將透過平台上的遊戲和活動社群承載遊戲用戶的互動，以提高虎牙及相應其他遊戲項目的用戶留存率。基於我們擁有的直播和遊戲數據，結合AI能力，我們可以更好地推動優質內容的輸出和互動直播玩法的推出，從而整體提高我們的用戶參與度。

(spoken in foreign language)

（用外語說）

(interpreted) On this basis, we focus on construction and upgrading of the platform ecology. In an overall more open industry environment, HUYA acts as a pioneer in breaking industry barriers and we are strengthening cooperation with multiple platforms and products, including professional content co-creation, cross-platform live broadcasts, and commercialization initiatives, so as to reach a wider range of users and further expand the influence of HUYA platform.

（解讀）在此基礎上，我們將重點放在平台生態的建置與升級。在整體更加開放的行業環境下，虎牙作為打破行業壁壘的先行者，我們正在加強與多個平台和產品的合作，包括專業內容共創、跨平台直播和商業化舉措，以達到更廣泛的用戶範圍，進一步擴大虎牙平台的影響力。

Right now, we have begun to selectively deliver HUYA's live broadcast and video content to other live broadcast and short-video platforms, as well as multiple product lines in the Tencent ecosystem. In June this year, the total mobile MAU reached by HUYA content ecosystem reached about 120 million, and this volume continues to grow.

目前，我們已經開始選擇性地將虎牙的直播和視訊內容投放到其他直播和短視頻平台，以及騰訊生態中的多個產品線。今年6月，虎牙內容生態的行動端月活躍用戶總數達到約1.2億，且數字仍在持續成長。

(spoken in foreign language)

（用外語說）

(interpreted) Therefore, we do not only serve the users on HUYA, but also users on more platforms across the entire environment and industry. We can also participate in a larger market. At the same time, we believe that upgrade of content and platform can bring more commercial opportunities, especially in the process of HUYA's transformation from a pure game live broadcast platform to providing more game-related services, and the distribution of game content on multiple platforms and the broadcast content can help to drive distribution and promote -- and promotion of the games and enhance the influence of broadcasters and bring more opportunities for revenue to grow in game distribution, advertising, and prop sales.

（解讀）所以我們不只服務虎牙的用戶，還要服務全環境、全產業更多平台的用戶。我們還可以參與更大的市場。同時，我們相信內容和平台的升級可以帶來更多的商業機會，特別是在虎牙從純粹的遊戲直播平台轉型為提供更多遊戲相關服務的過程中，以及遊戲內容在多個平台的分發過程中轉播內容有助於帶動遊戲的發行與推廣，提升轉播商的影響力，為遊戲發行、廣告、道具銷售帶來更多的收入成長機會。

Maggie Ye, CLSA.

葉瑪姬，里昂證券。

(spoken in foreign language)

（用外語說）

(interpreted) Good evening, management. Thanks for the opportunity to ask question. We declared USD250 million special cash dividend this time and also renewed share repurchase program. And meanwhile, we still have cash deposits and short-term investments of RMB8.2 billion as of end of June. Please could you share with us the overall strategy of capital allocation and the use of cash going forward? Thank you.

（翻譯）晚上好，管理階層。感謝您有機會提問。本次我們宣布了2.5億美元的特別現金分紅，並更新了股票回購計畫。同時，截至6月底，我們仍有現金存款和短期投資82億元。請您分享未來資金配置和現金使用的整體策略？謝謝。

(spoken in foreign language)

（用外語說）

(interpreted) As of the end of June this year, HUYA held cash and cash equivalents and deposits totaling approximately RMB8.2 billion, equivalent to USD1.1 billion, of which more than half were still overseas. The change in this amount of funds compared to the end of March was mainly due to the distribution of USD150 million in dividends, share repurchase expenses and other payments. After we announced and paid the new special cash dividend of USD250 million, this time, it is estimated that the company will continue to have a cash deposits nearly USD900 million with no debt.

（解讀）截至今年6月底，虎牙持有現金及現金等價物及存款總計約82億元人民幣，折合11億美元，其中超過一半仍在境外。該資金數額較3月底的變動主要是由於分配了1.5億美元的股息、股票回購費用和其他支出。在我們宣布並支付新的2.5億美元特別現金股利後，預計公司將繼續擁有近9億美元的現金存款，且無負債。

(spoken in foreign language)

（用外語說）

(interpreted) Regarding the use of cash, we currently have sufficient cash for the company's daily operation and future development. While consolidating the financial fundamentals, we are also expecting operating cash flow to improve. The company will continue to set aside a portion of funds for potential business development and as a reserve fund for -- in the event of uncertainty in the external environment. In addition, we remain open to investment projects related to the industry chain to seize related development opportunities. So, we will also set aside a portion of fund accordingly.

（解讀）關於現金使用情況，目前我們擁有充足的現金用於公司日常經營和未來發展。在鞏固財務基本面的同時，我們也預期經營現金流將會改善。公司將繼續撥出部分資金用於潛在的業務發展，並作為應對外部環境不確定性的儲備基金。此外，我們對產業鏈相關投資項目保持開放態度，並把握相關發展機會。所以，我們也會相應地撥出一部分資金。

(spoken in foreign language)

（用外語說）

(interpreted) At the same time, we will continue to attach importance to shareholder returns, especially cash returns to shareholders. In terms of dividends, in addition to the special dividend of USD400 million announced this year, the company's management also intends to continue to share the company's profits and surpluses with our shareholders who support us in the future.

(解讀)同時，我們將繼續重視股東回報，特別是股東的現金回報。股息方面，除了今年宣布的4億美元特別股息外，公司管理層還打算在未來繼續與支持我們的股東分享公司的利潤和盈餘。

Of course, the specific dividend policy, including the amount of the dividend and the timing of payout, is subject to further review and approval by the company's Board of Directors. In terms of repurchase, our repurchase plan has been extended to the end of March 2025 and there is currently a repurchase quota of approximately USD43 million. The company will continue to consider a variety of factors, including market conditions and stock liquidity, to formulate an implementation strategy for our repurchase.

當然，具體的股利政策，包括股利金額、發放時間等，仍有待公司董事會進一步審議批准。回購方面，我們的回購計畫已延長至2025年3月末，目前回購額度約4,300萬美元。本公司將持續考慮市場狀況、股票流動性等多種因素，並制定回購實施策略。

Ritchie Sun, HSBC.

孫瑞奇，匯豐銀行。

(spoken in foreign language)

（用外語說）

(interpreted) Thank you management for taking my questions. I would like to ask about the games-related services business. Can management discuss the latest progress and the expectation in the third quarter for this business? Thank you.

（解釋）感謝管理層回答我的問題。我想問一下遊戲相關的服務業務。管理階層能否討論一下該業務的最新進展以及第三季的預期？謝謝。

(spoken in foreign language)

（用外語說）

(interpreted) In the second quarter, revenue from our game-related services, advertising and other businesses increased by 152.7% year over year or 26.6% quarter over quarter, reaching approximately RMB310 million, and also reached a milestone of accounting for 20% of the total revenue for the first time. The rapid development of this part of our business is closely related to our cooperation with more game titles, better utilization of live content and PGC programs, and adoption of innovative operating methods to promote business development.

（解讀）第二季度，我們的遊戲相關服務、廣告及其他業務收入年增152.7%，季增26.6%，達到約人民幣3.1億元，也達到了營收佔20%的里程碑。收入。這部分業務的快速發展，與我們與更多遊戲合作，更好地利用直播內容和PGC節目，採用創新的運作方式推動業務發展密切相關。

(spoken in foreign language)

（用外語說）

(interpreted) Looking further into this question, in terms of game distribution, we continue to add coverage of evergreen games to promote the return of users of these games. Amongst recent new games, in second quarter, we mainly involved in promoting and distributing the DnF Mobile game. The DnF Mobile game not only ranks among the top in its new -- in this year's new game live broadcast viewing indicator numbers on HUYA platform but we also have achieved better-than-expected results in terms of distribution.

（解讀）進一步來看這個問題，在遊戲發行方面，我們不斷增加長青遊戲的覆蓋，促進這些遊戲的用戶回流。在最近的新遊戲中，第二季我們主要參與了DnF手遊的推廣和發行。《地下城與勇士》手遊不僅在虎牙平台今年新遊戲直播觀看指標中名列前茅，而且在發行方面也取得了好於預期的成績。

In particular, according to current data available, the in-game spend per user of HUYA distribution channel users is significantly higher than the overall market, reflecting the high business potential of HUYA platform's game users on this game. Our current initial results in game distribution are also due to our continuous efforts to create a unique distribution model based on game content. More accurately, we are able to reach users through our broadcaster groups and focus on product design optimization to increase the conversion rate of game downloads and registrations of users.

特別是，根據目前掌握的數據，虎牙通路用戶的人均遊戲內支出明顯高於整體市場，反映出虎牙平台遊戲用戶對遊戲的巨大商業潛力。我們目前在遊戲發行上所取得的初步成績，也是得益於我們不斷努力打造以遊戲內容為基礎的獨特發行模式。更準確地說，我們可以透過主播群觸達用戶，並專注於產品設計優化，提高遊戲下載和用戶註冊的轉換率。

(spoken in foreign language)

（用外語說）

(interpreted) In the second quarter, we also started to selling games of -- to selling items for games such as League of Legends, League of Legends Mobile, and VALORANT. For these e-sport games, we innovatively integrate the sales of props with corresponding events. For example, the League of Legends Champion Skins sales in Legends Cup live broadcast room received very enthusiastic response and was super popular.

（解釋）第二季度，我們也開始販售《英雄聯盟》、《英雄聯盟手機版》和《VALORANT》等遊戲的物品。針對這些電競遊戲，我們創新地將道具的銷售與對應的賽事結合。例如英雄聯盟冠軍皮膚在英雄盃直播間的銷售，反應非常熱烈，人氣超高。

In terms of game advertising, we are also exploring new directions. For example, we recently launched competing till the end or Yijing Daoudi, interactive variety show, which innovatively combines game promotion and entertainment content. Each episodes corresponds to a different game theme, and it has currently cooperated with Mingchao, Wuthering Waves, DnF Mobile, Eggy Party, and other games. While this program is popular among users, it can also effectively help bringing active players to the corresponding games for us.

在遊戲廣告方面，我們也在探索新的方向。例如我們最近推出了《一競到底》互動綜藝，創新地將遊戲推廣和娛樂內容結合。每集對應不同的遊戲主題，目前與名朝、呼嘯波濤、DnF Mobile、蛋蛋派對等遊戲合作。這個程式在深受用戶歡迎的同時，也能有效幫助我們將活躍玩家帶到對應的遊戲中。

(spoken in foreign language)

（用外語說）

(interpreted) It is also worth mentioning that our game-related services have also brought new sources of income for HUYA's broadcasters, helping them to increase their income levels. In the first half of this year, thousands of broadcasters have received income from game distribution and prop sale services. We believe that this will also help HUYA to consolidate and attract broadcasters and enhance the company's content cost to revenue correlation.

（解讀）另外值得一提的是，我們的遊戲相關服務也為虎牙旗下主播帶來了新的收入來源，幫助他們提高了收入水準。今年上半年，已有數千家主播獲得了遊戲發行和道具銷售服務的收入。我們相信，這也將有助於虎牙鞏固和吸引廣播公司，並增強公司內容成本與收入的相關性。

(spoken in foreign language)

（用外語說）

(interpreted) Summer is generally a peak season for our industry, and we are also working hard to seize corresponding opportunities. For games that have covered distributions and prop sales, we will cooperate according to the popularity of the games and the update schedule of the games and promote related business through live broadcast content and other programs.

（解讀）夏季一般是我們產業的旺季，我們也在努力把握相應的機會。對於已涵蓋發行和道具銷售的遊戲，我們將根據遊戲的熱度和遊戲的更新進度進行配合，並透過直播內容等節目推廣相關業務。

There are also many new games coming online this summer, and we will further expand the scope of cooperation in different game categories and with different cooperating partners. Overall, we are confident that the game-related services business will continue to expand in the future. We currently expect revenue from game-related services, advertising, and other segments in Q3 to continue to achieve a double-digit growth compared to the second quarter.

今年夏天還有許多新遊戲上線，我們將進一步擴大不同遊戲類別、不同夥伴的合作範圍。整體而言，我們對遊戲相關服務業務未來將持續擴大充滿信心。我們目前預計第三季遊戲相關服務、廣告等版面的營收將較第二季持續達到兩位數成長。

Yiwen Zhang, China Renaissance.

張藝文，中國文藝復興。

(spoken in foreign language)

（用外語說）

(interpreted) So, thanks for taking my question. My question regarding our margin trend. So, we see some fluctuation in gross margin in Q2 both sequential and YoY. So, we want to understand how -- what are the reasons behind and how should we look about future trend? Thank you.

（解釋）所以，感謝您提出我的問題。我關於我們的利潤趨勢的問題。因此，我們看到第二季毛利率環比和同比都出現了一些波動。那麼，我們想了解背後的原因是什麼，以及我們該如何看待未來的趨勢？謝謝。

(spoken in foreign language)

（用外語說）

(interpreted) The non-GAAP gross profit margin in the second quarter of this year was 14.2%, representing a 0.7% lower than the first quarter and 1.8% lower than the same period last year. The slight decline in gross margin in this quarter was mainly due to the decline in live broadcast revenue and the increase in content production costs.

（解讀）今年第二季非美國通用會計準則毛利率為14.2%，較一季下降0.7個百分點，較去年同期下降1.8個百分點。本季毛利率小幅下降主要是由於直播收入下降和內容製作成本增加所致。

Although the trend of live broadcast revenue has stabilized and the quarter-over-quarter decline has further narrowed, its scale is still significantly lower than the same period last year. This is mainly because our adjustment of the live broadcast business started in the second half of last year. The year-on-year pace of live broadcast revenue in the first half of the year was still high. And due to the influence of the macro and industry environment, the recovery of users' consumption willingness to revert is still low.

儘管直播營收趨勢趨穩，季減幅進一步收窄，但其規模仍明顯低於去年同期。這主要是因為我們對直播業務的調整是從去年下半年開始的。上半年直播收入年增率依然較高。且由於宏觀和產業環境的影響，用戶消費意願的恢復程度仍然較低。

The large investment in a second -- in self-made content in the second quarter has also caused a impact, especially we had Legend Cup and Thunder Honor Cup and other high-quality self-made events with large scale and influence in this quarter.

第二季自製內容的大量投入也造成了影響，特別是本季我們舉辦了傳奇盃、雷霆榮譽盃等規模較大、影響力較大的優質自製賽事。

(spoken in foreign language)

（用外語說）

(interpreted) The live broadcast revenue share ratio remained basically stable this quarter, and the amount of broadcasters' contract costs is also being optimized. The proportion of game-related services, advertising and other revenue in total revenue increased from 6.2% in second quarter last year to 16.2% in the first quarter this year to 20% in the second quarter of this year.

（解讀）本季直播營收佔比維持基本穩定，主播簽約費用金額也在優化。遊戲相關服務、廣告及其他收入佔總收入的比例從去年第二季的6.2%上升到今年第一季的16.2%，再到今年第二季的20%。

As it is still the early stage of our business development, we have introduced some platform-specific incentives. These will cause some fluctuations in our gross margin, but the gross margin of this part of business is still significantly higher than that of live broadcast business. So, it has a positive impact on our overall gross margin performance, but it is still not big enough to offset the impact of other factors of this quarter.

由於目前仍處於我們業務發展的早期階段，我們推出了一些針對平台的激勵措施。這些都會造成我們毛利率的一些波動，但這部分業務的毛利率還是明顯高於直播業務的。所以，它對我們整體的毛利率表現有正面的影響，但仍然不足以抵銷本季其他因素的影響。

(spoken in foreign language)

（用外語說）

(interpreted) I'd also like to point out that as a content-driven company, the content investment plays an important role in attracting and retaining users. While increasing investment in self-made content and achieving good results, we have also dynamically adjusted the expenditure of sales expenses. Therefore, sales expenses in the second quarter have been further saved, driving the overall operating expenses to decrease by 26.3% year over year and 6.4% quarter over quarter.

（解讀）我還想指出，作為一家內容驅動的公司，內容投入對於吸引和留住用戶起著重要作用。在增加自製內容投入並取得良好成績的同時，我們也動態調整了銷售費用的支出。因此，第二季的銷售費用進一步節省，帶動整體營運費用較去年同期下降26.3%，季減6.4%。

So, from the operating profit perspective, our overall operating performance has improved compared to before and the operating loss has narrowed both year over year and quarter over quarter, and the non-GAAP operating profit is closing to a breakeven point.

因此，從營業利潤的角度來看，我們的整體經營業績較之前有所改善，營業虧損同比和環比均有所收窄，非公認會計準則營業利潤正在接近盈虧平衡點。

(spoken in foreign language)

（用外語說）

(interpreted) We believe that as the live broadcast revenue becomes stabilized and its negative impact on overall gross profit margin will gradually decrease with the improvement of overall revenue structure, it is suspected that the gross profit margin fluctuation caused by seasonal high cost of large-scale events in Q4 will be significantly reduced.

（解讀）我們認為，隨著直播收入趨於穩定，隨著整體收入結構的改善，其對整體毛利率的負面影響將逐漸減少，疑似大額季節性高成本導致的毛利率波動。規模事件將明顯減少。

In the long run, based on a more balanced revenue structure and the optimization of broadcaster and content costs, we believe that there is still room for further improvement on our gross profit margin. As for this year, we maintain the expectation that the full year gross profit margin will increase compared to 2023, and at the same time, full year profit level will also increase.

長期來看，基於更均衡的收入結構以及轉播商和內容成本的最佳化，我們相信毛利率仍有進一步提升的空間。對於今年，我們維持全年毛利率較2023年有所提升的預期，同時全年利潤水準也會有所提升。

Thank you. Thank you, once again, for joining us today. If you have further questions, please feel free to contact HUYA's Investor Relations through the contact information provided on our website, or Piacente Financial Communications. This concludes today's call, and we look forward to speaking to you again next quarter. Thank you.

謝謝。再次感謝您今天加入我們。如果您還有其他疑問，請隨時透過我們網站上提供的聯絡方式聯絡滬亞投資者關係部，或聯絡 Piacente Financial Communications。今天的電話會議到此結束，我們期待下個季度再次與您交談。謝謝。