HUYA Inc (HUYA) 2024 Q3 法說會逐字稿

[Good day], and thank you for standing by. Welcome to HUYA's third-quarter 2024 earnings webinar. I am Hanyu Liu from the HUYA's investor relations. (Event Instructions) Please be advised that today's webinar is being recorded.

[您好]，感謝您的支持。歡迎參加 HUYA 2024 年第三季收益網路研討會。我是滬亞投資者關係部的劉涵宇。(活動說明)請注意，今天的網路研討會正在錄製。

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 soon.

該公司的財務和營運結果已於今天稍早發布並在網路上公佈。您也可以造訪 IR 網站 ir.huya.com 查看收益新聞稿。此通話的重播將很快在 IR 網站上提供。

Participants of management on today's call will be Mr. Junhong Huang, our Acting Co-CEO and Senior Vice President; and Mr. Raymond Peng Lei, our Acting Co-CEO and CFO. Management will begin with prepared remarks, and the call will conclude with a Q&A session.

今天電話會議的管理參與者包括我們的代理聯席執行長兼高級副總裁黃俊宏先生；以及我們的代理聯席執行長兼財務長彭蕾先生。管理階層將以準備好的發言開始會議，並以問答環節結束會議。

Before we continue, please note that today's discussion will contain forward-looking statements made under 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. Further information regarding this 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.

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。有關此風險和其他風險和不確定性的更多資訊包含在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，該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.

另請注意，HUYA 的收益新聞稿和本次電話會議包括未經審計的 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 指標與未經審計的最直接可比較 GAAP 指標的對帳。

With that, I'm pleased to turn the call over to our Co-CEO and SVP, Mr. Huang. Please go ahead.

說到這裡，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 earnings conference today.

好的。大家好。感謝您參加我們今天的收益會議。

We were pleased to make significant strides in developing our game-related services business during the third quarter. Game-related service advertising and other revenues reached a new record high, contributing 26.7% of our total net revenues.

我們很高興在第三季在遊戲相關服務業務發展方面取得了重大進展。遊戲相關服務廣告及其他收入創下新高，貢獻了我們總淨收入的26.7%。

To drive this progress, we continued to enhance content and upgrade product features on our platform to improve users' experience while exploring new partnerships and business opportunities to expand our user reach and unlock our growth potential. Moreover, despite the ongoing challenges in the macroeconomic and industry environment, we maintained a relatively stable year-over-year operating performance and achieved a non-GAAP net income of RMB78 million.

為了推動這一進步，我們不斷增強平台上的內容和升級產品功能，以改善用戶體驗，同時探索新的合作夥伴關係和商業機會，以擴大我們的用戶覆蓋範圍並釋放我們的成長潛力。儘管宏觀經濟和產業環境持續面臨挑戰，我們仍維持了相對穩定的年比經營業績，實現非公認會計準則淨利7,800萬元。

Now, let's take a detailed look at our recent operational and strategic achievements. First, our users -- engagement across our high-quality user base remains stable during the third quarter, with mobile MAUs improving slightly sequentially to RMB84 million. While we maintain our disciplined approach to marketing and promotion spending, we also enrich our content and service offerings, as well as product features, to reinforce our users' engagement.

現在，讓我們詳細了解我們最近的營運和策略成就。首先，我們的用戶－我們優質用戶群的參與度在第三季保持穩定，行動月活躍用戶數季比小幅上升至 8,400 萬元人民幣。在我們保持嚴謹的行銷和促銷支出態度的同時，我們也豐富了我們的內容和服務以及產品功能，以加強用戶的參與度。

Furthermore, we continue to strengthen our cooperation with various content platforms, joining hands with these partners to conduct cross-platform streaming and co-produce premium professional content. We also selectively distributed our comparing game live streaming and video content to product lines within Tencent's ecosystem and other content channels.

此外，我們不斷加強與各內容平台的合作，與這些合作夥伴共同進行跨平台串流播放，共同製作優質專業內容。我們也選擇性地將比較遊戲直播和影片內容分發到騰訊生態系統內的產品線和其他內容管道。

Thanks to these initiatives, we estimate that HUYA's content reached a total of over 140 million users in September, taking into account other platforms' users, as well as our own mobile users. We believe our productive platform collaborations will continue to broaden our reach among gamer users, empowering us to explore more commercialization of opportunities around game-related services and live streaming.

由於這些舉措，我們估計，包括其他平台的用戶以及我們自己的行動用戶，虎牙的內容在 9 月共覆蓋超過 1.4 億用戶。我們相信，我們富有成效的平台合作將繼續擴大我們在遊戲玩家用戶中的影響力，使我們能夠探索更多與遊戲相關服務和直播相關的商業化機會。

Moving on to game-related services, our game distribution, in-game item sales, and game advertising business continue to grow robustly. Revenues from game-related services, advertising, and others reached RMB410.2 million for the third quarter of 2024, up by 209.3% year over year and 32.9% quarter over quarter.

在遊戲相關服務方面，我們的遊戲發行、遊戲內物品銷售和遊戲廣告業務持續強勁成長。2024年第三季遊戲相關服務、廣告及其他收入達人民幣4.102億元，較去年同期成長209.3%，較上季成長32.9%。

For game distribution, we work closely with game studios on new game releases, version updates, and related operational activities and incentivized our broadcasters to participate in game distribution. These efforts effectively promoted our growth this summer, with total growth generated through HUYA's game distribution channel in the third quarter rising to more than 20 times that of the year-ago period.

在遊戲發行方面，我們與遊戲工作室密切合作，共同發布新遊戲、更新版本及開展相關營運活動，並激勵主播參與遊戲發行。這些努力有效促進了我們今年夏季的成長，第三季透過虎牙遊戲分銷管道產生的總成長比去年同期成長了20多倍。

The quarter's top titles included Honor of Kings, Demi-Gods and Semi-Devil Mobile, DnF Mobile, QQ Speed Mobile, and Peacekeeper Elite. We are confident of further developing our game distribution service as we expand our reach in the vast game market by offering distribution for a wider range of titles, including both mobile and PC games, and collaborating with additional game studios. Once more, we plan to implement targeted initiatives for broadcasters to enable them to provide more tailored user services and drive users' interest in exploring and engaging with the games distributed via our platform.

本季的熱門遊戲包括《王者榮耀》、《天龍八部手遊》、《地下城與勇士手遊》、《QQ飛車手遊》和《和平精英》。我們有信心進一步發展我們的遊戲發行服務，透過為更廣泛的遊戲（包括手機遊戲和電腦遊戲）提供發行服務以及與其他遊戲工作室合作，擴大我們在廣闊的遊戲市場的影響力。我們再次計劃針對廣播公司實施有針對性的舉措，使他們能夠提供更客製化的用戶服務，並激發用戶探索和參與透過我們的平台分發的遊戲的興趣。

We have also strengthened our collaborations with major game titles' in-game item sales, broadening the scope of our coverage in this area. In particular, we were promoting inclusive or customized in-game items for our platform and broadcasters and holding sales events for initial release of new in-game items.

我們也加強了與主要遊戲內物品銷售的合作，擴大了我們在該領域的覆蓋範圍。具體來說，我們正在為我們的平台和廣播公司推廣包容性或客製化的遊戲內物品，並為新的遊戲內物品的首次發布舉辦銷售活動。

For instance, during the third quarter, we held a CrossFire workshop offering HUYA inclusive weapon skins, as well as an inclusive initial release of co-branded outfit skins featuring a well-known broadcaster on our platform. Sold on that broadcaster's channel, both initiatives garnered great interest from our users. Notably, the total value of the co-branded outfit skins sold on the broadcaster's channel during this initial release activity exceeded RMB50 million, validating the growth potential of our in-game item sales business.

例如，在第三季度，我們舉辦了穿越火線研討會，提供虎牙包容性武器皮膚，以及與我們平台上知名主播的聯名服裝皮膚的包容性初始發布。這兩個計劃都透過該廣播公司的頻道進行了宣傳，引起了用戶的極大興趣。值得注意的是，本次首發活動中，主播頻道銷售的聯名服飾皮膚總價值超過5000萬元人民幣，驗證了我們遊戲內物品銷售業務的成長潛力。

In terms of game advertising, we responded to the summer's increasing game marketing demand with comparing new game launch promotions and anniversary events for the existing games. In the third quarter, we collaborated with a number of game companies promoting popular games such as Arena Breakout, World of Warcraft, and Naruto Mobile. Going forward, we will continue to diversify our advertiser base and enhance our game promotion and marketing capabilities through HUYA's streamer-created content and in-house-produced events.

遊戲廣告方面，針對暑假日益旺盛的遊戲行銷需求，我們透過比較新遊戲上線促銷、已有遊戲週年慶等活動進行投放。第三季度，我們與多家遊戲公司合作推廣《魔獸世界》、《火影忍者手遊》等熱門遊戲。展望未來，我們將繼續透過虎牙的主播創作內容和內部製作的活動，實現廣告客戶基礎的多元化，並增強我們的遊戲推廣和行銷能力。

Moving on to our professional content enrichment efforts on our platform, including licensed and in-house content, in the third quarter, we broadcasted over 90 licensed esports tournaments. The LPL, KPL, Valorant Champions, and Esports World Cup were among the most-watched events during the quarter.

我們在平台上不斷豐富專業內容，包括授權內容和內部內容，第三季我們播放了超過 90 場授權電競錦標賽。LPL、KPL、Valorant Champions 和電競世界盃是本季觀看次數最多的賽事。

In addition to the tournament of more proven esports game titles, which continue to attract user attention, Valorant's tournaments have become increasingly popular since the game's launch in China last year. This year's Valorant Champions increased its viewership by approximately 160% compared to the previous edition, further boosting the popularity of the game's content on our platform.

除了更多成熟的電競遊戲的錦標賽不斷吸引用戶關注之外，自去年該遊戲在中國推出以來，Valorant 的錦標賽也變得越來越受歡迎。今年的 Valorant Champions 收視率與上一屆相比增加了約 160%，進一步提升了遊戲內容在我們平台上的受歡迎程度。

We also broadcasted the recently concluded LoL Worlds 2024, one of the year's most important esports events. We prepared comprehensively for LoL Worlds and were pleased to see our hard work drive positive outcomes. We optimized our tournament broadcast audio and video technology for the event, providing a variety of HDR video quality options to suit users' various devices and network environments, which brought our users industry-leading image quality effects and viewing experiences. We also introduced a competition data analysis system for this event that instantly captured each data point and converted the data into a visual presentation, allowing viewers to see real-time changes in teams and players with win rates while they watch the competition.

我們也轉播了最近結束的 2024 年英雄聯盟全球總決賽，這是今年最重要的電競賽事之一。我們為英雄聯盟全球總決賽做了充分的準備，很高興看到我們的努力取得了積極的成果。我們針對本次賽事優化了賽事轉播音視訊技術，提供多種HDR視訊品質選項，適應用戶不同的裝置和網路環境，為用戶帶來業界領先的畫質效果和觀看體驗。本次賽事我們也引進了比賽數據分析系統，可以即時捕捉每一個數據點，並將數據轉換成視覺呈現，讓觀眾在觀賽的同時，能夠即時看到隊伍、選手以及勝率的變化。

Also, in addition to our official streams, popular broadcasters and professional players on our platform created secondary live commentary for the event, providing our users with more diverse and entertaining tournament viewing experience unique to HUYA. Based on our initial statistics, we maintained our leading market share of this event's viewership and further increased our market share year over year, significantly ahead of other live streaming platforms.

此外，除了我們的官方直播之外，我們平台上的熱門主播和職業選手還為賽事製作了二級直播評論，為我們的用戶提供了虎牙獨有的更加豐富多彩、更加有趣的賽事觀看體驗。根據我們初步統計，我們在本次活動收視率上保持了領先的市場份額，並且市場份額同比進一步提升，大幅領先於其他直播平台。

In terms of in-house content, we broadcasted over 20 self-organized esports tournaments and entertainment PGC shows in the third quarter. For example, we successfully hosted the HoK Streamers League in collaboration with two other major live streaming platforms to rave reviews across platforms. We also continued our Village Games series for community participation and hosted the [Zhou Shen] Village Games for Honor of Kings.

在內部內容方面，我們在第三季度播出了 20 多場自組織的電子競技比賽和娛樂 PGC 節目。例如，我們與其他兩個主要直播平台合作成功舉辦了HoK Streamers League，並在各個平台上獲得了好評。我們也繼續舉辦社區參與村運會系列活動，並主辦了《王者榮耀》村運會（週深）。

Additionally, we collaborated with well-known TV programs to produce Streamer Rush Forward, a reality show featuring our game and entertainment broadcasters, which attracted strong user interest. For Competing to the End, our interactive gameplay variety show that integrates game promotion and entertainment content, we covered more hot and new games in this quarter, such as HoK's new mode, Black Mesa, Wukong, Naruto Mobile.

此外，我們與知名電視節目合作，製作了遊戲和娛樂主播真人秀節目《主播衝向前線》，引起了用戶的強烈興趣。對於我們的融合遊戲推廣和娛樂內容的互動遊戲綜藝節目《競逐到底》，我們在本季度報導了更多熱門遊戲和新遊戲，例如《王者榮耀》的新模式、《黑山》、《悟空》、《火影忍者手遊》。

Given that our in-house content generally delivers good ROI performance, we are strengthening our investment in this area to create more influential and commercially valuable event IPs. As our range of in-house content expands and becomes more diverse, we will also focus on scheduling these programs to seamlessly integrate with our licensed events to better complement and enrich our professional content library. For example, following the conclusion of LoL Worlds 2024, we commenced Season 2 of our LoL Legends Cup, building on the success of its inaugural season in May.

鑑於我們的自創內容普遍具有良好的ROI表現，我們正在加強該領域的投入，打造更具影響力和商業價值的活動IP。隨著我們內部內容的範圍不斷擴大和多樣化，我們還將專注於安排這些節目與我們的授權活動無縫集成，以更好地補充和豐富我們的專業內容庫。例如，在 2024 年英雄聯盟全球總決賽結束後，我們開始了英雄聯盟傳奇杯第 2 賽季，以鞏固 5 月份首個賽季的成功。

Finally, we continue to explore innovative features to engage users and enhance interaction while differentiating HUYA's live streaming experiences, including product cooperation with leading game titles. For example, in the third quarter, HUYA became the first platform in the industry to integrate Honor of Kings' bullet chatting gameplay mode in live broadcast, adding both native features and platform-exclusive modifications developed by HUYA using Honor of Kings tools.

最後，我們繼續探索創新功能以吸引用戶並增強互動，同時區分虎牙的直播體驗，包括與領先遊戲的產品合作。例如，第三季度，虎牙成為業界首個將王者榮耀彈幕玩法模式融入直播的平台，既加入了原生功能，也加入了虎牙利用王者榮耀工具開發的平台專屬修改版。

In this mode, viewers can activate special skill cards that impact the live game by sending bullet chats or visual GIFs to the channel, creating unique gameplay situations that drive more interesting live streaming content. Given these features promised, we will continue to leverage HUYA's expertise in creating engaging game live streaming content to bring entertaining exclusive features to our streamers and users.

在此模式下，觀眾可以透過向頻道發送子彈聊天或視覺 GIF 來啟動影響直播遊戲的特殊技能卡，從而創造獨特的遊戲情境，從而推動更有趣的直播內容。鑑於承諾的這些功能，我們將繼續利用虎牙在創建引人入勝的遊戲直播內容方面的專業知識，為我們的串流媒體和用戶帶來有趣的獨家功能。

Looking ahead, we will remain focused on fostering our in-house content initiatives. We are especially excited about Season 2 of our self-produced Legend Cup and look forward to amplifying this series' success and influence. We will also deepen collaboration with content creators and industry partners to extend our content reach beyond the HUYA platform and explore broader cooperation with more game developers and publishers to expand our presence in the game market. We are confident these efforts will unleash new commercialization opportunities, propelling our long-term business development.

展望未來，我們將繼續致力於促進我們的內部內容計劃。我們對自主製作的傳奇杯第二季感到特別興奮，並期待擴大該系列的成功和影響力。我們還將深化與內容創作者和行業合作夥伴的合作，將我們的內容覆蓋範圍擴展到虎牙平台之​​外，並探索與更多遊戲開發商和發行商的更廣泛合作，以擴大我們在遊戲市場的影響力。我們相信，這些努力將釋放新的商業化機會，推動我們的長期業務發展。

With that, I will now turn the call over to our Acting Co-CEO and CFO, Raymond Lei, who has been with us for a few months. He will share more details on our results. Raymond, please go ahead.

說完這些，我現在將電話轉給代理聯席執行長兼財務長 Raymond Lei，他已經和我們在一起幾個月了。他將分享更多關於我們成果的細節。雷蒙德，請繼續。

Thank you, Vincent, and hello, everyone. I am delighted to be part of HUYA's management team and to speak with you for the first time. I'll start with an overview of our financial performance.

謝謝你，文森特，大家好。我很高興成為HUYA管理團隊的一員並第一次與您交談。我將首先概述我們的財務表現。

Our total net revenues were RMB1.54 billion in the third quarter of 2024. The soft macro and industrial environment, which impacted users' willingness to pay for live streaming, continued to weigh on our live streaming revenues. Meanwhile, we proactively adjusted our business structure to support our strategic transformation and maintained prudent operations.

2024年第三季度，我們的總淨收入為人民幣15.4億元。宏觀及產業環境疲軟影響了用戶對直播的付費意願，並持續對我們的直播收入造成壓力。同時，我們積極調整業務結構，支撐策略轉型，維持審慎經營。

Game-related services, advertising, and other businesses showed strong momentum and made a more meaningful contribution to our top line, increasing by 209.3% year over year and 32.9% quarter over quarter, primarily due to increased revenue from game distribution and advertising services and in-game item sales. We are pleased to see more users paying for our game-related services, driving growth of 9.5% year over year in paying users to reach 4.6 million in the third quarter. Also, our continuous efforts to improve operational efficiency paid off, with total operating expenses decreasing by 20.9% year over year.

遊戲相關服務、廣告和其他業務表現出強勁勢頭，對我們的營收做出了更有意義的貢獻，同比增長209.3%，環比增長32.9%，這主要歸功於遊戲發行和廣告服務以及遊戲內物品銷售收入的增加。我們很高興看到越來越多的用戶為我們的遊戲相關服務付費，推動付費用戶數量年增9.5%，第三季達到460萬。此外，我們不斷努力提高營運效率，取得了成效，總營運費用較去年同期下降了 20.9%。

I'd also like to review our recent progress in optimizing our content. We continue to refine our street procurement strategy for licensed content, striving for better commercial terms. As we disclosed in September, we entered into a second supplemental license agreement for a series of League of Legends matches that decreased the license fee, which we believe will help us further reduce our overall esports license costs this year and in 2025.

我也想回顧一下我們在優化內容方面的最新進展。我們不斷完善授權內容的街頭採購策略，爭取更好的商業條款。正如我們在 9 月所揭露的那樣，我們針對英雄聯盟系列比賽簽訂了第二份補充許可協議，降低了許可費，我們相信這將有助於我們進一步降低今年和 2025 年的整體電競許可成本。

Let's move on to more details of our Q3 financial results. Our total net revenues were RMB1.54 billion for Q3, of which live streaming revenues were RMB1.13 billion and game-related services, advertising, and other revenues were RMB410 million, compared with total net revenue of RMB1.66 billion for the same period last year. Cost of revenues decreased by 6% year over year to RMB1.33 billion for Q3, primarily due to decreased revenue sharing fees and content cost, as well as bandwidth and server custody fees.

讓我們繼續了解第三季財務業績的更多細節。第三季度，我們總淨收入為人民幣15.4億元，其中直播收入為人民幣11.3億元，遊戲相關服務、廣告及其他收入為人民幣4.1億元，而去年同期總淨收入為人民幣16.6億元。第三季營收成本年減6%至人民幣13.3億元，主要由於收入分成費和內容成本以及頻寬和伺服器託管費下降。

Revenue sharing fees and content costs decreased by 5% year over year to RMB1.17 billion for Q3, primarily due to decreased live streaming revenue sharing fees associated with the decline in live streaming revenues, as well as lower costs related to licensed esports content. Partially offset by increased game-related services, advertising, and other revenue sharing fees, bandwidth and server custody fees decreased by 26% year over year to RMB61 million for Q3, primarily due to continued technology and management enhancement efforts, as well as favorable pricing terms.

第三季營收分成費用及內容成本年減 5% 至 11.7 億元，主要因直播收入下降導致的直播收入分成費用減少，以及授權電競內容相關成本降低。頻寬和伺服器託管費用第三季年減 26% 至 6,100 萬元，部分抵銷了遊戲相關服務、廣告和其他收入分成費用的增加，這主要由於持續的技術和管理提升努力，以及優惠的定價條件。

Gross profit was RMB204 million for Q3, compared with RMB243 million for the same period last year. Gross margin was 13.2% for Q3, compared with 14.6% for the same period last year. The change was primarily attributable to increased revenue sharing fees and content costs as a percentage of total net revenues, which rose mainly because the decrease in live streaming revenues outpaced the decrease in content costs. Excluding share-based compensation expenses, non-GAAP gross profit was RMB207 million and the non-GAAP gross margin was 13.5% for Q3.

第三季毛利為2.04億元人民幣，去年同期為2.43億元。第三季毛利率為13.2%，去年同期為14.6%。這項變更主要歸因於收入分成費和內容成本佔總淨收入的百分比增加，而這百分比上升主要是因為直播收入的降幅超過了內容成本的降幅。剔除股權激勵費用，第三季非美國通用會計準則毛利為2.07億元，非美國通用會計準則毛利率為13.5%。

Research and development expenses decreased by 12% year over year to RMB126 million for Q3, primarily due to decreased personnel-related expenses and share-based compensation expenses. Sales and marketing expenses decreased by 30% year over year to RMB73 million for Q3, primarily due to decreased marketing and promotion fees, as well as personnel-related expenses. General and administrative expenses decreased by 25% year over year to RMB50 million for Q3, primarily due to decreased professional service fees and the personnel-related expenses.

第三季研發費用年減12%至人民幣1.26億元，主要由於人員相關費用和股權激勵費用減少。第三季銷售及行銷費用年減30%至7,300萬元，主要由於行銷及推廣費用以及人員相關費用的減少。第三季度，管理費用年減25%至5,000萬元，主要由於專業服務費及人員相關費用減少。

Other income was RMB13 million for Q3, compared with RMB40 million for the same period last year, primarily due to realized damages received in the third quarter of 2023 from a favorable outcome in a broadcaster-related lawsuit and lower government subsidies.

第三季其他收入為 1,300 萬元，去年同期為 4,000 萬元，主要由於 2023 年第三季因廣播公司相關訴訟的有利結果而收到的已實現損害賠償金以及政府補貼減少。

As a result, operating loss was stable at RMB32 million for Q3 compared with the same period last year. Excluding share-based compensation expenses and the application of intangible assets from business acquisition, non-GAAP operating loss was RMB13 million for Q3, compared with RMB15 million for the same period last year. Non-GAAP operating margin was negative 0.9% for Q3.

因此，第三季經營虧損與去年同期相比穩定在人民幣3,200萬元。剔除股權激勵費用及業務收購產生的無形資產應用，第三季非美國通用會計準則經營虧損為1,300萬元人民幣，去年同期為1,500萬元。第三季非公認會計準則營業利益率為負 0.9%。

Interest income was RMB97 million for Q3, compared with RMB128 million for the same period last year, which was primarily attributable to the special cash dividends paid in May and October 2024. Net income attributable to HUYA Inc., was RMB24 million for Q3, compared with RMB11 million for the same period last year.

第三季利息收入為人民幣 9,700 萬元，去年同期為人民幣 1.28 億元，主要歸因於 2024 年 5 月和 10 月派發的特別現金股息。第三季歸屬於虎牙公司的淨利為2,400萬元人民幣，去年同期為1,100萬元。

Excluding share-based compensation expenses, impairment loss of investments, and amortization of intangible assets from business acquisitions, net of income taxes, non-GAAP net profit attributable to HUYA Inc., was RMB78 million for Q3, compared with RMB107 million for the same period last year. Non-GAAP net margin was 5.1% for Q3.

剔除股權激勵費用、投資減損損失、業務收購產生的無形資產攤銷等費用，扣除所得稅後，第三季歸屬於虎牙的非美國通用會計準則淨利為7,800萬元人民幣，去年同期為1.07億元人民幣。第三季非公認會計準則淨利率為 5.1%。

Diluted net income per ADS was RMB0.1 for Q3. Non-GAAP diluted net income per ADS was RMB0.34 for Q3.

第三季每股美國存託憑證攤薄淨利0.1元人民幣。第三季非美國通用會計準則每股攤薄淨利0.34元。

As of September 30, 2024, the company had cash and cash equivalents, short-term deposits, short-term investments, and long-term deposits of RMB8.1 billion, compared with RMB8.2 billion as of June 30, 2024.

截至 2024 年 9 月 30 日，公司現金及現金等價物、短期存款、短期投資及長期存款為人民幣 81 億元，而截至 2024 年 6 月 30 日為人民幣 82 億元。

Finally, an update on our shareholder returns, as of the end of September 2024, we had repurchased USD61.1 million of HUYA shares through our share repurchase program. The two special cash dividends we paid this year also retained an aggregate value of approximately USD400 million to our shareholders. We remain committed to consolidating our financial and operating performance and creating more value for shareholders.

最後，關於我們股東回報的最新情況，截至 2024 年 9 月底，我們已透過股票回購計畫回購了 6,110 萬美元的 HUYA 股票。我們今年派發的兩次特別現金股利也為我們的股東保留了總計約4億美元的價值。我們將繼續致力於鞏固我們的財務和經營業績並為股東創造更多價值。

With that, I'd like to open the call to your questions.

現在，我想開始回答你們的問題。

Thank you, Raymond, and hello, everyone. (Event Instructions) Nelson Cheung, Citibank.

謝謝你，雷蒙德，大家好。(活動說明) 花旗銀行，Nelson Cheung。

(spoken in foreign language) Thanks, management, for taking my question. My question is related to the game-related services. I'm wondering if management can share the latest updates on the game-related services in third quarter and any new updates in fourth quarter right now. And how do we perceive the upcoming development plans for this business in 2025, and what would be the comparative advantage of HUYA? Thank you.

（以外語說）謝謝管理階層回答我的問題。我的問題是關於遊戲相關服務的。我想知道管理層是否可以分享第三季遊戲相關服務的最新更新以及第四季的任何新更新。我們如何看待該業務在2025年的未來發展計畫以及滬亞的比較優勢是什麼？謝謝。

(interpreted) In the third quarter, our game-related business continued to achieve rapid growth, with revenues from game-related services, advertising, and others reaching RMB410 million, an increase of 209.3% year over year and 32.9% quarter over quarter. This accounted for a record-high percentage of our total revenue at 26.7%.

第三季度，我們的遊戲相關業務持續快速成長，遊戲相關服務、廣告及其他收入達人民幣4.10億元，較去年同期成長209.3%，較上季成長32.9%。這占我們總收入的比例達到了創紀錄的26.7%。

With regard to the game distribution, we closely collaborated with game developers on new game launches, version updates, and related operational activities, incentivizing broadcasters to participate in game distribution services. Currently, the distribution revenue is the largest portion of our game-related services revenue. It is worth noting that distribution revenue is recognized on a net basis after the revenue sharing with the game developers. Therefore, the actual business volume and growth amount are significantly larger.

在遊戲發行方面，我們與遊戲開發商緊密合作，推動新遊戲上線、版本更新及相關營運活動，激勵實況主參與遊戲發行服務。目前，發行收入是我們遊戲相關服務收入的最大組成部分。值得注意的是，分銷收入是在與遊戲開發商分成後以淨額確認的。因此實際業務量和成長金額明顯較大。

In the third quarter, the total gross receipts from games distributed through HUYA's distribution channel increased to over 20 times that of the same period last year. And going forward, we plan to continue providing distribution services for more games, including mobile and PC games, new and existing titles, and deepen our collaboration with additional game developers. Furthermore, we plan targeted initiatives for broadcasters to encourage them to provide more customized user services, enhancing users' interest in exploring and engaging with the games distributed through our platform.

第三季度，虎牙透過發行管道發行的遊戲總收入年增20倍以上。未來，我們計劃繼續為更多遊戲提供發行服務，包括手機和電腦遊戲、新遊戲和現有遊戲，並深化與其他遊戲開發商的合作。此外，我們還計劃為廣播公司推出有針對性的舉措，鼓勵他們提供更客製化的用戶服務，增強用戶探索和參與透過我們的平台分發的遊戲的興趣。

We have also strengthened our cooperation with major games and in-game item sales, particularly by launching exclusive and customized in-game items for our platform and broadcasters, as well as promoting initial release events for these items. For instance, in the third quarter, we held a CrossFire event offering HUYA exclusive game skins. We also had an exclusive initial release of co-branded game skins featuring a well-known broadcaster sold in that broadcaster's stream. Both initiatives garnered enthusiastic response from our users, especially during the initial release event, where the total value of co-branded skins sold existed RMB50 million and validating the growth potential of our in-game item sales business.

我們也加強了與主要遊戲和遊戲內物品銷售的合作，特別是為我們的平台和廣播公司推出獨家和客製化的遊戲內物品，以及推廣這些物品的初始發布活動。例如，在第三季度，我們舉辦了穿越火線活動，提供虎牙獨家遊戲皮膚。我們也首次獨家販售了與知名主播聯名的遊戲造型，並在該主播的直播中販售。這兩項措施都得到了我們用戶的熱烈回應，特別是在首次發布活動期間，銷售的聯名皮膚總價值達到人民幣 5,000 萬元，驗證了我們遊戲內物品銷售業務的成長潛力。

In terms of game advertising, we responded to the increased marketing demand during the summer with promotional activities for new game launches and anniversary events for existing games, enhancing our game promotion and marketing capabilities through streamer-created and in-house-produced content while continuing to expand our advertiser base.

遊戲廣告方面，我們透過舉辦新遊戲發布的促銷活動和現有遊戲的周年紀念活動來應對暑期期間增加的營銷需求，透過主播創建和內部製作的內容增強我們的遊戲推廣和營銷能力，同時繼續擴大我們的廣告客戶基礎。

Overall, we believe HUYA has several key advantages in the continued development of game-related services. First, we have a high-quality gaming user base on our platform, where the average revenue per user, or ARPU, for several games we distribute is higher than the overall gaming market, indicating the commercial value potential for HUYA's gaming users.

總體而言，我們認為虎牙在遊戲相關服務的持續發展中具有幾個關鍵優勢。首先，我們平台擁有優質的遊戲用戶群，我們發行的多款遊戲的每用戶平均收入（ARPU）高於整體遊戲市場，這表明虎牙遊戲用戶的商業價值潛力。

Second, our broadcasters play an active role in promoting game-related services, understanding users' gaming needs and participating in revenue sharing, which helps achieve mutual benefits. And third, HUYA has established long-term partnerships with various game developers through our live stream business, laying down a good foundation for deeper collaboration on game distribution and in-game item sales.

其次，我們的實況主積極推廣遊戲相關服務，了解用戶的遊戲需求，並參與收益分成，實現互利共贏。第三，虎牙透過直播業務與各遊戲開發商建立了長期合作夥伴關係，為在遊戲發行、遊戲道具銷售等方面的深入合作奠定了良好的基礎。

Additionally, we are strengthening our collaboration with multiple content platforms and selectively distributing HUYA's game live streams and video content across Tencent ecosystem and other content platforms. We estimated that as of September this year, HUYA's content ecosystem reached over 140 million users, including our own mobile users and those from other platforms, and we expect the scale to continue to grow. As we effectively collaborate to cover a broader game audience, we can explore more commercialization opportunities.

此外，我們正在加強與多個內容平台的合作，並選擇性地在騰訊生態系統和其他內容平台上分發虎牙的遊戲直播和視訊內容。我們估計，截至今年9月，虎牙的內容生態系統已覆蓋超過1.4億用戶，其中包括我們自己的行動用戶和來自其他平台的用戶，我們預計規模將持續成長。隨著我們有效合作以接觸更廣泛的遊戲受眾，我們可以探索更多的商業化機會。

Finally, I want to mention that since the revenue from game-related services, especially from distribution, is closely linked to gaming revenue itself, as we gradually expand this business, its income may be somewhat affected by the seasonal nature of the gaming industry. For example, peak seasons occur during holidays, and fluctuations can vary between quarters. According to public statistics, the domestic gaming market sales revenue exceeded RMB300 billion in 2023, and overall, the market space for HUYA is still enormous. We will continue to explore diverse forms of cooperation with more game developers to achieve business growth.

最後我想說一下，由於遊戲相關服務的收入，特別是發行的收入和遊戲收入本身是緊密相關的，隨著我們逐步擴大這項業務，它的收入可能會受到遊戲產業季節性的影響。例如，旺季發生在假期期間，波動可能因季度而異。根據公開統計數據，2023年國內遊戲市場銷售收入將突破3,000億元，整體來看虎牙的市場空間仍龐大。我們將繼續探索與更多遊戲開發商進行多種形式的合作，以實現業務成長。

Thomas Chong, Jefferies.

傑富瑞 (Jefferies) 的托馬斯張 (Thomas Chong)。

(spoken in foreign language)

（用外語說）

(interpreted) In the third quarter, our live streaming revenue continued to be influenced by the current macroeconomic and industry environment, with users' willingness to spend on tipping remained weak. Meanwhile, during our strategic transformation, we proactively adjusted our business structure and maintained a prudent operational strategy. However, we have also observed rapid growth in revenues related to game advertising. From user behavior, we see that the engagement of our core users in live streaming remained relatively stable.

(解讀)第三季度，我們的直播收入持續受到當前宏觀經濟和產業環境的影響，用戶打賞消費意願仍然較弱。同時，我們在策略轉型過程中積極調整業務結構，保持審慎的經營策略。然而，我們也觀察到與遊戲廣告相關的收入的快速成長。從使用者行為來看，我們看到核心使用者對直播的參與​​度保持相對穩定。

Due to external factors, we currently expect live streaming revenue to face short-term pressure. However, we believe that the external economic environment will happen in the future and the business will still have some room for flexibility. On one hand, we will closely monitor market conditions to adjust our operational activities accordingly. On the other hand, we will continue to invest in live streaming content, optimize the broadcaster and user ecosystem, and constantly improve the technology and products to create a differentiated HUYA live streaming experience.

受外部因素影響，我們目前預計直播收入將面臨短期壓力。但我們認為未來外圍經濟環境仍將有利於業務的彈性。一方面，我們將密切關注市場狀況，並據此調整我們的營運活動。另一方面，我們將持續在直播內容上投入，優化主播和用戶生態，不斷精進技術和產品，打造差異化的虎牙直播體驗。

We hope to maintain and enhance user engagement and prepare for a more diversified commercialization forms in the future. In the long run, we expect that with the expansion of game-related services, advertising and other revenue sales, the overall business will achieve a relatively stable development.

我們希望維持並提升用戶參與度，為未來更多樣化的商業化形態做好準備。長期來看，我們預期隨著遊戲相關服務、廣告及其他收入銷售的擴大，整體業務將實現相對穩定的發展。

Lei Zhang, Bank of America.

美國銀行的張雷。

(spoken in foreign language) Thanks, management, for taking my question. Can you give us more color on the driver of Q3's margin change? And how should we look at our margin trend going forward? Thank you.

（以外語說）謝謝管理階層回答我的問題。能否詳細介紹一下第三季利潤率變動的因素？我們該如何看待未來的利潤趨勢？謝謝。

(interpreted) In the third quarter, our gross profit margin was 13.2%, slightly down from the second quarter and the same period of last year. This quarter, we continue to optimize our content costs, reducing broadcaster signing costs year over year, and we further improved our strict licensed content procurement strategy to secure better commercial terms, which saved on licensed content costs. However, the cost savings this quarter were still insufficient to offset the impact of the declining of live streaming revenue.

(解讀)第三季度，我們的毛利率為13.2%，較第二季和去年同期略有下降。本季度，我們繼續優化內容成本，廣播公司簽約成本同比下降，並進一步完善了嚴格的授權內容採購策略，以確保更好的商業條款，從而節省了授權內容成本。不過，本季的成本節省仍不足以抵銷直播收入下滑的影響。

In terms of operating expenses, through continued efforts to enhance operational efficiency, particularly in better controlling our sales expenses, our total operating expenses decreased by 20.9% year over year. Therefore, overall operational performance remained relatively stable, with a non-GAAP net profit of RMB78 million.

營業費用方面，透過持續努力提升營運效率，特別是更好地控制銷售費用，我們的總營業費用較去年同期下降了20.9%。因此整體經營績效保持相對穩定，非公認會計準則淨利為人民幣7,800萬元。

Regarding the future profit trends, we believe the following factors will be significant. On one hand, we need to consider changes in overall revenue scale, including the seasonal fluctuations in different businesses. On the other hand, we will continue to adjust our cost structure to enhance the collaboration between broadcaster costs and revenue.

對於未來的獲利趨勢，我們認為以下幾個因素將發揮重要作用。一方面，我們需要考慮整體營收規模的變化，包括不同業務的季節性波動。另一方面，我們將持續調整成本結構，加強廣播公司成本與收入的配合。

On the professional content side, in September this year, we signed a second supplemental licensing agreement for a series of League of Legends matches, which reduced related licensing fees. We believe that this will help further optimize overall licensed esports events costs in this year and in 2025.

專業內容方面，今年9月，我們簽署了第二份英雄聯盟系列比賽補充授權協議，降低了相關授權費用。我們相信這將有助於進一步優化今年和 2025 年的整體授權電競賽事成本。

However, quarter to quarter, since the major S14 event will mainly take place in the fourth quarter, the event licensing costs in the fourth quarter are expected to be higher than the third quarter. For self-produced content with good investment returns, we plan to strengthen investment in this area to create more influential and commercially valuable event IPs, such as holding the second season of the League of Legends Cup in this month, building on the success we had in its inauguration season.

然而，從季度來看，由於 S14 重大活動主要將在第四季度舉行，因此預計第四季度的活動授權成本將高於第三季。對於投資回報好的自製內容，我們計劃加強這方面的投入，打造更多有影響力和商業價值的賽事IP，例如本月舉辦英雄聯盟杯第二賽季，延續首賽季的成功。

Nevertheless, we expect that the gross profit margin in the fourth quarter will show a relatively noticeable improvement compared to the low base from the same period last year. Therefore, we anticipate that the non-GAAP results for Q4 and this entire year will also show a relatively noticeable year-over-year growth.

儘管如此，我們預計第四季的毛利率相對於去年同期的低基數將會出現相對明顯的改善。因此，我們預期第四季及全年非公認會計準則業績也將出現相對明顯的年成長。

Cheng Hao Lin, CICC.

程浩林，中金公司。

(spoken in foreign language) Hi, management. Thanks for taking my question, and congratulations on another solid quarter. My question is about our shareholder return strategy. Could the management help update our capital allocation strategy and the shareholder return plan in the future? Thank you.

（外語）嗨，管理階層。感謝您回答我的問題，並祝賀您又一個季度取得豐碩成果。我的問題是關於我們的股東回報策略。管理階層能否幫助我們更新未來的資本配置策略和股東回報計畫？謝謝。

(interpreted) As of the end of September, HUYA held approximately RMB8.1 billion, about USD1.15 billion, in cash and cash equivalents, which remained stable compared to the end of June, partially influenced by the fluctuations in the US dollar exchange rate. In October, we paid a special cash dividend of USD215 million. Currently, the company still has approximately USD900 million in cash and cash deposits, with about half of it held overseas, and the company has no debt.

(解讀)截至9月底，滬亞持有現金及現金等價物約81億元人民幣，約合11.5億美元，較6月底維持穩定，部分受到美元匯率波動的影響。10月份，我們發放了2.15億美元特別現金股利。目前，公司仍持有約9億美元現金及現金存款，其中約一半存放在海外，且公司無任何債務。

The overall strategy for cash usage is similar to what we mentioned in the last earnings call. We have sufficient cash to fund our daily operations and business development. While consolidating our financial fundamentals, the company will continue to allocate some funds for potential business development and as a reserve under uncertain external conditions. We will also remain open to suitable opportunities and investment projects related to the industry chain, so as to seize industry development opportunities.

現金使用的整體策略與我們在上次財報電話會議上提到的類似。我們有足夠的現金來資助我們的日常營運和業務發展。在鞏固財務基本面的同時，公司將繼續撥出部分資金用於潛在業務發展以及作為外部不確定條件下的儲備。我們也會持續尋找合適的產業鏈相關機會和投資項目，掌握產業發展機會。

At the same time, we will continue to place importance on shareholder returns. In terms of dividends, this year, we have returned approximately USD400 million to our shareholders through special cash dividends. In the future, we intend to share the company's profits and surplus cash with our shareholders. Future dividend plans, including the amounts and timing, will depend on further review and approval by the company's Board of Directors.

同時，我們將繼續重視股東回報。股利方面，今年我們透過特別現金股利向股東返還了約4億美元。未來我們打算與股東分享公司的利潤和剩餘現金。未來的股息計劃，包括金額和時間，將取決於公司董事會的進一步審查和批准。

Regarding share repurchases, based on our up to USD100 million repurchase plan, as of the end of September, we had repurchased USD61.1 million worth of HUYA's shares. In the future, we will comprehensively consider market conditions and stock liquidity when formulating our execution strategies.

關於股票回購，根據我們高達1億美元的回購計劃，截至9月底，我們已回購了價值6,110萬美元的虎牙股票。未來我們在製定執行策略時會綜合考慮市場狀況和股票流動性。

Thank you, Vincent. 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.

謝謝你，文森。再次感謝您今天的參與。如果您還有其他問題，請隨時透過我們網站或Piacente Financial Communications提供的聯絡資訊聯絡HUYA的投資者關係部門。

This concludes today's call, and we look forward to speaking with you again next quarter. Thank you.

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。

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.

本記錄中標記（翻譯）的部分是由現場通話中的翻譯人員說的。翻譯由贊助此活動的公司提供。