WUHAN, China, Aug. 10, 2020 /PRNewswire/ -- DouYu International Holdings Limited ("DouYu" or the "Company") (Nasdaq: DOYU), a leading game-centric live streaming platform in China and a pioneer in the eSports value chain, today announced its unaudited financial results for the second quarter and six months ended June 30, 2020
Second Quarter 2020 Financial and Operational Highlights
Mr. Shaojie Chen, Chief Executive Officer of DouYu, commented, "We are pleased to announce that DouYu continued to deliver solid financial and operational results in the second quarter of 2020. In this quarter, we continued to demonstrate our ability to maintain our steady growth as our revenues once again outperformed the high-end range of our guidance, increasing by 33.9% year over year to RMB2.51 billion in the quarter. In addition, our adjusted net income in the quarter grew at a rapid pace, increasing by 513.7% year over year to RMB322.9 million. Going forward, by upgrading our high-quality content offerings on a continual basis, we remain confident in our ability to sustain our growth trajectory as well as further enhance our position as an industry-leading eSports-centric community with diversified live-streaming content."
Mr. Hao Cao, Vice President of DouYu, commented, "We continued to deliver solid financial results in the second quarter of 2020 as we increased investment in those initiatives with growth potential and higher operating efficiency. This investment strategy enabled us to sustain the growth trajectory of our revenues, bolster our ROI, and steadily improve the profitability of our platform. Looking ahead, we plan to continue exploring our platform's monetization capabilities while also enhancing our operating efficiency to generate sustainable shareholder value over the long term."
Second Quarter 2020 Financial Results
Total net revenues in the second quarter of 2020 increased by 33.9% to RMB2,508.2 million (US$354.4 million) from RMB1,872.7 million in the same period of 2019, primarily driven by the increase in live streaming and advertising revenues.
Live streaming revenues in the second quarter of 2020 increased by 35.8% to RMB2,319.9 million (US$327.8 million) from RMB1,708.3 million in the same period of 2019. This increase was primarily due to the Company's optimization of its platform's interactive features and continuous refinement of its event models, both of which helped to further cultivate users' paying habits.
Advertising and other revenues in the second quarter of 2020 increased by 14.5% to RMB188.3 million (US$26.6 million) from RMB164.4 million in the same period of 2019, primarily attributable to the Company's improving brand awareness and the corresponding increase in demand for advertising products related to streamer promotion.
Cost of revenues in the second quarter of 2020 increased by 26.3% to RMB1,985.3 million (US$280.5 million) from RMB1,571.7 million in the same period of 2019, primarily due to the increase in revenue sharing fees and content costs.
Revenue sharing fees and content costs in the second quarter of 2020 increased by 32.3% to RMB1,754.9 million (US$248.0 million) from RMB1,326.6 million in the same period of 2019. This increase was primarily explained by: 1) increases in revenue sharing fees, which were largely in line with the increases in total net revenues, 2) increases in content costs attributable to the Company's investments in eSports-related content and market expansion initiatives in Japan, and 3) increased investment in tournament-related videos and in-house content production.
Bandwidth costs in the second quarter of 2020 increased by 9.8% to RMB168.4 million (US$23.8 million) from RMB153.3 million in the same period of 2019. This increase was primarily due to increases in the growth of mobile users and total user engagement as well as the Company's ongoing efforts to improve the viewing experience of users.
Gross profit in the second quarter of 2020 increased by 73.7% to RMB522.9 million (US$73.9 million) from RMB301.1 million in the same period of 2019. Gross margin in the second quarter of 2020 expanded to 20.8% from 16.1% in the same period of 2019.
Sales and marketing expenses in the second quarter of 2020 decreased by 15.3% to RMB142.1 million (US$20.1 million) from RMB167.8 million in the same period of 2019, primarily attributable to the postponement of large-scale offline events as a result of the COVID-19 pandemic and related safety concerns.
Research and development expenses in the second quarter of 2020 increased by 12.5% to RMB94.9 million (US$13.4 million) from RMB84.4 million in the same period of 2019, mainly due to the increased investment in technological innovations as well as higher share-based compensation to related employees.
General and administrative expenses in the second quarter of 2020 increased by 8.4% to RMB79.5 million (US$11.2 million) from RMB73.3 million in the same period of 2019, mainly due to higher professional service fees related to the compliance requirements of being a publicly-listed company on the NASDAQ.
Other operating income, net in the second quarter of 2020 was RMB32.5 million (US$4.6 million), compared with RMB14.5 million in the same period of 2019.
Income from operations in the second quarter of 2020 was RMB238.9 million (US$33.8 million), compared with an operating loss of RMB10.0 million in the same period of 2019.
Adjusted operating income[1] in the second quarter of 2020, which adds back share-based compensation expenses, was RMB272.7 million (US$38.5 million), compared with RMB17.4 million in the same period of 2019.
Income tax expenses in the second quarter of 2020 and 2019 were nil due to the Company's cumulative net losses and the resulting tax loss carryforward.
Net income in the second quarter of 2020 was RMB319.3 million (US$45.1 million), compared with RMB23.2 million in the same period of 2019.
Adjusted net income in the second quarter of 2020, which excludes share-based compensation expenses, share of income in equity method investments, gain on disposal of investment or subsidiaries, and impairment loss of investments, was RMB322.9 million (US$45.6 million), compared with RMB52.6 million in the same period of 2019, implying an adjusted net margin of 12.9% for the second quarter of 2020.
Basic and diluted net income per ADS[2] in the second quarter of 2020 were RMB1.06 (US$0.15) and RMB1.02 (US$0.14) respectively. Adjusted basic and diluted net income per ADS in the second quarter of 2020 were RMB1.07 (US$0.15) and RMB1.07 (US$0.15) respectively.
Business Outlook
The Company expects its total net revenues to be in the range of RMB2,640 million to RMB2,680 million in the third quarter of 2020, representing year-over-year growth between 42.1% and 44.2%. This forecast reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change.
Conference Call Information
The Company will hold a conference call on Monday, August 10, 2020, at 8:00 am Eastern Time (or 8:00 pm Beijing Time on the same day) to discuss the financial results. Listeners may access the call by dialing the following numbers:
International: | 1-412-317-6061 |
United States Toll Free: | 1-888-317-6003 |
Mainland China Toll Free: | 4001-206115 |
Hong Kong Toll Free: | 800-963976 |
Singapore Toll Free: | 800-120-5863 |
Conference ID: | 5488573 |
The replay will be accessible through August 17, 2020, by dialing the following numbers:
International: | 1-412-317-0088 |
United States Toll Free: | 1-877-344-7529 |
Conference ID: | 10146942 |
A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.douyu.com/.
[1] "Adjusted operating income" is defined as operating income adding back share-based compensation expenses. For more information, refer to "Use of Non-GAAP Financial Measures" and "Reconciliations of Non-GAAP Results" at the end of this press release. |
[2] Every ten ADSs represent one ordinary share. |
About DouYu International Holdings Limited
Headquartered in Wuhan, China, DouYu International Holdings Limited (Nasdaq: DOYU) is a leading game-centric live streaming platform in China and a pioneer in the eSports value chain. DouYu operates its platform on both PC and mobile apps, through which users can enjoy immersive and interactive games and entertainment live streaming. DouYu's platform brings together a deep pool of top live streamers. By providing a sustainable streamer development system built on advanced technology infrastructure and capabilities, DouYu helps ensure a consistent supply of quality content. Through collaborations with a variety of participants across the eSports value chain, the Company has gained coveted access to a wide variety of premium eSports content, which further attracts viewers and enhances user experience. For more information, please see http://ir.douyu.com/.
Use of Non-GAAP Financial Measures
Adjusted operating income (loss) is calculated as operating income (loss) adjusted for share-based compensation expenses. Adjusted net income is calculated as net loss adjusted for share-based compensation expenses, share of income (loss) in equity method investments and impairment loss on investments. Adjusted net income attributable to DouYu is calculated as net income attributable to DouYu adjusted for share-based compensation expenses, share of income (loss) in equity method investments and impairment loss of investments. Adjusted basic and diluted net income per ordinary share is non-GAAP net income attributable to ordinary shareholders divided by weighted average number of ordinary shares used in the calculation of non-GAAP basic and diluted net income per ordinary share. The Company adjusted the non-cash impact of (i) share-based compensation expenses, (ii) share of income (loss) in equity method investments and (iii) impairment loss of investments to understand and evaluate the Company's core operating performance. The non-GAAP financial measures are presented to enhance investors' overall understanding of the Company's financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. Investors are encouraged to review the reconciliation of the historical non-GAAP financial measures to its most directly comparable GAAP financial measures. As non-GAAP financial measures have material limitations as analytical metrics and may not be calculated in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measures as a substitute for, or superior to, such metrics in accordance with U.S. GAAP.
For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of Non-GAAP Results" near the end of this release.
Exchange Rate Information
This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB7.0768 to US$1.00, the noon buying rate in effect on June 26, 2020, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB amounts could have been, or could be, converted, realized or settled in U.S. dollars at that rate on June 26, 2020, or at any other rate.
Safe Harbor Statement
This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the Securities Exchange Commission. The announced results of the fourth quarter and full year 2019 are preliminary and subject to audit adjustments. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.
Investor Relations Contact
Mao Mao
DouYu International Holdings Limited
Email: ir@douyu.tv
Phone: +1 (646) 224-6934
Xinran Rao
ICR, Inc.
Email: DouYu.IR@icrinc.com
Phone: +1 (646) 224-6934
Media Relations Contact
Iris Ding
DouYu International Holdings Limited
Email: pr_douyu@douyu.tv
Phone: +1 (646) 308-1475
Edmond Lococo
ICR, Inc.
Email: DouYu.PR@icrinc.com
Phone: +1 (646) 308-1475
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||
(All amounts in thousands, except share, ADS, per share and per ADS data) | |||
As of December 31 | As of June 30 | ||
2019 | 2020 | 2020 | |
RMB | RMB | US$(1) | |
ASSETS Current assets | |||
Cash and cash equivalents | 8,091,990 | 8,178,190 | 1,155,634 |
Restricted cash | 42,903 | 10,703 | 1,512 |
Accounts receivable, net(2) | 188,100 | 160,610 | 22,695 |
Prepayments(2) | 50,304 | 98,524 | 13,922 |
Amounts due from related parties | 24,044 | 40,533 | 5,728 |
Other current assets | 204,310 | 178,744 | 25,258 |
Total current assets | 8,601,651 | 8,667,304 | 1,224,749 |
Property and equipment, net | 38,909 | 35,236 | 4,979 |
Intangible assets, net | 198,057 | 188,538 | 26,642 |
Investments(2) | 225,534 | 481,671 | 68,063 |
Goodwill | 30,973 | 14,032 | 1,983 |
Right-of-use assets, net(3) | - | 85,516 | 12,084 |
Other non-current assets | 8,547 | 17,171 | 2,426 |
Total non-current assets | 502,020 | 822,164 | 116,177 |
TOTAL ASSETS | 9,103,671 | 9,489,468 | 1,340,926 |
LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY | |||
LIABILITIES | |||
Current liabilities | |||
Accounts Payable | 890,039 | 1,078,540 | 152,405 |
Advances from customers | 17,135 | 13,275 | 1,876 |
Deferred revenue | 195,983 | 182,658 | 25,811 |
Accrued expenses and other current liabilities | 392,347 | 297,498 | 42,038 |
Amounts due to related parties | 298,733 | 263,966 | 37,300 |
Lease liabilities due within one year(3) | - | 44,485 | 6,286 |
Total current liabilities | 1,794,237 | 1,880,422 | 265,716 |
Lease liabilities(3) | - | 38,276 | 5,409 |
Deferred revenue | 46,070 | 40,074 | 5,663 |
Total non-current liabilities | 46,070 | 78,350 | 11,072 |
TOTAL LIABILITIES | 1,840,307 | 1,958,772 | 276,788 |
(1) Translations of certain RMB amounts into U.S. dollars at a specified rate are solely for the convenience of the reader. Unless otherwise noted, all | |||
(2) The Group adopted Accounting Standards Update ("ASU") 2016-13, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit | |||
(3) The Group adopted Accounting Standards Update ("ASU") 2016-02, "Leases (Topic 842)" and its amendments on January 1, 2020 with modified | |||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) | |||
(All amounts in thousands, except share, ADS, per share and per ADS data) | |||
As of December 31 | As of June 30 | ||
2019 | 2020 | 2020 | |
RMB | RMB | US$(1) | |
Shareholders' equity | |||
Ordinary shares | 22 | 22 | 3 |
Treasury shares | (168,567) | (695,098) | (98,222) |
Additional paid-in capital | 10,324,278 | 10,433,755 | 1,474,361 |
Accumulated deficit | (3,348,718) | (2,752,222) | (388,908) |
Accumulated other comprehensive income | 434,894 | 491,674 | 69,476 |
Total DouYu Shareholders' equity | 7,241,909 | 7,478,131 | 1,056,710 |
Non-controlling interests | 21,455 | 52,565 | 7,428 |
Total Shareholders' Equity | 7,263,364 | 7,530,696 | 1,064,138 |
TOTAL LIABILITIES, CONVERTIBLE | |||
REDEEMABLE PREFERRED SHARES | |||
AND SHAREHOLDERS' EQUITY | 9,103,671 | 9,489,468 | 1,340,926 |
(1) Translations of certain RMB amounts into U.S. dollars at a specified rate are solely for the convenience of the reader. Unless otherwise noted, | |||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) | |||||||||||||
(All amounts in thousands, except share, ADS, per share and per ADS data) | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||
June 30, | March 31, | June 30, | June 30, | June 30, | June 30, | June 30, | |||||||
2019 | 2020 | 2020 | 2020 | 2019 | 2020 | 2020 | |||||||
RMB | RMB | RMB | US$(1) | RMB | RMB | US$(1) | |||||||
Net Revenues | 1,872,729 | 2,278,035 | 2,508,152 | 354,419 | 3,361,853 | 4,786,187 | 676,321 | ||||||
Cost of revenues | (1,571,679) | (1,792,181) | (1,985,270) | (280,532) | (2,857,674) | (3,777,451) | (533,780) | ||||||
Gross profit | 301,050 | 485,854 | 522,882 | 73,887 | 504,179 | 1,008,736 | 142,541 | ||||||
Operating expenses(2) | |||||||||||||
Sales and marketing expenses | (167,759) | (107,357) | (142,058) | (20,074) | (291,328) | (249,414) | (35,244) | ||||||
General and administrative expenses | (73,344) | (84,580) | (79,470) | (11,230) | (136,802) | (164,050) | (23,181) | ||||||
Research and development expenses | (84,404) | (92,888) | (94,920) | (13,413) | (163,825) | (187,808) | (26,539) | ||||||
Other operating income, net | 14,497 | 16,578 | 32,454 | 4,586 | 29,382 | 49,032 | 6,929 | ||||||
Total operating expenses | (311,010) | (268,246) | (283,994) | (40,131) | (562,573) | (552,240) | (78,035) | ||||||
Income (Loss) from operations | (9,960) | 217,608 | 238,888 | 33,756 | (58,394) | 456,496 | 64,506 | ||||||
Other expenses, net | (3,766) | (10,018) | (8,382) | (1,184) | (3,879) | (18,400) | (2,600) | ||||||
Foreign exchange gains | - | - | - | - | 32,045 | - | - | ||||||
Interest Income, net | 35,166 | 45,044 | 50,106 | 7,080 | 69,118 | 95,150 | 13,445 | ||||||
Income before income taxes | 21,440 | 252,634 | 280,612 | 39,652 | 38,890 | 533,246 | 75,351 | ||||||
Income tax expenses | - | - | - | - | - | - | - | ||||||
Share of income (loss) in equity method | 1,716 | 1,892 | 15,132 | 2,138 | 2,418 | 17,024 | 2,406 | ||||||
Gain (loss) on disposal of investment or | - | - | 23,526 | 3,324 | - | 23,526 | 3,324 | ||||||
Net income | 23,156 | 254,526 | 319,270 | 45,114 | 41,308 | 573,796 | 81,081 | ||||||
Less: Net loss attributable to non- | (880) | (5,924) | (16,775) | (2,370) | (1,484) | (22,699) | (3,208) | ||||||
Net income attributable to DouYu | 24,036 | 260,450 | 336,045 | 47,484 | 42,792 | 596,495 | 84,289 | ||||||
Net income per ordinary share | |||||||||||||
Basic | 0.86 | 8.18 | 10.56 | 1.49 | 1.53 | 18.73 | 2.65 | ||||||
Diluted | 0.82 | 7.90 | 10.23 | 1.44 | 1.46 | 18.12 | 2.56 | ||||||
Net income per ADS(3) | |||||||||||||
Basic | - | 0.82 | 1.06 | 0.15 | - | 1.87 | 0.26 | ||||||
Diluted | - | 0.79 | 1.02 | 0.14 | - | 1.81 | 0.26 | ||||||
Weighted average number of ordinary shares used in calculating net income per ordinary share | |||||||||||||
Basic | 8,063,790 | 31,848,831 | 31,828,405 | 31,828,405 | 8,063,790 | 31,838,618 | 31,838,618 | ||||||
Diluted | 29,351,365 | 32,976,034 | 32,864,145 | 32,864,145 | 29,343,741 | 32,920,090 | 32,920,090 | ||||||
Weighted average number of ADS used in calculating net income per ADS(2) | |||||||||||||
Basic | - | 318,488,308 | 318,284,051 | 318,284,051 | - | 318,386,179 | 318,386,179 | ||||||
Diluted | - | 329,760,341 | 328,641,453 | 328,641,453 | - | 329,200,897 | 329,200,897 | ||||||
(1) Translations of certain RMB amounts into U.S. dollars at a specified rate are solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at | |||||||||||||
(2) Share-based compensation expenses was allocated in cost of revenues and operating expenses as follows: | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||
June 30, | March 31, | June 30, | June 30, | June 30, | June 30, | June 30, | |||||||
2019 | 2020 | 2020 | 2020 | 2019 | 2020 | 2020 | |||||||
RMB | RMB | RMB | US$(1) | RMB | RMB | US$(1) | |||||||
Research and development expenses | - | 5,563 | 5,575 | 788 | - | 11,137 | 1,574 | ||||||
Sales and marketing expenses | - | 1,174 | 1,148 | 162 | - | 2,322 | 328 | ||||||
General and administrative expenses | 27,383 | 35,114 | 27,130 | 3,834 | 45,213 | 62,244 | 8,796 | ||||||
(3) Every ten ADSs represent one ordinary share. | |||||||||||||
RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS | |||||||
(All amounts in thousands, except share, ADS, per share and per ADS data) | |||||||
Three Months Ended | Six Months Ended | ||||||
June 30, | March 31, | June 30, | June 30, | June 30, | June 30, | June 30, | |
2019 | 2020 | 2020 | 2020 | 2019 | 2020 | 2020 | |
RMB | RMB | RMB | US$(1) | RMB | RMB | US$(1) | |
Income (Loss) from operations | (9,960) | 217,608 | 238,888 | 33,756 | (58,394) | 456,496 | 64,506 |
Add: | |||||||
Share-based compensation expenses | 27,383 | 41,850 | 33,853 | 4,784 | 45,213 | 75,703 | 10,698 |
Adjusted Operating income (loss) | 17,423 | 259,458 | 272,741 | 38,540 | (13,181) | 532,199 | 75,204 |
Net income | 23,156 | 254,526 | 319,270 | 45,114 | 41,308 | 573,796 | 81,081 |
Add: | |||||||
Share-based compensation expenses | 27,383 | 41,850 | 33,853 | 4,784 | 45,213 | 75,703 | 10,698 |
Share of income (loss) in equity method investments | (1,716) | (1,892) | (15,132) | (2,138) | (2,418) | (17,024) | (2,406) |
Gain (loss) on disposal of investment or subsidiaries | - | - | (23,526) | (3,324) | - | (23,526) | (3,324) |
Impairment loss of investment | 3,790 | 2,446 | 8,400 | 1,187 | 3,790 | 10,846 | 1,533 |
Adjusted net income | 52,613 | 296,931 | 322,865 | 45,623 | 87,893 | 619,795 | 87,582 |
Net income attributable to DouYu | 24,036 | 260,450 | 336,045 | 47,484 | 42,792 | 596,495 | 84,289 |
Add: | |||||||
Share-based compensation expenses | 27,383 | 41,850 | 33,853 | 4,784 | 45,213 | 75,703 | 10,698 |
Share of income (loss) in equity method investments | (1,716) | (1,892) | (15,132) | (2,138) | (2,418) | (17,024) | (2,406) |
Gain (loss) on disposal of investment or subsidiaries | - | - | (23,526) | (3,324) | - | (23,526) | (3,324) |
Impairment loss of investment | 3,790 | 2,446 | 8,400 | 1,187 | 3,790 | 10,846 | 1,533 |
Adjusted net income attributable to DouYu | 53,493 | 302,855 | 339,640 | 47,993 | 89,377 | 642,494 | 90,790 |
Adjusted net income per ordinary | |||||||
Basic | 4.51 | 9.51 | 10.67 | 1.51 | 7.31 | 20.18 | 2.85 |
Diluted | 1.91 | 9.51 | 10.67 | 1.51 | 3.20 | 20.18 | 2.85 |
Adjusted net income per ADS(2) | |||||||
Basic | - | 0.95 | 1.07 | 0.15 | - | 2.02 | 0.29 |
Diluted | - | 0.95 | 1.07 | 0.15 | - | 2.02 | 0.29 |
Weighted average number of ordinary shares used in calculating adjusted net income per ordinary share | |||||||
Basic | 8,063,790 | 31,848,831 | 31,828,405 | 31,828,405 | 8,063,790 | 31,838,618 | 31,838,618 |
Diluted | 27,969,895 | 31,848,831 | 31,828,405 | 31,828,405 | 27,947,586 | 31,838,618 | 31,838,618 |
Weighted average number of ADS used in calculating net income per ADS(2) | |||||||
Basic | - | 318,488,308 | 318,284,051 | 318,284,051 | - | 318,386,179 | 318,386,179 |
Diluted | - | 318,488,308 | 318,284,051 | 318,284,051 | - | 318,386,179 | 318,386,179 |
(1) Translations of certain RMB amounts into U.S. dollars at a specified rate are solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at | |||||||
(2) Every ten ADSs represent one ordinary share. | |||||||
SOURCE DouYu International Holdings Limited
