HUYA Inc. Reports Fourth Quarter and Fiscal Year 2020 Unaudited Financial Results

 
 

HUYA Inc. ("Huya" or the "Company") (NYSE: HUYA), a leading game live streaming platform in China today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2020 .

 

  Fourth Quarter 2020 Highlights  

 
  •   Total net revenues for the fourth quarter of 2020 increased by 21.2% to RMB2,990.3 million ( US$458.3 million ), from RMB2,467.5 million for the same period of 2019.
  •  
  •   Net income attributable to HUYA Inc. was RMB253.2 million ( US$38.8 million ) for the fourth quarter of 2020, representing an increase of 58.6% from RMB159.7 million for the same period of 2019.
  •  
  •   Non-GAAP net income attributable to HUYA Inc.   [1] was RMB305.9 million ( US$46.9 million ) for the fourth quarter of 2020, representing an increase of 26.5% from RMB241.9 million for the same period of 2019.
  •  
  •   Average mobile MAUs   [2] of Huya Live in the fourth quarter of 2020 reached 79.5 million, representing an increase of 29.1% from 61.6 million in the fourth quarter of 2019.
  •  
  •   Average MAUs   [3] of Huya Live in the fourth quarter of 2020 reached 178.5 million, representing an increase of 18.8% from 150.2 million in the fourth quarter of 2019.
  •  
  •   Total number of paying users   [4] of Huya Live in the fourth quarter of 2020 reached 6.0 million, representing an increase of 17.6% from 5.1 million in the fourth quarter of 2019.
  •  

"Throughout 2020 we have continuously invested in high-quality broadcasters, e-sports tournaments, and entertainment programs to enrich our content offerings, and have thus seen significant user growth and high level of user engagement, despite the challenges presented by the global COVID-19 pandemic," said Mr. Rongjie Dong , Chief Executive Officer of Huya. "Our mobile MAUs reached 79.5 million in the fourth quarter, an increase of 29.1% year-over-year. Moving through 2021, we will continue to make investments into our content offerings, improve our products, and extend the breadth and diversity of our platform, to provide users with more enjoyable experience."

 

Ms. Catherine Liu , Chief Financial Officer of Huya, commented, "We are pleased to deliver solid financial results in 2020. For the full year, our total net revenues were up 30.3%, reaching RMB10.9 billion and our net income increased by 88.9% to RMB884.2 million . The year 2020 ended on a strong note, with total net revenues and gross profit for the fourth quarter up 21.2% and 28.1%, respectively, year-over-year. With continued top-line expansion and our ability to drive operating leverage, our operating margin improved to 6.3% in the fourth quarter from 4.1%, and our non-GAAP operating margin increased to 9.0% from 7.4%, both compared with the same quarter of 2019. Leveraging our team's strong execution capabilities, we will continue to capture growth opportunities to drive value for our users and shareholders."

 
 
    
 

  [1] "Non-GAAP net income attributable to HUYA Inc." is defined as net income attributable to HUYA Inc. before share-based compensation expenses, gain on fair value change of investments and equity investee's investments, and equity investee's partial disposal of its investment, net of income taxes. For more information, refer to "Use of Non-GAAP Financial Measures" and "Reconciliations of GAAP and Non-GAAP Results" at the end of this press release.  

 
 

  [2] Refers to average monthly active users on mobile apps. Average mobile MAUs for any period is calculated by dividing (i) the sum of active users on the mobile apps for each month during such relevant period, by (ii) the number of months during such relevant period.  

 
 

  [3] Refers to average monthly active users on our platform. Average MAUs for any period is calculated by dividing (i) the sum of active users on our platform for each month during such relevant period, by (ii) the number of months during such relevant period.  

 
 

  [4] Refers to the sum of user accounts that purchased various products and services on our platform at least once during such relevant period.  

 
 
 

  Fourth Quarter 2020 Financial Results  

 

  Total net revenues for the fourth quarter of 2020 increased by 21.2% to RMB2,990.3 million ( US$458.3 million ), from RMB2,467.5 million for the same period of 2019.

 

  Live streaming revenues increased by 20.0% to RMB2,814.9 million ( US$431.4 million ) for the fourth quarter of 2020, from RMB2,346.1 million for the same period of 2019, primarily due to the increase in the number of paying users and the average spending per paying user on Huya Live. The increase in the number of paying users was primarily driven by the Company's overall user growth. The increase in the average spending per paying user was primarily driven by the year-end promotional activities and the enrichment and enhancement of content, products and services.

 

  Advertising and other revenues increased by 44.6% to RMB175.5 million ( US$26.9 million ) for the fourth quarter of 2020, from RMB121.3 million for the same period of 2019, primarily driven by the increasing and diversifying advertiser base, mainly attributable to strengthened recognition of Huya's brand name in China's online advertising market.

 

  Cost of revenues increased by 19.6% to RMB2,392.7 million ( US$366.7 million ) for the fourth quarter of 2020 from RMB2,000.9 million for the same period of 2019, primarily attributable to the increase in revenue sharing fees and content costs.

 

  Revenue sharing fees and content costs increased by 29.8% to RMB2,044.6 million ( US$313.3 million ) for the fourth quarter of 2020 from RMB1,575.1 million for the same period of 2019, primarily due to the increase in revenue sharing fees in relation to higher live streaming revenues, and the increase in spending in e-sports and self-produced content, as well as on content creators.

 

  Bandwidth costs decreased by 26.1% to RMB166.7 million ( US$25.5 million ) for the fourth quarter of 2020 from RMB225.6 million for the same period of 2019, primarily due to improved management in bandwidth costs and continued technology enhancement efforts.

 

  Gross profit increased by 28.1% to RMB597.7 million ( US$91.6 million ) for the fourth quarter of 2020 from RMB466.6 million for the same period of 2019. Gross margin increased to 20.0% for the fourth quarter of 2020 from 18.9% for the same period of 2019.

 

  Research and development expenses increased by 21.0% to RMB215.7 million ( US$33.1 million ) for the fourth quarter of 2020 from RMB178.3 million for the same period of 2019, mainly attributable to increased personnel-related expenses.

 

  Sales and marketing expenses increased by 63.2% to RMB193.1 million ( US$29.6 million ) for the fourth quarter of 2020 from RMB118.3 million for the same period of 2019, primarily attributable to the increased marketing expenses to promote the Company's content, products, services and brand name, as well as increased personnel-related expenses.

 

  General and administrative expenses decreased by 0.3% to RMB96.1 million ( US$14.7 million ) for the fourth quarter of 2020 from RMB96.4 million for the same period of 2019, mainly due to improved management efficiency.

 

  Operating income increased by 84.4% to RMB187.4 million ( US$28.7 million ) for the fourth quarter of 2020 from RMB101.6 million for the same period of 2019. Operating margin increased to 6.3% for the fourth quarter of 2020 from 4.1% for the same period of 2019.

 

  Non-GAAP operating income , which excludes share-based compensation expenses, increased by 46.5% to RMB269.3 million ( US$41.3 million ) for the fourth quarter of 2020 from RMB183.8 million for the same period of 2019. Non-GAAP operating margin increased to 9.0% for the fourth quarter of 2020 from 7.4% for the same period of 2019.

 

  Income tax expenses increased by 35.1% to RMB37.3 million ( US$5.7 million ) for the fourth quarter of 2020 from RMB27.6 million for the same period of 2019.

 

  Net income   attributable to HUYA Inc. for the fourth quarter of 2020 increased by 58.6% to RMB253.2 million ( US$38.8 million ), from RMB159.7 million for the same period of 2019.

 

  Non-GAAP net income attributable to HUYA Inc. for the fourth quarter of 2020, which excludes share-based compensation expenses, gain on fair value change of investments and equity investee's investments, and equity investee's partial disposal of its investment, net of income taxes, increased by 26.5% to RMB305.9 million ( US$46.9 million ), from RMB241.9 million for the same period of 2019.

 

  Diluted net income per American depositary share ("ADS") was RMB1.05   (US$0.16) for the fourth quarter of 2020, compared with RMB0.68 for the same period of 2019. Each ADS represents one Class A ordinary share of the Company.

 

  Non-GAAP diluted net income per ADS was RMB1.27   (US$0.19) for the fourth quarter of 2020, compared with RMB1.02 for the same period of 2019.

 

  Balance Sheets and Cash Flow  

 

As of December 31, 2020 , the Company had cash and cash equivalents, short-term deposits and short-term investments of RMB10,474.9 million ( US$1,605.3 million ), compared with RMB10,798.3 million as of September 30, 2020 . The decrease was primarily attributable to the land use right acquisition of approximately RMB310 million in Foshan City in November 2020.

 

Net cash provided by operating activities was RMB458.9 million ( US$70.3 million ) for the fourth quarter of 2020.

 

  Fiscal Year 2020 Financial Results  

 

  Total net revenues in fiscal year 2020 increased by 30.3% to RMB10,914.4 million ( US$1,672.7 million ), from RMB8,374.5 million in the prior year.

 

  Live streaming revenues increased by 29.3% to RMB10,311.6 million ( US$1,580.3 million ) in fiscal year 2020, from RMB7,976.2 million in the prior year, primarily due to the increase in the number of paying users and the average spending per paying user on Huya Live. The increase in the number of paying users was primarily driven by the Company's overall user growth. The increase in the average spending per paying user was primarily driven by the enrichment and enhancement of content, products and services.

 

  Advertising and other revenues increased by 51.3% to RMB602.8 million ( US$92.4 million ) in fiscal year 2020, from RMB398.3 million in the prior year, primarily driven by the increasing and diversifying advertiser base, mainly attributable to strengthened recognition of Huya's brand name in China's online advertising market.

 

  Cost of revenues increased by 25.4% to RMB8,646.3 million ( US$1,325.1 million ) in fiscal year 2020 from RMB6,892.6 million in the prior year, primarily attributable to the increase in revenue sharing fees and content costs, bandwidth costs and personnel-related costs.

 

  Revenue sharing fees and content costs increased by 27.6% to RMB7,086.8 million ( US$1,086.1 million ) in fiscal year 2020 from RMB5,552.7 million in the prior year, primarily due to the increase in revenue sharing fees in relation to higher live streaming revenues, and the increase in spending in e-sports and self-produced content, as well as on content creators.

 

  Bandwidth costs increased by 9.8% to RMB879.2 million ( US$134.7 million ) in fiscal year 2020 from RMB800.8 million in the prior year, primarily due to an increase in bandwidth usage as a result of the Company's larger user base, partially offset by improved management in bandwidth costs and continuous technology enhancement efforts.

 

  Gross profit increased by 53.0% to RMB2,268.1 million ( US$347.6 million ) in fiscal year 2020 from RMB1,481.9 million in the prior year. Gross margin increased to 20.8% in fiscal year 2020 from 17.7% in fiscal year 2019.

 

  Research and development expenses increased by 44.3% to RMB734.3 million ( US$112.5 million ) in fiscal year 2020 from RMB508.7 million in the prior year, mainly attributable to increases in personnel-related expenses.

 

  Sales and marketing expenses increased by 27.3% to RMB558.0 million ( US$85.5 million ) in fiscal year 2020 from RMB438.4 million in the prior year, primarily attributable to the increased marketing expenses to promote the Company's content, products, services and brand name, as well as increased personnel-related expenses.

 

  General and administrative expenses increased by 26.1% to RMB445.0 million ( US$68.2 million ) in fiscal year 2020 from RMB352.8 million in the prior year, mainly due to increase in personnel-related expenses.

 

  Operating income increased by 177.4% to RMB725.0 million ( US$111.1 million ) in fiscal year 2020 from RMB261.4 million in the prior year. Operating margin increased to 6.6% in fiscal year 2020 from 3.1% in the prior year.

 

  Non-GAAP operating income , which excludes share-based compensation expenses, increased by 108.6% to RMB1,133.2 million ( US$173.7 million ) in fiscal year 2020 from RMB543.1 million in the prior year. Non-GAAP operating margin increased to 10.4% in fiscal year 2020 from 6.5% in the prior year.

 

  Income tax expenses increased by 84.0% to RMB176.8 million ( US$27.1 million ) in fiscal year 2020 from RMB96.1 million in the prior year.

 

  Net income   attributable to HUYA Inc. increased by 88.9% to RMB884.2 million ( US$135.5 million ) in fiscal year 2020 from RMB468.2 million in the prior year.

 

  Non-GAAP net income attributable to HUYA Inc. in fiscal year 2020, which excludes share-based compensation expenses, gain on fair value change of investments and equity investee's investments, and equity investee's partial disposal of its investment, net of income taxes, increased by 68.2% to RMB1,261.5 million ( US$193.3 million ), from RMB749.9 million in the prior year.

 

  Diluted net income per ADS was RMB3.71   (US$0.57) in fiscal year 2020, compared with diluted net income per ADS of RMB2.02 in the prior year.

 

  Non-GAAP diluted net income per ADS was RMB5.29   (US$0.81) in fiscal year 2020, compared with RMB3.23 in the prior year.

 

  Net cash provided by operating activities was RMB1,239.9 million ( US$190.0 million ) for fiscal year 2020.

 

  Conference Call  

 

The Company's management will host an earnings conference call at 7:00 a.m. U.S. Eastern Time on March 23, 2021 ( 7:00 p.m.   Beijing / Hong Kong time on March 23, 2021 ).

 

For participants who wish to join the call, please complete online registration using the link provided below at least 20 minutes prior to the scheduled call start time. Upon registration, participants will receive the conference call access information, including dial-in numbers, Direct Event passcode, a unique registrant ID and an e-mail with detailed instructions to join the conference call.

 

  Participant Online Registration: https://apac.directeventreg.com/registration/event/2296665

 

Once complete the registration, please dial-in at least 10 minutes before the scheduled start time of the earnings call and enter the Direct Event passcode and registrant ID as instructed to connect to the call.

 

Additionally, a live and archived webcast of the conference call will be available on the Company's investor relations website at https://ir.huya.com .

 

A replay of the conference call will be accessible approximately two hours after the conclusion of the live call until March 30, 2021 , by dialing the following telephone numbers:

 
 
        
 

  United States:  

 
 

  +1-646-254-3697  

 
 

  International:  

 
 

  +61-2-8199-0299  

 
 

  Hong Kong, China:  

 
 

  +852-3051-2780  

 
 

  Replay Access Code:  

 
 

  2296665  

 
 
 

  About HUYA Inc.  

 

HUYA Inc. is a leading game live streaming platform in China with a large and active game live streaming community. The Company cooperates with e-sports event organizers, as well as major game developers and publishers, and has developed e-sports live streaming as one of the most popular content genres on its platform. The Company has created an engaged, interactive and immersive community for game enthusiasts of China's young generation. Building on its success in game live streaming, Huya has also extended its content to other entertainment content genres. Huya's open platform also functions as a marketplace for broadcasters and talent agencies to congregate and closely collaborate with the Company.

 

  Use of Non-GAAP Financial Measures  

 

The unaudited condensed consolidated financial information is prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"), except that the consolidated statement of changes in shareholders' equity, consolidated statements of cash flows, and the detailed notes have not been presented. Huya uses non-GAAP gross profit, non-GAAP operating income, non-GAAP net income attributable to HUYA Inc., non-GAAP net income attributable to ordinary shareholders, and non-GAAP basic and diluted net income per ADS, which are non-GAAP financial measures. Non-GAAP gross profit is gross profit excluding share-based compensation expenses allocated in cost of revenues. Non-GAAP operating income is operating income excluding share-based compensation expenses. Non-GAAP net income attributable to HUYA Inc. is net income attributable to HUYA Inc. excluding share-based compensation expenses, gain on fair value change of investments and equity investee's investments, and equity investee's partial disposal of its investment, net of income taxes. Non-GAAP net income attributable to ordinary shareholders is net income attributable to ordinary shareholders excluding share-based compensation expenses, gain on fair value change of investments and equity investee's investments, and equity investee's partial disposal of its investment, net of income taxes. Non-GAAP basic and diluted net income per ADS 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 ADS. The Company believes that separate analysis and exclusion of the impact of (i) share-based compensation expenses, and (ii) gain on fair value change of investments and equity investee's investments, and equity investee's partial disposal of its investment, net of income taxes add clarity to the constituent parts of its performance. The Company reviews these non-GAAP financial measures together with GAAP financial measures to obtain a better understanding of its operating performance. It uses the non-GAAP financial measure for planning, forecasting and measuring results against the forecast. The Company believes that non-GAAP financial measure is useful supplemental information for investors and analysts to assess its operating performance without the effect of (i) share-based compensation expenses, which have been and will continue to be significant recurring expenses in its business, and (ii) gain on fair value change of investments and equity investee's investments, and equity investee's partial disposal of its investment, net of income taxes, which both may recur when there is observable price change in the future. However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact the Company's net income for the period. In addition, because non-GAAP financial measures are not measured in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measure in isolation from or as an alternative to the financial measure prepared in accordance with U.S. GAAP.

 

The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned "HUYA Inc. Reconciliations of GAAP and 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 RMB6.5250 to US$1.00 , the rate in effect as of December 31, 2020 as certified for customs purposes by the Federal Reserve Bank of New York .

 

  Safe Harbor Statement  

 

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as Huya's strategic and operational plans, contain forward-looking statements. Huya may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission ("SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Huya's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Huya's goals and strategies; Huya's future business development, results of operations and financial condition; the expected growth of the game live streaming market; the expectation regarding the rate at which to gain active users, especially paying users; Huya's ability to monetize the user base; fluctuations in general economic and business conditions in China ; the impact of the COVID-19 to Huya's business operations and the economy in China and elsewhere generally; any adverse changes in laws, regulations, rules, policies or guidelines applicable to Huya; the occurrence of any event, change or other circumstances that could give rise to the right of one or both of Huya and DouYu to terminate the definitive merger agreement between Huya and DouYu; the outcome of any legal proceedings that may be instituted against Huya, DouYu or their respective shareholders or directors; the ability to obtain regulatory approvals and meet other closing conditions to the merger, including the risk that regulatory approvals required for the merger are not obtained or are obtained subject to conditions that are not anticipated or that are material and adverse to Huya's or DouYu's business; a delay in closing the merger; the ability to obtain approval by DouYu's shareholders on the expected terms and schedule; business disruptions from the proposed merger that will harm Huya's or DouYu's business, including current plans and operations; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the merger; certain restrictions during the pendency of the merger that may impact Huya's or DouYu's ability to pursue certain business opportunities or strategic transactions; the ability of Huya or DouYu to retain and hire key personnel; uncertainty as to the long-term value of the Class A ordinary shares of Huya following the merger; the continued availability of capital and financing following the merger; Huya's ability to realize the intended synergies from the potential merger with DouYu; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Huya's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Huya does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

 

  For investor and media inquiries, please contact:  

 

In China :

 

HUYA Inc.
Investor Relations
Tel: +86-20-2290-7829
E-mail: ir@huya.com  

 

The Piacente Group, Inc.
Jenny Cai  
Tel: +86-10-6508-0677
E-mail: huya@tpg-ir.com  

 

In the United States :

 

The Piacente Group, Inc.
Brandi Piacente  
Tel: +1-212-481-2050
E-mail: huya@tpg-ir.com  

 

 

 

 

 

 

 
 
                                                                                                                                                                                                                                                                                                                                                
 

   HUYA INC.   

 

   UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS   

 

  (All amounts in thousands, except share, ADS, per share data and per ADS data)  

 
 
 
 
 

   As of December 31,   

 
 
 

   As of December 31,   

 
 
 
 

   2019   

 
 
 

   2020   

 
 
 

   2020   

 
 
 
 

  RMB  

 
 
 

  RMB  

 
 
 

  US$  

 
 
 
 
 
 
 
 
 

   Assets   

 
 
 
 
 
 
 
 

   Current assets   

 
 
 
 
 
 
 
 

  Cash and cash equivalents  

 
 
 

  1,113,193  

 
 
 

  3,293,573  

 
 
 

  504,762  

 
 

  Restricted cash  

 
 
 

  1,392  

 
 
 

  164,889  

 
 
 

  25,270  

 
 

  Short-term deposits  

 
 
 

  6,743,445  

 
 
 

  5,974,790  

 
 
 

  915,677  

 
 

  Short-term investments  

 
 
 

  2,219,531  

 
 
 

  1,206,539  

 
 
 

  184,910  

 
 

  Accounts receivable, net  

 
 
 

  61,708  

 
 
 

  71,237  

 
 
 

  10,918  

 
 

  Amounts due from related parties  

 
 
 

  51,936  

 
 
 

  64,802  

 
 
 

  9,931  

 
 

  Prepayments and other current assets  

 
 
 

  400,615  

 
 
 

  495,108  

 
 
 

  75,879  

 
 
 
 
 
 
 
 
 

   Total current assets   

 
 
 

  10,591,820  

 
 
 

  11,270,938  

 
 
 

  1,727,347  

 
 
 
 
 
 
 
 
 

   Non-current assets   

 
 
 
 
 
 
 
 

  Deferred tax assets  

 
 
 

  45,816  

 
 
 

  48,313  

 
 
 

  7,404  

 
 

  Investments  

 
 
 

  379,424  

 
 
 

  467,206  

 
 
 

  71,602  

 
 

  Property and equipment, net  

 
 
 

  96,686  

 
 
 

  94,555  

 
 
 

  14,491  

 
 

  Intangible assets, net  

 
 
 

  45,085  

 
 
 

  62,796  

 
 
 

  9,624  

 
 

  Right-of-use assets, net  

 
 
 

  102,824  

 
 
 

  87,418  

 
 
 

  13,397  

 
 

  Prepayments and other non-current assets  

 
 
 

  104,895  

 
 
 

  379,461  

 
 
 

  58,155  

 
 
 
 
 
 
 
 
 

   Total non-current assets   

 
 
 

  774,730  

 
 
 

  1,139,749  

 
 
 

  174,673  

 
 
 
 
 
 
 
 
 

   Total assets   

 
 
 

  11,366,550  

 
 
 

  12,410,687  

 
 
 

  1,902,020  

 
 
 
 
 
 
 
 
 

   Liabilities and shareholders' equity   

 
 
 
 
 
 
 
 

   Current liabilities   

 
 
 
 
 
 
 
 

  Accounts payable  

 
 
 

  3,725  

 
 
 

  10,083  

 
 
 

  1,545  

 
 

  Advances from customers and deferred revenue  

 
 
 

  845,966  

 
 
 

  485,878  

 
 
 

  74,464  

 
 

  Income taxes payable  

 
 
 

  26,051  

 
 
 

  56,861  

 
 
 

  8,714  

 
 

  Accrued liabilities and other current liabilities  

 
 
 

  1,460,025  

 
 
 

  1,707,289  

 
 
 

  261,654  

 
 

  Amounts due to related parties  

 
 
 

  79,032  

 
 
 

  95,457  

 
 
 

  14,629  

 
 

  Lease liabilities due within one year  

 
 
 

  31,878  

 
 
 

  29,227  

 
 
 

  4,479  

 
 
 
 
 
 
 
 
 

   Total current liabilities   

 
 
 

  2,446,677  

 
 
 

  2,384,795  

 
 
 

  365,485  

 
 
 
 
 
 
 
 
 

   Non-current liabilities   

 
 
 
 
 
 
 
 

  Lease liabilities  

 
 
 

  70,110  

 
 
 

  57,620  

 
 
 

  8,831  

 
 

  Deferred tax liabilities  

 
 
 

  -  

 
 
 

  13,350  

 
 
 

  2,046  

 
 

  Deferred revenue  

 
 
 

  164,913  

 
 
 

  178,144  

 
 
 

  27,302  

 
 
 
 
 
 
 
 
 

   Total non-current liabilities   

 
 
 

  235,023  

 
 
 

  249,114  

 
 
 

  38,179  

 
 
 
 
 
 
 
 
 

   Total liabilities   

 
 
 

  2,681,700  

 
 
 

  2,633,909  

 
 
 

  403,664  

 
 
 
 
 
 
 
 
 
 

 

 

 

 

 

 
 
                                                                                                           
 

   HUYA INC.   

 

   UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)   

 

  (All amounts in thousands, except share, ADS, per share data and per ADS data)  

 
 
 
 
 

   As of December 31,   

 
 
 

   As of December 31,   

 
 
 
 

   2019   

 
 
 

   2020   

 
 
 

   2020   

 
 
 
 

  RMB  

 
 
 

  RMB  

 
 
 

  US$  

 
 
 
 
 
 
 
 
 

   Shareholders' equity   

 
 
 
 
 
 
 
 

  Class A ordinary shares (US$0.0001 par value;
750,000,000 shares authorized as of December
31, 2019 and 2020, respectively; 67,101,314 and
83,490,841 shares issued and outstanding as of
December 31, 2019 and 2020, respectively)
 

 
 
 

  44  

 
 
 

  55  

 
 
 

  8  

 
 

  Class B ordinary shares (US$0.0001 par value;
200,000,000 shares authorized as of December
31, 2019 and 2020, respectively; 152,357,321
and 152,357,321 shares issued and outstanding
as of December 31, 2019 and 2020, respectively)
 

 
 
 

  100  

 
 
 

  100  

 
 
 

  15  

 
 

  Additional paid-in capital  

 
 
 

  10,081,946  

 
 
 

  11,465,575  

 
 
 

  1,757,176  

 
 

  Statutory reserves  

 
 
 

  64,679  

 
 
 

  122,429  

 
 
 

  18,763  

 
 

  Accumulated deficit *   

 
 
 

  (1,986,054)  

 
 
 

  (1,883,643)  

 
 
 

  (288,681)  

 
 

  Accumulated other comprehensive income  

 
 
 

  524,135  

 
 
 

  72,262  

 
 
 

  11,075  

 
 
 
 
 
 
 
 
 

   Total shareholders' equity   

 
 
 

  8,684,850  

 
 
 

  9,776,778  

 
 
 

  1,498,356  

 
 
 
 
 
 
 
 
 

   Total liabilities and shareholders' equity   

 
 
 

  11,366,550  

 
 
 

  12,410,687  

 
 
 

  1,902,020  

 
 
 

  * On January 1, 2020, the Company adopted ASC326, "Financial Instruments-Credit Losses" using modified-retrospective transition
approach. Following the adoption of this guidance, a cumulative-effect adjustment to accumulated deficit, amounting to RMB3.1
million, was recognized as of January 1, 2020.
 

 
 
 

 

 

 

 

 

 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
 

   HUYA INC.   

 

   UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS   

 

  (All amounts in thousands, except share, ADS, per share data and per ADS data)  

 
 
 
 
 

   Three Months Ended   

 
 
 

   Twelve Months Ended   

 
 
 
 

   December 31,
 
   2019   

 
 
 

   September 30,
 
   2020   

 
 
 

   December 31,
 
   2020   

 
 
 

   December 31,
 
   2020   

 
 
 

   December 31,
 
   2019   

 
 
 

   December 31,
 
   2020   

 
 
 

   December 31,
 
   2020   

 
 
 
 

  RMB  

 
 
 

  RMB  

 
 
 

  RMB  

 
 
 

  US$  

 
 
 

  RMB  

 
 
 

  RMB  

 
 
 

  US$  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   Net revenues   

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  Live streaming  

 
 
 

  2,346,141  

 
 
 

  2,657,208  

 
 
 

  2,814,869  

 
 
 

  431,398  

 
 
 

  7,976,214  

 
 
 

  10,311,624  

 
 
 

  1,580,326  

 
 

  Advertising and others  

 
 
 

  121,329  

 
 
 

  157,632  

 
 
 

  175,473  

 
 
 

  26,892  

 
 
 

  398,287  

 
 
 

  602,750  

 
 
 

  92,375  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   Total net revenues   

 
 
 

  2,467,470  

 
 
 

  2,814,840  

 
 
 

  2,990,342  

 
 
 

  458,290  

 
 
 

  8,374,501  

 
 
 

  10,914,374  

 
 
 

  1,672,701  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  Cost of revenues (1)  

 
 
 

  (2,000,909)  

 
 
 

  (2,194,263)  

 
 
 

  (2,392,681)  

 
 
 

  (366,694)  

 
 
 

  (6,892,579)  

 
 
 

  (8,646,308)  

 
 
 

  (1,325,105)  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   Gross profit   

 
 
 

  466,561  

 
 
 

  620,577  

 
 
 

  597,661  

 
 
 

  91,596  

 
 
 

  1,481,922  

 
 
 

  2,268,066  

 
 
 

  347,596  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   Operating expenses (1)   

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  Research and development expenses  

 
 
 

  (178,290)  

 
 
 

  (182,683)  

 
 
 

  (215,664)  

 
 
 

  (33,052)  

 
 
 

  (508,714)  

 
 
 

  (734,261)  

 
 
 

  (112,530)  

 
 

  Sales and marketing expenses  

 
 
 

  (118,324)  

 
 
 

  (143,846)  

 
 
 

  (193,110)  

 
 
 

  (29,595)  

 
 
 

  (438,396)  

 
 
 

  (558,012)  

 
 
 

  (85,519)  

 
 

  General and administrative expenses  

 
 
 

  (96,367)  

 
 
 

  (118,741)  

 
 
 

  (96,053)  

 
 
 

  (14,721)  

 
 
 

  (352,824)  

 
 
 

  (445,006)  

 
 
 

  (68,200)  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   Total operating expenses   

 
 
 

  (392,981)  

 
 
 

  (445,270)  

 
 
 

  (504,827)  

 
 
 

  (77,368)  

 
 
 

  (1,299,934)  

 
 
 

  (1,737,279)  

 
 
 

  (266,249)  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  Other income, net  

 
 
 

  28,046  

 
 
 

  47,613  

 
 
 

  94,519  

 
 
 

  14,486  

 
 
 

  79,390  

 
 
 

  194,169  

 
 
 

  29,758  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   Operating income   

 
 
 

  101,626  

 
 
 

  222,920  

 
 
 

  187,353  

 
 
 

  28,714  

 
 
 

  261,378  

 
 
 

  724,956  

 
 
 

  111,105  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  Interest and short-term investments income  

 
 
 

  88,346  

 
 
 

  75,919  

 
 
 

  73,993  

 
 
 

  11,340  

 
 
 

  304,491  

 
 
 

  313,366  

 
 
 

  48,025  

 
 

  Gain on fair value change of investments  

 
 
 

  -  

 
 
 

  -  

 
 
 

  -  

 
 
 

  -  

 
 
 

  -  

 
 
 

  2,160  

 
 
 

  331  

 
 

  Other non-operating expenses  

 
 
 

  -  

 
 
 

  -  

 
 
 

  -  

 
 
 

  -  

 
 
 

  -  

 
 
 

  (10,010)  

 
 
 

  (1,534)  

 
 

  Foreign currency exchange gains (losses),
net
 

 
 
 

  99  

 
 
 

  4,677  

 
 
 

  (221)  

 
 
 

  (34)  

 
 
 

  1,157  

 
 
 

  2,056  

 
 
 

  315  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   I   ncome before income tax   expenses   

 
 
 

  190,071  

 
 
 

  303,516  

 
 
 

  261,125  

 
 
 

  40,020  

 
 
 

  567,026  

 
 
 

  1,032,528  

 
 
 

  158,242  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  Income tax expenses  

 
 
 

  (27,599)  

 
 
 

  (50,657)  

 
 
 

  (37,285)  

 
 
 

  (5,714)  

 
 
 

  (96,078)  

 
 
 

  (176,784)  

 
 
 

  (27,093)  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   Income before share of (loss) income in
equity method investments, net of
income taxes
 
 

 
 
 

  162,472  

 
 
 

  252,859  

 
 
 

  223,840  

 
 
 

  34,306  

 
 
 

  470,948  

 
 
 

  855,744  

 
 
 

  131,149  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  Share of (loss) income in equity method
investments, net of income taxes
 

 
 
 

  (2,802)  

 
 
 

  154  

 
 
 

  29,321  

 
 
 

  4,494  

 
 
 

  (2,775)  

 
 
 

  28,414  

 
 
 

  4,355  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   Net income attributable to HUYA Inc.   

 
 
 

  159,670  

 
 
 

  253,013  

 
 
 

  253,161  

 
 
 

  38,800  

 
 
 

  468,173  

 
 
 

  884,158  

 
 
 

  135,504  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   Net income   attributable to ordinary
shareholders
 
 

 
 
 

  159,670  

 
 
 

  253,013  

 
 
 

  253,161  

 
 
 

  38,800  

 
 
 

  468,173  

 
 
 

  884,158  

 
 
 

  135,504  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

 

 

 

 

 
 
                                                                                                                                                                                                                                                                                                                                                         
 

   HUYA INC.   

 

   UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)   

 

  (All amounts in thousands, except share, ADS, per share data and per ADS data)  

 
 
 
 
 

   Three Months Ended   

 
 
 

   Twelve Months Ended   

 
 
 
 

   December 31,
 
   2019   

 
 
 

   September 30,
 
   2020   

 
 
 

   December 31,
 
   2020   

 
 
 

   December 31,
 
   2020   

 
 
 

   December 31,
 
   2019   

 
 
 

   December 31,
 
   2020   

 
 
 

   December 31,
 
   2020   

 
 
 
 

  RMB  

 
 
 

  RMB  

 
 
 

  RMB  

 
 
 

  US$  

 
 
 

  RMB  

 
 
 

  RMB  

 
 
 

  US$  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   Net income per   ADS*   

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  —Basic  

 
 
 

  0.73  

 
 
 

  1.10  

 
 
 

  1.07  

 
 
 

  0.16  

 
 
 

  2.18  

 
 
 

  3.89  

 
 
 

  0.60  

 
 

  —Diluted  

 
 
 

  0.68  

 
 
 

  1.05  

 
 
 

  1.05  

 
 
 

  0.16  

 
 
 

  2.02  

 
 
 

  3.71  

 
 
 

  0.57  

 
 

   Net income   per ordinary share   

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  —Basic  

 
 
 

  0.73  

 
 
 

  1.10  

 
 
 

  1.07  

 
 
 

  0.16  

 
 
 

  2.18  

 
 
 

  3.89  

 
 
 

  0.60  

 
 

  —Diluted  

 
 
 

  0.68  

 
 
 

  1.05  

 
 
 

  1.05  

 
 
 

  0.16  

 
 
 

  2.02  

 
 
 

  3.71  

 
 
 

  0.57  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   Weighted average number of ADS used in
calculating net income per ADS
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  —Basic  

 
 
 

  219,382,541  

 
 
 

  230,554,718  

 
 
 

  236,099,598  

 
 
 

  236,099,598  

 
 
 

  214,811,862  

 
 
 

  227,081,238  

 
 
 

  227,081,238  

 
 

  —Diluted  

 
 
 

  236,144,302  

 
 
 

  240,474,833  

 
 
 

  240,985,724  

 
 
 

  240,985,724  

 
 
 

  232,024,961  

 
 
 

  238,631,613  

 
 
 

  238,631,613  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  * Each ADS represents one Class A ordinary share.  

 
 
 

  (1) Share-based compensation was allocated in cost of revenues and operating expenses as follows:  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   Three Months Ended   

 
 
 

   Twelve Months Ended   

 
 
 
 

   December 31,
 
   2019   

 
 
 

   September 30,
 
   2020   

 
 
 

   December 31,
 
   2020   

 
 
 

   December 31,
 
   2020   

 
 
 

   December 31,
 
   2019   

 
 
 

   December 31,
 
   2020   

 
 
 

   December 31,
 
   2020   

 
 
 
 

  RMB  

 
 
 

  RMB  

 
 
 

  RMB  

 
 
 

  US$  

 
 
 

  RMB  

 
 
 

  RMB  

 
 
 

  US$  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  Cost of revenues  

 
 
 

  14,806  

 
 
 

  17,352  

 
 
 

  17,003  

 
 
 

  2,606  

 
 
 

  31,593  

 
 
 

  64,942  

 
 
 

  9,953  

 
 

  Research and development expenses  

 
 
 

  36,369  

 
 
 

  42,552  

 
 
 

  36,653  

 
 
 

  5,617  

 
 
 

  86,296  

 
 
 

  150,723  

 
 
 

  23,099  

 
 

  Sales and marketing expenses  

 
 
 

  2,640  

 
 
 

  2,711  

 
 
 

  2,050  

 
 
 

  314  

 
 
 

  5,919  

 
 
 

  9,879  

 
 
 

  1,514  

 
 

  General and administrative expenses  

 
 
 

  28,370  

 
 
 

  45,549  

 
 
 

  26,281  

 
 
 

  4,028  

 
 
 

  157,936  

 
 
 

  182,664  

 
 
 

  27,994  

 
 
 

 

 

 

 

 

 
 
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
 

   HUYA INC.   

 

   RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS   

 

  (All amounts in thousands, except share, ADS, per share data and per ADS data)  

 
 
 
 
 

   Three Months Ended   

 
 
 

   Twelve Months Ended   

 
 
 
 

   December 31,
 
   2019   

 
 
 

   September 30,
 
   2020   

 
 
 

   December 31,
 
   2020   

 
 
 

   December 31,
 
   2020   

 
 
 

   December 31,
 
   2019   

 
 
 

   December 31,
 
   2020   

 
 
 

   December 31,
 
   2020   

 
 
 
 

  RMB  

 
 
 

  RMB  

 
 
 

  RMB  

 
 
 

  US$  

 
 
 

  RMB  

 
 
 

  RMB  

 
 
 

  US$  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  Gross profit  

 
 
 

  466,561  

 
 
 

  620,577  

 
 
 

  597,661  

 
 
 

  91,596  

 
 
 

  1,481,922  

 
 
 

  2,268,066  

 
 
 

  347,596  

 
 

  Share-based compensation expenses allocated
in cost of revenues
 

 
 
 

  14,806  

 
 
 

  17,352  

 
 
 

  17,003  

 
 
 

  2,606  

 
 
 

  31,593  

 
 
 

  64,942  

 
 
 

  9,953  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   Non-GAAP gross profit   

 
 
 

  481,367  

 
 
 

  637,929  

 
 
 

  614,664  

 
 
 

  94,202  

 
 
 

  1,513,515  

 
 
 

  2,333,008  

 
 
 

  357,549  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  Operating income  

 
 
 

  101,626  

 
 
 

  222,920  

 
 
 

  187,353  

 
 
 

  28,714  

 
 
 

  261,378  

 
 
 

  724,956  

 
 
 

  111,105  

 
 

  Share-based compensation expenses  

 
 
 

  82,185  

 
 
 

  108,164  

 
 
 

  81,987  

 
 
 

  12,565  

 
 
 

  281,744  

 
 
 

  408,208  

 
 
 

  62,560  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   Non-GAAP operating income   

 
 
 

  183,811  

 
 
 

  331,084  

 
 
 

  269,340  

 
 
 

  41,279  

 
 
 

  543,122  

 
 
 

  1,133,164  

 
 
 

  173,665  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  Net income attributable to HUYA Inc.  

 
 
 

  159,670  

 
 
 

  253,013  

 
 
 

  253,161  

 
 
 

  38,800  

 
 
 

  468,173  

 
 
 

  884,158  

 
 
 

  135,504  

 
 

  Gain on fair value change of investments and
equity investee's investments, and equity
investee's partial disposal of its investment,
net of income taxes
 

 
 
 

  -  

 
 
 

  -  

 
 
 

  (29,231)  

 
 
 

  (4,480)  

 
 
 

  -  

 
 
 

  (30,851)  

 
 
 

  (4,728)  

 
 

  Share-based compensation expenses  

 
 
 

  82,185  

 
 
 

  108,164  

 
 
 

  81,987  

 
 
 

  12,565  

 
 
 

  281,744  

 
 
 

  408,208  

 
 
 

  62,560  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   Non-GAAP net income attributable to
HUYA Inc.
 
 

 
 
 

  241,855  

 
 
 

  361,177  

 
 
 

  305,917  

 
 
 

  46,885  

 
 
 

  749,917  

 
 
 

  1,261,515  

 
 
 

  193,336  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  Net income attributable to ordinary
shareholders
 

 
 
 

  159,670  

 
 
 

  253,013  

 
 
 

  253,161  

 
 
 

  38,800  

 
 
 

  468,173  

 
 
 

  884,158  

 
 
 

  135,504  

 
 

  Gain on fair value change of investments and
equity investee's investments, and equity
investee's partial disposal of its investment,
net of income taxes
 

 
 
 

  -  

 
 
 

  -  

 
 
 

  (29,231)  

 
 
 

  (4,480)  

 
 
 

  -  

 
 
 

  (30,851)  

 
 
 

  (4,728)  

 
 

  Share-based compensation expenses  

 
 
 

  82,185  

 
 
 

  108,164  

 
 
 

  81,987  

 
 
 

  12,565  

 
 
 

  281,744  

 
 
 

  408,208  

 
 
 

  62,560  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   Non-GAAP net income attributable to
ordinary shareholders
 
 

 
 
 

  241,855  

 
 
 

  361,177  

 
 
 

  305,917  

 
 
 

  46,885  

 
 
 

  749,917  

 
 
 

  1,261,515  

 
 
 

  193,336  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   Non-GAAP net income per ordinary share   

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  —Basic  

 
 
 

  1.10  

 
 
 

  1.57  

 
 
 

  1.30  

 
 
 

  0.20  

 
 
 

  3.49  

 
 
 

  5.56  

 
 
 

  0.85  

 
 

  —Diluted  

 
 
 

  1.02  

 
 
 

  1.50  

 
 
 

  1.27  

 
 
 

  0.19  

 
 
 

  3.23  

 
 
 

  5.29  

 
 
 

  0.81  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   Non-GAAP net income per ADS   

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  —Basic  

 
 
 

  1.10  

 
 
 

  1.57  

 
 
 

  1.30  

 
 
 

  0.20  

 
 
 

  3.49  

 
 
 

  5.56  

 
 
 

  0.85  

 
 

  —Diluted  

 
 
 

  1.02  

 
 
 

  1.50  

 
 
 

  1.27  

 
 
 

  0.19  

 
 
 

  3.23  

 
 
 

  5.29  

 
 
 

  0.81  

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

   Weighted average number of ADS used   in  
calculating   Non-GAAP net income per
ADS
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

  —Basic  

 
 
 

  219,382,541  

 
 
 

  230,554,718  

 
 
 

  236,099,598  

 
 
 

  236,099,598  

 
 
 

  214,811,862  

 
 
 

  227,081,238  

 
 
 

  227,081,238  

 
 

  —Diluted  

 
 
 

  236,144,302  

 
 
 

  240,474,833  

 
 
 

  240,985,724  

 
 
 

  240,985,724  

 
 
 

  232,024,961  

 
 
 

  238,631,613  

 
 
 

  238,631,613  

 
 
 

 

 

 

 

 Cision View original content: https://www.prnewswire.com/news-releases/huya-inc-reports-fourth-quarter-and-fiscal-year-2020-unaudited-financial-results-301253482.html  

 

SOURCE HUYA Inc.

 
 

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The comparative results for the three months and twelve months ended December 31, 2023 have been restated in the financial statements and management's discussion & analysis ("FY2024 MD&A") for the year ended December 31, 2024 to include additional merchant fees and player bonus expenses which were not captured in the previously published financial statements (note 2 of the Financial Statements for the year ended December 31, 2024). The Company's payment processor deducted the additional merchant fee from the daily remittances to the Company, and the deductions were not accounted for by the Company. These additional fees were identified as part of the year-end reconciliation of the amount due from the payment processor, and the financial statements and FY2024 MD&A have been adjusted accordingly. These restatements did not impact the cash balances reported for the years ended December 31, 2022, 2023, or 2024. However, they did result in adjustments to the reported current asset balances for those periods.

 

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  •  Total Wagers1 at Northstarbets.ca were $303.0 million in Q4 2024, a 42% increase compared to $213.3 million in Q4 2023.
  •  
  •  Gross Gaming Revenue2 at Northstarbets.ca was $10.0 million in Q4 2024, a 31.6% increase from $7.6 million in Q4 2023.
  •  
  •  Revenue2 was $9.5 million in Q4 2024, a 51% increase from $6.3 million in Q4 2023. Revenue in Q4 2024 includes $1.5 million of managed services revenue, which compares to $0.2 million in Q4 2023.
  •  
  •  Gross Margin was $3.6 million, a 71% increase from $2.1 million in Q4 2023, while the Gross Margin percentage increased to 38.1%, up from 33.6% in Q4 2023.
  •  
  •  Profit/(loss) before marketing and other expenses1 was $0.6 million in Q4 2024 compared to a loss of $2.5 million in Q4 2023, indicating that gross margin is now sufficient to cover the Company's overhead expenses.
  •  

Financial Highlights for the Year Ended December 31, 2024 ("FY 2024"):

 
  •  Total Wagers2 at Northstarbets.ca were $980.0 million in FY 2024, a 51% increase compared to $648.8 million in the year ended December 31, 2023.
  •  
  •  Gross Gaming Revenue2 at Northstarbets.ca was $34.0 million in FY 2024, a 51% increase from $22.5 million in FY 2023.
  •  
  •  Revenue2 was $29.6 million in FY 2024, a 57% increase from $18.8 million in FY 2023. Revenue in FY 2024 includes $2.3 million of managed services revenue, which compares to $0.5 million in FY 2023.3
  •  
  •  Gross Margin was $10.5 million, marking a 91% increase from $5.5 million in FY 2023, with the Gross Margin increasing to 35.7%, up from 29.3% in FY 2023.
  •  
  •  Profit/(loss) before marketing and other expenses1 was $0.1 million in FY 2024 compared to a loss of $6.7 million in YTD 2023, an improvement of $6.8 million.
  •  

"Early in 2025, we completed our most significant fund-raising to date, with a $43.4 million debt financing. This capital gives us a long runway on which to continue our trajectory of growth in wagering, gross margins and improving operating leverage. This was a milestone event for our business," added Mr. Moskowitz.

 

2024 Operating Highlights:

 
  • Completed the inaugural Blackjack Championship tournament, an innovative online competition that helped drive the acquisition of new high-value players and engagement for existing customers while increasing Blackjack wagering activity.
  •  
  • Implemented a series of enhancements to the NorthStar Bets platform, highlighted by streamlined navigation in both the Casino and Sportsbook sections, a doubling of Casino game selection since the start of 2024, personalized prop bets and intelligent parlay suggestions.
  •  
  • Introduced the "NorthStar Elite" program and branded tables to help secure the loyalty and satisfaction of our most active players and reinforcing the Company's positioning as a premium offering.
  •  
  • Launched "Sports Insights 2.0," a robust suite of enhancements to our content vertical that includes a redesigned home page, comprehensive team and player statistics, injury and player news feeds, added coverage of popular sports and strengthened casino content.
  •  
  • Gained significant traction outside the Ontario market with managed services revenue from Northstarbets.com site, owned by the Abenaki Council of Wolinak, increasing from $0.5 million in FY 2023 to $2.3 million in FY 2024.
  •  
  • Outpaced the industry growth rates reported by iGaming Ontario in 2024 in both Total Wagers (51% for NorthStar vs. 33% for the industry) and Gross Gaming Revenue (51% for NorthStar vs. 31.5% for the industry).
  •  

Outlook

 

"We expect our consistent pattern of year-over-year revenue increases to continue throughout 2025, based on our ongoing success in attracting and engaging high-value players," said Mr. Moskowitz. "We will maintain disciplined control over costs so that incremental gross margin falls primarily to the bottom line. As we continue to focus on operational excellence, we remain confident that we have the capital necessary to reach profitability based on our current business platform."

 

FY 2024 Corporate Update Webinar

 

On May 15, 2025, Michael Moskowitz will present an in-depth Corporate Update, including a discussion of the Company's FY 2024 Earnings, current operations and strategic priorities. All investors and other interested parties are invited to register for the webinar at the link below.

 

Date: Thursday, May 15, 2025
Time: 11:00 am EDT
Register: Webinar Registration

 

Management will be available to answer your questions following the presentation on the webinar platform. You may also submit your question(s) beforehand in the registration form linked above.

 

Extension of Strategic Marketing Agreement

 

The Company also announced that its wholly owned subsidiary, NorthStar Gaming (Ontario) Inc. ("NorthStar Ontario"), has extended its strategic partnership with Playtech Software Limited ("Playtech Software") through the renewal of their previously announced strategic marketing agreement. Under the agreement, Playtech Software contributes services designed to accelerate NorthStar Ontario's player acquisition strategy in the province. The agreement was first implemented in June 2023 and has since been renewed several times. Pursuant to the latest renewal, Playtech Software will reimburse marketing expenses valued at a total of up to $1.5 million over a 3-month period through to March 31, 2025. Playtech Software will be compensated through a share of revenue from the income generated in connection with the marketing initiatives to which it contributes. The Transaction between Playtech and NorthStar Ontario is exempted from Multilateral Instrument 61-101 Protection of Minority Securityholders in Special Transactions.

 

"We are very pleased to renew the marketing services agreement with Playtech Software," said Michael Moskowitz, Chair and CEO of NorthStar. "The agreement serves to extend our marketing budget and has contributed to our tremendous growth in Ontario. Playtech plc continues to be a valuable strategic partner and we look forward to further collaboration."

 

Continuous Disclosure

 

Further to a review by the staff of the Ontario Securities Commission (the "OSC") of the Company's continuous disclosure, the FY2024 MD&A includes enhanced disclosures with respect to:

 
  • the Company's regulatory framework, licensing regimes applicable to its business operations and the legal authorizations necessary to conduct its business operations;
  •  
  • specific risk factors relating to the Company's business operations which include risks relating to operating in a heavily regulated industry, cyber security risks and risks relating to conflicts of interest with respect to directors and officers of the Company; and
  •  
  • the relationship between the Abenaki Council of Wolinak and the Company as well as its subsidiary, Slapshot Media Inc.
  •  

Such amended disclosure is being included in the FY2024 MD&A to address comments received from the OSC on its management's discussion & analysis, for the period ended September 30, 2024, and to improve the Company's disclosure.

 

As a result of having to include such enhanced disclosure after the OSC review, the Company will be placed on the public list of Refilings and Errors in accordance with OSC Staff Notice 51-711 (Revised) - Refilings and Corrections of Errors for a period of three (3) years.

 

Additional Information

 

For additional information, please refer to the Company's condensed consolidated financial statements for the year ended December 31, 2024, and the corresponding FY2024 MD&A. These documents are available on SEDAR+ at www.sedarplus.ca, and on the Company's corporate website at www.northstargaming.ca.

 

About NorthStar

 

NorthStar proudly owns and operates NorthStar Bets, a Canadian-born casino and sportsbook platform that delivers a premium, distinctly local gaming experience. Designed with high-stakes players in mind, NorthStar Bets Casino offers a curated selection of the most popular games, ensuring an elevated user experience. Our sportsbook stands out with its exclusive Sports Insights feature, seamlessly integrating betting guidance, stats, and scores, all tailored to meet the expectations of a premium audience.

 

As a Canadian company, NorthStar is uniquely positioned to cater to customers who seek a high-quality product and an exceptional level of personalized service, setting a new standard in the industry. NorthStar is committed to operating at the highest level of responsible gaming standards.

 

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. Neither the TSX Venture Exchange ("TSXV") nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.

 

Non-IFRS Financial Measures [/ Reconciliation of Non-IFRS Measures to IFRS Measures]

 

Throughout this document, management uses certain non-IFRS financial measures and supplementary financial measures to evaluate the performance of the Company. The terms "Gross Gaming Revenue" "Total Wagers" and "Profit/(Loss) before marketing and other expenses" are non-IFRS financial measures. These measures are not recognized measures under International Financial Reporting Standards ("IFRS") and do not have a standardized meaning prescribed by IFRS and are, therefore, not necessarily comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of our results of operations from management's perspective and to discuss NorthStar's financial outlook. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the Company's financial information reported under IFRS. We believe that securities analysts, investors and other interested parties frequently use non-IFRS measures, including industry metrics, in the evaluation of companies in our industry. Management also uses non-IFRS measures and industry metrics in order to facilitate operating performance comparisons from period to period, the preparation of annual operating budgets and forecasts and to determine components of executive compensation.

 

Total Wagers

 

Total Wagers are calculated as the total amount of money bet by customers in respect of bets that have settled in the applicable period. Total Wagers does not include free bets or other promotional incentives, nor money bet by customers in respect of bets that are open at period end. Total Wagers is used to provide investors with supplemental measures of our operating performance and thus highlight trends in our business that may not otherwise be apparent when relying solely on IFRS measures.

 

Gross Gaming Revenue

 

Gross Gaming Revenue is calculated as dollar amounts bet by customers less the dollar amounts paid out to the customers in respect of such bets which have settled in the applicable period.

 

Reconciliation of Non-IFRS Measures to IFRS Measures

 
                                
 In Q4 2024, the Company reported $10.0 million of Gross Gaming Revenue ($34.0 million in FY 2024) and has provided a reconciliation to the most comparable IFRS financial measure (Revenue) as follows:
$ Millions (unaudited)
Unaudited Three
months ended
Year ended
 Dec 31,
2024 
 Dec 31,
2023 
 Dec 31,
2024 
 Dec 31,
2023 
Gross gaming revenue from wagered games$10.0$ 7.6$ 34.0$22.5
Bonuses, promotional costs and free bets(2.0)(1.5)(6.7)(4.2)
Sub-total Gaming revenue8.06.127.318.3
Other revenue from managed services1.50.22.30.5
Revenue$ 9.5$ 6.3$ 29.6$ 18.8
 

 

 

Operating Results

 

Marketing expenses are a key driver of the business but are completely discretionary. Management considers "Profit/(Loss) before marketing and other expenses" to be a good indication of the extent to which the business' Gross Margin is in excess of its overhead costs, and therefore offsetting some portion of marketing expenses, reflecting improving economies of scale.

 
                                                    
$ Millions (unaudited) Unaudited Three 
months ended 
Year ended
 Dec 31,
2024 
 Dec 31,
2023 
 Dec 31,
2024 
 Dec 31,
2023 
Revenue$ 9,478$ 6,275$ 29,556$ 18,845
Cost of Revenues5,8684,16719,01313,317
Gross Margin3,6102,10810,5435,528
General and administrative expenses3,0334,45210,45312,277
 Profit/(Loss) before marketing and other expenses (1) 577(2,344)90(6,749)
Marketing5,2495,47215,45614,094
Loss before other expenses (1) (4,672)(7,816)(15,366)(20,843)
Other expenses(1,070)1493,6456,547
Net loss$ (3,602)$ (7,965)$ (19,011)$ (27,390)
 

 

 

(1) These measures are not defined by IFRS, do not have standard meanings and may not be comparable with other industries or companies.

 

Cautionary Note Regarding Forward-Looking Information and Statements

 

This communication contains "forward-looking information" within the meaning of applicable securities laws in Canada ("forward-looking statements"), including without limitation, statements with respect to the following: expected performance of the Company's business, the Company's growth plans being fully funded, expansion into new markets and future growth opportunities, and expected benefits of transactions. The foregoing are provided for the purpose of presenting information about management's current expectations and plans relating to the future and allowing investors and others to get a better understanding of the Company's anticipated financial position, results of operations, and operating environment. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "continues", "forecasts", "projects", "predicts", "intends", "anticipates" or "believes", or variations of, or the negatives of, such words and phrases, or state that certain actions, events or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. This information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. This forward-looking information is based on management's opinions, estimates and assumptions that, while considered by NorthStar to be appropriate and reasonable as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, levels of activity, performance, or achievements to be materially different from those expressed or implied by such forward-looking information. Such factors include, among others, the following: risks related to the Company's business and financial position; risks associated with general economic conditions; adverse industry risks; future legislative and regulatory developments; the ability of the Company to implement its business strategies; and those factors discussed in greater detail under the "Risk Factors" section of the Company's most recent annual information form, which is available under NorthStar's profile on SEDAR+ at www.sedarplus.ca. Many of these risks are beyond the Company's control.

 

If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking statements. Although the Company has attempted to identify important risk factors that could cause actual results to differ materially from those contained in the forward-looking statements, there may be other risk factors not presently known to the Company or that the Company presently believes are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking statements. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. No forward-looking statement is a guarantee of future results. Accordingly, you should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this press release represents NorthStar's expectations as of the date specified herein, and are subject to change after such date. However, the Company disclaims any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws.

 

All of the forward-looking information contained in this press release is expressly qualified by the foregoing cautionary statements.

 
 

For further information:

 

Company Contact:

 

Corey Goodman
Chief Development Officer 647-530-2387
investorrelations@northstargaming.ca

 

Investor Relations:
RB Milestone Group LLC (RBMG)
Northstar@rbmilestone.com

 
 

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