Release Date: November 20, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- DouYu International Holdings Ltd (DOYU, Financial) achieved a 3% quarter-over-quarter increase in total net revenues, marking the first sequential growth in eight consecutive quarters.
- The company successfully expanded its innovative business segment, with advertising and other revenues increasing by 49.4% year-over-year.
- DouYu International Holdings Ltd (DOYU) broadcasted nearly 30 large-scale official tournaments, enhancing user engagement and platform visibility.
- The company implemented a successful summer recruitment campaign for streamers, increasing the daily average number of streams and enhancing streamer retention rates.
- DouYu International Holdings Ltd (DOYU) introduced diverse game prop commercialization models, establishing the platform as a preferred choice for game prop purchases.
Negative Points
- Total net revenues decreased by 21.8% year-over-year, primarily due to a decline in live streaming revenues.
- Mobile MAUs decreased by 18.6% year-over-year, impacted by increased competition from short video platforms.
- The number of paying users declined year-over-year due to macroeconomic challenges and reduced promotional activities.
- Gross profit decreased significantly, with a gross margin of 5.7% compared to 14.2% in the same period of 2023.
- Net income for the third quarter of 2024 was RMB3.4 million, a sharp decline from RMB76.4 million in the same period of 2023.
Q & A Highlights
Q: My question is mainly regarding your live streaming business. How should we look at the future growth of the live streaming business and any strategic changes here?
A: As discussed, we faced challenges from market competition and a softer macroeconomic environment, impacting traffic and revenue. Our mobile MAU decreased due to competition from short video platforms. To tackle these, we adjusted user acquisition strategies, focusing on retaining core users and improving user operational efficiency. We also enhanced content offerings and diversified monetization channels. Our strategy includes launching diverse marketing products related to game props, leveraging deep partnerships with game developers.
Q: Can management elaborate on the strategy to optimize cost structure and streamers' operations? What are the detailed measures and goals?
A: We refined content costs, including streamer compensation and copyright fees, by dynamically evaluating content value and adjusting strategies based on ROI. We optimized self-produced content costs and restructured streamer compensation, emphasizing performance-based incentives. We also adjusted streamer contract renewal and recruitment, focusing on lowering base compensation and enhancing performance incentives. These initiatives aim to drive efficiency and cost control while maintaining high-quality content.
Q: How should we think about gross profit margin and profit for the whole year of 2024? Do we expect profit improvement in 2025?
A: The decline in gross margin was mainly due to decreased live streaming revenues. We implemented measures to optimize content costs and streamer compensation, but effects on gross margin improvement remain modest. We aim to contain losses and refine our revenue-cost structure through ongoing operational adjustments, steadily improving financial performance over time.
Q: Regarding the domestic new console TV game Black Myth: Wukong, can management share more details about its performance on DouYu platform?
A: Black Myth: Wukong became a breakout hit, driving significant traffic growth on our platform. On launch day, it attracted a large portion of our streamers and viewers. We partnered with the developer for promotions and employed diverse content strategies to enhance user engagement and retention. While the game's long-term excitement may be challenging to sustain, we channeled users to other top-performing gaming segments to enhance retention.
Q: What are the future plans for DouYu's platform development and growth?
A: We are committed to navigating macroeconomic challenges with resilience and agility. Our focus is on new revenue streams and cost efficiencies to mitigate financial pressure. We aim to support sustainable platform development while delivering enduring value for stakeholders, leveraging our core strengths and exploring new growth opportunities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
