Release Date: November 27, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- JOYY Inc (YY, Financial) reported a group revenue of $558.7 million for the third quarter, with Bigo segment revenues slightly increasing year-over-year to $496.0 million.
- The company's non-GAAP operating profit increased by 16.4% quarter over quarter, reaching $34.9 million.
- Bigo's non-GAAP operating profit expanded to $72.9 million, exceeding expectations with a 5.0% quarter-over-quarter increase.
- JOYY Inc (YY) achieved a 21.6% year-over-year revenue growth from developed countries, highlighting successful market penetration.
- The company maintained a strong cash flow, generating $61.1 million in operating cash flow and actively repurchasing $117.8 million worth of shares in the third quarter.
Negative Points
- Total net revenues decreased compared to the same period last year, from $567.1 million to $558.7 million.
- Bigo's livestreaming revenue declined year-over-year due to content cost optimization and adjustments to non-core audio livestreaming products.
- The company's GAAP net income attributable to controlling interest decreased from $72.9 million in the same period of 2023 to $60.6 million.
- Foreign currency exchange losses negatively impacted Bigo's GAAP net margin, contributing to a lower net income margin compared to the previous year.
- The company anticipates potential negative impacts on Bigo's top line in Q4 due to adjustments in content costs and non-core audio livestreaming products.
Q & A Highlights
Q: Can management comment on the 2025 outlook, particularly regarding user trends, revenue, operating expenses, and profit?
A: Ting Li, JOYY Inc's Chief Operating Officer, explained that Bigo's non-live streaming revenue grew substantially year-over-year, while live streaming revenue declined due to content cost optimization and adjustments to non-core audio live streaming. These changes aim to build a sustainable ecosystem and healthier profit model. For 2025, JOYY plans to focus on developed countries and premium users, expecting Bigo's paying users to grow and non-live streaming revenue to maintain double-digit growth. However, adjustments may impact overall growth. Fuyong Liu, General Manager of Finance, added that operational efficiency improved, with non-GAAP gross and operating profit margins increasing. For 2025, JOYY will continue optimizing costs and user acquisition strategies, expecting stable or growing non-GAAP operating profit for Bigo and narrowing losses for other segments.
Q: Could management share the general monetization trends across different key regions in fiscal year 2025?
A: Ting Li noted that developed countries continue to drive growth, with revenues increasing by 21.6% year-over-year. The Middle East region showed signs of rebound with a 2.1% quarter-over-quarter growth. JOYY will prioritize regions with high monetization potential, focusing on developed countries and the Middle East.
Q: Can you provide more details on the progress in capital return and the share repurchase program for 2025?
A: Fuyong Liu stated that JOYY has been active in shareholder return initiatives, repurchasing $118 million worth of shares in Q3 and $244 million in total for the first three quarters of 2024. This accounts for 12% of total shares outstanding as of the end of last year. JOYY will continue to prioritize shareholder returns in 2025.
Q: What is the outlook for advertising and other new initiative businesses into 2025?
A: Ting Li highlighted that Bigo's advertising revenue grew significantly, contributing 15.8% to the segment's total revenue. Likee's advertising revenue grew 33.4% year-over-year, and Bigo Audience Network showed strong momentum with over 20% sequential growth. Future growth will depend on expanding DAU and entering new markets. JOYY will focus on long-term growth and market share increase.
Q: What are the expected trends in operating expenses and profit for 2025?
A: Fuyong Liu mentioned that JOYY's disciplined execution improved operational efficiency, with non-GAAP gross and operating profit margins increasing. For 2025, JOYY will continue optimizing content costs and user acquisition strategies, expecting stable or growing non-GAAP operating profit for Bigo and narrowing losses for other segments.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
