JOYY Highlights Third Quarter 2021 Results, Achieving Non-GAAP Profitability and Further Expanding Share Repurchase Program by US$1 Billion
SINGAPORE, Nov. 17, 2021 /PRNewswire/ -- JOYY Inc. (NASDAQ: YY) ("JOYY" or the "Company", formerly known as YY Inc.), a global video-based social media company, today announced its unaudited financial results for the third quarter of 2021.
JOYY's total revenues in the third quarter of 2021 increased by 21.7% year over year to US$650.5 million, while BIGO's revenues in the third quarter of 2021 increased by 16.1% year over year to US$568.7 million. JOYY recorded net income from continuing operations attributable to controlling interest of US$7.5 million and attained non-GAAP profitability at the group level for the first time since it deconsolidated YY Live, recording US$35.1 million in non-GAAP net income[1], mainly attributable to BIGO's margin expansion and improved operating leverage at the group level. During the quarter, BIGO's non-GAAP net income expanded to US$49.6 million, while its non-GAAP net income margin1 improved to 8.7% from 3.3% in the previous quarter.
David Xueling Li, Chairman and CEO of JOYY, commented, "Despite the recent volatility in the macro environment and the increased uncertainty due to COVID-19, our persistent execution of our globalization strategy helped us achieve substantial progress on multiple fronts. In the past quarter, our efforts of enhancing our diversified and localized content ecosystem have helped Bigo Live further expand its product reach and user base, while continuing the cultivation of talented content creators and effectively increasing engagement levels in Likee's content community.
"Furthermore, through the combination of improved synergy among various products, enhanced operating leverage, and prudent marketing strategy, we have achieved a steady expansion in profitability for the entire group," Mr. Li concluded.
Third Quarter Financial Highlights
Net revenues increased by 21.7% to US$650.5 million in the third quarter of 2021 from US$534.4 million in the corresponding period of 2020, primarily driven by the growth of livestreaming revenues from BIGO.
Gross profit increased by 35.5% to US$210.8 million in the third quarter of 2021 from US$155.5 million in the corresponding period of 2020. Gross margin improved to 32.4% in the third quarter of 2021 from 29.1% in the corresponding period of 2020.
Operating income was US$6.9 million in the third quarter of 2021, compared to operating loss of US$89.3 million in the corresponding period of 2020. Operating income margin was 1.1% in the third quarter of 2021, compared to operating loss margin of 16.7% in the corresponding period of 2020, primarily as a result of BIGO turning profits for two consecutive quarter since the second quarter of 2021.
Non-GAAP operating income[1] was US$31.3 million in the third quarter of 2021, compared to non-GAAP operating loss of US$39.5million in the corresponding period of 2020. Non-GAAP operating income margin was 4.8% in the third quarter of 2021, compared to non-GAAP operating loss margin 7.4% in the corresponding period of 2020.
Net income from continuing operations attributable to controlling interest of JOYY was US$7.5 million in the third quarter of 2021, compared to US$191.0 million in the corresponding period of 2020. Net income margin was 1.2% in the third quarter of 2021, compared to 35.7% in the corresponding period of 2020. Net income and net income margin were higher in the third quarter of 2020, primarily due to the gain from partial disposal of investments in Huya.
Non-GAAP net income from continuing operations attributable to controlling interest and common shareholders of JOYY[1] was US$35.1 million in the third quarter of 2021, compared to non-GAAP net loss of US$26.6 million in the corresponding period of 2020. Non-GAAP net income margin was 5.4% in the third quarter of 2021, compared to non-GAAP net loss margin of 5.0% in the corresponding period of 2020.
Third Quarter Business Highlights
During the past quarter, the Company continued to cultivate its global diversified content pool and effectively expanded the reach of its global live streaming product.
Bigo Live has achieved an increase in MAU by 10.7% year over year to 31 million in the third quarter of 2021. Through various cross-industry collaborations and a series of localized operational activities, the Company broadened Bigo Live's talent pool of content creators and expanded its localized premium content library, covering a number of categories including pan-entertainment, gaming, and lifestyle. In the lifestyle category, Bigo Live made its initial foray into e-commerce live streaming in Southeast Asia and launched its Bigo Market Place channel in Indonesia, Malaysia, and Thailand, further expanding Bigo Live's product outreach by providing a diversified interactive experience for its users. The Company also introduced several innovative product features leading to improvements in user engagement on Bigo Live. As a result, the number of streamers for multiuser chatrooms increased by 2.3% and the average duration per live streaming session increased by 5.3% sequentially in the third quarter.
Likee, the Company's global short-form videos product continued to cultivate a friendly and vibrant content creation community, concentrating its efforts on identifying, cultivating, and supporting talented content creators. The Company launched a series of incentive programs that offer both user traffic and other economic rewards for Likee, targeting influential content creators with more than 10,000 fans. As a result, the number of certified content creators increased by 17.0% in the third quarter. In late August, the Company introduced a new "Superlike" feature on the Likee platform in certain regions, enabling content creators to interact with a larger group of fans in a non-real-time manner, enhancing social interactions and adding a monetization venue for content creators. After launching the Superlike feature for a month in Russia, the number of certified content creators joining the Likee community increased by 7.1%.
As the Company transitioned Hago from an interactive platform primarily focused on casual games to an audio and video multiplayer social interaction and entertainment platform, it continued launching feature updates focusing on the improvement of multiuser social interactive activities. As a result, on a sequential basis, the penetration rate for Hago's Channel featuring multi-users' social interactive activities increased by 4.0% and the average duration of the voice chat room increased by 14.3% to 80 minutes.
Business Outlook
For the fourth quarter of 2021, the Company expects net revenues to be between US$652 million and US$661 million, representing a year-over-year growth of 14.7% to 16.3%. This guidance excludes the revenue contribution from Huya and YY Live in the same period of last year. This forecast considers the potential impact of the COVID-19 pandemic and reflects the Company's current and preliminary views on the market and operational conditions, which are subject to changes, particularly as to the potential impact of the COVID-19 on the global economy and users' paying capabilities.
Share Repurchase Program
In May 2020, the Company announced that its board of directors has authorized to extend its then existing share repurchase program, as previously approved by the board of directors in August 2019, for another 12-month period upon its original expiry date under which the Company may repurchase up to US$300 million of its shares between August 2019 and August 2021. As of September 30, 2021, such share repurchase program already expired. The Company had almost fully executed this share repurchase program and repurchased approximately US$300 million of its shares.
In September 2021, the Company announced that its board of directors has authorized a new share repurchase plan under which the Company may repurchase up to US$200 million of its shares between September 2021 and September 2022. As of September 30, 2021, the Company had repurchased approximately US$16.7 million of its shares.
In November 2021, the board of directors of the Company has further authorized an additional share repurchase plan under which the Company may repurchase up to US$1 billion of its shares between November 2021 and November 2022.
The share repurchases may be made from time to time in the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. JOYY's board of directors will review the share repurchase plan periodically, and may authorize adjustment of its terms and size. The Company expects to fund repurchases made under those plans from its existing funds.
About JOYY Inc.
JOYY is a leading global social media company that enables users to interact with each other in real time through online live media. On a mission to connect people and enrich their lives through video, JOYY currently operates several social products, including Bigo Live for live streaming, Likee for short-form videos, Hago for multiplayer social interaction and entertainment, and instant messaging product and others. The Company has created a highly engaging and vibrant user community for users across the globe. JOYY was listed on the NASDAQ in November 2012.
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 JOYY's strategic and operational plans, contain forward-looking statements. JOYY 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 fourth parties. Statements that are not historical facts, including statements about JOYY'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: JOYY's goals and strategies; JOYY's future business development, results of operations and financial condition; the expected growth of the online communication social platform market in China; the expectation regarding the rate at which to gain active users, especially paying users; JOYY's ability to monetize the user base; fluctuations in general economic and business conditions in China; the impact of the COVID-19 to JOYY's business operations and the economy in China and elsewhere generally; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in JOYY'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 JOYY does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
[1] For details of the non-GAAP measures, including the reconciliations of GAAP measures to non-GAAP measures, please refer to the press release titled "JOYY Reports Third Quarter 2021 Unaudited Financial Results" issued by the Company on November 18, 2021. |
Investor Relations Contact:
JOYY Inc.
Jane Xie/Maggie Yan
Email: joyy-ir@joyy.com
ICR, LLC
Robin Yang
Tel: (+1) 646 915-1611
Email: joyy@icrinc.com
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