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DouYu International Holdings Limited Reports Second Quarter 2021 Unaudited Financial Results

  • Monday, August 16, 2021, 4:00 pm
  • ACROFAN=PRNewswire
  • mediainquiries@prnewswire.com

WUHAN, China, Aug. 16, 2021 /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 ended June 30, 2021.


Second Quarter 2021 Financial and Operational Highlights


  • Total net revenues in the second quarter of 2021 were RMB2,336.8 million (US$361.9 million), compared with RMB2,508.2 million in the same period of 2020.
  • Gross profit in the second quarter of 2021 was RMB306.5 million (US$47.5 million), compared with RMB522.9 million in the same period of 2020.
  • Net loss in the second quarter of 2021 was RMB181.7 million (US$28.1 million), compared with a net income of RMB319.3 million in the same period of 2020.
  • Adjusted net loss in the second quarter of 2021 was RMB145.1 million (US$22.5 million), compared with an adjusted net income of RMB322.9 million in the same period of 2020.
  • Average mobile MAUs in the second quarter of 2021 increased by 3.9% to 60.7 million from 58.4 million in the same period of 2020.
  • Quarterly average paying user count in the second quarter of 2021 was 7.2 million, compared with 7.6 million in the same period of 2020.

Mr. Shaojie Chen, Chief Executive Officer of DouYu, commented, "Our core operating metric continued to grow at a steady pace in the second quarter of 2021, with our quarterly average mobile MAUs increased by 3.9% year over year to 60.7 million. Looking ahead, we plan to continue expanding our content ecosystem both upstream and downstream to cover each link of the game industry value chain. We will also bolster our industry leadership through the continuous execution of our live streaming, video, content, and community strategies."


Mr. Hao Cao, Vice President of DouYu, commented, "In the second quarter of 2021, our total revenues were RMB2.34 billion and gross profit was RMB307 million, representing a gross margin of 13.1%. During the quarter, we continued to increase our investments in proprietary content production while further upgrading the functions and content of our video and community related products. Going forward, we will continue exploring new methods to improve our monetization capabilities and generate long-term shareholder value."


Second Quarter 2021 Financial Results


Total net revenues in the second quarter of 2021 were RMB2,336.8 million (US$361.9 million), compared with RMB2,508.2 million in the same period of 2020.


Live streaming revenues in the second quarter of 2021 were RMB2,178.1 million (US$337.3 million), compared with RMB2,319.9 million in the same period of 2020. The decrease in year-over-year comparison was mostly due to the decrease in user time as a result of the recovery from the COVID-19 pandemic and less stay-at-home time. This decline was partially offset by increased mobile MAU and improvements in user engagement as a result of the Company's increased sales and marketing initiatives.


Advertising and other revenues in the second quarter of 2021 were RMB158.7 million (US$24.6 million), compared with RMB188.3 million in the same period of 2020. The year-over-year decrease was primarily attributable to the trend of game advertisers normalizing their marketing expenditures, which were relatively higher in the same period last year due to the COVID-19 pandemic.


Cost of revenues in the second quarter of 2021 was RMB2,030.2 million (US$314.4 million), compared with RMB1,985.3 million in the same period of 2020. This increase was primarily due to revenue sharing fees and content costs increased by RMB51.9 million, partially offset by bandwidth costs decreased by RMB6.6 million.


Revenue sharing fees and content costs in the second quarter of 2021 increased by 3.0% to RMB1,806.8 million (US$279.8 million) from RMB1,754.9 million in the same period of 2020. This increase was due to the Company's increased investments in the broadcasting rights for eSports tournaments, in-house production of PGC contents, and quality streamers in the overseas market.


Bandwidth costs in the second quarter of 2021 decreased by 3.9% to RMB161.8 million (US$25.1 million) from RMB168.4 million in the same period of 2020. This decrease was mainly due to continuous in-house technology upgrades, which led to higher bandwidth efficiency and lower bandwidth usage costs.


Gross profit in the second quarter of 2021 was RMB306.5 million (US$47.5 million), compared with RMB522.9 million in the same period of 2020. Gross margin in the second quarter of 2021 was 13.1%, compared with 20.8% in the same period of 2020. This decrease was primarily due to the increase in content costs and the decrease in revenues, partially offset by the decrease in bandwidth costs.


Sales and marketing expenses in the second quarter of 2021 were RMB295.0 million (US$45.7 million), compared with RMB142.1 million in the same period of 2020. This increase was mainly attributable to the increased promotional channels for user acquisition and increased promotions and branding activities.


Research and development expenses in the second quarter of 2021 were RMB123.0 million (US$19.1 million), compared with RMB94.9 million in the same period of 2020. This increase was primarily attributable to additional investments in technical personnel due to Company's further overseas expansion and technology infrastructure upgrade to enhance user experience.


General and administrative expenses in the second quarter of 2021 were RMB102.6 million (US$15.9 million), compared with RMB79.5 million in the same period of 2020. This increase was primarily due to the increase in professional service fees during the quarter.


Other operating income, net in the second quarter of 2021 was RMB16.7 million (US$2.6 million), compared with RMB32.5 million in the same period of 2020.


Loss from operations in the second quarter of 2021 was RMB197.4 million (US$30.6 million), compared with a profit from operations of RMB238.9 million in the same period of 2020.


Adjusted operating loss in the second quarter of 2021, which adds back share-based compensation expenses, was RMB165.1 million (US$25.6 million), compared with an adjusted operating income of RMB272.7 million in the same period of 2020.


Income tax expenses in the second quarter of 2021 and 2020 were nil due to the Company's cumulative net losses and the resulting tax loss carry forward.


Net loss in the second quarter of 2021 was RMB181.7 million (US$28.1 million), compared with a net income of RMB319.3 million in the same period of 2020.


Adjusted net loss in the second quarter of 2021, which excludes share-based compensation expenses, share of income in equity method investments, and impairment loss of investments, was RMB145.1 million (US$22.5 million), compared with an adjusted net income of RMB322.9 million in the same period of 2020.2


Basic and diluted net loss per ADS[1] in the second quarter of 2021 were RMB0.45 (US$0.07) and RMB0.45 (US$0.07) respectively. Adjusted basic and diluted net loss per ADS in the second quarter of 2021 were RMB0.35 (US$0.05) and RMB0.35 (US$0.05) respectively.


[1] Every ten ADSs represent one ordinary share.


Conference Call Information


The Company will hold a conference call on Monday, Aug 16, 2021, at 7:00 am Eastern Time (or 7:00 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:


1268939


The replay will be accessible through Monday, Aug 23, 2021, by dialing the following numbers:


International:


1-412-317-0088


United States Toll Free:


1-877-344-7529


Conference ID:


10159457


A live and archived webcast of the conference call will also be available at the Company's investor relations website at https://ir.douyu.com/.


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 https://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, gain on disposal of investment or subsidiaries 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, gain on disposal of investment or subsidiaries 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 impact of (i) share-based compensation expenses, (ii) share of income (loss) in equity method investments, (iii) gain on disposal of investment or subsidiaries and (iv) 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 RMB6.4566 to US$1.00, the noon buying rate in effect on June 30, 2021, 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 30, 2021, 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. 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


Doris Li
DouYu International Holdings Limited
Email: ir@douyu.tv
Phone: +1 (646) 224-6934


Robin Yang
ICR, Inc.
Email: DouYu.IR@icrinc.com
Phone: +1 (646) 224-6934


Media Relations Contact


Doris Li
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



2020


2021


2021


ASSETS


RMB


RMB


US$ (1)


Current assets:





Cash and cash equivalents


5,279,902


5,372,180


832,045


Restricted cash


11,875


10,703


1,658


Short-term bank deposits


2,230,229


1,260,000


195,149


Accounts receivable, net


199,744


176,970


27,409


Prepayments


66,257


65,826


10,195


Amounts due from related parties


9,045


11,519


1,784


Other current assets


236,704


394,574


61,112


Total current assets


8,033,756


7,291,772


1,129,352






Property and equipment, net


37,792


31,274


4,844


Intangible assets, net


141,672


101,439


15,711


Long-term bank deposits


100,000


746,010


115,542


Investments


500,659


538,955


83,473


Goodwill


12,933


12,804


1,983


Right-of-use assets, net


62,141


41,497


6,427


Other non-current assets


19,004


41,460


6,422


Total non-current assets


874,201


1,513,439


234,402


TOTAL ASSETS


8,907,957


8,805,211


1,363,754


 


LIABILITIES AND SHAREHOLDERS' EQUITY





LIABILITIES





Current liabilities:





Accounts payable


986,073


922,029


142,804


Advances from customers


10,911


7,956


1,232


Deferred revenue


242,013


201,638


31,230


Accrued expenses and other current liabilities


384,041


483,302


74,854


Amounts due to related parties


223,525


431,019


66,756


Lease liabilities due within one year


36,281


29,112


4,509


Total current liabilities


1,882,844


2,075,056


321,385






Lease liabilities


16,952


10,124


1,568


Deferred revenue


30,779


24,378


3,776


Total non-current liabilities


47,731


34,502


5,344


TOTAL LIABILITIES


1,930,575


2,109,558


326,729



(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 a rate of RMB6.4566 to US$1.00, the noon buying rate in effect on June 30, 2021, in the H.10 statistical release of the
Federal Reserve Board.


 


 


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



2020


2021


2021



RMB


RMB


US$ (1)


SHAREHOLDERS' EQUITY





Ordinary shares


23


23


4


Treasury shares


(695,098)


(695,098)


(107,657)


Additional paid-in capital


10,486,398


10,552,003


1,634,297


Accumulated deficit


(2,863,219)


(3,072,246)


(475,830)


Accumulated other comprehensive income


10,911


(52,435)


(8,121)


Total DouYu Shareholders' Equity


6,939,015


6,732,247


1,042,693


Noncontrolling interests


38,367


(36,594)


(5,668)


Total Shareholders' Equity


6,977,382


6,695,653


1,037,025


TOTAL LIABILITIES  AND SHAREHOLDERS' EQUITY


8,907,957


8,805,211


1,363,754



(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 a rate of RMB6.4566 to US$1.00, the noon buying rate in effect on June 30, 2021, in the H.10 statistical release of the
Federal Reserve Board.


 


 


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,


2020


March 31,


2021


June 30,


2021


June 30,


2021


June 30,


2020


June 30,


2021


June 30,


2021



RMB


RMB


RMB


US$ (1)


RMB


RMB


US$ (1)


Net revenues


2,508,152


2,152,687


2,336,771


361,920


4,786,187


4,489,459


695,329


Cost of revenues


(1,985,270)


(1,892,499)


(2,030,223)


(314,442)


(3,777,451)


(3,922,722)


(607,552)


Gross profit


522,882


260,188


306,548


47,478


1,008,736


566,737


87,777


Operating income (expenses)(2)









Sales and marketing expenses


(142,058)


(209,877)


(294,953)


(45,682)


(249,414)


(504,829)


(78,188)


General and administrative expenses


(79,470)


(88,074)


(102,624)


(15,894)


(164,050)


(190,698)


(29,535)


Research and development expenses


(94,920)


(111,264)


(123,015)


(19,053)


(187,808)


(234,280)


(36,285)


Other operating income, net


32,454


23,924


16,681


2,584


49,032


40,605


6,289


Total operating expenses


(283,994)


(385,291)


(503,911)


(78,045)


(552,240)


(889,202)


(137,719)


Income (loss) from operations


238,888


(125,103)


(197,363)


(30,567)


456,496


(322,465)


(49,942)


Other income (expenses), net


(8,382)


127


178


28


(18,400)


305


47


Interest income, net


50,106


20,930


19,768


3,062


95,150


40,697


6,303


Gain on disposal of subsidiary


23,526


-


-


-


23,526


-


-


Income (loss) before income taxes and share of


    income (loss) in equity method investments


304,138


(104,046)


(177,417)


(27,477)


556,772


(281,463)


(43,592)


Income tax expense


-


-


-


-


-


-


-


Share of income (loss) in equity method investments


15,132


2,213


(4,243)


(657)


17,024


(2,029)


(314)


Net income (loss)


319,270


(101,833)


(181,660)


(28,134)


573,796


(283,492)


(43,906)


Less: Net loss attributable to noncontrolling interest


(16,775)


(39,814)


(34,651)


(5,367)


(22,699)


(74,465)


(11,533)


Net income (loss) attributable to ordinary 


    shareholders of the Company


336,045


(62,019)


(147,009)