YY
$24.93
YY Inc ADR
($1.20)
(4.59%)
Earnings Details
2nd Quarter June 2022
Monday, August 29, 2022 7:00:00 PM
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Summary

YY Inc ADR Beats but Guides Lower

YY Inc ADR (YY) reported 2nd Quarter June 2022 earnings of $0.69 per share on revenue of $596.1 million. The consensus earnings estimate was $0.20 per share on revenue of $603.1 million. The Earnings Whisper number was $0.26 per share. Revenue fell 9.9% compared to the same quarter a year ago.

The company said it expects third quarter revenue of $561.5 million to $593.5 million. The current consensus revenue estimate is $650.93 million for the quarter ending September 30, 2022.

JOYY Inc. is a leading global social media platform 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 Inc. currently operates several social platforms, including Bigo Live for live streaming, Likee for short-form videos, Hago for casual games, and instant messaging platform and others.

Results
Reported Earnings
$0.69
Earnings Whisper
$0.26
Consensus Estimate
$0.20
Reported Revenue
$596.1 Mil
Revenue Estimate
$603.1 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

JOYY Reports Second Quarter 2022 Unaudited Financial Results

SINGAPORE, Aug. 30, 2022 (GLOBE NEWSWIRE) -- 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 second quarter of 2022.

Second Quarter 2022 Financial Highlights1

  • Net revenues were US$596.1 million, compared to US$661.7 million in the corresponding period of 2021.
  • Net income from continuing operations attributable to controlling interest of JOYY2 was US$18.7 million, compared to net loss of US$109.3 million in the corresponding period of 2021, primarily as a result of BIGO turning profits since the second quarter of 2021.
  • Non-GAAP net income from continuing operations attributable to controlling interest and common shareholders of JOYY3 was US$51.5 million, compared to non-GAAP net loss of US$0.5 million in the corresponding period of 2021, primarily as a result of improved gross margin, disciplined marketing spending and enhanced operating efficiency at the group level.

Second Quarter 2022 Operational Highlights

  • Average mobile MAUs4 of Bigo Live increased by 10.6% to 32.6 million from 29.5 million in the corresponding period of 2021.
  • Average mobile MAUs of Likee decreased by 37.5% to 57.7 million from 92.3 million in the corresponding period of 2021, primarily due to reduced spending on user acquisition via advertisement.
  • Average mobile MAUs of Hago decreased by 27.4% to 8.5 million from 11.8 million in the corresponding period of 2021, primarily due to reduced spending on user acquisition via advertisement.
  • Global average mobile MAUs decreased by 11.2% to 273.1 million from 307.5 million in the corresponding period of 2021, primarily due to the decrease in average mobile MAUs of Likee and Hago.
  • Total number of paying users of BIGO (including Bigo Live, Likee and imo)5 decreased by 8.1% to 1.45 million from 1.58 million in the corresponding period of 2021.
  • Average revenue per paying user of BIGO (including Bigo Live, Likee and imo)6 decreased to US$285.0 from US$316.0 in the corresponding period of 2021.

Mr. David Xueling Li, Chairman and Chief Executive Officer of JOYY, commented, “The steady expansion in our profitability in the second quarter amidst the current market condition demonstrated the improved efficiency and resilience of our business. We saw some positive outcomes from our continued iteration of our product features and cultivation of our user community, as Bigo Live’s MAUs maintained its solid growth momentum, increasing by 10.6% year-over-year to 32.6 million. The current macro environment has not undermined our proven capabilities in capturing growth opportunities in the social entertainment sector nor our long-term outlook on the industry, and we view the current market fluctuations as opportunities to deepen our focus and plan in the long run. We will continue to cultivate diversified, premium content, innovate interactive features, and organize tailored local activities, in order to further improve user experience, and ultimately drive the growth of our user community and global business. We remain committed to generating value for our users and creators while improving efficiency and enhancing resilience. As we continue to invest in building our long-term capabilities, we firmly believe that JOYY as a company will emerge from the current uncertainties as a more focused and productive organization, and be well positioned to capture long-term growth opportunities and generate sustainable shareholder value.”

Second Quarter 2022 Financial Results

NET REVENUES

Net revenues were US$596.1 million in the second quarter of 2022, compared to US$661.7 million in the corresponding period of 2021.

Live streaming revenues were US$565.2 million in the second quarter of 2022, compared to US$629.6 million in the corresponding period of 2021, primarily due to the decreases in the number of paying users and average revenue per paying user of BIGO, as global macroeconomic uncertainties and the appreciation of U.S. dollars against certain other local currencies negatively affected users’ paying activities.

Other revenues decreased by 3.8% to US$30.9 million in the second quarter of 2022 from US$32.1 million in the corresponding period of 2021.

COST OF REVENUES AND GROSS PROFIT

Cost of revenues decreased by 17.6% to US$377.7 million in the second quarter of 2022 from US$458.3 million in the corresponding period of 2021. Revenue-sharing fees and content costs were US$247.0 million in the second quarter of 2022, compared to US$289.1 million in the corresponding period of 2021. Bandwidth costs decreased to US$20.0 million in the second quarter of 2022 from US$27.5 million in the corresponding period of 2021, primarily due to the improvement in bandwidth usage efficiency by the Company, partially offset by the increased bandwidth usage as a result of continued MAUs expansion of Bigo Live.

Gross profit increased by 7.4% to US$218.4 million in the second quarter of 2022 from US$203.4 million in the corresponding period of 2021. Gross margin improved to 36.6% in the second quarter of 2022 from 30.7% in the corresponding period of 2021, primarily due to optimization of revenue sharing cost and improved bandwidth usage efficiency.

OPERATING EXPENSES AND INCOME

Operating expenses decreased by 41.1% to US$185.0 million in the second quarter of 2022 from US$314.0 million in the corresponding period of 2021. Among the operating expenses, sales and marketing expenses decreased to US$98.4 million in the second quarter of 2022 from US$112.2 million in the corresponding period of 2021, primarily due to the Company’s reduced spending on user acquisition via advertisement for Likee and Hago. General and administrative expenses decreased to US$23.7 million for the second quarter of 2022 from US$101.1 million in the corresponding period of 2021. General and administrative expenses was higher in the second quarter of 2021 primarily due to one-off impairment loss arising from certain equity investments.

Operating income was US$38.7 million in the second quarter of 2022, compared to operating loss of US$101.1 million in the corresponding period of 2021. Operating income margin was 6.5% in the second quarter of 2022, compared to operating loss margin of 15.3% in the corresponding period of 2021, primarily as a result of BIGO turning profits since the second quarter of 2021.

Non-GAAP operating income7 was US$59.9 million in the second quarter of 2022, compared to non-GAAP operating loss of US$13.0 million in the corresponding period of 2021. Non-GAAP operating income margin8 was 10.0% in the second quarter of 2022, compared to non-GAAP operating loss margin of 2.0% in the corresponding period of 2021.

NET INCOME

Net income from continuing operations attributable to controlling interest of JOYY was US$18.7 million in the second quarter of 2022, compared to net loss of US$109.3 million in the corresponding period of 2021. Net income margin was 3.1% in the second quarter of 2022, compared to net loss margin of 16.5% in the corresponding period of 2021.

Non-GAAP net income from continuing operations attributable to controlling interest and common shareholders of JOYY was US$51.5 million in the second quarter of 2022, compared to non-GAAP net loss of US$0.5 million in the corresponding period of 2021. Non-GAAP net income margin9 was 8.6% in the second quarter of 2022, compared to non-GAAP net loss margin of 0.1% in the corresponding period of 2021.

NET INCOME PER ADS

Diluted net income from continuing operations per ADS10 was US$0.23 in the second quarter of 2022, compared to diluted net loss of US$1.43 in the corresponding period of 2021.

Non-GAAP diluted net income from continuing operations per ADS11 was US$0.65 in the second quarter of 2022, compared to diluted net loss of US$0.01 in the corresponding period of 2021.

BALANCE SHEET AND CASH FLOWS

As of June 30, 2022, the Company had cash and cash equivalents, restricted cash and cash equivalents, short-term deposits, restricted short-term deposits and short-term investments of US$4,289.2 million. For the second quarter of 2022, net cash inflow from operating activities was US$61.7 million.

SHARES OUTSTANDING

As of June 30, 2022, the Company had a total of 1,426.6 million common shares, or the equivalent of 71.3 million ADSs, outstanding.

Business Outlook

For the third quarter of 2022, the Company expects net revenues to be between US$561.5 million and US$593.5 million12. This forecast 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 from increasing macroeconomic uncertainties.

Quarterly Dividend

On August 11, 2020, the Company’s board of directors approved a quarterly dividend policy for the next three years commencing in the fourth quarter of 2020. On November 16, 2020, the Company’s board of directors announced an additional quarterly dividend policy. Based on these two dividend policies, the board of directors has accordingly declared a dividend of US$0.51 per ADS, or US$0.0255 per common share, for the second quarter of 2022, which is expected to be paid on October 6, 2022 to shareholders of record as of the close of business on September 22, 2022. The ex-dividend date will be September 21, 2022. Under the policy, the board of directors of the Company reserves the discretion relating to the determination to make dividend distributions and the amount of such distributions in any particular quarter, depending on the Company’s operations and earnings, cash flow, financial condition and other relevant factors.

Recent Developments

Share Repurchase Program

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. In November 2021, the Company announced that its board of directors has 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. As of June 30, 2022, the Company had repurchased approximately US$327.9 million of its shares pursuant to those plans.

Conference Call Information

The Company will hold a conference call at 9:00 PM U.S. Eastern Time on Monday, August 29, 2022 (9:00 AM Singapore/Hong Kong Time on Tuesday, August 30, 2022). Details for the conference call are as follows:  

Event Title:JOYY Inc. Second Quarter 2022 Earnings Conference Call
Conference ID:#10024616

All participants must use the link provided below to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of participant dial-in numbers, the Direct Event passcode, and a unique registrant ID by email.

PRE-REGISTER LINK: https://s1.c-conf.com/diamondpass/10024616-kro0vn.html 
A live and archived webcast of the conference call will also be available at the Company's investor relations website at https://ir.joyy.com.

The replay will be accessible through September 6, 2022, by dialing the following numbers:

United States:1-855-883-1031
Singapore:800-101-3223
Hong Kong:800-930-639
Conference ID:#10024616


  

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 networking, 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.

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”). JOYY uses non-GAAP operating income, non-GAAP operating (loss) margin, non-GAAP net income (loss) from continuing operations attributable to controlling interest of JOYY, non-GAAP net (loss) margin attributable to controlling interest of JOYY, non-GAAP net income (loss) from continuing operations attributable to common shareholders of JOYY, and basic and diluted non-GAAP net income (loss) per ADS, which are non-GAAP financial measures. Non-GAAP operating income (loss) is operating income (loss) excluding share-based compensation expenses, impairment of goodwill and investments, amortization of intangible assets from business acquisitions, and gain on disposal of subsidiaries and business. Non-GAAP operating (loss) margin is non-GAAP operating income as a percentage of net revenues. Non-GAAP net income (loss) from continuing operations is net income (loss) from continuing operations excluding share-based compensation expenses, impairment of goodwill and investments, amortization of intangible assets from business acquisitions, gain on disposal of subsidiaries and business, (loss) gain on disposal and deemed disposal of investments, gain (loss) on fair value change of investments, reconciling items on the share of equity method investments(refers to share of income (loss) from equity method investments resulting from non-recurring or non-cash items of the equity method investments), gain (loss) on extinguishment of debt and derivative, interest expenses related to the convertible bonds’ amortization to face value, and income tax effects of above non-GAAP reconciling items. Non-GAAP net income (loss) from continuing operations attributable to controlling interest of JOYY is net income (loss) from continuing operations attributable to controlling interest of JOYY excluding share-based compensation expenses, impairment of goodwill and investments, amortization of intangible assets from business acquisitions, (loss) gain on disposal and deemed disposal of subsidiaries and business, gain on disposal of investments, gain (loss) on fair value change of investments, reconciling items on the share of equity method investments, gain (loss) on extinguishment of debt and derivative, interest expenses related to the convertible bonds’ amortization to face value, income tax effects of above non-GAAP reconciling items and adjustments for non-GAAP reconciling items for the net (loss) income from continuing operations attributable to non-controlling interest shareholders. Non-GAAP net (loss) margin is non-GAAP net income (loss) from continuing operations attributable to controlling interest of JOYY as a percentage of net revenues. Non-GAAP net income (loss) from continuing operations attributable to common shareholders of JOYY is net income (loss) from continuing operations attributable to common shareholders of JOYY excluding share-based compensation expenses, impairment of goodwill and investments, amortization of intangible assets from business acquisitions, (loss) gain on disposal and deemed disposal of subsidiaries and business, gain on disposal of investments, gain (loss) on fair value change of investments, reconciling items on the share of equity method investments, gain (loss) on extinguishment of debt and derivative, interest expenses related to the convertible bonds’ amortization to face value, accretion, cumulative dividend and deemed dividend to subsidiaries’ preferred shareholders and income tax effects of above non-GAAP reconciling items and adjustments for non-GAAP reconciling items for the net (loss) income from continuing operations attributable to non-controlling interest shareholders. After the non-GAAP reconciliation, non-GAAP net income (loss) from continuing operations attributable to controlling interests of JOYY is equal to the non-GAAP net income (loss) from continuing operations attributable to common shareholders of JOYY. Basic and diluted non-GAAP net income (loss) from continuing operations per ADS is non-GAAP net income (loss) from continuing operations attributable to common shareholders of JOYY divided by weighted average number of ADS used in the calculation of basic and diluted net income per ADS. The Company believes that separate analysis and exclusion of the non-cash impact of above reconciling items adds 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 non-cash effect of (i) share-based compensation expenses and amortization of intangible assets from business acquisitions, gain (loss) on extinguishment of debt and derivative, interest expenses related to the convertible bonds’ amortization to face value, which have been and will continue to be significant recurring expenses in its business, (ii) impairment of goodwill and investments, gain on disposal of subsidiaries and business, (loss) gain on disposal and deemed disposal of investments, gain (loss) on fair value change of investments, reconciling items on the share of equity method investments, and accretion, cumulative dividend and deemed dividend to subsidiaries’ preferred shareholders, which may not be recurring in its business, and (iii) income tax expenses and non-GAAP adjustments for net income (loss) from continuing operations attributable to non-controlling interest shareholders, which are affected by above non-GAAP reconciling items. 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 (loss) 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 “JOYY Inc. Unaudited Reconciliation of GAAP and Non-GAAP Results” near the end of this release.

Investor Relations Contact 
JOYY Inc.
Jane Xie/Maggie Yan
Email: joyy-ir@joyy.com 

ICR, Inc.
Robin Yang
Email: joyy@icrinc.com 

1 On November 16, 2020, the Company entered into definitive agreements with Baidu, Inc. (“Baidu”). Pursuant to the agreements, Baidu would acquire JOYY’s domestic video-based entertainment live streaming business (“YY Live”), which includes YY mobile app, YY.com website and PC YY, among others, for an aggregate purchase price of approximately US$3.6 billion in cash, subject to certain adjustments. Subsequently, the sale was substantially completed on February 8, 2021, with certain customary matters remaining to be completed in the future, including necessary regulatory approvals from government authorities. As a result, the historical financial results of YY Live are reflected in the Company’s consolidated financial statements as discontinued operations and the Company ceased consolidation of YY Live business since February 8, 2021. The financial information and non-GAAP financial information disclosed in this press release is presented on a continuing operations basis, unless otherwise specifically stated.

For the avoidance of confusion, the continuing operations for the three months ended June 30, 2021, March 31, 2022 and June 30, 2022 as well as the continuing operations for the six months ended June 30, 2021 and June 30, 2022 as presented in this press release primarily consisted of BIGO, excluding Huya and YY Live.

2 Net income (loss) from continuing operations attributable to controlling interest of JOYY, is net income (loss) from continuing operations less net (loss) income from continuing operations attributable to the non-controlling interest shareholders and the mezzanine equity classified as non-controlling interest shareholders.

3 Non-GAAP net income (loss) from continuing operations attributable to controlling interest of JOYY is a non-GAAP financial measure, which is defined as net loss from continuing operations attributable to controlling interest of JOYY excluding share-based compensation expenses, impairment of goodwill and investment, amortization of intangible assets from business acquisitions, gain on disposal of subsidiaries and business, gain (loss) on disposal and deemed disposal of investments, gain (loss) on fair value change of investments, reconciling items on the share of equity method investments which refer to those similar non-GAAP reconciling items of the Company, gain (loss) on extinguishment of debt and derivative, interest expenses related to the convertible bonds amortization to face value, income tax effects on non-GAAP adjustments and non-GAAP adjustments for net (loss) income attributable to non-controlling interest shareholders. These adjustments amounted to US$32.8 million and US$108.9 million in the second quarter of 2022 and 2021, respectively. Please refer to the section titled “Unaudited Reconciliation of GAAP and Non-GAAP Results” for more details.

4 Refers to mobile average monthly active users. Average mobile MAU for any period is calculated by dividing (i) the sum of the Company’s mobile active users for each month of such period, by (ii) the number of months in such period.

5 The paying users are calculated by number of paying users during a given period as the cumulative number of registered user accounts that have purchased virtual items or other products and services on platforms including Bigo Live, Likee and imo at least once during the relevant period.

6 Average revenue per user is calculated by dividing our total revenues from live streaming on platforms including Bigo Live, Likee and imo during a given period by the number of paying users for our live streaming services on these platforms for that period.

7 Non-GAAP operating income (loss) is a non-GAAP financial measure, which is defined as operating income (loss) excluding share-based compensation expenses, amortization of intangible assets from business acquisitions, impairment of goodwill and investments and gain on disposal of subsidiaries and business. Please refer to the section titled “Unaudited Reconciliation of GAAP and Non-GAAP Results” for details.

8 Non-GAAP operating income (loss) margin is a non-GAAP financial measure, which is defined as non-GAAP operating income (loss) as a percentage of net revenues. Please refer to the section titled “Unaudited Reconciliation of GAAP and Non-GAAP Results” for details.

9 Non-GAAP net income (loss) margin is non-GAAP net income (loss) from continuing operations attributable to controlling interest of JOYY as a percentage of net revenues.

10 ADS is American Depositary Share. Each ADS represents twenty Class A common shares of the Company. Diluted net income (loss) per ADS is net income (loss) attributable to common shareholders of JOYY divided by weighted average number of diluted ADS.

11 Non-GAAP diluted net income (loss) from continuing operations per ADS is a non-GAAP financial measure, which is defined as non-GAAP net income (loss) from continuing operations attributable to common shareholders of JOYY divided by weighted average number of ADS used in the calculation of non-GAAP diluted net income (loss) per ADS. Please refer to the section titled “Unaudited Reconciliation of GAAP and Non-GAAP Results” for details.

12 The current outlook does not consider the results of Shopline Corporation Limited, which will be consolidated upon the closing of the proposed financing transaction the Company announced on August 22, 2022.


JOYY INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except share, ADS and per ADS data)

  December
31,
2021
 June
30,
2022
  US$ US$
Assets    
Current assets    
Cash and cash equivalents 1,837,185 1,393,670
Restricted cash and cash equivalents 297,022 296,696
Short-term deposits 1,604,198 2,130,462
Restricted short-term deposits 285 37,495
Short-term investments 946,543 430,901
Accounts receivable, net 114,372 114,129
Amounts due from related parties 56,984 98,809
Prepayments and other current assets(1) 213,733 206,113
     
Total current assets 5,070,322 4,708,275
     
Non-current assets    
Investments 1,022,455 1,073,124
Property and equipment, net 365,392 332,178
Land use rights, net 370,052 347,219
Intangible assets, net 312,082 285,131
Right-of-use assets, net 16,565 16,239
Goodwill 1,958,263 1,953,066
Other non-current assets 4,881 7,044
     
Total non-current assets 4,049,690 4,014,001
     
Total assets 9,120,012 8,722,276
     
Liabilities, mezzanine equity and shareholders’ equity    
Current liabilities    
Short-term loan - 29,800
Accounts payable 18,011 20,544
Deferred revenue 60,910 59,228
Advances from customers 3,426 1,284
Income taxes payable 65,738 67,813
Accrued liabilities and other current liabilities(1) 2,345,838 2,296,304
Amounts due to related parties 6,931 3,180
Lease liabilities due within one year 11,041 7,034
Convertible bonds - 448,910
     
Total current liabilities 2,511,895 2,934,097
     
Non-current liabilities    
Convertible bonds 924,077 402,798
Lease liabilities 5,734 9,198
Deferred revenue 6,422 7,661
Deferred tax liabilities 36,214 37,028
Other non-current liabilities 7,372 12,372
     
Total non-current liabilities 979,819 469,057
     
Total liabilities 3,491,714 3,403,154


JOYY INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(All amounts in thousands, except share, ADS and per ADS data)

  December
31
2021
  June
30
2022
 
  US$  US$ 
     
Mezzanine equity 65,833  68,333 
     
Shareholders’ equity    
Class A common shares (US$0.00001 par value; 10,000,000,000 and 10,000,000,000 shares authorized, 1,317,840,464 shares issued and 1,146,336,305 shares outstanding as of December 31, 2021; 1,317,840,464 shares issued and 1,100,059,298 shares outstanding as of June 30, 2022, respectively) 13  13 
Class B common shares (US$0.00001 par value; 1,000,000,000 and 1,000,000,000 shares authorized, 326,509,555 and 326,509,555 shares issued and outstanding as of December 31, 2021 and June 30, 2022, respectively) 3  3 
Treasury Shares (US$0.00001 par value; 171,504,159 and 217,781,166 shares held as of December 31, 2021 and June 30, 2022, respectively) (526,724)  (614,224) 
Additional paid-in capital 3,246,523  3,267,806 
Statutory reserves 26,804  26,804 
Retained earnings 2,712,534  2,627,458 
Accumulated other comprehensive income 69,175  (82,341) 
       
Total JOYY Inc.’s shareholders’ equity 5,528,328  5,225,519 
       
Non-controlling interests 34,137  25,270 
       
Total shareholders’ equity 5,562,465  5,250,789 
       
Total liabilities, mezzanine equity and shareholders’ equity 9,120,012  8,722,276 
       
       

(1)   JOYY has ceased consolidation of YY Live business since February 8, 2021 and classified and presented all the related assets and liabilities related to YY Live business on a net basis within prepayments and other current assets. The considerations received by the Company so far were recorded as advance payments received within accrued liabilities and other current liabilities.

JOYY INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(All amounts in thousands, except share, ADS and per ADS data)

  Three Months Ended
 Six Months Ended
  June
30,
2021
  March
31,
2022
  June
30,
2022
  June
30,
2021
  June
30,
2022
 
  US$  US$  US$  US$  US$ 
                
Net revenues               
Live streaming(1) 629,626  590,099  565,239  1,243,759  1,155,338 
Others 32,088  33,681  30,859  61,038  64,540 
                
Total net revenues 661,714  623,780  596,098  1,304,797  1,219,878 
                
Cost of revenues(2) (458,272) (422,624) (377,671) (901,202) (800,295)
                
Gross profit 203,442  201,156  218,427  403,595  419,583 
                
Operating expenses(2)               
Research and development expenses (100,744) (64,098) (62,876) (187,749) (126,974)
Sales and marketing expenses (112,151) (104,367) (98,415) (249,555) (202,782)
General and administrative expenses (101,114) (32,095) (23,680) (155,714) (55,775)
                
Total operating expenses (314,009) (200,560) (184,971) (593,018) (385,531)
                
Gain on disposal of subsidiaries 4,959  -  -  4,959  - 
Other income 4,526  5,741  5,286  10,344  11,027 
                
Operating (loss) income (101,082) 6,337  38,742  (174,120) 45,079 
                
Interest expenses (3,602) (3,069) (3,356) (7,760) (6,425)
Interest income and investment income 23,489  18,219  17,942  45,499  36,161 
Foreign currency exchange (losses) gain, net (5,909) (3,364) 12,509  (7,418) 9,145 
Gain (loss) on disposal and deemed disposal of investments 676  1,918  (393) 5,019  1,525 
(Loss) gain on fair value change of investments (841) (20,132) 1,282  (15,992) (18,850)
Gain on extinguishment of debt and derivative 1,649  2,115  4,017  1,266  6,132 
Other non-operating expenses (381) -  -  (381) - 
                
(Loss) income before income tax (expenses) benefits (86,001) 2,024  70,743  (153,887) 72,767 
                
Income tax (expenses) benefits (2,700) 805  (22,944) (18,449) (22,139)
                
(Loss) income before share of loss in equity method investments, net of income taxes (88,701) 2,829  47,799  (172,336) 50,628 
                
Share of loss in equity method investments, net of income taxes (23,974) (35,689) (32,837) (29,425) (68,526)
                
Net (loss) income from continuing operations (112,675) (32,860) 14,962  (201,761) (17,898)
                
Net income from discontinued operations -  -  -  35,567  - 
                
Net (loss) income (112,675) (32,860) 14,962  (166,194) (17,898)
                
Net loss attributable to the non-controlling interest shareholders and the mezzanine equity classified as non-controlling interest shareholders 3,327  5,383  3,689  5,114  9,072 
                
Net (loss) income attributable to controlling interest of JOYY Inc. (109,348) (27,477) 18,651  (161,080) (8,826)
                
Including:               
Net (loss) income from continuing operations attributable to controlling interest of JOYY Inc. (109,348) (27,477) 18,651  (196,647) (8,826)
Net income from discontinued operations attributable to controlling interest of JOYY Inc. -  -  -  35,567  - 
                
Accretion of subsidiaries’ redeemable convertible preferred shares to redemption value (1,345) (1,250) (1,250) (2,736) (2,500)
Cumulative dividend on subsidiary’s Series A Preferred Shares (1,000) (1,000) (1,000) (2,000) (2,000)
                
Net (loss) income attributable to common shareholders of JOYY Inc. (111,693) (29,727) 16,401  (165,816) (13,326)

     

Including:               
Net (loss) income from continuing operations attributable to common shareholders of JOYY Inc. (111,693) (29,727) 16,401  (201,383) (13,326)
Net income from discontinued operations attributable to common shareholders of JOYY Inc. -  -  -  35,567  - 
                

JOYY INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
(All amounts in thousands, except share, ADS and per ADS data)

  Three Months Ended Six Months Ended
  June
30,
2021
 March
31,
2022
 June
30,
2022
 June
30,
2021
 June
30,
2022
 
  US$ US$ US$ US$ US$ 
            
Net (loss) income per ADS           
—Basic (1.43)(0.41)0.23 (2.11)(0.18)
Continuing operations (1.43)(0.41)0.23 (2.56)(0.18)
Discontinued operations - - - 0.45 - 
—Diluted (1.43)(0.41)0.23 (2.11)(0.18)
Continuing operations (1.43)(0.41)0.23 (2.56)(0.18)
Discontinued operations - - - 0.45 - 
            
Weighted average number of ADS used in calculating net (loss) income per ADS           
—Basic 77,997,827 72,881,330 71,893,282 78,596,888 72,604,421 
—Diluted 77,997,827 72,881,330 72,586,310 78,596,888 72,604,421 

(1)   Live streaming revenues by geographical areas were as follows:

  Three Months Ended Six Months Ended
  June
30,
2021
 March
31,
2022
 June
30,
2022
 June
30,
2021
 June
30,
2022
 
  US$ US$ US$ US$ US$ 
            
PRC 111,479 134,130 137,246 223,039 271,376 
Non-PRC 518,147 455,969 427,993 1,020,720 883,962 
            

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

  Three Months Ended Six Months Ended
  June
30,
2021
 March
31,
2022
 June
30,
2022
 June
30,
2021
 June
30,
2022
 
  US$ US$ US$ US$ US$ 
            
Cost of revenues 3,075 4,545 1,344 4,563 5,889 
Research and development expenses 7,921 6,410 5,093 12,923 11,503 
Sales and marketing expenses 410 251 282 859 533 
General and administrative expenses (20,501) 3,330 2,026 (4,382) 5,356 


JOYY INC.

UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS
(All amounts in thousands, except share, ADS and per ADS data)

  Three Months Ended
  Six Months Ended
 
  June
30,
2021
 March
31,
2022
 June
30,
2022
  June
30,
2021
 June
30,
2022
 
  US$ US$ US$  US$ US$ 
             
Operating (loss) income (101,082) 6,337 38,742  (174,120) 45,079 
Share-based compensation expenses (9,095) 14,536 8,745  13,963 23,281 
Amortization of intangible assets from business acquisitions 11,683 12,409 12,365  31,986 24,774 
Impairment of investments 90,499 - -  90,499 - 
Gain on disposal of subsidiaries (4,959) - -  (4,959) - 
             
Non-GAAP operating (loss) income (12,954) 33,282 59,852  (42,631) 93,134 
             
Net (loss) income from continuing operations (112,675) (32,860) 14,962  (201,761) (17,898) 
Share-based compensation expenses (9,095) 14,536 8,745  13,963 23,281 
Amortization of intangible assets from business acquisitions 11,683 12,409 12,365  31,986 24,774 
Impairment of investments 90,499 - -  90,499 - 
Gain on disposal of subsidiaries (4,959) - -  (4,959) - 
(Gain) loss on disposal and deemed disposal of investments (676) (1,918) 393  (5,019) (1,525) 
Loss (gain) on fair value change of investments 841 20,132 (1,282)  15,992 18,850 
Reconciling items on the share of equity method investments 22,346 11,143 12,774  29,710 23,917 
Gain on extinguishment of debt and derivative (1,649) (2,115) (4,017)  (1,266) (6,132) 
Interest expenses related to the convertible bonds’ amortization to face value 713 629 619  1,407 1,248 
Income tax effects on non-GAAP adjustments (568) (4,518) 3,833  25 (685) 
             
Non-GAAP net (loss) income from continuing operations (3,540) 17,438 48,392  (29,423) 65,830 
             
Net (loss) income from continuing operations attributable to common shareholders of JOYY Inc. (111,693) (29,727) 16,401  (201,383) (13,326) 
Share-based compensation expenses (9,095) 14,536 8,745  13,963 23,281 
Amortization of intangible assets from business acquisitions 11,683 12,409 12,365  31,986 24,774 
Impairment of investments 90,499 - -  90,499 - 
Gain on disposal of subsidiaries (4,959) - -  (4,959) - 
(Gain) loss on disposal and deemed disposal of investments (676) (1,918) 393  (5,019) (1,525) 
Loss (gain) on fair value change of investments 841 20,132 (1,282)  15,992 18,850 
Reconciling items on the share of equity method investments 22,346 11,143 12,774  29,710 23,917 
Gain on extinguishment of debt and derivative (1,649) (2,115) (4,017)  (1,266) (6,132) 
Interest expenses related to the convertible bonds’ amortization to face value 713 629 619  1,407 1,248 
Accretion, cumulative dividend and deemed dividend to subsidiaries’ preferred shareholders 2,345 2,250 2,250  4,736 4,500 
Income tax effects on non-GAAP adjustments (568) (4,518) 3,833  25 (685) 
Non-GAAP adjustments for net loss attributable to the non-controlling interest shareholders (256) (1,930) (629)  (223) (2,559) 
             
Non-GAAP net (loss) income from continuing operations attributable to controlling interest and common shareholders of JOYY Inc. (469) 20,891 51,452  (24,532) 72,343 


Non-GAAP net (loss) income from continuing operations per ADS            
—Basic (0.01) 0.29 0.72  (0.31) 1.00 
—Diluted (0.01) 0.28 0.65  (0.31) 0.93 
Weighted average number of ADS used in calculating Non-GAAP net (loss) income from continuing operations per ADS            
—Basic 77,997,827 72,881,330 71,893,282  78,596,888 72,604,421 
—Diluted 77,997,827 83,897,416 82,225,273  78,596,888 83,090,336 


JOYY INC.

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

  Three Months Ended
 
  June 30, 2022
 
          
  Bigo All other Elimination(1) Total 
  US$ US$ US$ US$ 
          
Net revenues         
Live streaming 480,446 84,793 - 565,239 
Others 22,197 8,795 (133) 30,859 
          
Total net revenues 502,643 93,588 (133) 596,098 
          
Cost of revenues(2) (309,271) (68,533) 133 (377,671) 
          
Gross profit 193,372 25,055 - 218,427 
Operating expenses(2)         
Research and development expenses (45,997) (16,879) - (62,876) 
Sales and marketing expenses (78,690) (19,725) - (98,415) 
General and administrative expenses (11,100) (12,580) - (23,680) 
          
Total operating expenses (135,787) (49,184) - (184,971) 
          
Other income 3,601 1,685 - 5,286 
          
Operating income (loss) 61,186 (22,444) - 38,742 
          
Interest expenses (1,117) (3,096) 857 (3,356) 
Interest income and investment income 1,750 17,049 (857) 17,942 
Foreign currency exchange gain (losses), net 12,839 (330) - 12,509 
Gain on extinguishment of debt and derivative - 4,017 - 4,017 
Loss on disposal and deemed disposal of investments - (393) - (393) 
Gain on fair value change of investments - 1,282 - 1,282 
          
Income (loss) before income tax expenses 74,658 (3,915) - 70,743 
          
Income tax expenses (8,583) (14,361) - (22,944) 
          
Income (loss) before share of loss in equity method investments, net of income taxes 66,075 (18,276) - 47,799 
          
Share of loss in equity method investments, net of income taxes - (32,837) - (32,837) 
          
Net income (loss) from continuing operations 66,075 (51,113) - 14,962 
          

(1)   The elimination mainly consists of revenues and expenses generated from services among Bigo and all other segments, and interest income and interest expenses generated from the loan between Bigo and all other segments.

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

  Three Months Ended
  June 30, 2022
   
  Bigo All other Total
  US$ US$ US$
       
Cost of revenues 918 426 1,344
Research and development expenses 2,994 2,099 5,093
Sales and marketing expenses 193 89 282
General and administrative expenses 1,357 669 2,026


JOYY INC.

UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS OF UNAUDITED SEGMENT REPORT
(All amounts in thousands, except share, ADS and per ADS data)

  Three Months Ended
  June 30, 2022
       
  Bigo All other Total
  US$ US$ US$
       
Operating income (loss) 61,186 (22,444) 38,742
Share-based compensation expenses 5,462 3,283 8,745
Amortization of intangible assets from business acquisitions 11,225 1,140 12,365
       
Non-GAAP operating income (loss) 77,873  (18,021) 59,852
       
Net income (loss) from continuing operations 66,075 (51,113) 14,962
Share-based compensation expenses 5,462 3,283 8,745
Amortization of intangible assets from business acquisitions 11,225 1,140 12,365
Gain on fair value change of investments - (1,282) (1,282)
Loss on disposal and deemed disposal of investments - 393 393
Reconciling items on the share of equity method investments - 12,774 12,774
Gain on extinguishment of debt and derivative - (4,017) (4,017)
Interest expenses related to the convertible bonds’ amortization to face value - 619 619
Income tax effects on non-GAAP adjustments 3,578 255 3,833
       
Non-GAAP net income (loss) from continuing operations 86,340  (37,948) 48,392
       

JOYY INC.
UNAUDITED SEGMENT REPORT
(All amounts in thousands, except share, ADS and per ADS data)

  Three Months Ended
 
  March 31 2022
 
          
  Bigo All other Elimination(1) Total 
  US$ US$ US$ US$ 
          
Net revenues         
Live streaming 513,154 76,945 - 590,099 
Others 21,429 12,283 (31) 33,681 
          
Total net revenues 534,583 89,228 (31) 623,780 
          
Cost of revenues(2) (350,563) (72,092) 31 (422,624) 
          
Gross profit  184,020 17,136 - 201,156 
          
Operating expenses(2)         
Research and development expenses (46,606) (17,492) - (64,098) 
Sales and marketing expenses (81,937) (22,430) - (104,367) 
General and administrative expenses (14,634) (17,461) - (32,095) 
          
Total operating expenses (143,177) (57,383) - (200,560) 
          
Other income 4,351 1,390 - 5,741 
          
Operating income (loss) 45,194 (38,857) - 6,337 
          
Interest expenses (788) (3,069) 788 (3,069) 
Interest income and investment income 1,003 18,004 (788) 18,219 
Foreign currency exchange losses, net (2,857) (507) - (3,364) 
Gain on extinguishment of debt and derivative - 2,115 - 2,115 
Gain on disposal and deemed disposal of investments - 1,918 - 1,918 
Loss on fair value change of investments - (20,132) - (20,132) 
          
Income (loss) before income tax benefits (expenses) 42,552 (40,528) - 2,024 
          
Income tax benefits (expenses) 2,108 (1,303) - 805 
          
Income (loss) before share of loss in equity method investments, net of income taxes 44,660 (41,831) - 2,829 
          
Share of loss in equity method investments, net of income taxes - (35,689) - (35,689) 
          
Net income (loss) from continuing operations 44,660 (77,520) - (32,860) 
          

(1)   The elimination mainly consists of revenues and expenses generated from services among Bigo and all other segments, and interest income and interest expenses generated from the loan between Bigo and all other segments.


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

  Three Months Ended
 
  March 31, 2022
 
        
  Bigo All other Total 
  US$ US$ US$ 
        
Cost of revenues 1,386 3,159 4,545 
Research and development expenses 4,629 1,781 6,410 
Sales and marketing expenses 77 174 251 
General and administrative expenses 1,443 1,887 3,330 


JOYY INC.

UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS OF UNAUDITED SEGMENT REPORT
(All amounts in thousands, except share, ADS and per ADS data)

  Three Months Ended
 
  March 31 2022
 
        
  Bigo All other Total 
  US$ US$ US$ 
        
Operating income (loss) 45,194 (38,857) 6,337 
Share-based compensation expenses 7,535 7,001 14,536 
Amortization of intangible assets from business acquisitions 11,225 1,184 12,409 
        
Non-GAAP operating income (loss) 63,954 (30,672) 33,282 
        
Net income (loss) from continuing operations 44,660 (77,520) (32,860) 
Share-based compensation expenses 7,535 7,001 14,536 
Amortization of intangible assets from business acquisitions 11,225 1,184 12,409 
Loss on fair value change of investments - 20,132 20,132 
Gain on disposal and deemed disposal of investments - (1,918) (1,918) 
Reconciling items on the share of equity method investments - 11,143 11,143 
Gain on extinguishment of debt and derivative - (2,115) (2,115) 
Interest expenses related to the convertible bonds’ amortization to face value - 629 629 
Income tax effects on non-GAAP adjustments (3,517) (1,001) (4,518) 
        
Non-GAAP net income (loss) from continuing operations 59,903 (42,465) 17,438 
        

JOYY INC.
UNAUDITED SEGMENT REPORT
(All amounts in thousands, except share, ADS and per ADS data)

  Three Months Ended
 
  June 30, 2021
 
          
  Bigo All other Elimination(1) Total 
  US$ US$ US$ US$ 
          
Net revenues         
Live streaming 576,498 53,128 - 629,626 
Others 21,273 10,815 - 32,088 
          
Total net revenues 597,771 63,943 - 661,714 
          
Cost of revenues(2) (406,359) (51,913) - (458,272) 
          
Gross profit  191,412 12,030 - 203,442 
Operating expenses(2)         
Research and development expenses (73,061) (27,683) - (100,744) 
Sales and marketing expenses (96,673) (15,478) - (112,151) 
General and administrative expenses 6,126 (107,240) - (101,114) 
          
Total operating expenses (163,608) (150,401) - (314,009) 
          
Gain on disposal of subsidiaries - 4,959 - 4,959 
Other income 1,262 3,264 - 4,526 
          
Operating income (loss) 29,066 (130,148) - (101,082) 
          
Other non-operating expenses - (381) - (381) 
Interest expenses (624) (3,348) 370 (3,602) 
Interest income and investment income 245 23,614 (370) 23,489 
Foreign currency exchange losses, net (5,360) (549) - (5,909) 
(Loss) gain on extinguishment of debt and derivative (45) 1,694 - 1,649 
Gain on disposal and deemed disposal of investments - 676 - 676 
Loss on fair value change of investments - (841) - (841) 
          
Income (loss) before income tax expenses 23,282 (109,283) - (86,001) 
          
Income tax benefits (expenses) 352 (3,052) - (2,700) 
          
Income (loss) before share of loss in equity method investments, net of income taxes 23,634 (112,335) - (88,701) 
          
Share of loss in equity method investments, net of income taxes - (23,974) - (23,974) 
          
Net income (loss) from continuing operations 23,634 (136,309) - (112,675) 
          

(1) The elimination mainly consists of interest income and interest expenses generated from the loan between Bigo and all other segments.

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

  Three Months Ended
 
  June 30, 2021
 
       
  Bigo All otherTotal 
  US$ US$US$ 
       
Cost of revenues 2,330 7453,075 
Research and development expenses 4,489 3,4327,921 
Sales and marketing expenses 208 202410 
General and administrative expenses (22,619) 2,118(20,501) 


JOYY INC.

UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS OF UNAUDITED SEGMENT REPORT
(All amounts in thousands, except share, ADS and per ADS data)

  Three Months Ended
 
  June 30, 2021
 
        
  Bigo All other Total 
  US$ US$ US$ 
        
Operating income (loss) 29,066 (130,148) (101,082) 
Share-based compensation expenses (15,592) 6,497 (9,095) 
Amortization of intangible assets from business acquisitions 11,225 458 11,683 
Impairment of investments - 90,499 90,499 
Gain on disposal of subsidiaries - (4,959) (4,959) 
        
Non-GAAP operating income (loss) 24,699 (37,653) (12,954) 
        
Net income (loss) from continuing operations 23,634 (136,309) (112,675) 
Share-based compensation expenses (15,592) 6,497 (9,095) 
Amortization of intangible assets from business acquisitions 11,225 458 11,683 
Impairment of investments - 90,499 90,499 
Gain on disposal of subsidiaries - (4,959) (4,959) 
Loss on fair value change of investments - 841 841 
Gain on disposal and deemed disposal of investments - (676) (676) 
Reconciling items on the share of equity method investments - 22,346 22,346 
Loss (gain) on extinguishment of debt and derivative 45 (1,694) (1,649) 
Interest expenses related to the convertible bonds’ amortization to face value - 713 713 
Income tax effects on non-GAAP adjustments 128 (696) (568) 
        
Non-GAAP net income (loss) from continuing operations 19,440 (22,980) (3,540) 
        

Source: JOYY Inc.