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JOYY Inc. (YY - Free Report) delivered second-quarter 2022 non-GAAP earnings of 65 cents per American depositary shares (ADS), which beat the Zacks Consensus Estimate of 20 cents and increased significantly from the year-ago reported loss of a penny per share.
Revenues totaled $596.2 million, which declined 9.9% year over year and missed the Zacks Consensus Estimate by 0.6%. The decrease in the top line was due to global macroeconomic uncertainties and the seasonality impact of the Ramadan holiday in the Middle East.
JOYY Inc. Sponsored ADR Price, Consensus and EPS Surprise
Live streaming revenues (95% of total revenues) decreased 10.2% year over year to $565.2 million, primarily due to 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.
Notably, other revenues (5% of total revenues) decreased 3.8% to $30.8 million. Global average mobile MAUs decreased 11.2% year over year to 273.1 million, primarily due to the decrease in average mobile MAUs of Likee and Hago.
BIGO and All Other contributed 85% and 15%, respectively to total live streaming revenues in the second quarter. Further, year-over-year growth at YY Live and HUYA Live was 11.5% and 93.7%, respectively.
During the second quarter, Bigo Live’s monthly active users (MAUs) increased 10.6% year over year to 32.6 million. Notably, users in Southeast Asia and other emerging markets increased 18.6%, while users in Europe increased 8.7% year over year.
Average mobile MAUs of Bigo Live increased 10.6% year over year to 32.6 million. Average mobile MAUs of Likee decreased 37.5% year over year to 57.7 million, primarily due to reduced spending on user acquisition through advertisement.
During the second quarter, Hago’s live streaming revenues increased 7.1% year over year, and its number of paying users grew 12.8% over the same period. Average mobile MAUs of Hago decreased 27.4% year over year to 8.5 million.
The cost of revenues decreased 17.6% to $377.7 million in the second quarter of 2022. Revenue-sharing fees and content costs were $247.0 million, down from $289.1 million in the corresponding period of 2021.
Bandwidth costs decreased to $20.0 million in the second quarter of 2022 from $27.5 million in the corresponding period of 2021, primarily due to the improvement in bandwidth usage efficiency by the company, partially offset by increased bandwidth usage as a result of continued MAUs expansion of Bigo Live.
Operating Details
Gross profit climbed 7.4% from the year-ago quarter to $218.4 million. Gross margin expanded 590 basis points (bps) to 37% in the second quarter, primarily due to optimization of revenue sharing cost and improved bandwidth usage efficiency.
Operating expenses totaled $185 million, down 41.1% from the year-ago quarter. Research & development (R&D), sales & marketing (S&M) and general & administrative (G&A) expenses declined 37.6%, 12.2%, and 76.6% year over year, respectively. As a percentage of revenues, R&D contracted 470 bps while S&M expenses contracted 40 bps year over year. G&A expenses, as a percentage of revenues, contracted significantly to 4% from 15% in the year-ago quarter.
The company reported a non-GAAP operating income of $38.7 million against an operating loss of $12.9 million in the year-ago period.
The operating income margin was 6.5% in the second quarter of 2022, in contrast to the operating loss margin of 15.3% in the corresponding period of 2021, primarily as the result of BIGO turning profitable from the second quarter of 2021.
Balance Sheet & Cash Flow
As of Jun 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 $4.2 billion. For the second quarter of 2022, the net cash inflow from operating activities was $61.7 million.
As of Jun 30, 2022, the company had a total of 1,426.6 million common shares, or the equivalent of 71.3 million ADSs, outstanding.
Q3 Guidance
For the third quarter of 2022, the company expects net revenues to be between $561.5 million and $593.5 million.
Zacks Rank & Other Stocks to Consider
Currently, YY carries a Zacks Rank #1 (Strong Buy).
Here are some other top-ranked stocks from the broader Computer and Technology sector:
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JOYY (YY) Q2 Earnings Beat Estimates, Revenues Decline Y/Y
JOYY Inc. (YY - Free Report) delivered second-quarter 2022 non-GAAP earnings of 65 cents per American depositary shares (ADS), which beat the Zacks Consensus Estimate of 20 cents and increased significantly from the year-ago reported loss of a penny per share.
Revenues totaled $596.2 million, which declined 9.9% year over year and missed the Zacks Consensus Estimate by 0.6%. The decrease in the top line was due to global macroeconomic uncertainties and the seasonality impact of the Ramadan holiday in the Middle East.
JOYY Inc. Sponsored ADR Price, Consensus and EPS Surprise
JOYY Inc. Sponsored ADR price-consensus-eps-surprise-chart | JOYY Inc. Sponsored ADR Quote
Top-Line Details
Live streaming revenues (95% of total revenues) decreased 10.2% year over year to $565.2 million, primarily due to 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.
Notably, other revenues (5% of total revenues) decreased 3.8% to $30.8 million. Global average mobile MAUs decreased 11.2% year over year to 273.1 million, primarily due to the decrease in average mobile MAUs of Likee and Hago.
BIGO and All Other contributed 85% and 15%, respectively to total live streaming revenues in the second quarter. Further, year-over-year growth at YY Live and HUYA Live was 11.5% and 93.7%, respectively.
During the second quarter, Bigo Live’s monthly active users (MAUs) increased 10.6% year over year to 32.6 million. Notably, users in Southeast Asia and other emerging markets increased 18.6%, while users in Europe increased 8.7% year over year.
Average mobile MAUs of Bigo Live increased 10.6% year over year to 32.6 million. Average mobile MAUs of Likee decreased 37.5% year over year to 57.7 million, primarily due to reduced spending on user acquisition through advertisement.
During the second quarter, Hago’s live streaming revenues increased 7.1% year over year, and its number of paying users grew 12.8% over the same period. Average mobile MAUs of Hago decreased 27.4% year over year to 8.5 million.
The cost of revenues decreased 17.6% to $377.7 million in the second quarter of 2022. Revenue-sharing fees and content costs were $247.0 million, down from $289.1 million in the corresponding period of 2021.
Bandwidth costs decreased to $20.0 million in the second quarter of 2022 from $27.5 million in the corresponding period of 2021, primarily due to the improvement in bandwidth usage efficiency by the company, partially offset by increased bandwidth usage as a result of continued MAUs expansion of Bigo Live.
Operating Details
Gross profit climbed 7.4% from the year-ago quarter to $218.4 million. Gross margin expanded 590 basis points (bps) to 37% in the second quarter, primarily due to optimization of revenue sharing cost and improved bandwidth usage efficiency.
Operating expenses totaled $185 million, down 41.1% from the year-ago quarter. Research & development (R&D), sales & marketing (S&M) and general & administrative (G&A) expenses declined 37.6%, 12.2%, and 76.6% year over year, respectively. As a percentage of revenues, R&D contracted 470 bps while S&M expenses contracted 40 bps year over year. G&A expenses, as a percentage of revenues, contracted significantly to 4% from 15% in the year-ago quarter.
The company reported a non-GAAP operating income of $38.7 million against an operating loss of $12.9 million in the year-ago period.
The operating income margin was 6.5% in the second quarter of 2022, in contrast to the operating loss margin of 15.3% in the corresponding period of 2021, primarily as the result of BIGO turning profitable from the second quarter of 2021.
Balance Sheet & Cash Flow
As of Jun 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 $4.2 billion. For the second quarter of 2022, the net cash inflow from operating activities was $61.7 million.
As of Jun 30, 2022, the company had a total of 1,426.6 million common shares, or the equivalent of 71.3 million ADSs, outstanding.
Q3 Guidance
For the third quarter of 2022, the company expects net revenues to be between $561.5 million and $593.5 million.
Zacks Rank & Other Stocks to Consider
Currently, YY carries a Zacks Rank #1 (Strong Buy).
Here are some other top-ranked stocks from the broader Computer and Technology sector:
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Monolithic Power Systems (MPWR - Free Report) carries a Zacks Rank of 2, currently.
MPWR’s shares have risen 3.5% in the year-to-date period against the Zacks Semiconductor - Analog and Mixed industry’s decline of 11.4%.
Arista Networks (ANET - Free Report) presently sports a Zacks Rank of 1.
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