HUYA Inc. Q3 FY2025 earnings call

• Total net revenues reached approximately RMB 1.7 billion in Q3, the highest in the past 9 quarters, with year-over-year growth of around 10%. Non-GAAP operating profit was RMB 6.3 million. - Game-related services, advertising and other revenues surpassed 30% of total net revenues for the first time. - Total MAUs stable at around 162 million. Streamer ecosystem expanding with top streamers on other platforms. - Upcoming launch of Goose Goose Duck Mobile, with preregistrations surpassing 10 million during October testing. Created live streaming variety show [A SIKA ZIYE] for the game. - E-sports achievements: Hosted League of Legends World Championship, Asia Invitational, Demacia Cup, and Delta Force tournaments. - International expansion: Overseas user base growing, focusing on user experience and content ecosystem.

Live Streaming: Revenues for Q3 were RMB 1.16 billion, up 3% year-over-year. Domestic paying users remained stable at 4.4 million. Game-related services, advertising and other revenues: Reached RMB 532 million in Q3, up 30% year-over-year, accounting for 31.5% of total net revenues. In-game item sales revenue grew by more than 200% year-over-year in the third quarter.

• Live streaming revenues expected to remain stable in Q4. - Non-live stream business (game-related services, advertising, etc.) to continue strong growth, potentially accelerating due to in-game item sales expansion and deeper game collaborations. - Overall revenue growth expected to accelerate in 2026 versus 2025.

Q: Regarding the in-game item sales business. Could you please share some color on the updates from the past quarter as well as the future outlook for this segment?

A: This quarter, in-game item sales continued to scale rapidly. In-game item sales revenue grew over 200% year-over-year in the third quarter. Looking ahead, focus is on further enriching item categories in existing titles, expanding into additional game partnerships, and improving storefront and merchandising systems.

Q: This is regarding company's overall revenue growth. Firstly, live stream revenue has resumed positive year-over-year growth this quarter. So could you share your views on the segment growth going forward? And secondly, for the non-live stream business, which now accounting for over 30% of total revenue, what is your expectation on this segment future growth going forward? And what will be the primary growth driver?

A: Live streaming revenue has returned to growth. Non-live stream business should continue growing at a very strong pace, potentially accelerating further due to in-game item sales expansion and other deeper game collaborations. Primary growth driver is in-game item sales and deeper game collaborations.

Q: So I would like to ask about the publishing of Goose Goose Duck and overall the game publishing business. So what is our strategy as well as outlook going forward?

A: Goose Goose Duck Mobile is our first full-fledged publishing effort. It went through a second round of testing with preregistrations surpassing 10 million. We will continue to follow a content-driven publishing strategy, relying on our streamer network, short-form media reach and e-sports presence to focus on titles that work well in live streaming and interactive settings.

Q: With the solid momentum of Delta Force launch this year, we also observed a lot of like collaboration between Huya and this title. Maybe have management to elaborate more on their ongoing partnership.

A: Focus on building a vibrant community engagement and e-sports tournament ecosystem for Delta Force. Launched Delta Force Map tool for community engagement. Hosted Delta Force e-sports tournaments, with plans for more seasons.

Q: My question is on the new business. Can you break down their financial impact in our profitability? And how should we think about the trend for our profit of this going forward?

A: Our gross margin remained stable this quarter. We expect to see gradual margin improvement over time as we further scale and expand our game-related services and optimize cost structures.