Mr Viral
HUYA Inc., the leading game live steaming platform in China, released its fourth quarter and full year 2024 earnings results on Tuesday, marking solid progress with its adjusted (Non-GAAP) net income growing 125.6% to 268.8 million yuan ($36.8 million) for fiscal year 2024, along with net cash provided by operating activities turning positive at 94 million yuan over the year, while enhancing shareholders’ return by offering a 2025-2027 Dividend Plan of no less than $400 million.
Huya’s 2025-2027 Dividend Plan is expected to be distributed to shareholders over the next three years. To be specific, for 2025 alone, Huya declared a cash dividend of $1.47 per ordinary share or per ADS, totaling approximately $340 million. For 2026 and 2027, Huya expects to distribute no less than $30 million in cash dividends annually. In addition, the company extends the existing share repurchase program until March 31, 2026. Raymond Peng Lei, Acting Co-Chief Executive Officer and Chief Financial Officer of Huya, said at the earnings conference call that this move is expected to “enhance shareholder returns and optimize capital structure”.
As the company commits itself to building a more comprehensive game content and services platform, investors are interested in finding out what achievements Huya has made over the strategic transition period, particularly over the past year. To begin with, let’s analyze the company’s financial performance first, and then take a deeper look at the company’s achievements with respect to its strategic commercialization model update, enhanced live streaming content ecology, and technology and product upgrades.
Huya’s total net revenues stood at 6.08 billion yuan for the full year of 2024 with improved profitability. In 2024, revenues from game-related services, advertising, and others segment grew rapidly by increasing 145.4% year-on-year to 1.33 billion yuan, accounting for 21.9% of Huya’s total net revenues, a big increase from 7.8% of a year earlier. In addition, this segment’s revenues reached 372 million yuan in 2024Q4, increasing year-on-year by 99.4%, despite a slight sequential decline from Q3 peak due to the game industry’s seasonality.
In 2024Q4, gross margin increased to 11.4% from 1% in the same period of 2023, through further rationalizing broadcaster-related and e-sports content costs. This quarter also saw better operational efficiencies of 23.8% year-on-year reduction in total operating expenses, contributing to the improvement in broad profit metrics, with adjusted net income turning positive at 1.2 million yuan during 2024Q4.
Revenue improvement in the game-related services, advertising and others segment is reflected in the game distribution, in-game item sales, advertising and enhanced international business presence.
Regarding the game distribution business, Huya has continuously optimized operational excellence for both new and existing titles, and emerged as one of the primary distribution channels for several games. For instance, following the launch of Delta Force, Huya actively encouraged its game streamers’ participation in the title’s live streaming and game promotion activities, which led to rapid growth in gross receipts for the game generated through the Huya distribution channel while also boosting its live streaming content’s performance. The company also plans to collaborate with more game developers and publishers on distribution and joint operations.
The in-game item sales business is also upgraded by diversifying in-game item categories and improving traffic efficiency on live channels. The Huya Live app’s “Mall” section is integrated with certain popular game skins, tools and user incentive activities, accompanied by special Spring Festival promotion featuring Huya-exclusive benefits, driving the monthly total in-game item sales GMV in January to a record high.
Game and esports content are at the core of Huya’s content ecosystem, and the company has spared no effort in enriching the content portfolio, further strengthening users’ inclination to watch on the Huya platform when it comes to e-sports content. In the fourth quarter of 2024 alone, Huya broadcast over 100 licensed e-sports tournaments, featuring major events such as League of Legends’ Worlds 2024, Honor of Kings’ KPL Grand Finals, among others. In this quarter Huya also broadcasted more than 35 self-organized e-sports tournaments and entertainment PGC shows.
Encouragingly, in 2024, Huya has provided the platform users with a steady stream of fresh content, as Huya management elaborated at the conference call that the company “reduced the gap between major licensed tournaments and in-house produced content for both League of Legends and Honor of Kings significantly, from over a month in 2023 to no longer than two weeks in 2024.”
Moreover, Huya also takes the lead in the number of top-tier in-house produced e-sports events and audience scale. Internal statistics and estimates from Huya believed that the company captured more than half of the market share for the industry’s top-tier in-house produced organized e-sports events in 2024. Junhong Huang, Acting Co-Chief Executive Officer and Senior Vice President of Huya, believed “Huya’s flagship Legend Cup S2 has set a new standard for premier self-organized tournaments across various platforms…and the viewership metrics of the Legend Cup series on Huya platform nearly equaled or even surpassed those of some top-tier licensed e-sports events.” The company plans to replicate the established model of successful self-organized tournament to a wider array of popular e-sports titles on its platform, which is worth looking forward to.
Apart from the company’s commercialization and content enrichment efforts, technology and product upgrades have pushed the user experience to another level.
To further enhance Huya’s e-sports community vibe, Huya launched a series of product features on the app around tournaments to increase viewer engagement and facilitate access to professional e-sports analysis. Huya also developed features to allow viewers to have access to in-team chats during matches and flexibly switch between the first-person perspectives of different players, which, according to the company, will gradually be integrated with content releases to provide exclusive content for team fans.
In addition, a “Huya Ratings” (translated as “Huya sharp review” in Chinese) section was introduced on the Huya platform, which provides users with a professional forum for e-sports ratings and reviews of e-sports players, tournaments, broadcasters and more, quickly gaining recognition and active participation from users.
Citing an example from the company management at the earnings call, that by the end of early March, “this year’s LPL Split 1 has received 6.8 million total of user ratings, representing an increase of approximately 80% compared to the cumulative ratings of last year’s LPL Summer Split, and more than double that of the event on another well-known rating platform during the same period”. It not only demonstrates the higher user engagement of the “Huya Ratings”, but also strengthens the e-sports community with increased interaction.
In an era when artificial intelligence plays an increasingly important role, Huya is also actively embracing cutting-edge technologies, including AI. As pointed out by Junhong Huang, in February, Huya “became the first game live streaming platform to fully deploy the DeepSeek-R1 model, and developed an ‘AI Assistant (DeepSeek-R1)’ feature to help users efficiently search for game strategies and live channels of interest.”
Huang further explained the company’s strategy in technology development, that Huya will further advance its “AI + Live Streaming” strategy by applying AI large models to improve broadcasters’ content creation efficiency through smart interaction upgrades, full-process automation, and data-driven operational support. He believes “this will also foster AI-powered digital IP innovation and facilitate the design of more distinctive virtual streamers, delivering a novel experience for both users and content creators.”
Together with Huya’s improved profitability, enhanced content ecosystem and user experience, the “AI + Live Streaming” strategy, as well as its commitment to increasing shareholder value, the company is expected to bring more surprises to investors.
SEE ALSO: HUYA Posted Quarter-on-Quarter Revenue Growth in Q2 2024, Declaring $250 Million Special Cash Dividend
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