JOYY Reports Third Quarter 2020 Unaudited Financial Results

JOYY Inc.
·34 min read

GUANGZHOU, China, Nov. 17, 2020 (GLOBE NEWSWIRE) -- JOYY Inc. (NASDAQ: YY) (JOYY or the Company, formerly known as YY Inc.), a global video-based social media platform, today announced its unaudited financial results for the third quarter of 2020. 

Third Quarter 2020 Financial Highlights 1

  • Net revenues increased by 36.1% to RMB6,286.4 million (US$925.9 million) from RMB4,617.3 million in the corresponding period of 2019.

  • Net income from continuing operations attributable to controlling interest of JOYY Inc. 2 was RMB2,303.2 million (US$339.2 million), compared to RMB61.8 million in the corresponding period of 2019, primarily due to the impact of gain from partial disposal of investments in Huya.

  • Non-GAAP net income from continuing operations attributable to controlling interest and common shareholders of JOYY Inc. 3 increased by 64.0% to RMB809.4 million (US$119.2 million) from RMB493.4 million in the corresponding period of 2019, primarily due to the decrease in the operation loss of Bigo Inc (Bigo).

Third Quarter 2020 Operational Highlights

  • Global average mobile MAUs 4 decreased by 4.0% to 390.1 million from 406.3 million in the corresponding period of 2019, mainly due to the impact of Indian governments measures to block certain Chinese-owned apps in its local market, which included Bigo Live, Likee and Hago.

  • Average mobile MAUs of Likee increased by 3.8% to 104.0 million from 100.2 million in the corresponding period of 2019.

  • Average mobile MAUs of global live streaming services decreased by 2.3% to 92.0 million from 94.1 million in the corresponding period of 2019, among that (i) 41.3 million were from YY, which increased by 3.4% year over year; and (ii) 50.7 million were from outside of China, which decreased by 6.5% year over year, including 28.0 million from Bigo Live, which increased by 27.7% year over year, and 22.7 million from HAGO, which decreased by 29.7% year over year primarily due to the impact of Indian governments measures to block such app in its local market.

  • Total number of paying users 5 of YY decreased by 4.7% to 4.1 million from 4.3 million in the corresponding period of 2019, mainly due to COVID-19 impacts.

Mr. David Xueling Li, Chairman and Chief Executive Officer of JOYY, commented, Despite uncertainties from macro perspective, we remained focused on executing our dual-engine growth strategy in the third quarter of 2020. Through a combination of globalized market reach and localized operations management, we continued to achieve solid growth in our financial results. Despite the negative impact from Indian governments measures to block certain Chinese-owned apps in its local market and other geopolitical risks, our global MAU remained relatively stable, thanks to rapid expansion of our business in other regions. During the quarter, Bigo Live maintained its robust growth trajectory and further diversified its geographic coverage, accomplishing 270% and 231% revenue growth in Europe and East Pacific regions, respectively. Likee continued to gain momentum through a measured approach of balancing its user expansion and user retention, with continuous improvement in user engagement level by introducing multiple functions of its video production tools, dynamic community and thematic functionalities, as reflected by increase in content creator engagement.

Mr. Li continued, We believe Baidus strategic acquisition of YY Live is a true win-win for both parties, as it will accelerate YY Lives business growth and unlock more value across the domestic entertainment live streaming sector. Going forward, we will continue to expand our live streaming and short-form video content ecosystem in key overseas markets around the world, and explore new business lines, aiming to further enter into the industrial AI internet sector.

Mr. Bing Jin, Chief Financial Officer of JOYY, further commented, Despite the impact of geopolitical headwinds, we grew our total revenues by 36.1% year over year to RMB6,286.4 million during the third quarter of 2020 and exceeded the high end of our previous guidance. More specifically, revenues from Bigo grew by 120.8% year over year to RMB3,394.8 million, mostly driven by the uptick in its live streaming revenues. It is also the first quarter for Bigo to achieve a positive non-GAAP operating margin. As we remain in an abundant cash position after recent transaction with Baidu, we will continue to invest in business development efforts to further expand our global market reach, and cultivate new business to enhance our service offerings. We will also actively explore other ways to return value to our shareholders to maximize shareholder value.

Third Quarter 2020 Financial Results

NET REVENUES
Net revenues increased by 36.1% to RMB6,286.4 million (US$925.9 million) in the third quarter of 2020 from RMB4,617.3 million in the corresponding period of 2019, primarily driven by continued growth in user base and expansion of global footprint in Bigo .

Live streaming revenues increased by 40.1% to RMB6,049.1 million (US$890.9 million) in the third quarter of 2020 from RMB4,317.8 million in the corresponding period of 2019, primarily attributable to the continued live streaming revenues growth in Bigo segment.

Other revenues decreased by 20.8% to RMB237.3 million (US$34.9 million) in the third quarter of 2020 from RMB299.4 million in the corresponding period of 2019, primarily due to the decrease in other revenues in YY segment.

COST OF REVENUES AND GROSS PROFIT
Cost of revenues increased by 38.8% to RMB3,961.7 million (US$583.5 million) in the third quarter of 2020 from RMB2,854.5 million in the corresponding period of 2019. Revenue-sharing fees and content costs increased to RMB2,840.3 million (US$418.3 million) in the third quarter of 2020 from RMB1,951.0 million in the corresponding period of 2019 as a result of the increase in live streaming revenues of the Company. Bandwidth costs decreased to RMB236.9 million (US$34.9 million) in the third quarter of 2020 from RMB286.3 million in the corresponding period of 2019, primarily related to the termination of service and access to users in India after its measures to block certain Chinese-owned apps in late June.

Gross profit increased by 31.9% to RMB2,324.7 million (US$342.4 million) in the third quarter of 2020 from RMB1,762.7 million in the corresponding period of 2019. Gross margin was 37.0% in the third quarter of 2020, compared to 38.2% in the corresponding period of 2019. The gross margin contraction was primarily caused by the fact that Bigo segment had lower gross margin but contributed significantly greater portions of net revenues in the third quarter of 2020, compared to the corresponding period of 2019.

OPERATING INCOME
Operating expenses were RMB1,999.9 million (US$294.6 million) in the third quarter of 2020, compared to RMB1,807.9 million in the corresponding period of 2019. Among the operating expenses, sales and marketing expenses increased to RMB1,083.0 million (US$159.5 million) in the third quarter of 2020 from RMB957.3 million in the corresponding period of 2019, primarily due to the Companys increased efforts in sales and marketing activities in overseas markets. Research and development expenses increased to RMB636.0 million (US$93.7 million) in the third quarter of 2020 from RMB538.1 million in the corresponding period of 2019, mostly due to the increasing headcount and investments in talent recruitment as part of the Companys efforts to enhance its research and development capabilities. General and administrative expenses were RMB280.8 million (US$41.4 million) in the third quarter of 2020, compared to RMB312.5 million in the corresponding period of 2019. The decrease of general and administrative expenses was mainly attributable to a decrease in provision for loss allowances of receivables.

Operating income was RMB466.6 million (US$68.7 million) in the third quarter of 2020, compared to RMB96.4 million in the corresponding period of 2019. Operating margin was 7.4% in the third quarter of 2020, compared to 2.1% in the corresponding period of 2019, primarily due to the decrease in operation loss of Bigo segment.

Non-GAAP operating income 6 increased by 77.8% to RMB825.8 million (US$121.6 million) in the third quarter of 2020 from RMB464.4 million in the corresponding period of 2019. Non-GAAP operating margin 7 was 13.1% in the third quarter of 2020, compared to 10.1% in the corresponding period of 2019.

NET INCOME
Net income from continuing operations attributable to controlling interest of JOYY Inc. was RMB2,303.2 million (US$339.2 million) in the third quarter of 2020, compared to RMB61.8 million in the corresponding period of 2019. Net margin was 36.6% in the third quarter of 2020, compared to 1.3% in the corresponding period of 2019, mainly due to the gain from partial disposal of investments in Huya.

Non-GAAP net income from continuing operations attributable to controlling interest and common shareholders of JOYY Inc. increase by 64.0% to RMB809.4 million (US$119.2 million) in the third quarter of 2020 from RMB493.4 million in the corresponding period of 2019. Non-GAAP net margin 8 increased to 12.9% in the third quarter of 2020 from 10.7% in the corresponding period of 2019.

NET INCOME PER ADS
Diluted net income from continuing operations per ADS 9 was RMB25.92 (US$3.82) in the third quarter of 2020, compared to RMB 0.56 in the corresponding period of 2019.

Non-GAAP diluted net income from continuing operations per ADS 10 increased by 58.8% to RMB8.89 (US$1.31) in the third quarter of 2020 from RMB5.60 in the corresponding period of 2019.

BALANCE SHEET AND CASH FLOWS
As of September 30, 2020, the Company had cash and cash equivalents, restricted cash and cash equivalents, short-term deposits, restricted short-term deposits and short-term investments of RMB24,469.7 million (US$3,604.0 million). For the third quarter of 2020, net cash from operating activities was RMB1,029.9 million (US$151.7 million).

SHARES OUTSTANDING
As of September 30, 2020, the Company had a total of 1,619.7 million common shares, or the equivalent of 81.0 million ADSs, outstanding.

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 third quarter of 2020. Under the policy, quarterly dividends will be set at approximately US$25.0 million in each fiscal quarter. The board of directors has accordingly declared a dividend of US$0.31 per ADS, or US$0.0155 per common share, for the third quarter of 2020, which is expected to be paid on December 23, 2020 to shareholders of record as of the close of business on December 11, 2020. The ex-dividend date will be December 10, 2020. 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 Companys operations and earnings, cash flow, financial condition and other relevant factors.

Recent Developments
On November 16, 2020, the Company entered into definitive agreements with Baidu, Inc. (Baidu). Pursuant to the agreements, Baidu will acquire JOYYs 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. The closing of the transaction is subject to certain conditions and is currently expected to occur in the first half of 2021.

Conference Call Information
The Company will hold a conference call on 9:00 PM U.S. Eastern Time on Monday, November 16, 2020 (10:00 AM Beijing/Hong Kong Time on Tuesday, November 17, 2020). Details for the conference call are as follows:

Event Title: JOYYs Third Quarter 2020 Earnings Conference Call
Conference ID: #8576720

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: 
http://apac.directeventreg.com/registration/event/8576720

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

The replay will be accessible through November 24, 2020 by dialing the following numbers:

United States:   +1-646-254-3697
International:    +61-2-8199-0299
Conference ID: #8576720

Exchange Rate
This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars, in this press release, were made at a rate of RMB6.7896 to US$1.00, the noon buying rate in effect on September 30, 2020 in the City of New York for cable transfers in Renminbi per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York.

About JOYY Inc.
JOYY Inc. is a global social media platform. The Companys highly engaged users contribute to a vibrant social community by creating, sharing, and enjoying a vast range of entertainment content and activities. JOYY enables users to interact with each other in real time through online live media and offers users a uniquely engaging and immersive entertainment experience. JOYY owns Bigo, a fast-growing global tech company headquartered in Singapore. Bigo owns several popular video based social platforms including Bigo Live, a leading global live streaming platform outside China; Likee, a leading global short-form video social platform; and video communication service and others. JOYY has created an online community for global video and live streaming users. JOYY Inc. 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 JOYYs 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 JOYYs 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: JOYYs goals and strategies; JOYYs 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; JOYYs ability to monetize the user base; fluctuations in general economic and business conditions in China; the impact of the COVID-19 to JOYYs 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 JOYYs 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 margin, non-GAAP net income from continuing operations attributable to controlling interest of JOYY Inc., non-GAAP net margin attributable to controlling interest of JOYY Inc., non-GAAP net income from continuing operations attributable to common shareholders of JOYY Inc., and basic and diluted non-GAAP net income per ADS, which are non-GAAP financial measures. Non-GAAP operating income is operating income 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 margin is non-GAAP operating income as a percentage of net revenues. Non-GAAP net income from continuing operations is net income 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, fair value change on derivatives, 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 from continuing operations attributable to controlling interest of JOYY Inc. is net income from continuing operations attributable to controlling interest of JOYY Inc. 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, fair value change on derivatives, 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 margin is non-GAAP net income from continuing operations attributable to controlling interest of JOYY Inc. as a percentage of net revenues. Non-GAAP net income from continuing operations attributable to common shareholders of JOYY Inc. is net income from continuing operations attributable to common shareholders of JOYY Inc. 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, fair value change on derivatives, 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 from continuing operations attributable to controlling interests of JOYY Inc. is equal to the non-GAAP net income from continuing operations attributable to common shareholders of JOYY Inc. Basic and diluted non-GAAP net income from continuing operations per ADS is non-GAAP net income from continuing operations attributable to common shareholders of JOYY Inc. 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, fair value change on derivatives, 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 (loss) income 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 Companys net income 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. Reconciliation of GAAP and Non-GAAP Results near the end of this release.

Investor Relations Contact
JOYY Inc.
Jane Xie/Maggie Yan
Tel: +86 (20) 8212-0000
Email: IR@YY.com

ICR, Inc.
Jack Wang
Tel: +1 (646) 915-1611
Email: IR@YY.com

1 Starting from the second quarter of 2020, the Company deconsolidated HUYA Inc. (Huya) and Huyas historical financial results are and will be reflected in the Companys consolidated financial statements as discontinued operations accordingly. The financial information and non-GAAP financial information of the Company disclosed in this press release is presented on a continuing operations basis, unless otherwise specifically stated. After the deconsolidation of Huya, the Company accounts for its investment in Huya as an equity method investment and applies the equity method accounting one quarter in arrears. Share of income or loss from the investment in Huya will be included in net income or loss from continuing operations.

2 Net income from continuing operations attributable to controlling interest of JOYY Inc., is net income 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 from continuing operations attributable to controlling interest of JOYY Inc. is a non-GAAP financial measure, which is defined as net income from continuing operations attributable to controlling interest of JOYY Inc. 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 on 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, fair value change on derivatives, 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 reversal of RMB1,493.8 million (US$220.0 million) and RMB431.7 million in the third quarter of 2020 and 2019, respectively. Please refer to the section titled 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 Companys mobile active users for each month of such period, by (ii) the number of months in such period.

5 Refers to a registered user that has purchased virtual items on YYs platforms at least once during the period presented.

6 Non-GAAP operating income is a non-GAAP financial measure, which is defined as operating income 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 Reconciliation of GAAP and Non-GAAP Results for details.

7 Non-GAAP operating margin is a non-GAAP financial measure, which is defined as non-GAAP operating income as a percentage of net revenues. Please refer to the section titled Reconciliation of GAAP and Non-GAAP Results for details.

8 Non-GAAP net margin is non-GAAP net income from continuing operations attributable to controlling interest of JOYY Inc. as a percentage of net revenues.

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

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


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

 

 

December
 31,
2019

 

September
3 0 ,
2020

 

September
3 0 ,
2020

 

 

RMB

 

RMB

 

US$

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

2,780,345

 

12,466,359

 

1,836,096

Restricted cash and cash equivalents

 

3,500

 

3,500

 

515

Short-term deposits

 

10,027,440

 

8,190,367

 

1,206,311

Restricted short-term deposits

 

653,034

 

504,312

 

74,277

Short-term investments

 

3,402,658

 

3,305,128

 

486,793

Accounts receivable, net

 

675,196

 

1,049,931

 

154,638

Amounts due from related parties

 

1,709

 

2,279

 

336

Financing receivables, net

 

105,344

 

1,469

 

216

Prepayments and other current assets

 

569,730

 

617,810

 

90,994

Assets held for sale

 

10,581,013

 

-

 

-

 

 

 

 

 

 

 

Total current assets

 

28,799,969

 

26,141,155

 

3,850,176

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

Deferred tax assets

 

81,819

 

77,429

 

11,404

Investments (1)

 

1,983,483

 

8,375,126

 

1,233,523

Property and equipment, net

 

2,159,674

 

2,511,631

 

369,923

Land use rights, net

 

1,736,544

 

1,700,472

 

250,452

Intangible assets, net

 

3,134,778

 

2,544,297

 

374,734

Right-of-use assets, net

 

172,783

 

143,381

 

21,118

Goodwill

 

12,947,192

 

12,639,182

 

1,861,550

Financing receivables, net

 

129,380

 

128,627

 

18,945

Other non-current assets

 

289,131

 

157,274

 

23,164

Assets held for sale

 

774,730

 

-

 

-

 

 

 

 

 

 

 

Total non-current assets

 

23,409,514

 

28,277,419

 

4,164,813

 

 

 

 

 

 

 

Total assets

 

52,209,483

 

54,418,574

 

8,014,989

 

 

 

 

 

 

 

Liabilities, mezzanine equity and shareholders equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

120,826

 

108,245

 

15,943

Deferred revenue

 

548,303

 

579,704

 

85,381

Advances from customers

 

99,130

 

69,314

 

10,209

Income taxes payable

 

425,572

 

452,729

 

66,680

Accrued liabilities and other current liabilities

 

3,150,303

 

3,610,862

 

531,821

Amounts due to related parties

 

205,921

 

30,672

 

4,517

Lease liabilities due within one year

 

83,686

 

94,581

 

13,930

Short-term loans

 

557,203

 

1,004,125

 

147,892

Liabilities held for sale

 

2,446,677

 

-

 

-

 

 

 

 

 

 

 

Total current liabilities

 

7,637,621

 

5,950,232

 

876,373

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

Convertible bonds

 

5,008,571

 

5,197,691

 

765,537

Lease liabilities

 

92,669

 

53,849

 

7,931

Deferred revenue

 

75,628

 

68,238

 

10,050

Deferred tax liabilities

 

264,639

 

302,708

 

44,584

Other non-current liabilities

 

11,495

 

-

 

-

Liabilities held for sale

 

235,023

 

-

 

-

 

 

 

 

 

 

 

Total non-current liabilities

 

5,688,025

 

5,622,486

 

828,102

 

 

 

 

 

 

 

Total liabilities

 

13,325,646

 

11,572,718

 

1,704,475


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

 

 

December
31,
2019

 

 

September
 3 0 ,
2020

 

 

September
 3 0 ,
2020

 

 

 

RMB

 

 

RMB

 

 

US$

 

 

 

 

 

 

 

 

Mezzanine equity

 

466,071

 

 

484,638

 

 

71,379

 

 

 

 

 

 

 

 

 

Shareholders equity

 

 

 

 

 

 

 

Class A common shares (US$0.00001 par value; 10,000,000,000 and 10,000,000,000 shares authorized, 1,301,845,404 shares issued and 1,293,162,504 shares outstanding as of December 31, 2019; 1,312,572,924 shares issued and 1,293,160,576 shares outstanding as of September 30, 2020, respectively)

 

80

 

 

80

 

 

12

 

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, 2019 and September 30, 2020, respectively)

 

24

 

 

24

 

 

4

 

Treasury Shares (US$0.00001 par value; 8,682,900 and 19,412,348 shares held as of December 31, 2019 and September 30, 2020, respectively)

 

(168,072

)

 

(320,858

)

 

(47,257

)

Additional paid-in capital

 

21,921,562

 

 

22,601,191

 

 

3,328,796

 

Statutory reserves

 

149,961

 

 

85,282

 

 

12,561

 

Retained earnings

 

10,272,122

 

 

19,834,864

 

 

2,921,360

 

Accumulated other comprehensive income

 

890,209

 

 

150,707

 

 

22,197

 

 

 

 

 

 

 

 

 

Total JOYY Inc.s shareholders equity

 

33,065,886

 

 

42,351,290

 

 

6,237,673

 

 

 

 

 

 

 

 

 

Non-controlling interests

 

5,351,880

 

 

9,928

 

 

1,462

 

 

 

 

 

 

 

 

 

Total shareholders equity (2)

 

38,417,766

 

 

42,361,218

 

 

6,239,135

 

 

 

 

 

 

 

 

 

Total liabilities, mezzanine equity and  shareholders equity

 

52,209,483

 

 

54,418,574

 

 

8,014,989

 

 

 

 

 

 

 

 

 


(1)

Increase in the amounts of investments was mainly attributable to the Group's investment in Huya. On April 3rd, 2020, Huya ceased to be a subsidiary of the Company and the Company recognized its investment in Huya as an equity method investment.

 

 

(2)

On January 1, 2020, the Company adopted ASC326, Financial Instruments-Credit Losses using modified-retrospective transition approach. Following the adoption of this guidance, a cumulative-effect adjustment to shareholders equity, amounting to RMB12.1 million, was recognized as of January 1, 2020.


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

 

 

Three Months Ended

 

Nine Months Ended

 

 

September
30 ,
201 9

 

 

June
3 0 ,
2020

 

 

September
 30 ,
2020

 

 

September
30 ,
2020

 

 

September
30,
2019

 

 

September
30,
2020

 

 

September
30,
2020

 

 

 

RMB

 

 

RMB

 

 

RMB

 

 

US$

 

 

RMB

 

 

RMB

 

 

US$

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

 

 

 

 

 

 

 

 

Live streaming (1)

 

4,317,840

 

 

5,607,748

 

 

6,049,090

 

 

890,935

 

 

11,251,654

 

 

16,138,599

 

 

2,376,959

 

Others

 

299,425

 

 

232,344

 

 

237,285

 

 

34,948

 

 

799,503

 

 

725,365

 

 

106,835

 

 

 

 

 

 

 

 

 

 

 

Total net revenues

 

4,617,265

 

 

5,840,092

 

 

6,286,375

 

 

925,883

 

 

12,051,157

 

 

16,863,964

 

 

2,483,794

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues (2)

 

(2,854,546

)

 

(3,769,095

)

 

(3,961,719

)

 

(583,498

)

 

(7,155,814

)

 

(10,739,492

)

 

(1,581,756

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

1,762,719

 

 

2,070,997

 

 

2,324,656

 

 

342,385

 

 

4,895,343

 

 

6,124,472

 

 

902,038

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses (2)

 

 

 

 

 

 

 

 

 

Research and development expenses

 

(538,089

)

 

(693,458

)

 

(636,015

)

 

(93,675

)

 

(1,402,791

)

 

(1,895,637

)

 

(279,197

)

Sales and marketing expenses

 

(957,261

)

 

(909,825

)

 

(1,083,038

)

 

(159,514

)

 

(2,393,235

)

 

(2,925,127

)

 

(430,825

)

General and administrative expenses

 

(312,516

)

 

(412,714

)

 

(280,831

)

 

(41,362

)

 

(764,774

)

 

(891,681

)

 

(131,330

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

(1,807,866

)

 

(2,015,997

)

 

(1,999,884

)

 

(294,551

)

 

(4,560,800

)

 

(5,712,445

)

 

(841,352

)

 

 

 

 

 

 

 

 

 

 

Other income

 

141,570

 

 

40,243

 

 

141,801

 

 

20,885

 

 

211,469

 

 

202,854

 

 

29,877

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

96,423

 

 

95,243

 

 

466,573

 

 

68,719

 

 

546,012

 

 

614,881

 

 

90,563

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expenses

 

(123,456

)

 

(131,656

)

 

(135,193

)

 

(19,912

)

 

(141,943

)

 

(391,364

)

 

(57,642

)

Interest income and investment income

 

116,598

 

 

162,519

 

 

152,429

 

 

22,450

 

 

291,900

 

 

429,341

 

 

63,235

 

Foreign currency exchange gains (losses), net

 

15,748

 

 

3,246

 

 

(55,002

)

 

(8,101

)

 

30,469

 

 

(63,735

)

 

(9,387

)

(Loss) gain on disposal and deemed disposal of investments (3)

 

-

 

 

(13,444

)

 

2,040,359

 

 

300,512

 

 

-

 

 

2,135,818

 

 

314,572

 

(Loss) gain on fair value change of investments

 

(11,492

)

 

708,633

 

 

(39,792

)

 

(5,861

)

 

2,652,642

 

 

1,002,635

 

 

147,672

 

Fair value change on derivatives

 

(1,753

)

 

2,174

 

 

(29,664

)

 

(4,369

)

 

(1,753

)

 

(17,144

)

 

(2,525

)

Other non-operating expenses

 

-

 

 

(4,257

)

 

(1,000

)

 

(147

)

 

-

 

 

(17,257

)

 

(2,542

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax expenses

 

92,068

 

 

822,458

 

 

2,398,710

 

 

353,291

 

 

3,377,327

 

 

3,693,175

 

 

543,946

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expenses

 

(58,692

)

 

(187,246

)

 

(127,215

)

 

(18,737

)

 

(285,959

)

 

(458,917

)

 

(67,591

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before share of income in equity method investments, net of income taxes

 

33,376

 

 

635,212

 

 

2,271,495

 

 

334,554

 

 

3,091,368

 

 

3,234,258

 

 

476,355

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share of income (loss) in equity method investments, net of income taxes

 

21,189

 

 

(23,544

)

 

26,550

 

 

3,910

 

 

35,337

 

 

(9,085

)

 

(1,338

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income from continuing operations

 

54,565

 

 

611,668

 

 

2,298,045

 

 

338,464

 

 

3,126,705

 

 

3,225,173

 

 

475,017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income from discontinued operations (4)

 

123,242

 

 

6,343,255

 

 

-

 

 

-

 

 

308,503

 

 

6,514,481

 

 

959,480

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

177,807

 

 

6,954,923

 

 

2,298,045

 

 

338,464

 

 

3,435,208

 

 

9,739,654

 

 

1,434,497

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Net income (loss) attributable to the non-controlling interest shareholders and the mezzanine equity classified as non-controlling interest shareholders

 

67,879

 

 

(43,062

)

 

(5,148

)

 

(758

)

 

162,770

 

 

51,811

 

 

7,631

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to controlling interest of JOYY Inc.

 

109,928

 

 

6,997,985

 

 

2,303,193

 

 

339,222

 

 

3,272,438

 

 

9,687,843

 

 

1,426,866

 

 

 

 

 

 

 

 

 

 

 

Including:

 

 

 

 

 

 

 

 

 

Net income from continuing operations attributable to controlling interest of JOYY Inc.

 

61,757

 

 

619,426

 

 

2,303,193

 

 

339,222

 

 

3,148,022

 

 

3,242,757

 

 

477,606

 

Net income from discontinued operations attributable to controlling interest of JOYY Inc.

 

48,171

 

 

6,378,559

 

 

-

 

 

-

 

 

124,416

 

 

6,445,086

 

 

949,260

 

 

 

 

 

 

 

 

 

 

 

Less: Accretion of subsidiaries redeemable convertible preferred shares to redemption value

 

9,715

 

 

9,865

 

 

9,642

 

 

1,420

 

 

28,556

 

 

29,212

 

 

4,302

 

Cumulative dividend on subsidiarys Series A Preferred Shares

 

6,982

 

 

7,090

 

 

6,930

 

 

1,021

 

 

20,523

 

 

20,995

 

 

3,092

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders of JOYY Inc.

 

93,231

 

 

6,981,030

 

 

2,286,621

 

 

336,781

 

 

3,223,359

 

 

9,637,636

 

 

1,419,472

 

 

 

 

 

 

 

 

 

 

 

Including:

 

 

 

 

 

 

 

 

 

Net income from continuing operations attributable to common shareholders of JOYY Inc.

 

45,060

 

 

602,471

 

 

2,286,621

 

 

336,781

 

 

3,098,943

 

 

3,192,550

 

 

470,212

 

Net income from discontinued operations attributable to common shareholders of JOYY Inc.

 

48,171

 

 

6,378,559

 

 

-

 

 

-

 

 

124,416

 

 

6,445,086

 

 

949,260

 


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

 

 

Three Months Ended

 

Nine Months Ended

 

 

September
 30,
2019

 

June
 30,
2020

 

September
30,
2020

 

September
30,
2020

 

September
 30,
2019

 

September
 30,
2020

 

September
30,
2020

 

 

RMB

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per ADS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

1.16

 

87.69

 

28.49

 

4.20

 

42.24

 

120.55

 

17.76

Continuing operations

 

0.56

 

7.57

 

28.49

 

4.20

 

40.61

 

39.93

 

5.88

Discontinued operations

 

0.60

 

80.12

 

-

 

-

 

1.63

 

80.62

 

11.88

Diluted

 

1.11

 

85.68

 

25.92

 

3.82

 

41.20

 

108.54

 

15.99

Continuing operations

 

0.56

 

7.39

 

25.92

 

3.82

 

39.79

 

38.67

 

5.70

Discontinued operations

 

0.55

 

78.29

 

-

 

-

 

1.41

 

69.87

 

10.29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of ADS used in calculating net income per ADS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

80,033,607

 

79,609,517

 

80,262,892

 

80,262,892

 

76,310,648

 

79,949,342

 

79,949,342

Diluted

 

80,973,447

 

81,477,788

 

93,076,688

 

93,076,688

 

81,040,767

 

92,186,612

 

92,186,612


(1)     

Live streaming revenues by geographical areas were as follows:

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September
 30,
201 9

 

June
 30,
2020

 

September
 30 ,
2020

 

September
30,
2020

 

September
 30,
2019

 

September
30,
2020

 

September
30,
2020

 

 

RMB

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PRC

 

3,138,668

 

2,965,737

 

3,110,451

 

458,120

 

8,886,950

 

8,895,787

 

1,310,208

Non-PRC

 

1,179,172

 

2,642,011

 

2,938,639

 

432,815

 

2,364,704

 

7,242,812

 

1,066,751


(2)

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

   

 

 

Three Months Ended

 

Nine Months Ended

 

 

September
 30 ,
201 9

 

June
 30,
2020

 

September
 30 ,
2020

 

September
30 ,
2020

 

September
 30
2019

 

September
 30,
2020

 

September
 30,
2020

 

 

RMB

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

12,111

 

9,637

 

13,676

 

2,014

 

33,734

 

34,962

 

5,149

Research and development expenses

 

105,002

 

92,465

 

86,504

 

12,741

 

309,883

 

266,969

 

39,320

Sales and marketing expenses

 

1,175

 

2,024

 

2,744

 

404

 

4,792

 

6,683

 

984

General and administrative expenses

 

46,223

 

91,019

 

85,254

 

12,557

 

145,718

 

221,475

 

32,620


(3)

(Loss) gain on disposal and deemed disposal of investments mainly represented the gain from our further disposal of our equity interest in Huya in the third quarter of 2020.

 

 

(4)

Gain from the disposal and deconsolidation amounted to around RMB6.4 billion was reported as part of the net income from discontinued operations in the second quarter of 2020.


JOYY INC.

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

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30 ,
201 9

 

June
3 0 ,
2020

 

September 30 ,
2020

 

September
30 ,
2020

 

September 30,
2019

 

September 30,
2020

 

September 30,
2020

 

 

RMB

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

96,423

 

95,243

 

466,573

 

68,719

 

546,012

 

614,881

 

90,563

Share-based compensation expenses

 

164,511

 

195,145

 

188,178

 

27,716

 

494,127

 

530,089

 

78,073

Impairment of goodwill and investments

 

10,000

 

43,861

 

-

 

-

 

10,000

 

43,861

 

6,460

Amortization of intangible assets from business acquisitions

 

193,487

 

175,043

 

171,085

 

25,198

 

444,227

 

532,317

 

78,402

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP operating income

 

464,421

 

509,292

 

825,836

 

121,633

 

1,494,366

 

1,721,148

 

253,498


Net income from continuing operations

 

54,565

 

 

611,668

 

 

2,298,045

 

 

338,464

 

 

3,126,705

 

 

3,225,173

 

475,017

 

Share-based compensation expenses

 

164,511

 

 

195,145

 

 

188,178

 

 

27,716

 

 

494,127

 

 

530,089

 

78,073

 

Impairment of goodwill and investments

 

10,000

 

 

43,861

 

 

   -

 

 

   -

 

 

10,000

 

 

43,861

 

6,460

 

Amortization of intangible assets from business acquisitions

 

193,487

 

 

175,043

 

 

171,085

 

 

25,198

 

 

444,227

 

 

532,317

 

78,402

 

(Loss) gain on disposal and deemed disposal of investments

 

-

 

 

13,444

 

 

(2,040,359

)

 

(300,512

)

 

-

 

 

(2,135,818

)

(314,572

)

(Loss) gain on fair value change of investments (1)

 

11,492

 

 

(708,633

)

 

39,792

 

 

5,861

 

 

(2,652,642

)

 

(1,002,635

)

(147,672

)

Reconciling items on the share of equity method investments (1)

 

(9,461

)

 

8,805

 

 

25,879

 

 

3,812

 

 

(13,997

)

 

37,117

 

5,467

 

Fair value change on derivatives

 

1,753

 

 

(2,174

)

 

29,664

 

 

4,369

 

 

1,753

 

 

17,144

 

2,525

 

Interest expenses related to the convertible bonds amortization to face value

 

100,885

 

 

106,908

 

 

107,728

 

 

15,867

 

 

105,172

 

 

316,878

 

46,671

 

Income tax effects on non-GAAP adjustments

 

(40,166

)

 

42,452

 

 

(15,241

)

 

(2,245

)

 

(89,053

)

 

47,766

 

7,035

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income from continuing operations

 

487,066

 

 

486,519

 

 

804,771

 

 

118,530

 

 

1,426,292

 

 

1,611,892

 

237,406

 


Net income from continuing operations attributable to common shareholders of JOYY Inc.

 

45,060

 

 

602,471

 

 

2,286,621

 

 

336,781

 

 

3,098,943

 

 

3,192,550

 

 

470,212

 

Share-based compensation expenses

 

164,511

 

 

195,145

 

 

188,178

 

 

27,716

 

 

494,127

 

 

530,089

 

 

78,073

 

Impairment of goodwill and investments

 

10,000

 

 

43,861

 

 

-

 

 

-

 

 

10,000

 

 

43,861

 

 

6,460

 

Amortization of intangible assets from business acquisitions

 

193,487

 

 

175,043

 

 

171,085

 

 

25,198

 

 

444,227

 

 

532,317

 

 

78,402

 

(Loss) gain on disposal and deemed disposal of investments

 

-

 

 

13,444

 

(2,040,359) (300,512) - (2,135,818) (314,572)(Loss) gain on fair value change of investments 11,492 (708,633) 39,792 5,861 (2,652,642) (1,002,635) (147,672)Reconciling items on the share of equity method investments (9,461) 8,805 25,879 3,812 (13,997) 37,117 5,467 Fair value change on derivatives 1,753 (2,174) 29,664 4,369 1,753 17,144 2,525 Interest expenses related to the convertible bonds’ amortization to face value 100,885 106,908 107,728 15,867 105,172 316,878 46,671 Accretion, cumulative dividend and deemed dividend to subsidiaries’ preferred shareholders 16,697 16,955 16,572 2,441 49,079 50,207 7,394 Income tax effects on non-GAAP adjustments (40,166) 42,452 (15,241) (2,245) (89,053) 47,766 7,035 Non-GAAP adjustments for net income (loss) attributable to the non-controlling interest shareholders (847) (688) (569) (84) (1,666) 19 3 Non-GAAP net income from continuing operations attributable to controlling interest and common shareholders of JOYY Inc. 493,411 493,589 809,350 119,204 1,445,943 1,629,495 239,998




Non-GAAP net income from continuing operations per ADS

—Basic

6.17

6.20

10.08

1.49

18.95

20.38

3.00

—Diluted

5.60

5.57

8.89

1.31

18.09

18.28

2.69

Weighted average number of ADS used in calculating Non-GAAP net income from continuing operations per ADS

—Basic

80,033,607

79,609,517

80,262,892

80,262,892

76,310,648

79,949,342

79,949,342

—Diluted

91,400,547

91,904,888

93,076,688

93,076,688

81,040,767

92,186,612

92,186,612

(1)

(Loss) gain on fair value change of equity investees’ investments was reclassified to the reconciling items on the equity method investments from gain on fair value change of investments


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

Three Months Ended

September 30, 2020

YY

Bigo

Elimination(1)

Total

Total

RMB

RMB

RMB

RMB

US$

Net revenues

Live streaming

2,770,876

3,278,214

-

6,049,090

890,935

Others

120,661

116,624

-

237,285

34,948

Total net revenues

2,891,537

3,394,838

-

6,286,375

925,883

Cost of revenues(2)

(1,624,172

)

(2,337,547

)

-

(3,961,719

)

(583,498

)

Gross profit

1,267,365

1,057,291

-

2,324,656

342,385

Operating expenses(2)

Research and development expenses

(303,147

)

(332,868

)

-

(636,015

)

(93,675

)

Sales and marketing expenses

(230,230

)

(852,808

)

-

(1,083,038

)

(159,514

)

General and administrative expenses

(90,752

)

(190,079

)

-

(280,831

)

(41,362

)

Total operating expenses

(624,129

)

(1,375,755

)

-

(1,999,884

)

(294,551

)

Other income

135,286

6,515

-

141,801

20,885

Operating income (loss)

778,522

(311,949

)

-

466,573

68,719

Other non-operating expenses

(1,000

)

-

-

(1,000

)

(147

)

Interest expenses

(127,167

)

(12,516

)

4,490

(135,193

)

(19,912

)

Interest income and investment income

156,780

139

(4,490

)

152,429

22,450

Foreign currency exchange gains (loss), net

1,014

(56,016

)

-

(55,002

)

(8,101

)

Fair value change on derivatives

(29,664

)

-

-

(29,664

)

(4,369

)

Gain on disposal and deemed disposal of investments

2,040,359

-

-

2,040,359

300,512

Loss on fair value change of investments

(39,792

)

-

-

(39,792

)

(5,861

)

Income (loss) before income tax expenses

2,779,052

(380,342

)

-

2,398,710

353,291

Income tax expenses

(124,579

)

(2,636

)

-

(127,215

)

(18,737

)

Income (loss) before share of loss in equity method investments, net of income taxes

2,654,473

(382,978

)

-

2,271,495

334,554

Share of gain in equity method investments, net of income taxes

26,550

-

-

26,550

3,910

Net income (loss) from continuing operations

2,681,023

(382,978

)

-

2,298,045

338,464


(1)

The elimination mainly consists of interest income and interest expenses generated from the loan between YY and Bigo segments.

(2)

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


Three Months Ended

September 30, 2020

YY

Bigo

Total

Total

RMB

RMB

RMB

US$

Cost of revenues

9,738

3,938

13,676

2,014

Research and development expenses

36,643

49,861

86,504

12,741

Sales and marketing expenses

1,772

972

2,744

404

General and administrative expenses

(7,860

)

93,114

85,254

12,557


JOYY INC.
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

September 30, 2020

YY

Bigo

Total

Total

RMB

RMB

RMB

US$

Operating income (loss)

778,522

(311,949

)

466,573

68,719

Share-based compensation expenses

40,293

147,885

188,178

27,716

Amortization of intangible assets from business acquisitions

-

171,085

171,085

25,198

Non-GAAP operating income

818,815

7,021

825,836

121,633

Net income (loss) from continuing operations

2,681,023

(382,978

)

2,298,045

338,464

Share-based compensation expenses

40,293

147,885

188,178

27,716

Amortization of intangible assets from business acquisitions

-

171,085

171,085

25,198

Gain on disposal and deemed disposal of investments

(2,040,359

)

-

(2,040,359

)

(300,512

)

Loss on fair value change of investments

39,792

-

39,792

5,861

Reconciling items on the share of equity method investments

25,879

-

25,879

3,812

Fair value change on derivatives

29,664

-

29,664

4,369

Interest expenses related to the convertible bonds’ amortization to face value

107,728

-

107,728

15,867

Income tax effects on non-GAAP adjustments

(7,248

)

(7,993

)

(15,241

)

(2,245

)

Non-GAAP net income (loss) from continuing operations

876,772

(72,001

)

804,771

118,530


JOYY INC.

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

Three Months Ended

June 30, 2020

YY

Bigo

Elimination(1)

Total

Total

RMB

RMB

RMB

RMB

US$

Net revenues

Live streaming

2,661,788

2,945,960

-

5,607,748

793,725

Others

115,618

116,726

-

232,344

32,886

Total net revenues

2,777,406

3,062,686

-

5,840,092

826,611

Cost of revenues(2)

(1,583,125

)

(2,185,970

)

-

(3,769,095

)

(533,481

)

Gross profit

1,194,281

876,716

-

2,070,997

293,130

Operating expenses(2)

Research and development expenses

(292,459

)

(400,999

)

-

(693,458

)

(98,153

)

Sales and marketing expenses

(224,955

)

(684,870

)

-

(909,825

)

(128,777

)

General and administrative expenses

(232,427

)

(180,287

)

-

(412,714

)

(58,416

)

Total operating expenses

(749,841

)

(1,266,156

)

-

(2,015,997

)

(285,346

)

Other income

31,679

8,564

-

40,243

5,696

Operating income (loss)

476,119

(380,876

)

-

95,243

13,480

Other non-operating expenses

-

(4,257

)

-

(4,257

)

(603

)

Interest expenses

(126,282

)

(14,231

)

8,857

(131,656

)

(18,635

)

Interest income and investment income

171,299

77

(8,857

)

162,519

23,003

Foreign currency exchange gains, net

2,839

407

-

3,246

459

Fair value change on derivatives

2,174

-

-

2,174

308

Loss on disposal and deemed disposal of investments

(13,444

)

-

-

(13,444

)

(1,903

)

Gain on fair value change of investments

708,633

-

-

708,633

100,300

Income (loss) before income tax expenses

1,221,338

(398,880

)

-

822,458

116,409

Income tax (expenses) benefits

(203,468

)

16,222

-

(187,246

)

(26,503

)

Income (loss) before share of loss in equity method investments, net of income taxes

1,017,870

(382,658

)

-

635,212

89,906

Share of loss in equity method investments, net of income taxes

(23,544

)

-

-

(23,544

)

(3,332

)

Net income (loss) from continuing operations

994,326

(382,658

)

-

611,668

86,574


(1)

The elimination mainly consists of interest income and interest expenses generated from the loan between YY and Bigo segments.

(2)

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


Three Months Ended

June 30, 2020

YY

Bigo

Total

Total

RMB

RMB

RMB

US$

Cost of revenues

1,103

8,534

9,637

1,364

Research and development expenses

26,528

65,937

92,465

13,088

Sales and marketing expenses

816

1,208

2,024

286

General and administrative expenses

53,199

37,820

91,019

12,883

JOYY INC.
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, 2020

YY

Bigo

Total

Total

RMB

RMB

RMB

US$

Operating income (loss)

476,119

(380,876

)

95,243

13,480

Share-based compensation expenses

81,646

113,499

195,145

27,621

Impairment of goodwill and investments

43,861

-

43,861

6,208

Amortization of intangible assets from business acquisitions

-

175,043

175,043

24,776

Non-GAAP operating income (loss)

601,626

(92,334

)

509,292

72,085

Net income (loss) from continuing operations

994,326

(382,658

)

611,668

86,574

Share-based compensation expenses

81,646

113,499

195,145

27,621

Impairment of goodwill and investments

43,861

-

43,861

6,208

Amortization of intangible assets from business acquisitions

-

175,043

175,043

24,776

Loss on disposal and deemed disposal of investments

13,444

-

13,444

1,903

Gain on fair value change of investments

(708,633

)

-

(708,633

)

(100,300

)

Reconciling items on the share of equity method investments

8,805

-

8,805

1,246

Fair value change on derivatives

(2,174

)

-

(2,174

)

(308

)

Interest expenses related to the convertible bonds’ amortization to face value

106,908

-

106,908

15,132

Income tax effects on non-GAAP adjustments

65,180

(22,728

)

42,452

6,009

Non-GAAP net income (loss) from continuing operations

603,363

(116,844

)

486,519

68,861

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

Three Months Ended

September 30, 2019

YY

Bigo

Elimination(1)

Total

Total

RMB

RMB

RMB

RMB

US$

Net revenues

Live streaming

2,899,044

1,418,796

-

4,317,840

604,088

Others

181,006

118,419

-

299,425

41,891

Total net revenues

3,080,050

1,537,215

-

4,617,265

645,979

Cost of revenues(2)

(1,729,389

)

(1,125,157

)

-

(2,854,546

)

(399,366

)

Gross profit

1,350,661

412,058

-

1,762,719

246,613

Operating expenses(2)

Research and development expenses

(249,620

)

(288,469

)

-

(538,089

)

(75,281

)

Sales and marketing expenses

(340,619

)

(616,642

)

-

(957,261

)

(133,926

)

General and administrative expenses

(225,281

)

(87,235

)

-

(312,516

)

(43,723

)

Total operating expenses

(815,520

)

(992,346

)

-

(1,807,866

)

(252,930

)

Other income

136,535

5,035

-

141,570

19,806

Operating income (loss)

671,676

(575,253

)

-

96,423

13,489

Interest expenses

(123,456

)

(11,078

)

11,078

(123,456

)

(17,272

)

Interest income and investment income

127,068

608

(11,078

)

116,598

16,313

Foreign currency exchange (losses) gains, net

2,798

12,950

-

15,748

2,203

Fair value change on derivatives

(1,753

)

-

-

(1,753

)

(245

)

Loss on fair value change of investments

(11,492

)

-

-

(11,492

)

(1,608

)

Income (loss) before income tax expenses

664,841

(572,773

)

-

92,068

12,880

Income tax (expenses) benefits

(146,835

)

88,143

-

(58,692

)

(8,211

)

Income (loss) before share of income in equity method investments, net of income taxes

518,006

(484,630

)

-

33,376

4,669

Share of income in equity method investments, net of income taxes

21,189

-

-

21,189

2,964

Net income (loss) from continuing operations

539,195

(484,630

)

-

54,565

7,633


(1)

The elimination mainly consists of interest income and interest expenses generated from the loan between YY and Bigo segments.

(2)

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


Three Months Ended

September 30, 2019

YY

Bigo

Total

Total

RMB

RMB

RMB

US$

Cost of revenues

5,043

7,068

12,111

1,694

Research and development expenses

26,848

78,154

105,002

14,690

Sales and marketing expenses

419

756

1,175

164

General and administrative expenses

41,265

4,958

46,223

6,467


JOYY INC.
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

September 30, 2019

YY

Bigo

Total

Total

RMB

RMB

RMB

US$

Operating income (loss)

671,676

(575,253

)

96,423

13,489

Share-based compensation expenses

73,575

90,936

164,511

23,015

Impairment of goodwill and investments

10,000

-

10,000

1,399

Amortization of intangible assets from business acquisitions

-

193,487

193,487

27,070

Non-GAAP operating income (loss)

755,251

(290,830

)

464,421

64,973

Net income (loss) from continuing operations

539,195

(484,630

)

54,565

7,633

Share-based compensation expenses

73,575

90,936

164,511

23,015

Impairment of goodwill and investments

10,000

-

10,000

1,399

Amortization of intangible assets from business acquisitions

-

193,487

193,487

27,070

Gain on fair value change of investments

11,492

-

11,492