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Form 6-K JOYY Inc. For: Mar 26

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March 26, 2021 6:08 AM EDT

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of March 2021

--------------

 

Commission File Number: 001-35729

 

----------

 

JOYY Inc.

 

Building B-1 North Block of Wanda Plaza

No. 79 Wanbo Er Road, Nancun Town

Panyu District, Guangzhou 511442

People’s Republic of China
(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x   Form 40-F ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

 

 

 

 

 

EXHIBIT INDEX

 

Exhibit No. Description
   
Exhibit 99.1 Press Release

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

JOYY INC.

   
  By:   /s/ David Xueling Li
    Name: David Xueling Li
    Title: Chairman and Chief Executive Officer

 

 

Date: March 26, 2021

 

 

 

Exhibit 99.1

 

JOYY Reports Fourth Quarter and Full Year 2020 Unaudited Financial Results

  

Guangzhou, China, March 26, 2021 - 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 fourth quarter and full year of 2020.

 

 

Fourth Quarter 2020 Financial Highlights1

·Net revenues increased by 77.5% to RMB3,783.5 million (US$579.9 million) from RMB2,131.9 million in the corresponding period of 2019.
·Net loss from continuing operations attributable to controlling interest of JOYY2 was RMB791.9 million (US$121.4 million), compared to RMB816.6 million in the corresponding period of 2019, primarily due to the decrease in the operation loss of Bigo Inc (“BIGO”).
·Non-GAAP net loss from continuing operations attributable to controlling interest and common shareholders of JOYY3 decreased by 67.2% to RMB149.4 million (US$22.9 million) from RMB455.7 million in the corresponding period of 2019, primarily due to the decrease in the operation loss of BIGO.

 

 

1 Starting from the second quarter of 2020, the Company deconsolidated HUYA Inc. (NYSE: HUYA) (“Huya”) and Huya’s historical financial results were reflected in the Company’s 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 accounted for its investment in Huya as an equity method investment and applied the equity method accounting one quarter in arrears. Share of income or loss from the investment in Huya was included in net income or loss from continuing operations.

 

On November 16, 2020, the Company entered into definitive agreements with Baidu, Inc. (Nasdaq: BIDU) (“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 near future. As a result, the historical financial results of YY Live are reflected in the Company’s consolidated financial statements as discontinued operations accordingly. The financial information and non-GAAP financial information disclosed in this press release is presented on a continuing operations basis, unless otherwise specifically stated.

 

2 Net income from continuing operations attributable to controlling interest of JOYY, 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 is a non-GAAP financial measure, which is defined as net income 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 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 RMB642.5 million (US$98.5 million) and RMB360.9 million in the fourth quarter of 2020 and 2019, respectively. Please refer to the section titled “Reconciliation of GAAP and Non-GAAP Results” for more details. 

 1 

 

 

Full Year 2020 Highlights

·Net revenues increased by 112.1% to RMB13,230.9 million (US$2,027.7 million) from RMB6,239.3 million in 2019.
·Net loss from continuing operations attributable to controlling interest of JOYY was RMB105.1 million (US$16.1 million), compared to RMB516.7 million in 2019.
·Non-GAAP net loss from continuing operations attributable to controlling interest and common shareholders of JOYY was RMB1,142.3 million (US$175.1 million), compared to RMB1,963.2 million in 2019.

  

Fourth Quarter 2020 Operational Highlights

·Global average mobile MAUs4 decreased by 7.1% to 393.7 million from 423.6 million in the corresponding period of 2019, primarily due to the impact of the Indian government’s measures to block Chinese-owned apps in its local market, which included Bigo Live, Likee and Hago, partially offset by increases in MAUs outside India.
·Average mobile MAUs of Likee increased by 4.2% to 120.1 million from 115.3 million in the corresponding period of 2019.
·Average mobile MAUs of Bigo Live increased by 24.5% to 28.7 million from 23.1 million in the corresponding period of 2019.
·Average mobile MAUs of Hago decreased by 49.9% to 16.5 million from 33.0 million in the corresponding period of 2019 primarily due to the impact of the Indian government’s measures to block Chinese-owned apps in its local market.
·Total number of paying users of YY Live decreased by 1.1% to 4.25 million from 4.30 million in the corresponding period of 2019, mainly due to the impacts of COVID-19 adversely affecting the sentiment of some users on the live streaming platforms of YY Live.

 

Mr. David Xueling Li, Chairman and Chief Executive Officer of JOYY, commented, “In the fourth quarter, we remained focused on executing our dual-engine growth strategy. Through a combination of globalized market reach and localized operations management, we continued to expand our international footprint and enhance our monetization capabilities. As a result, several of our platforms achieved solid revenue growth in the quarter, with revenues from Bigo Live increased by 100.4%, Likee by 407.5%, and Hago by 69.4% year over year. In terms of geographic coverage, we achieved promising results in both developed markets and the Middle East. For the whole year of 2020, our overseas business segment, BIGO, generated larger revenue than YY Live. Such progress illustrates not only our ability to capture the overseas market potential, but also our solid execution of growth strategies over the past several years. Through optimization of our products’ social features and improvement of content production tools, we continued to improve user experience and user engagement levels in the quarter. In 2021, we will continue to focus on the development of our platform’s content and social community via localized operations, further reducing content production barriers, and empowering content creators in all aspects of their activities. Such efforts will contribute to the abundant flow of high-quality content, which ultimately ensures the long-term sustainable growth of our social entertainment ecosystem.”

 

 

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.

 2 

 

 

Mr. Bing Jin, Chief Financial Officer of JOYY, further commented, “During the fourth quarter of 2020, we grew our total revenues by 77.5% year over year to RMB3,783.5 million (US$579.9 million), with revenues from Bigo grew by 87.9% year over year to RMB3,389.8 million (US$519.5 million), mostly driven by an uptick in its live streaming revenues. Due to its improved product monetization capabilities, BIGO has achieved a positive non-GAAP operating margin for the second consecutive quarter. Going forward, we will continue to invest in our business development initiatives to further expand our global market reach, cultivate our highly engaged user community, and grow our high-quality content offerings. We will also actively explore flexible ways to return value to our shareholders and maximize shareholder value.”

 

Fourth Quarter 2020 Financial Results

 

NET REVENUES

Net revenues increased by 77.5% to RMB3,783.5 million (US$579.9 million) in the fourth quarter of 2020 from RMB2,131.9 million in the corresponding period of 2019, primarily driven by the growth of live streaming revenues from BIGO.

 

Live streaming revenues increased by 93.3% to RMB3,593.9 million (US$550.8 million) in the fourth quarter of 2020 from RMB1,859.1 million in the corresponding period of 2019, primarily attributable to continued user base growth and enhanced monetization capabilities of BIGO.

 

Other revenues decreased by 30.5% to RMB189.6 million (US$29.1 million) in the fourth quarter of 2020 from RMB272.8 million in the corresponding period of 2019, primarily due to the decrease in other revenues in all other segment.

 

COST OF REVENUES AND GROSS PROFIT

Cost of revenues increased by 76.6% to RMB2,674.7 million (US$409.9 million) in the fourth quarter of 2020 from RMB1,514.5 million in the corresponding period of 2019. Revenue-sharing fees and content costs increased to RMB1,693.1 million (US$259.5 million) in the fourth quarter of 2020 from RMB708.6 million in the corresponding period of 2019 as a result of the increase in live streaming revenues of the Company. Bandwidth costs decreased to RMB179.5 million (US$27.5 million) in the fourth quarter of 2020 from RMB221.8 million in the corresponding period of 2019, primarily related to the Company’s improved efficiency and the termination of bandwidth usage for users in India after its measures to block certain Chinese mobile apps in late June 2020, partially offset by the continued user base expansion outside India.

 

 3 

 

 

Gross profit increased by 79.6% to RMB1,108.9 million (US$169.9 million) in the fourth quarter of 2020 from RMB617.4 million in the corresponding period of 2019. Gross margin improved to 29.3% in the fourth quarter of 2020 from 29.0% in the corresponding period of 2019.

 

OPERATING INCOME

Operating expenses were RMB1,675.2 million (US$256.7 million) in the fourth quarter of 2020, compared to RMB1,576.2 million in the corresponding period of 2019. Among the operating expenses, sales and marketing expenses increased to RMB973.8 million (US$149.2 million) in the fourth quarter of 2020 from RMB782.0 million in the corresponding period of 2019, primarily due to the Company’s increased efforts in sales and marketing activities in overseas markets. General and administrative expenses were RMB236.3 million (US$36.2 million) in the fourth quarter of 2020, compared to RMB319.8 million in the corresponding period of 2019. The decrease in general and administrative expenses was mainly attributable to a decrease in provision for loss allowances of receivables.

 

Operating loss was RMB557.6 million (US$85.5 million) in the fourth quarter of 2020, compared to RMB863.3 million in the corresponding period of 2019. Operating loss margin was 14.7% in the fourth quarter of 2020, compared to 40.5% in the corresponding period of 2019, primarily due to the decrease in operation loss of BIGO.

 

Non-GAAP operating loss5 decreased by 60.7% to RMB220.7 million (US$33.8 million) in the fourth quarter of 2020 from RMB561.5 million in the corresponding period of 2019. Non-GAAP operating loss margin6 was 5.8% in the fourth quarter of 2020, compared to 26.3% in the corresponding period of 2019.

 

NET INCOME

Net loss from continuing operations attributable to controlling interest of JOYY was RMB791.9 million (US$121.4 million) in the fourth quarter of 2020, compared to RMB816.6 million in the corresponding period of 2019. Net loss margin was 20.9% in the fourth quarter of 2020, compared to 38.3% in the corresponding period of 2019, primarily due to the decrease in operation loss of BIGO.

 

 

 

5 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.

 

6 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.

 4 

 

 

Non-GAAP net loss from continuing operations attributable to controlling interest and common shareholders of JOYY was RMB149.4 million (US$22.9 million) in the fourth quarter of 2020, compared to RMB455.7 million in the corresponding period of 2019. Non-GAAP net loss margin7 was 3.9% in the fourth quarter of 2020, compared to 21.4% in the corresponding period of 2019.

 

NET INCOME PER ADS

Diluted net loss from continuing operations per ADS8 was RMB10.07 (US$1.54) in the fourth quarter of 2020, compared to RMB10.43 in the corresponding period of 2019.

 

Non-GAAP diluted net loss from continuing operations per ADS9 was RMB1.86 (US$0.29) in the fourth quarter of 2020, compared to RMB5.70 in the corresponding period of 2019.

 

BALANCE SHEET AND CASH

As of December 31, 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 RMB23,503.6 million (US$3,602.1 million).

 

SHARES OUTSTANDING

As of December 31, 2020, the Company had a total of 1,598.9 million common shares, or the equivalent of 79.9 million ADSs, outstanding.

 

Full Year 2020 Financial Results

 

Net revenues for the full year of 2020 increased by 112.1% to RMB13,230.9 million (US$2,027.7 million) from RMB6,239.3 million in 2019, primarily driven by a 135.0% year-over-year increase in live streaming revenues.

 

Net loss from continuing operations attributable to controlling interest of JOYY for the full year of 2020 decreased by 79.7% to RMB105.1 million (US$16.1 million) from RMB516.7 million in 2019. Net loss margin for the full year of 2020 was 0.8%, compared with 8.3% in 2019.

 

 

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

 

8 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 divided by weighted average number of diluted ADS.

 

9 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 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. 

 5 

 

 

Non-GAAP net loss from continuing operations attributable to controlling interest and common shareholders of JOYY for the full year of 2020 was RMB1,142.3 (US$175.1 million), compared to RMB1,963.2 million in 2019. Non-GAAP net loss margin for the full year of 2020 was 8.6%, compared to 31.5% in 2019.

 

Diluted net loss from continuing operations per ADS for the full year of 2020 decreased by 71.6% to RMB2.14 (US$0.33) from RMB7.54 in 2019. Non-GAAP diluted net loss from continuing operations per ADS was RMB14.28 (US$2.19) in 2020, compared to RMB25.42 in the corresponding period of 2019.

 

Business Outlook

For the first quarter of 2021, the Company expects net revenues to be between USD$590 million and USD$605 million, representing a year-over-year growth of 72.5% to 76.9%. This guidance excludes the revenue contribution from Huya and YY Live in the same period of last year. This forecast considers the potential impact of the COVID-19 pandemic and 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 of the COVID-19 on the global economy and users’ paying capabilities.

 

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. Aggregating such quarterly cash dividend under another adopted quarterly dividend policy with the quarterly cash dividend announced on November 16, 2020, the board of directors has accordingly declared a dividend of US$0.51 per ADS, or US$0.0255 per common share, for the fourth quarter of 2020, which is expected to be paid on April 30, 2021 to shareholders of record as of the close of business on April 19, 2021. The ex-dividend date will be April 20, 2021. 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

●Changes in Management Composition

 

Mr. Bing Jin is pursuing a new job opportunity and will leave his position as the Company’s Chief Financial Officer at the end of April 2021. Mr. Jin has served as the Company’s Chief Financial Officer since 2017 and in that role made significant contributions to the Company’s business, finance, and corporate governance. The Company greatly appreciates Mr. Jin’s many contributions and wishes him well. Although leaving the Chief Financial Officer position, Mr. Jin has agreed to continue on as an advisor to JOYY to assist with transition through April 2022. The Company has commenced a search process for a new Chief Financial Officer in which Mr. Jin will actively participate.

 

 6 

 

 

●Independent Review Conclusion

 

As noted in the Company’s February 8, 2021 Form 6-K, the Company’s audit committee previously commenced an independent review of allegations raised in a November 18, 2020 short seller report targeting JOYY. With the assistance of independent counsel, working with a team of experienced forensic auditors and data analytics experts, the audit committee previously concluded that the allegations raised and conclusions reached in the report about the YY Live business were not substantiated. The audit committee has now also concluded its work as to the handful of claims in the report unrelated to the YY Live business (concerning BIGO) and likewise found the short seller allegations unsubstantiated. The audit committee’s review has thus concluded, with no adverse findings.

 

●Share Repurchase Program

 

On May 2020, the Company announced that its board of directors has authorized to extend its existing share repurchase program, as previously approved by the board of directors in August 2019, for another 12-month period upon its original expiry date under which the Company may repurchase up to US$300 million of its shares between August 2019 and August 2021. As of December 31, 2020, the Company had repurchased approximately US$139.5 million of its shares.

  

Conference Call Information

The Company will hold a conference call on 9:00 PM U.S. Eastern Time on Thursday, March 25, 2021 (09:00 AM Beijing/Hong Kong Time on Friday, March 26, 2021). Details for the conference call are as follows:

 

Event Title: JOYY Inc. Fourth Quarter and Full Year 2020 Earnings Conference Call

Conference ID: #4784747

 

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/4784747

 

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

 

The replay will be accessible through April 2, 2021 by dialing the following numbers:

 

United States:  +1-646-254-3697
International:  +61-2-8199-0299
Conference ID:  #4784747

 

 7 

 

 

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 RMB6.525 to US$1.00, the noon buying rate in effect on December 31, 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 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 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. The Company has created highly engaging and vibrant user communities 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.

 

 8 

 

 

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, non-GAAP net margin attributable to controlling interest of JOYY, non-GAAP net income from continuing operations attributable to common shareholders of JOYY, 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 is net income 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, 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 as a percentage of net revenues. Non-GAAP net income from continuing operations attributable to common shareholders of JOYY is net income 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, 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 is equal to the non-GAAP net income from continuing operations attributable to common shareholders of JOYY 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 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 Company’s 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.

 

 9 

 

 

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: [email protected]

 

ICR, Inc.

Jack Wang

Tel: +1 (646) 915-1611

Email: [email protected]

 

 10 

 

 

JOYY INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

 

   December
31,
2019		   December
31,
2020		   December
31,
2020		 
   RMB   RMB   US$ 
Assets            
Current assets               
Cash and cash equivalents   2,710,623    11,371,264    1,742,722 
Restricted cash and cash equivalents   3,500    89,604    13,732 
Short-term deposits   10,027,440    8,645,939    1,325,048 
Restricted short-term deposits   653,034    205,461    31,488 
Short-term investments   3,332,331    3,191,338    489,094 
Accounts receivable, net   668,342    933,057    142,997 
Amounts due from related parties   1,709    3,986    611 
Financing receivables, net   105,344    1,122    172 
Prepayments and other current assets   538,089    671,230    102,871 
Assets held for sale(1)   10,759,557    342,743    52,528 
                
Total current assets   28,799,969    25,455,744    3,901,263 
                
Non-current assets               
Deferred tax assets   67,111    -    - 
Investments(2)   1,983,483    8,086,663    1,239,335 
Property and equipment, net   2,079,084    2,620,797    401,655 
Land use rights, net   1,736,544    1,688,448    258,766 
Intangible assets, net   3,082,259    2,245,962    344,209 
Right-of-use assets, net   172,783    140,802    21,579 
Goodwill   12,947,192    12,215,156    1,872,055 
Financing receivables, net   129,380    128,644    19,716 
Other non-current assets   275,957    70,196    10,758 
Assets held for sale(1)   935,721    166,382    25,499 
                
Total non-current assets   23,409,514    27,363,050    4,193,572 
                
Total assets   52,209,483    52,818,794    8,094,835 
                
Liabilities, mezzanine equity and shareholders’ equity               
Current liabilities               
Accounts payable   120,826    136,733    20,955 
Deferred revenue   192,754    438,669    67,229 
Advances from customers   7,908    5,058    775 
Income taxes payable   422,113    397,334    60,894 
Accrued liabilities and other current liabilities   2,420,588    3,160,985    484,442 
Amounts due to related parties   205,921    24,941    3,822 
Lease liabilities due within one year   83,686    93,513    14,331 
Short-term loans   557,203    734,371    112,547 
Liabilities held for sale(1)   3,626,622    1,168,667    179,106 
                
Total current liabilities   7,637,621    6,160,271    944,101 
                
Non-current liabilities               
Convertible bonds   5,008,571    5,084,362    779,213 
Lease liabilities   92,669    52,989    8,121 
Deferred revenue   17,418    20,437    3,132 
Deferred tax liabilities   264,639    276,802    42,422 
Other non-current liabilities   11,495    -    - 
Liabilities held for sale(1)   293,233    28,807    4,415 
                
Total non-current liabilities   5,688,025    5,463,397    837,303 
                
Total liabilities   13,325,646    11,623,668    1,781,404 
 11 

 

 

JOYY INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

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

 

   December
31,
2019		   December
31,
2020		   December
30,
2020		 
   RMB   RMB   US$ 
             
Mezzanine equity   466,071    473,816    72,615 
                
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; 1,314,208,824 shares issued and 1,272,346,218 shares outstanding as of December 31, 2020, respectively)   80    78    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 December 31, 2020, respectively)   24    24    4 
Treasury Shares (US$0.00001 par value; 8,682,900 and 41,862,606 shares held as of December 31, 2019 and December 31, 2020, respectively)   (168,072)   (938,038)   (143,761)
Additional paid-in capital   21,921,562    22,853,665    3,502,477 
Statutory reserves   149,961    114,871    17,605 
Retained earnings   10,272,122    19,510,874    2,990,172 
Accumulated other comprehensive income   890,209    (856,032)   (131,190)
                
Total JOYY Inc.’s shareholders’ equity   33,065,886    40,685,442    6,235,319 
                
Non-controlling interests   5,351,880    35,868    5,497 
                
Total shareholders’ equity(3)   38,417,766    40,721,310    6,240,816 
                
Total liabilities, mezzanine equity and               
shareholders’ equity   52,209,483    52,818,794    8,094,835 

 

 

(1)As a result of the definitive agreements entered into with Baidu on the sale of YY Live, assets and liabilities to be disposed of in connection with this transaction were classified as held for sale as of December 31, 2020.

 

(2)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.

 

(3)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.
 12 

 

 

JOYY INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

 

   Three Months Ended   Twelve Months Ended 
  

December
31,
2019

   September
30,
2020		   December
31,
2020		   December
31,
2020		   December
31,
2019		   December
31,
2020		   December
31,
2020		 
   RMB   RMB   RMB   US$   RMB   RMB   US$ 
                             
Net revenues                                   
Live streaming(1)   1,859,105    3,543,546    3,593,945    550,796    5,330,790    12,524,825    1,919,513 
Others   272,753    159,482    189,588    29,056    908,519    706,120    108,218 
                                    
Total net revenues   2,131,858    3,703,028    3,783,533    579,852    6,239,309    13,230,945    2,027,731 
                                    
Cost of revenues(2)   (1,514,466)   (2,625,634)   (2,674,674)   (409,912)   (4,552,658)   (9,509,589)   (1,457,408)
                                    
Gross profit   617,392    1,077,394    1,108,859    169,940    1,686,651    3,721,356    570,323 
                                    
Operating expenses(2)                                   
Research and development expenses   (474,404)   (542,469)   (465,133)   (71,285)   (1,633,668)   (2,096,796)   (321,348)
Sales and marketing expenses   (782,034)   (933,110)   (973,776)   (149,238)   (2,794,724)   (3,484,814)   (534,071)
General and administrative expenses   (319,760)   (253,445)   (236,270)   (36,210)   (938,219)   (1,016,544)   (155,792)
                                    
Total operating expenses   (1,576,198)   (1,729,024)   (1,675,179)   (256,733)   (5,366,611)   (6,598,154)   (1,011,211)
                                    
Gain on disposal of subsidiaries and business   82,699    -    -    -    82,699    -    - 
Other income   12,801    31,756    8,724    1,337    39,306    56,111    8,599 
                                    
Operating loss   (863,306)   (619,874)   (557,596)   (85,456)   (3,557,955)   (2,820,687)   (432,289)
                                    
Interest expenses   (124,574)   (135,193)   (130,651)   (20,023)   (266,517)   (522,015)   (80,002)
Interest income and investment income   136,451    151,903    186,836    28,634    426,631    614,014    94,102 
Foreign currency exchange (losses) gains, net   (21,830)   (55,002)   (55,124)   (8,448)   8,639    (118,859)   (18,216)
Gain (loss) on disposal and deemed disposal of investments(3)   -    2,040,359    (238,690)   (36,581)   -    1,897,128    290,748 
Gain (loss) on fair value change of investments   26,670    (39,792)   125,079    19,169    2,679,312    1,127,714    172,830 
Fair value change on derivatives   (14,258)   (29,664)   (25,176)   (3,858)   (16,011)   (42,320)   (6,486)
Other non-operating expenses   -    (1,000)   -    -    -    (17,257)   (2,645)
                                    
(Loss) income before income tax expenses   (860,847)   1,311,737    (695,322)   (106,563)   (725,901)   117,718    18,042 
                                    
Income tax benefit (expenses)   32,845    (20,477)   (57,574)   (8,824)   141,108    (192,337)   (29,477)
                                    
(Loss) income before share of income in equity method investments, net of income taxes   (828,002)   1,291,260    (752,896)   (115,387)   (584,793)   (74,619)   (11,435)
                                    
Share of income (loss) in equity method investments, net of income taxes   5,978    26,550    (42,674)   (6,540)   41,315    (51,759)   (7,932)
                                    
Net (loss) income from continuing operations   (822,024)   1,317,810    (795,570)   (121,927)   (543,478)   (126,378)   (19,367)
                                    
Net income from discontinued operations(4)   1,086,845    980,235    779,076    119,398    4,243,507    9,849,538    1,509,507 
                                    
Net income (loss)   264,821    2,298,045    (16,494)   (2,529)   3,700,029    9,723,160    1,490,140 
                                    
Less: Net income (loss) attributable to the non-controlling interest shareholders and the mezzanine equity classified as non-controlling interest shareholders   92,024    (5,148)   (3,682)   (565)   254,794    48,129    7,376 
                                    
Net income (loss) attributable to controlling interest of JOYY Inc.   172,797    2,303,193    (12,812)   (1,964)   3,445,235    9,675,031    1,482,764 
                                    
Including:                                   
Net (loss) income from continuing operations attributable to controlling interest of JOYY Inc.   (816,566)   1,322,958    (791,888)   (121,362)   (516,703)   (105,112)   (16,109)
Net income from discontinued operations attributable to controlling interest of JOYY Inc.   989,363    980,235    779,076    119,398    3,961,938    9,780,143    1,498,873 
                                    
Less: Accretion of subsidiaries’ redeemable convertible preferred shares to redemption value   9,790    9,642    9,262    1,420    38,346    38,474    5,896 
Cumulative dividend on subsidiary’s Series A Preferred Shares   7,036    6,930    6,656    1,020    27,559    27,651    4,238 
                                    
Net income (loss) attributable to common shareholders of JOYY Inc.   155,971    2,286,621    (28,730)   (4,404)   3,379,330    9,608,906    1,472,630 
                                    
Including:                                   
Net (loss) income from continuing operations attributable to common shareholders of JOYY Inc.   (833,392)   1,306,386    (807,806)   (123,802)   (582,608)   (171,237)   (26,243)
Net income from discontinued operations attributable to common shareholders of JOYY Inc.   989,363    980,235    779,076    119,398    3,961,938    9,780,143    1,498,873 
 13 

 

 

JOYY INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

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

 

   Three Months Ended   Twelve Months Ended 
   December
31,
2019		   September
30,
2020		   December
31,
2020		   December
31,
2020		   December
31,
2019		   December
31,
2020		   December
31,
2020		 
   RMB   RMB   RMB   US$   RMB   RMB   US$ 
                             
Net income (loss) per ADS                                   
—Basic   1.95    28.49    (0.35)   (0.05)   43.77    120.10    18.40 
Continuing operations   (10.43)   16.28    (10.07)   (1.54)   (7.54)   (2.14)   (0.33)
Discontinued operations   12.38    12.21    9.72    1.49    51.31    122.24    18.73 
—Diluted   1.89    25.92    (0.35)   (0.05)   43.59    120.04    18.39 
Continuing operations   (10.43)   15.39    (10.07)   (1.54)   (7.54)   (2.14)   (0.33)
Discontinued operations   12.32    10.53    9.72    1.49    51.13    122.18    18.72 
                                    
Weighted average number of ADS used in calculating net income (loss) per ADS                                   
—Basic   79,917,791    80,262,892    80,191,367    80,191,367    77,219,846    80,009,988    80,009,988 
—Diluted   79,917,791    93,076,688    80,191,367    80,191,367    77,219,846    80,009,988    80,009,988 

 

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

 

   Three Months Ended   Twelve Months Ended 
   December
31,
2019		   September
30,
2020		   December
31,
2020		   December
31,
2020		   December
31,
2019		   December
31,
2020		   December
31,
2020		 
   RMB   RMB   RMB   US$   RMB   RMB   US$ 
                             
PRC   448,898    604,907    672,976    103,138    1,555,879    2,361,042    361,846 
Non-PRC   1,410,207    2,938,639    2,920,969    447,658    3,774,911    10,163,783    1,557,667 

 

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

 

   Three Months Ended   Twelve Months Ended 
   December
31,
2019		   September
30,
2020		   December
31,
2020		   December
31,
2020		   December
31,
2019		   December
31,
2020		   December
31,
2020		 
   RMB   RMB   RMB   US$   RMB   RMB   US$ 
                             
Cost of revenues   13,501    9,372    11,270    1,727    41,006    39,910    6,116 
Research and development expenses   94,396    74,382    60,616    9,290    362,441    295,289    45,256 
Sales and marketing expenses   1,474    1,657    2,816    432    5,000    9,018    1,382 
General and administrative expenses   27,857    88,236    97,648    14,965    117,629    291,759    44,714 

 

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

 

(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.

 

 14 

 

JOYY INC.

RECONCILIATION OF GAAP AND NON-GAAP RESULTS

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

 

   Three Months Ended   Twelve Months Ended 
   December
31,
2019		   September
30,
2020		   December
31,
2020		   December
31,
2020		   December
31,
2019		   December
31,
2020		   December
31,
2020		 
   RMB   RMB   RMB   US$   RMB   RMB   US$ 
                             
Operating loss   (863,306)   (619,874)   (557,596)   (85,456)   (3,557,955)   (2,820,687)   (432,289)
Share-based compensation expenses   137,228    173,647    172,350    26,414    526,076    635,976    97,468 
Impairment of goodwill and investments   52,334    -    -    -    62,334    43,861    6,722 
Amortization of intangible assets from business acquisitions   194,982    171,085    164,550    25,218    639,209    696,867    106,800 
Gain on deconsolidation and disposal of a subsidiary   (82,699)   -    -    -    (82,699)   -    - 
                                    
Non-GAAP operating loss   (561,461)   (275,142)   (220,696)   (33,824)   (2,413,035)   (1,443,983)   (221,299)
                                    
Net (loss) income from continuing operations   (822,024)   1,317,810    (795,570)   (121,927)   (543,478)   (126,378)   (19,367)
Share-based compensation expenses   137,228    173,647    172,350    26,414    526,076    635,976    97,468 
Impairment of goodwill and investments   52,334    -    -    -    62,334    43,861    6,722 
Amortization of intangible assets from business acquisitions   194,982    171,085    164,550    25,218    639,209    696,867    106,800 
Gain on deconsolidation and disposal of a subsidiary   (82,699)   -    -    -    (82,699)   -    - 
(Gain) loss on disposal and deemed disposal of investments   -    (2,040,359)   238,690    36,581    -    (1,897,128)   (290,748)
(Gain) loss on fair value change of investments(1)   (26,670)   39,792    (125,079)   (19,169)   (2,679,312)   (1,127,714)   (172,830)
Reconciling items on the share of equity method investments(1)   2,060    25,879    81,137    12,435    (11,937)   118,254    18,123 
Fair value change on derivatives   14,258    29,664    25,176    3,858    16,011    42,320    6,486 
Interest expenses related to the convertible bonds’ amortization to face value   102,510    107,728    106,446    16,314    207,682    423,324    64,877 
Income tax effects on non-GAAP adjustments   (30,889)   (15,241)   (20,835)   (3,193)   (119,942)   26,931    4,127 
                                    
Non-GAAP net loss from continuing operations   (458,910)   (189,995)   (153,135)   (23,469)   (1,986,056)   (1,163,687)   (178,342)
                             
Net (loss) income from continuing operations attributable to common shareholders of JOYY Inc.   (833,392)   1,306,386    (807,806)   (123,802)   (582,608)   (171,237)   (26,243)
Share-based compensation expenses   137,228    173,647    172,350    26,414    526,076    635,976    97,468 
Impairment of goodwill and investments   52,334    -    -    -    62,334    43,861    6,722 
Amortization of intangible assets from business acquisitions   194,982    171,085    164,550    25,218    639,209    696,867    106,800 
Gain on deconsolidation and disposal of a subsidiary   (82,699)   -    -    -    (82,699)   -    - 
(Gain) loss on disposal and deemed disposal of investments   -    (2,040,359)   238,690    36,581    -    (1,897,128)   (290,748)
(Gain) loss on fair value change of investments   (26,670)   39,792    (125,079)   (19,169)   (2,679,312)   (1,127,714)   (172,830)
Reconciling items on the share of equity method investments   2,060    25,879    81,137    12,435    (11,937)   118,254    18,123 
Fair value change on derivatives   14,258    29,664    25,176    3,858    16,011    42,320    6,486 
Interest expenses related to the convertible bonds’ amortization to face value   102,510    107,728    106,446    16,314    207,682    423,324    64,877 
Accretion, cumulative dividend and deemed dividend to subsidiaries’ preferred shareholders   16,826    16,572    15,918    2,440    65,905    66,125    10,134 
Income tax effects on non-GAAP adjustments   (30,889)   (15,241)   (20,835)   (3,193)   (119,942)   26,931    4,127 
Non-GAAP adjustments for net (loss) income attributable to the non-controlling interest shareholders   (2,205)   (569)   87    13    (3,871)   106    16 
                                    
Non-GAAP net loss from continuing operations attributable to controlling interest and common shareholders of JOYY Inc.   (455,657)   (185,416)   (149,366)   (22,891)   (1,963,152)   (1,142,315)   (175,068)
                             

Non-GAAP net loss from continuing operations per ADS

                            
—Basic   (5.70)   (2.31)   (1.86)   (0.29)   (25.42)   (14.28)   (2.19)
—Diluted   (5.70)   (2.31)   (1.86)   (0.29)   (25.42)   (14.28)   (2.19)
Weighted average number of ADS used in calculating Non-GAAP net loss from continuing operations per ADS                                   
—Basic   79,917,791    80,262,892    80,191,367    80,191,367    77,219,846    80,009,988    80,009,988 
—Diluted   79,917,791    80,262,892    80,191,367    80,191,367    77,219,846    80,009,988    80,009,988 

 

(1)(Gain) loss 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
 15 

 

JOYY INC.

UNAUDITED SEGMENT REPORT

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

 

   Three Months Ended 
   December 31, 2020 
                     
   Bigo   All other(1)   Elimination(2)   Total   Total 
   RMB   RMB   RMB   RMB   US$ 
                     
Net revenues                         
Live streaming   3,250,717    343,228    -    3,593,945    550,796 
Others   139,117    50,471    -    189,588    29,056 
                          
Total net revenues   3,389,834    393,699    -    3,783,533    579,852 
                          
Cost of revenues(3)   (2,338,161)   (336,513)   -    (2,674,674)   (409,912)
                          
Gross profit   1,051,673    57,186    -    1,108,859    169,940 
Operating expenses(3)                         
Research and development expenses   (313,673)   (151,460)   -    (465,133)   (71,285)
Sales and marketing expenses   (867,278)   (106,498)   -    (973,776)   (149,238)
General and administrative expenses   (139,675)   (96,595)   -    (236,270)   (36,210)
                          
Total operating expenses   (1,320,626)   (354,553)   -    (1,675,179)   (256,733)
                          
Other income   3,669    5,055    -    8,724    1,337 
                          
Operating loss   (265,284)   (292,312)   -    (557,596)   (85,456)
                          
Interest expenses   (11,835)   (125,066)   6,250    (130,651)   (20,023)
Interest income and investment income   268    192,818    (6,250)   186,836    28,634 
Foreign currency exchange gains (loss), net   (53,763)   (1,361)   -    (55,124)   (8,448)
Loss on disposal and deemed disposal of investments   -    (238,690)   -    (238,690)   (36,581)
Gain on fair value change of investments   -    125,079    -    125,079    19,169 
Fair value change on derivatives   (1,841)   (23,335)   -    (25,176)   (3,858)
                          
Loss before income tax expenses   (332,455)   (362,867)   -    (695,322)   (106,563)
                          
Income tax (expenses) benefit   31,859    (89,433)   -    (57,574)   (8,824)
                          
Loss before share of loss in equity method investments, net of income taxes   (300,596)   (452,300)   -    (752,896)   (115,387)
                          
Share of gain in equity method investments, net of income taxes   -    (42,674)   -    (42,674)   (6,540)
                          
Net loss from continuing operations   (300,596)   (494,974)   -    (795,570)   (121,927)

 

 16 

 

  

(1)As a result of the definitive agreements entered into with Baidu on the sale of YY Live, YY Live is represented as discontinued operations. YY segment is renamed as "all other" segment and has been recast to exclude the financial numbers of YY Live.

 

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

 

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

 

   Three Months Ended 
   December 31, 2020 
     
   Bigo   All other   Total   Total 
   RMB   RMB   RMB   US$ 
                 
Cost of revenues   6,891    4,379    11,270    1,727 
Research and development expenses   50,528    10,088    60,616    9,290 
Sales and marketing expenses   1,553    1,263    2,816    432 
General and administrative expenses   91,148    6,500    97,648    14,965 

  

 17 

 

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 
   December 31, 2020 
     
   Bigo   All other   Total   Total 
   RMB   RMB   RMB   US$ 
                 
Operating loss   (265,284)   (292,312)   (557,596)   (85,456)
Share-based compensation expenses   150,120    22,230    172,350    26,414 
Amortization of intangible assets from business acquisitions   164,327    223    164,550    25,218 
                     
Non-GAAP operating income(loss)   49,163    (269,859)   (220,696)   (33,824)
                     
Net loss from continuing operations   (300,596)   (494,974)   (795,570)   (121,927)
Share-based compensation expenses   150,120    22,230    172,350    26,414 
Amortization of intangible assets from business acquisitions   164,327    223    164,550    25,218 
Loss on disposal and deemed disposal of investments   -    238,690    238,690    36,581 
Gain on fair value change of investments   -    (125,079)   (125,079)   (19,169)
Reconciling items on the share of equity method investments   -    81,137    81,137    12,435 
Fair value change on derivatives   1,841    23,335    25,176    3,858 
Interest expenses related to the convertible bonds’ amortization to face value   -    106,446    106,446    16,314 
Income tax effects on non-GAAP adjustments   (28,364)   7,529    (20,835)   (3,193)
                     
Non-GAAP net loss from continuing operations   (12,672)   (140,463)   (153,135)   (23,469)
                     

 

 18 

 

JOYY INC.

UNAUDITED SEGMENT REPORT

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

 

   Three Months Ended 
   September 30, 2020 
                     
   Bigo   All other   Elimination(1)   Total   Total 
   RMB   RMB   RMB   RMB   US$ 
                     
Net revenues                         
Live streaming   3,278,214    265,332    -    3,543,546    521,908 
Others   116,624    42,858    -    159,482    23,489 
                          
Total net revenues   3,394,838    308,190    -    3,703,028    545,397 
                          
Cost of revenues(2)   (2,337,547)   (288,087)   -    (2,625,634)   (386,714)
                          
Gross profit   1,057,291    20,103    -    1,077,394    158,683 
Operating expenses(2)                         
Research and development expenses   (332,868)   (209,601)   -    (542,469)   (79,897)
Sales and marketing expenses   (852,808)   (80,302)   -    (933,110)   (137,432)
General and administrative expenses   (190,079)   (63,366)   -    (253,445)   (37,328)
                          
Total operating expenses   (1,375,755)   (353,269)   -    (1,729,024)   (254,657)
                          
Other income   6,515    25,241    -    31,756    4,677 
                          
Operating loss   (311,949)   (307,925)   -    (619,874)   (91,297)
                          
Other non-operating expenses   -    (1,000)   -    (1,000)   (147)
Interest expenses   (12,516)   (127,167)   4,490    (135,193)   (19,912)
Interest income and investment income   139    156,254    (4,490)   151,903    22,373 
Foreign currency exchange gains, net   (56,016)   1,014    -    (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 
Gain on fair value change of investments   -    (39,792)   -    (39,792)   (5,861)
                          
(Loss) income before income tax expenses   (380,342)   1,692,079    -    1,311,737    193,198 
                          
Income tax expenses   (2,636)   (17,841)   -    (20,477)   (3,016)
                          
(Loss) income before share of loss in equity method investments, net of income taxes   (382,978)   1,674,238    -    1,291,260    190,182 
                          
Share of income in equity method investments, net of income taxes   -    26,550    -    26,550    3,910 
                          
Net (loss) income from continuing operations   (382,978)   1,700,788    -    1,317,810    194,092 
                          
 19 

 

 

(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 
   September 30, 2020 
     
   Bigo   All other   Total   Total 
   RMB   RMB   RMB   US$ 
                 
Cost of revenues   3,938    5,434    9,372    1,380 
Research and development expenses   49,861    24,521    74,382    10,955 
Sales and marketing expenses   972    685    1,657    244 
General and administrative expenses   93,114    (4,878)   88,236    12,996 

 

 

 20 

 

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 
     
   Bigo   All other   Total   Total 
   RMB   RMB   RMB   US$ 
                 
Operating loss   (311,949)   (307,925)   (619,874)   (91,297)
Share-based compensation expenses   147,885    25,762    173,647    25,575 
Amortization of intangible assets from business acquisitions   171,085    -    171,085    25,198 
                     
Non-GAAP operating income (loss)   7,021    (282,163)   (275,142)   (40,524)
                     
Net (loss) income from continuing operations   (382,978)   1,700,788    1,317,810    194,092 
Share-based compensation expenses   147,885    25,762    173,647    25,575 
Amortization of intangible assets from business acquisitions   171,085    -    171,085    25,198 
Loss on fair value change of investments   -    39,792    39,792    5,861 
Gain on deemed disposal and disposal of investments   -    (2,040,359)   (2,040,359)   (300,512)
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   (7,993)   (7,248)   (15,241)   (2,245)
                     
Non-GAAP net loss from continuing operations   (72,001)   (117,994)   (189,995)   (27,983)
                     

 

 21 

 

JOYY INC.

UNAUDITED SEGMENT REPORT

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

 

 

   Three Months Ended 
   December 31, 2019 
                     
   Bigo   All other   Elimination(1)   Total   Total 
   RMB   RMB   RMB   RMB   US$ 
                     
Net revenues                         
Live streaming   1,638,731    220,374    -    1,859,105    267,044 
Others   165,550    107,203    -    272,753    39,179 
                          
Total net revenues   1,804,281    327,577    -    2,131,858    306,223 
                          
Cost of revenues(2)   (1,257,845)   (256,621)   -    (1,514,466)   (217,539)
                          
Gross profit   546,436    70,956    -    617,392    88,684 
Operating expenses(2)                         
Research and development expenses   (302,737)   (171,667)   -    (474,404)   (68,144)
Sales and marketing expenses   (608,108)   (173,926)   -    (782,034)   (112,332)
General and administrative expenses   (126,364)   (193,396)   -    (319,760)   (45,931)
                          
Total operating expenses   (1,037,209)   (538,989)   -    (1,576,198)   (226,407)
                          
Gain on disposal of subsidiaries and business   -    82,699    -    82,699    11,879 
Other income   1,315    11,486    -    12,801    1,839 
                          
Operating loss   (489,458)   (373,848)   -    (863,306)   (124,005)
                          
Interest expenses   (15,282)   (123,570)   14,278    (124,574)   (17,894)
Interest income and investment income   714    150,015    (14,278)   136,451    19,600 
Foreign currency exchange (losses) gains, net   (19,609)   (2,221)   -    (21,830)   (3,136)
Fair value change on derivatives   -    (14,258)   -    (14,258)   (2,048)
Gain on fair value change of investments   -    26,670    -    26,670    3,831 
                          
Loss before income tax expenses   (523,635)   (337,212)   -    (860,847)   (123,652)
                          
Income tax benefits   5,529    27,316    -    32,845    4,717 
                          
Loss before share of income in equity method investments, net of income taxes   (518,106)   (309,896)   -    (828,002)   (118,935)
                          
Share of income in equity method investments, net of income taxes   -    5,978    -    5,978    859 
                          
Net loss from continuing operations   (518,106)   (303,918)   -    (822,024)   (118,076)

 

(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 
   December 31, 2019 
     
   Bigo   All other   Total   Total 
   RMB   RMB   RMB   US$ 
                 
Cost of revenues   8,738    4,763    13,501    1,939 
Research and development expenses   71,307    23,089    94,396    13,559 
Sales and marketing expenses   1,090    384    1,474    212 
General and administrative expenses   9,392    18,465    27,857    4,001 

 

 22 

 

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 
   December 31, 2019 
     
   Bigo   All other   Total   Total 
   RMB   RMB   RMB   US$ 
                 
Operating loss   (489,458)   (373,848)   (863,306)   (124,005)
Share-based compensation expenses   90,527    46,701    137,228    19,711 
Impairment of goodwill and investments   -    52,334    52,334    7,517 
Amortization of intangible assets from business acquisitions   194,982    -    194,982    28,007 
Gain on deconsolidation and disposal of a subsidiary   -    (82,699)   (82,699)   (11,879)
                     
Non-GAAP operating loss   (203,949)   (357,512)   (561,461)   (80,649)
                     
Net loss from continuing operations   (518,106)   (303,918)   (822,024)   (118,076)
Share-based compensation expenses   90,527    46,701    137,228    19,711 
Impairment of goodwill and investments   -    52,334    52,334    7,517 
Amortization of intangible assets from business acquisitions   194,982    -    194,982    28,007 
Gain on deconsolidation and disposal of a subsidiary   -    (82,699)   (82,699)   (11,879)
Gain on fair value change of investments   -    (26,670)   (26,670)   (3,831)
Reconciling items on the share of equity method investments   -    2,060    2,060    296 
Fair value change on derivatives   -    14,258    14,258    2,048 
Interest expenses related to the convertible bonds’ amortization to face value   -    102,510    102,510    14,725 
Income tax effects on non-GAAP adjustments   (40,124)   9,235    (30,889)   (4,437)
                     
Non-GAAP net loss from continuing operations   (272,721)   (186,189)   (458,910)   (65,919)

 

 

 23 

 


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