YY Inc. (NASDAQ:YY) ("YY" or the "Company"), a leading live
streaming social media platform in China, today announced its
unaudited financial results for the third quarter of 2017.
Third Quarter 2017
Highlights
- Net revenues increased by 48.0% to RMB3,092.3 million (US$464.8
million) from RMB2,089.8 million in the corresponding period of
2016.
- Net income attributable to YY increased by 59.0% to RMB636.0
million (US$95.6 million) from RMB400.0 million in the
corresponding period of 2016.
- Non-GAAP net income attributable to YY1 increased by 46.7% to
RMB639.1 million (US$96.1 million) from RMB435.6 million in the
corresponding period of 2016.
“We continued to deliver robust financial and
operating results in the third quarter of 2017,” stated Mr. David
Xueling Li, Chairman and acting Chief Executive Officer of YY. “Our
mobile live streaming monthly active users (MAU) increased by 36.6%
year over year to 73.0 million, and our total live streaming paying
users increased by 46.5% year over year to over 6.3 million. Our
solid performance is a testament to our highly effective strategies
in introducing more initiatives to attract younger generation users
and to enhance existing user’s engagement and consumption on our
live streaming social media platform. In the past quarter, we
rolled out a series of innovative social functionalities and
features in the latest version of YY Live 7.0, including Accompany
Me, Happy Basketball, and Clip Doll Online. In addition, we
launched several new short-form video products to tap into more
segmented video verticals and fulfill the diversified demands of
users across China. On the Huya side, we are pleased to see that it
continued its trajectory of user growth and revenue generation in
the third quarter. Looking ahead, by leveraging our dual growth
engines, YY Live and Huya, we will continue to invent new ways to
attract users and stimulate user engagement, further build our
content ecosystem, and explore more monetization opportunities. We
believe that we have the right strategy in place to stay ahead of
the competition in China’s live streaming social media
industry.”
Mr. Bing Jin, Chief Financial Officer of YY,
further commented, “This was another quarter with solid financial
growth for YY. In the third quarter, our total net revenues
increased by 48.0% year over year to RMB3,092.3 million, exceeding
the high end of our previous guidance range. The growth was
primarily attributable to the significant increase of our live
streaming revenues, which grew by 60.4% year over year to
RMB2,871.6 million. Both YY Live and Huya broadcasting contributed
to such rapid revenue growth. Our non-GAAP net income attributable
to YY increased by 46.7% to RMB639.1 million in the quarter, of
which Huya’s Non-GAAP operating loss further shrank year over year
from RMB159.3 million to RMB10.1 million. In addition, during the
quarter, we completed a secondary offering and received
approximately USD442.2 million in net proceeds, thus further
demonstrating investors’ confidence in YY and laying a solid
capital foundation for YY’s future development.”
Third Quarter 2017 Financial Results
NET REVENUES Net revenues
increased by 48.0% to RMB3,092.3 million (US$464.8 million) in the
third quarter of 2017 from RMB2,089.8 million in the corresponding
period of 2016, primarily driven by the increase in live streaming
revenues. Live streaming revenues increased by 60.4% to RMB2,871.6
million (US$431.6 million) in the third quarter of 2017 from
RMB1,790.4 million in the corresponding period of 2016. Live
streaming revenues from the YY Live segment were RMB2,319.2 million
(US$348.6 million) and from the Huya segment were RMB552.4 million
(US$83.0 million) in the third quarter of 2017.
Revenues from online games were RMB122.0 million
(US$18.3 million) in the third quarter of 2017 as compared to
RMB149.5 million in the corresponding period of 2016.
Revenues from membership were RMB49.5 million
(US$7.4 million) in the third quarter of 2017 as compared to
RMB68.8 million in the corresponding period of 2016.
Other revenues, mainly representing revenues
from the Company's online advertising revenues, were RMB49.2
million (US$7.4 million) in the third quarter of 2017, compared
with RMB81.1 million in the corresponding period of 2016. The
declines in online gaming, membership, and other revenues mainly
reflected the Company’s continued strategic shift towards its live
streaming business.
COST OF REVENUES AND GROSS
PROFIT Cost of revenues increased by 48.2% to RMB1,889.3
million (US$284.0 million) in the third quarter of 2017 from
RMB1,275.0 million in the corresponding period of 2016, primarily
attributable to an increase in revenue-sharing fees and content
costs to RMB1,604.9 million (US$241.2 million) in the third quarter
of 2017 from RMB967.4 million in the corresponding period of 2016.
The increase in revenue-sharing fees and content costs paid to
performers, guilds and content providers was in line with the
increase in revenues and was primarily due to the higher level of
user engagement and spending driven by promotional activities. In
addition, bandwidth costs increased to RMB160.5 million (US$24.1
million) in the third quarter of 2017 from RMB149.2 million in the
corresponding period of 2016, primarily reflecting continued user
base expansion and video quality improvements, but largely offset
by the Company’s improved efficiency and pricing terms.
Gross profit increased by 47.6% to RMB1,203.0
million (US$180.8 million) in the third quarter of 2017 from
RMB814.8 million in the corresponding period of 2016. Gross margin
was 38.9% in the third quarter of 2017 as compared to 39.0% in the
corresponding period of 2016 and 40.1% in the second quarter of
2017. The sequential decline of gross margin was mainly
attributable to the increased revenue sharing with entry-level
hosts on the Company’s platform to develop a more healthy and
balanced ecosystem.
OPERATING INCOMEOperating
expenses in the third quarter of 2017 increased by 49.4% to
RMB560.3 million (US$84.2 million) from RMB375.0 million in the
corresponding period of 2016.
Operating income in the third quarter of 2017
increased by 39.9% to RMB661.4 million (US$99.4 million) from
RMB472.9 million in the corresponding period of 2016. Operating
margin in the third quarter of 2017 was 21.4% as compared to 22.6%
in the corresponding period of 2016.
Non-GAAP operating income2 increased by 30.7% to
RMB664.5 million (US$99.9 million) in the third quarter of 2017
from RMB508.4 million in the corresponding period of 2016. Non-GAAP
operating margin3 was 21.5% in the third quarter of 2017 as
compared to 24.3% in the corresponding period of 2016.
NET INCOMENet income
attributable to YY Inc. increased by 59.0% to RMB636.0 million
(US$95.6 million) in the third quarter of 2017 from RMB400.0
million in the corresponding period of 2016. Net margin in the
third quarter of 2017 increased to 20.6% from 19.1% in the
corresponding period of 2016.
Non-GAAP net income attributable to YY Inc.
increased by 46.7% to RMB639.1 million (US$96.1 million) from
RMB435.6 million in the corresponding period of 2016. Non-GAAP net
margin in the third quarter of 2017 was 20.7% as compared to 20.8%
in the corresponding period of 2016.
NET INCOME PER ADSDiluted net
income per ADS4 increased by 52.3% to RMB10.51 (US$1.58) in the
third quarter of 2017 from RMB6.90 in the corresponding period of
2016.
Non-GAAP diluted net income per ADS5 increased
by 41.2% to RMB10.56 (US$1.59) in the third quarter of 2017 from
RMB7.48 in the corresponding period of 2016.
BALANCE SHEET AND CASH FLOWS As
of September 30, 2017, the Company had cash and cash equivalents of
RMB1,129.0 million (US$169.7 million), short-term deposits of
RMB6,474.2 million (US$973.1 million) and restricted short-term
deposits of RMB1,000.0 million (US$150.3 million). For the third
quarter of 2017, net cash from operating activities was RMB1,045.0
million (US$157.1 million).
SHARES OUTSTANDING As of
September 30, 2017, the Company had a total of 1,260.8 million
common shares, or the equivalent of 63.0 million ADSs
outstanding.
Business OutlookFor the fourth
quarter of 2017, the Company expects net revenues to be between
RMB3.4 billion and RMB3.5 billion, representing a year-over-year
growth of 36.5% to 40.6%. This forecast reflects the Company's
current and preliminary view on the market and operational
conditions, which are subject to change.
Conference Call InformationThe
Company will hold a conference call on Tuesday, November 14, 2017
at 8:00 pm Eastern Time, or Wednesday, November 15, 2017 at 9:00 am
Beijing Time to discuss the financial results. Participants may
access the call by dialing the following numbers:
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United
States: |
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+1-845-675-0438 |
International Toll
Free: |
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+1-855-500-8701 |
China Domestic: |
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400-1200-654 |
Hong Kong: |
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+852-3018-6776 |
Conference ID: |
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# 4599539 |
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The replay will be accessible through November
22, 2017 by dialing the following numbers:
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United States Toll
Free: |
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+1-855-452-5696 |
International: |
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+61-2-9003-4211 |
Conference
ID: |
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# 4599539 |
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|
A live and archived webcast of the conference
call will also be available at the Company's investor relations
website at http://investors.yy.com/.
Exchange RateThis 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 RMB6.6533 to US$1.00,
the noon buying rate in effect on September 30, 2017 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 YY Inc.YY Inc. (“YY” or
the “Company”) is a leading live streaming social media platform in
China. The Company’s highly engaged users contribute to a vibrant
social community by creating, sharing and enjoying a vast range of
entertainment content and activities. YY enables users to interact
with each other in real-time through online live media and offers
users a uniquely engaging and immersive entertainment experience.
YY Inc. was listed on the NASDAQ in November 2012.
Safe Harbor StatementThis
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 YY's strategic and operational plans,
contain forward-looking statements. YY 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
third parties. Statements that are not historical facts, including
statements about YY’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: YY’s goals
and strategies; YY'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; YY’s ability to monetize the user base;
fluctuations in general economic and business conditions in China
and assumptions underlying or related to any of the foregoing.
Further information regarding these and other risks is included in
YY’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 YY does not undertake any obligation to update any
forward-looking statement, except as required under applicable
law.
Use of Non-GAAP Financial
MeasuresThe unaudited condensed consolidated financial
information is prepared in conformity with accounting principles
generally accepted in the United States of America (“U.S. GAAP”),
except that the consolidated statement of changes in shareholders’
equity, consolidated statements of cash flows, and the detailed
notes have not been presented. YY uses non-GAAP operating income,
non-GAAP operating margin, non-GAAP net income attributable to YY
Inc., non-GAAP net margin, non-GAAP net income
attributable to common shareholders, 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. Non-GAAP operating margin is non-GAAP
operating income as a percentage of net revenues. Non-GAAP net
income attributable to YY Inc. is net income attributable to YY
Inc. excluding share-based compensation expenses. Non-GAAP net
margin is non-GAAP net income attributable to YY Inc. as a
percentage of net revenues. Non-GAAP net income attributable to
common shareholders is net income attributable to common
shareholders excluding share-based compensation expenses. Basic and
diluted non-GAAP net income per ADS is non-GAAP net income
attributable to common shareholders 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 share-based compensation 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 effect of non-cash share-based
compensation expenses, which have been and will continue to be
significant recurring expenses in its business. 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.
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 “YY
Inc. Reconciliations of GAAP and Non-GAAP Results” near the end of
this release.
Investor Relations ContactYY
Inc.Matthew ZhaoTel: +86 (20) 8212-0000Email: IR@YY.com
ICR, Inc. Xueli SongTel: +1 (646) 915-1611Email:
IR@YY.com
__________________________________
1 Non-GAAP net income attributable to YY Inc. is a non-GAAP
financial measure, which is defined as net income attributable to
YY Inc. excluding share-based compensation expenses. Please refer
to the section titled "Reconciliation of GAAP and Non-GAAP Results"
for details.
2 Non-GAAP operating income is a non-GAAP financial measure,
which is defined as operating income excluding share-based
compensation expenses. Please refer to the section titled
"Reconciliation of GAAP and Non-GAAP Results" for details.
3 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 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 divided by weighted
average number of diluted ADS.
5 Non-GAAP diluted net income per ADS is a non-GAAP financial
measure, which is defined as non-GAAP net income attributable to
common shareholders 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).
|
YY INC. |
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS |
(All amounts in thousands, except share, ADS and per
ADS data) |
|
|
|
|
|
|
|
|
|
December 31,2016 |
|
September30,2017 |
|
September30,2017 |
|
|
RMB |
|
RMB |
|
US$ |
Assets |
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
Cash and
cash equivalents |
|
1,579,743 |
|
1,129,024 |
|
169,694 |
Short-term deposits |
|
3,751,519 |
|
6,474,206 |
|
973,082 |
Restricted short-term deposits |
|
- |
|
1,000,000 |
|
150,301 |
Short-term investment |
|
- |
|
89,070 |
|
13,387 |
Accounts
receivable, net |
|
169,571 |
|
167,551 |
|
25,183 |
Inventory |
|
2,266 |
|
332 |
|
50 |
Amount
due from related parties |
|
135,245 |
|
52,876 |
|
7,947 |
Prepayments and other current assets |
|
224,732 |
|
180,422 |
|
27,118 |
|
|
|
|
|
|
|
Total current
assets |
|
5,863,076 |
|
9,093,481 |
|
1,366,762 |
|
|
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
|
Deferred
tax assets(1) |
|
117,811 |
|
121,637 |
|
18,282 |
Investments |
|
918,602 |
|
1,076,111 |
|
161,741 |
Property
and equipment, net |
|
838,750 |
|
925,233 |
|
139,064 |
Land use
rights, net |
|
1,872,394 |
|
1,836,493 |
|
276,027 |
Intangible assets, net |
|
58,926 |
|
37,488 |
|
5,634 |
Goodwill |
|
14,300 |
|
14,257 |
|
2,143 |
Amount
due from related parties |
|
- |
|
20,000 |
|
3,006 |
Other
non-current assets |
|
101,933 |
|
71,334 |
|
10,722 |
|
|
|
|
|
|
|
Total
non-current assets |
|
3,922,716 |
|
4,102,553 |
|
616,619 |
|
|
|
|
|
|
|
Total
assets |
|
9,785,792 |
|
13,196,034 |
|
1,983,381 |
|
|
|
|
|
|
|
Liabilities,
mezzanine equity and shareholders’ equity |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Convertible bonds |
|
2,768,469 |
|
- |
|
- |
Accounts
payable |
|
137,107 |
|
102,242 |
|
15,367 |
Deferred
revenue |
|
430,683 |
|
630,911 |
|
94,827 |
Advances
from customers |
|
56,152 |
|
66,743 |
|
10,032 |
Income
taxes payable |
|
140,754 |
|
90,389 |
|
13,586 |
Accrued
liabilities and other current liabilities |
|
1,066,038 |
|
1,275,704 |
|
191,740 |
Amounts
due to related parties |
|
91,245 |
|
29,456 |
|
4,427 |
Short-term loan |
|
- |
|
597,213 |
|
89,762 |
|
|
|
|
|
|
|
Total current
liabilities |
|
4,690,448 |
|
2,792,658 |
|
419,741 |
|
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
|
|
Convertible bonds |
|
- |
|
6,636 |
|
997 |
Deferred
revenue |
|
25,459 |
|
49,222 |
|
7,398 |
Deferred
tax liabilities |
|
8,058 |
|
17,282 |
|
2,598 |
|
|
|
|
|
|
|
Total
non-current liabilities |
|
33,517 |
|
73,140 |
|
10,993 |
|
|
|
|
|
|
|
Total
liabilities |
|
4,723,965 |
|
2,865,798 |
|
430,734 |
|
|
|
|
|
|
|
YY INC. |
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(CONTINUED) |
(All amounts in thousands, except share, ADS and per
ADS data) |
|
|
|
|
|
|
|
|
|
December
31,2016 |
|
September 30,2017 |
|
September 30,2017 |
|
|
RMB |
|
RMB |
|
US$ |
|
|
|
|
|
|
|
Mezzanine
equity |
|
9,272 |
|
522,426 |
|
78,521 |
|
|
|
|
|
|
|
Shareholders’
equity |
|
|
|
|
|
|
Class A common shares
(US$0.00001 par value; 10,000,000,000 and 10,000,000,000 shares
authorized, 750,115,028 and 922,793,788 shares issued and
outstanding as of December 31, 2016 and September 30, 2017,
respectively) |
|
44 |
|
56 |
|
8 |
Class B common shares
(US$0.00001 par value; 1,000,000,000 and 1,000,000,000 shares
authorized, 359,557,976 and 337,982,976 shares issued and
outstanding as of December 31, 2016 and September 30, 2017,
respectively) |
|
26 |
|
24 |
|
4 |
Additional paid-in
capital |
|
2,165,766 |
|
5,161,606 |
|
775,796 |
Statutory reserves |
|
58,857 |
|
58,857 |
|
8,846 |
Retained earnings |
|
2,728,736 |
|
4,471,612 |
|
672,089 |
Accumulated other
comprehensive income |
|
93,066 |
|
60,671 |
|
9,119 |
|
|
|
|
|
|
|
Total YY Inc.’s
shareholders’ equity |
|
5,046,495 |
|
9,752,826 |
|
1,465,862 |
|
|
|
|
|
|
|
Non-controlling
interests |
|
6,060 |
|
54,984 |
|
8,264 |
|
|
|
|
|
|
|
Total
shareholders’ equity |
|
5,052,555 |
|
9,807,810 |
|
1,474,126 |
|
|
|
|
|
|
|
Total
liabilities, mezzanine equity
and shareholders’ equity |
|
9,785,792 |
|
13,196,034 |
|
1,983,381 |
|
|
|
|
|
|
|
_________________________________________________________ |
|
|
|
|
|
|
(1)
Effectively January 2017, ASU 2015-17 issued by FASB requires
entities to reclassify deferred tax assets and liabilities as
non-current in the balance sheet. Accordingly, the Company
retrospectively reclassified RMB107.3 million of deferred tax
assets from current assets into non-current assets as of December
31, 2016. |
|
YY INC. |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME |
(All amounts in thousands, except share, ADS and per
ADS data) |
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months
Ended |
|
|
September 30,2016 |
|
June
30,2017 |
|
September 30,2017 |
|
September30,2017 |
|
|
September30,2016 |
|
September30,2017 |
|
September30,2017 |
|
|
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
|
RMB |
|
RMB |
|
US$ |
|
|
|
|
|
|
|
|
|
|
|
Net
revenues |
|
|
|
|
|
|
|
|
|
Live streaming |
|
1,790,373 |
|
2,373,397 |
|
2,871,610 |
|
431,607 |
|
|
4,809,037 |
|
7,302,434 |
|
1,097,566 |
|
Online games |
|
149,530 |
|
153,959 |
|
122,035 |
|
18,342 |
|
|
508,901 |
|
415,742 |
|
62,487 |
|
Membership |
|
68,768 |
|
52,204 |
|
49,486 |
|
7,438 |
|
|
210,210 |
|
147,111 |
|
22,111 |
|
Others |
|
81,134 |
|
29,431 |
|
49,174 |
|
7,391 |
|
|
191,752 |
|
102,967 |
|
15,476 |
|
|
|
|
|
|
|
|
|
|
|
Total net
revenue |
|
2,089,805 |
|
2,608,991 |
|
3,092,305 |
|
464,778 |
|
|
5,719,900 |
|
7,968,254 |
|
1,197,640 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues(1) |
|
(1,275,002 |
) |
(1,563,445 |
) |
(1,889,313 |
) |
(283,966 |
) |
|
(3,543,873 |
) |
(4,829,753 |
) |
(725,918 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit |
|
814,803 |
|
1,045,546 |
|
1,202,992 |
|
180,812 |
|
|
2,176,027 |
|
3,138,501 |
|
471,722 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses(1) |
|
|
|
|
|
|
|
|
|
Research and
development expenses |
|
(163,236 |
) |
(167,359 |
) |
(166,139 |
) |
(24,971 |
) |
|
(515,112 |
) |
(499,059 |
) |
(75,009 |
) |
Sales and marketing
expenses |
|
(109,075 |
) |
(204,434 |
) |
(249,480 |
) |
(37,497 |
) |
|
(275,735 |
) |
(542,516 |
) |
(81,541 |
) |
General and
administrative expenses |
|
(102,683 |
) |
(104,545 |
) |
(144,678 |
) |
(21,745 |
) |
|
(276,245 |
) |
(325,875 |
) |
(48,979 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
expenses |
|
(374,994 |
) |
(476,338 |
) |
(560,297 |
) |
(84,213 |
) |
|
(1,067,092 |
) |
(1,367,450 |
) |
(205,529 |
) |
|
|
|
|
|
|
|
|
|
|
Gain on deconsolidation
and disposal of subsidiaries |
|
- |
|
- |
|
- |
|
- |
|
|
- |
|
37,989 |
|
5,710 |
|
Other income |
|
33,065 |
|
30,166 |
|
18,667 |
|
2,806 |
|
|
64,477 |
|
68,653 |
|
10,319 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income |
|
472,874 |
|
599,374 |
|
661,362 |
|
99,405 |
|
|
1,173,412 |
|
1,877,693 |
|
282,222 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on partial
disposal of investments |
|
- |
|
45,861 |
|
- |
|
- |
|
|
- |
|
45,861 |
|
6,893 |
|
Interest expense |
|
(20,357 |
) |
(3,459 |
) |
(3,651 |
) |
(549 |
) |
|
(60,327 |
) |
(28,378 |
) |
(4,265 |
) |
Interest income |
|
17,162 |
|
27,317 |
|
47,505 |
|
7,140 |
|
|
40,713 |
|
105,853 |
|
15,910 |
|
Foreign currency
exchange gains (losses), net |
|
(16 |
) |
(281 |
) |
(251 |
) |
(38 |
) |
|
773 |
|
(1,825 |
) |
(274 |
) |
Other non-operating
expense |
|
- |
|
- |
|
- |
|
- |
|
|
(23,474 |
) |
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
income tax expenses |
|
469,663 |
|
668,812 |
|
704,965 |
|
105,958 |
|
|
1,131,097 |
|
1,999,204 |
|
300,486 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expenses |
|
(69,909 |
) |
(100,531 |
) |
(74,684 |
) |
(11,225 |
) |
|
(194,710 |
) |
(264,288 |
) |
(39,723 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before
share of (loss) income in equity method investments, net of income
taxes |
|
399,754 |
|
568,281 |
|
630,281 |
|
94,733 |
|
|
936,387 |
|
1,734,916 |
|
260,763 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share of (loss) income
in equity method investments, net of income taxes |
|
(1,867 |
) |
4,726 |
|
6,806 |
|
1,023 |
|
|
3,879 |
|
15,467 |
|
2,325 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income |
|
397,887 |
|
573,007 |
|
637,087 |
|
95,756 |
|
|
940,266 |
|
1,750,383 |
|
263,088 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net loss
attributable to the non-controlling interest shareholders and the
mezzanine classified non-controlling interest shareholders |
|
(2,152 |
) |
(701 |
) |
1,120 |
|
168 |
|
|
(11,398 |
) |
(2,446 |
) |
(368 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to YY Inc. |
|
400,039 |
|
573,708 |
|
635,967 |
|
95,588 |
|
|
951,664 |
|
1,752,829 |
|
263,456 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YY INC. |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME (CONTINUED) |
(All amounts in thousands, except share, ADS and per
ADS data) |
|
|
|
Three Months Ended |
|
Nine Months
Ended |
|
|
September
30,2016 |
|
June 30,2017 |
|
September
30,2017 |
|
September
30,2017 |
|
|
September 30,2016 |
|
September 30,2017 |
|
September 30,2017 |
|
|
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
|
RMB |
|
RMB |
|
US$ |
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to YY Inc. |
|
400,039 |
|
573,708 |
|
635,967 |
|
95,588 |
|
|
951,664 |
|
1,752,829 |
|
263,456 |
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income: |
|
|
|
|
|
|
|
|
|
Unrealized gain (loss)
of available-for-sales securities, net of nil tax |
|
13,354 |
|
(39,818 |
) |
(22,128 |
) |
(3,326 |
) |
|
190,506 |
|
(19,710 |
) |
(2,962 |
) |
Foreign currency
translation adjustments, net of nil tax |
|
(562 |
) |
(712 |
) |
(12,592 |
) |
(1,893 |
) |
|
(1,671 |
) |
(12,685 |
) |
(1,907 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income attributable to YY Inc. |
|
412,831 |
|
533,178 |
|
601,247 |
|
90,369 |
|
|
1,140,499 |
|
1,720,434 |
|
258,587 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
per ADS |
|
|
|
|
|
|
|
|
|
—Basic |
|
7.07 |
|
10.09 |
|
10.60 |
|
1.59 |
|
|
16.91 |
|
30.30 |
|
4.55 |
|
—Diluted |
|
6.90 |
|
9.98 |
|
10.51 |
|
1.58 |
|
|
16.64 |
|
29.72 |
|
4.47 |
|
Weighted average number
of ADS used in calculating net income per ADS |
|
|
|
|
|
|
|
|
|
—Basic |
|
56,560,174 |
|
56,832,278 |
|
60,008,235 |
|
60,008,235 |
|
|
56,290,231 |
|
57,857,025 |
|
57,857,025 |
|
—Diluted |
|
60,814,662 |
|
57,488,989 |
|
60,503,529 |
|
60,503,529 |
|
|
60,773,398 |
|
59,681,394 |
|
59,681,394 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Share-based compensation was
allocated in cost of revenues and operating expenses as
follows:
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months
Ended |
|
|
September
30,2016 |
June 30,2017 |
September
30,2017 |
|
September
30,2017 |
|
|
September 30,2016 |
September
30,2017 |
September
30,2017 |
|
|
RMB |
RMB |
RMB |
|
US$ |
|
|
RMB |
RMB |
US$ |
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
3,701 |
3,021 |
(434 |
) |
(65 |
) |
|
12,454 |
6,210 |
933 |
Research and
development expenses |
|
11,120 |
10,492 |
(6,049 |
) |
(909 |
) |
|
64,893 |
15,847 |
2,382 |
Sales and marketing
expenses |
|
612 |
303 |
(74 |
) |
(11 |
) |
|
2,392 |
738 |
111 |
General and
administrative expenses |
|
20,086 |
9,649 |
9,700 |
|
1,458 |
|
|
51,199 |
26,406 |
3,969 |
|
YY 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
30,2016 |
|
June 30,2017 |
|
September
30,2017 |
|
September
30,2017 |
|
|
September 30,2016 |
|
September
30,2017 |
|
September
30,2017 |
|
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
|
RMB |
|
RMB |
|
US$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
472,874 |
|
599,374 |
|
661,362 |
|
99,405 |
|
|
1,173,412 |
|
1,877,693 |
|
282,222 |
Share-based
compensation expenses |
|
35,519 |
|
23,465 |
|
3,143 |
|
473 |
|
|
130,938 |
|
49,201 |
|
7,395 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating income |
|
508,393 |
|
622,839 |
|
664,505 |
|
99,878 |
|
|
1,304,350 |
|
1,926,894 |
|
289,617 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable
to YY Inc. |
|
400,039 |
|
573,708 |
|
635,967 |
|
95,588 |
|
|
951,664 |
|
1,752,829 |
|
263,456 |
Share-based
compensation expenses |
|
35,519 |
|
23,465 |
|
3,143 |
|
473 |
|
|
130,938 |
|
49,201 |
|
7,395 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
income attributable to YY Inc. |
|
435,558 |
|
597,173 |
|
639,110 |
|
96,061 |
|
|
1,082,602 |
|
1,802,030 |
|
270,851 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net
income per ADS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—Basic |
|
7.70 |
|
10.51 |
|
10.65 |
|
1.60 |
|
|
19.23 |
|
31.15 |
|
4.68 |
—Diluted |
|
7.48 |
|
10.39 |
|
10.56 |
|
1.59 |
|
|
18.79 |
|
30.54 |
|
4.59 |
Weighted average number
of ADS used in calculating Non-GAAP net income per ADS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
—Basic |
|
56,560,174 |
|
56,832,278 |
|
60,008,235 |
|
60,008,235 |
|
|
56,290,231 |
|
57,857,025 |
|
57,857,025 |
—Diluted |
|
60,814,662 |
|
57,488,989 |
|
60,503,529 |
|
60,503,529 |
|
|
60,773,398 |
|
59,681,394 |
|
59,681,394 |
|
YY INC. |
UNAUDITED SEGMENT REPORT |
(All amounts in thousands, except share, ADS and per
ADS data) |
|
|
|
Three Months Ended |
|
|
September 30,
2017 |
|
|
|
|
|
|
|
|
YY Live(2) |
|
Huya(2) |
|
Total |
|
Total |
|
|
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
|
|
|
|
|
|
|
|
|
Live
streaming |
|
2,319,251 |
|
552,359 |
|
2,871,610 |
|
431,607 |
|
Online games |
|
113,188 |
|
8,847 |
|
122,035 |
|
18,342 |
|
Membership |
|
46,139 |
|
3,347 |
|
49,486 |
|
7,438 |
|
Others |
|
30,193 |
|
18,981 |
|
49,174 |
|
7,391 |
|
|
|
|
|
|
|
|
|
|
|
Total net revenue |
|
2,508,771 |
|
583,534 |
|
3,092,305 |
|
464,778 |
|
|
|
|
|
|
|
|
|
|
|
Cost
of revenues(1) |
|
(1,379,016 |
) |
(510,297 |
) |
(1,889,313 |
) |
(283,966 |
) |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
1,129,755 |
|
73,237 |
|
1,202,992 |
|
180,812 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1) |
|
|
|
|
|
|
|
|
|
Research and development expenses |
|
(117,231 |
) |
(48,908 |
) |
(166,139 |
) |
(24,971 |
) |
Sales
and marketing expenses |
|
(228,318 |
) |
(21,162 |
) |
(249,480 |
) |
(37,497 |
) |
General and administrative expenses |
|
(127,342 |
) |
(17,336 |
) |
(144,678 |
) |
(21,745 |
) |
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
(472,891 |
) |
(87,406 |
) |
(560,297 |
) |
(84,213 |
) |
Other
income |
|
18,569 |
|
98 |
|
18,667 |
|
2,806 |
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
675,433 |
|
(14,071 |
) |
661,362 |
|
99,405 |
|
|
|
|
|
|
|
|
|
|
|
- Share-based compensation was allocated in cost of revenues and
operating expenses as follows:
|
|
|
|
|
Three Months Ended |
|
|
September 30,
2017 |
|
|
|
|
|
|
|
|
YY Live |
|
Huya |
Total |
|
Total |
|
|
|
RMB |
|
RMB |
RMB |
|
US$ |
|
|
|
|
|
|
|
|
|
|
Cost
of revenues |
|
(1,190 |
) |
756 |
(434 |
) |
(65 |
) |
Research and development expenses |
|
(7,973 |
) |
1,924 |
(6,049 |
) |
(909 |
) |
Sales
and marketing expenses |
|
(106 |
) |
32 |
(74 |
) |
(11 |
) |
General and administrative expenses |
|
8,473 |
|
1,227 |
9,700 |
|
1,458 |
|
|
|
|
|
|
|
|
|
|
- The Company revamped its internal organization and
one sub-business stream previously presented and reviewed under YY
Live was changed to be presented and reviewed under Huya from the
first quarter of 2017. Segment information for the 3 months ended
30 September 2016 has been restated accordingly.
- As the Company has disposed of a great majority of its online
education business before the end of 2016 and disposed of the
remaining portion of its online education business in the beginning
of 2017, 100 Education ceased to be an operating segment starting
from the first quarter of 2017.
|
YY 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,
2017 |
|
|
|
|
|
|
|
|
|
|
YY Live |
|
Huya |
|
Total |
Total |
|
|
|
RMB |
|
RMB |
|
RMB |
US$ |
|
|
|
|
|
|
|
|
Operating income (loss) |
|
675,433 |
|
(14,071 |
) |
661,362 |
99,405 |
Share-based compensation expenses |
|
(796 |
) |
3,939 |
|
3,143 |
473 |
|
|
|
|
|
|
|
|
Non-GAAP operating income (loss) |
|
674,637 |
|
(10,132 |
) |
664,505 |
99,878 |
|
|
|
|
|
|
|
|
YY INC. |
UNAUDITED SEGMENT REPORT |
(All amounts in thousands, except share, ADS and per
ADS data) |
|
|
|
Three Months Ended |
|
|
June 30,
2017 |
|
|
|
|
|
|
|
|
YY Live |
|
Huya |
|
Total |
|
Total |
|
|
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
|
|
|
|
|
|
|
|
|
Live
streaming |
|
1,931,569 |
|
441,828 |
|
2,373,397 |
|
350,095 |
|
Online games |
|
147,010 |
|
6,949 |
|
153,959 |
|
22,710 |
|
Membership |
|
50,014 |
|
2,190 |
|
52,204 |
|
7,701 |
|
Others |
|
19,034 |
|
10,397 |
|
29,431 |
|
4,341 |
|
|
|
|
|
|
|
|
|
|
|
Total net revenue |
|
2,147,627 |
|
461,364 |
|
2,608,991 |
|
384,847 |
|
|
|
|
|
|
|
|
|
|
|
Cost
of revenues(1) |
|
(1,159,554 |
) |
(403,891 |
) |
(1,563,445 |
) |
(230,620 |
) |
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
988,073 |
|
57,473 |
|
1,045,546 |
|
154,227 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1) |
|
|
|
|
|
|
|
|
|
Research and development expenses |
|
(132,223 |
) |
(35,136 |
) |
(167,359 |
) |
(24,687 |
) |
Sales
and marketing expenses |
|
(183,119 |
) |
(21,315 |
) |
(204,434 |
) |
(30,156 |
) |
General and administrative expenses |
|
(86,678 |
) |
(17,867 |
) |
(104,545 |
) |
(15,421 |
) |
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
(402,020 |
) |
(74,318 |
) |
(476,338 |
) |
(70,264 |
) |
Gain on deconsolidation
and disposal of subsidiaries |
|
- |
|
- |
|
- |
|
- |
|
Other
income |
|
30,156 |
|
10 |
|
30,166 |
|
4,450 |
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
616,209 |
|
(16,835 |
) |
599,374 |
|
88,413 |
|
|
|
|
|
|
|
|
|
|
|
- Share-based compensation was allocated in cost of revenues and
operating expenses as follows:
|
|
|
|
|
Three Months Ended |
|
|
June 30,
2017 |
|
|
|
|
|
|
|
|
YY Live |
Huya |
Total |
Total |
|
|
RMB |
RMB |
RMB |
US$ |
|
|
|
|
|
|
Cost
of revenues |
|
2,372 |
649 |
3,021 |
446 |
Research and development expenses |
|
8,229 |
2,263 |
10,492 |
1,548 |
Sales
and marketing expenses |
|
282 |
21 |
303 |
45 |
General and administrative expenses |
|
6,872 |
2,777 |
9,649 |
1,423 |
|
|
|
|
|
|
YY 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,
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
YY Live |
|
Huya |
|
Total |
|
Total |
|
|
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
616,209 |
|
(16,835 |
) |
599,374 |
|
88,413 |
Share-based compensation expenses |
|
17,755 |
|
5,710 |
|
23,465 |
|
3,462 |
|
|
|
|
|
|
|
|
|
Non-GAAP operating income (loss) |
|
633,964 |
|
(11,125 |
) |
622,839 |
|
91,875 |
|
|
|
|
|
|
|
|
|
YY INC. |
UNAUDITED SEGMENT REPORT |
(All amounts in thousands, except share, ADS and per
ADS data) |
|
|
|
Three Months Ended |
|
|
September 30,
2016 |
|
|
|
|
|
YY Live |
|
Huya |
|
100 Education |
|
Total |
|
Total |
|
|
|
RMB |
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues |
|
|
|
|
|
|
|
|
|
|
|
Live
streaming |
|
1,593,495 |
|
196,878 |
|
- |
|
1,790,373 |
|
268,482 |
|
Online games |
|
149,530 |
|
- |
|
- |
|
149,530 |
|
22,423 |
|
Membership |
|
68,768 |
|
- |
|
- |
|
68,768 |
|
10,312 |
|
Others |
|
20,240 |
|
- |
|
60,894 |
|
81,134 |
|
12,167 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total net revenue |
|
1,832,033 |
|
196,878 |
|
60,894 |
|
2,089,805 |
|
313,384 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
of revenues(1) |
|
(962,250 |
) |
(279,710 |
) |
(33,042 |
) |
(1,275,002 |
) |
(191,198 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (loss) |
|
869,783 |
|
(82,832 |
) |
27,852 |
|
814,803 |
|
122,186 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses(1) |
|
|
|
|
|
|
|
|
|
|
|
Research and development expenses |
|
(109,495 |
) |
(47,551 |
) |
(6,190 |
) |
(163,236 |
) |
(24,479 |
) |
Sales
and marketing expenses |
|
(68,794 |
) |
(21,753 |
) |
(18,528 |
) |
(109,075 |
) |
(16,357 |
) |
General and administrative expenses |
|
(63,984 |
) |
(18,087 |
) |
(20,612 |
) |
(102,683 |
) |
(15,398 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
(242,273 |
) |
(87,391 |
) |
(45,330 |
) |
(374,994 |
) |
(56,234 |
) |
Gain
on deconsolidation and disposal of subsidiaries |
|
- |
|
- |
|
- |
|
- |
|
- |
|
Other
income |
|
33,065 |
|
- |
|
- |
|
33,065 |
|
4,958 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
660,575 |
|
(170,223 |
) |
(17,478 |
) |
472,874 |
|
70,910 |
|
|
|
|
|
|
|
|
|
|
|
|
|
- Share-based compensation was allocated in cost of revenues and
operating expenses as follows:
|
|
|
Three Months Ended |
|
|
September 30,
2016 |
|
|
|
|
|
|
|
|
|
YY Live |
Huya |
100 Education |
Total |
Total |
|
|
RMB |
RMB |
RMB |
RMB |
US$ |
|
|
|
|
|
|
|
Cost
of revenues |
|
2,231 |
1,429 |
41 |
3,701 |
555 |
Research and development expenses |
|
6,108 |
4,234 |
778 |
11,120 |
1,668 |
Sales
and marketing expenses |
|
575 |
37 |
- |
612 |
92 |
General and administrative expenses |
|
1,435 |
5,177 |
13,474 |
20,086 |
3,012 |
|
|
|
|
|
|
|
YY 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,
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
YY Live |
|
Huya |
|
100 Education |
|
Total |
|
Total |
|
|
|
RMB |
|
RMB |
|
RMB |
|
RMB |
|
US$ |
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss) |
|
660,575 |
|
(170,223 |
) |
(17,478 |
) |
472,874 |
|
70,910 |
Share-based compensation expenses |
|
10,349 |
|
10,877 |
|
14,293 |
|
35,519 |
|
5,327 |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating income (loss) |
|
670,924 |
|
(159,346 |
) |
(3,185 |
) |
508,393 |
|
76,237 |
|
|
|
|
|
|
|
|
|
|
|
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