DouYu International Holdings Limited Reports First Quarter 2021 Unaudited Financial Results


    WUHAN, China, May 18, 2021 /PRNewswire/ -- DouYu International Holdings Limited ("DouYu" or the "Company") (Nasdaq: DOYU), a leading game-centric live streaming platform in China and a pioneer in the eSports value chain, today announced its unaudited financial results for the first quarter ended March 31, 2021.

    First Quarter 2021 Financial and Operational Highlights

    • Total net revenues in the first quarter of 2021 were RMB2,152.7 million (US$328.6 million), compared with RMB2,278.0 million in the same period of 2020.
    • Gross profit in the first quarter of 2021 was RMB260.2 million (US$39.7 million), compared with RMB485.9 million in the same period of 2020, implying a gross margin of 12.1% in the first quarter of 2021.
    • Net loss in the first quarter of 2021 was RMB101.8 million (US$15.5 million), compared with a net income of RMB254.5 million in the same period of 2020.
    • Adjusted net loss in the first quarter of 2021 was RMB70.7 million (US$10.8 million), compared with an adjusted net income of RMB296.9 million in the same period of 2020.
    • Average MAUs in the first quarter of 2021 increased by 21.3% to 191.9 million from 158.1 million in the same period of 2020.
    • Average mobile MAUs in the first quarter of 2021 increased by 4.5% to 59.1 million from 56.6 million in the same period of 2020.
    • Quarterly average paying user count in the first quarter of 2021 was 7.0 million, compared with 7.6 million in the same period of 2020.

    Mr. Shaojie Chen, Chief Executive Officer of DouYu, commented, "We are pleased to announce that we maintained steady operational growth in the first quarter of 2021 as we continued to upgrade our operational system. On a year-over-year basis, our total average MAUs increased by 21.3% to 191.9 million while our average mobile MAUs increased by 4.5% to 59.1 million. By continuously enriching our content library and diversifying our live streaming, video, and community content offerings, we remain committed to developing a diversified and industry leading game-centric integrated platform."

    Mr. Hao Cao, Vice President of DouYu, commented, "In the first quarter of 2021, our total revenues were RMB2.15 billion and gross profit was RMB260.2 million, representing a gross margin of 12.1%. During the quarter, we increased our investments in content, as we remained focused on improving our content production in both our video and community businesses. Looking ahead, we will continue to optimize the monetization capabilities and improve monetization efficiency of our platform while striving to generate more long-term value for our shareholders. "

    First Quarter 2021 Financial Results

    Total net revenues in the first quarter of 2021 were RMB2,152.7 million (US$328.6 million), compared with RMB2,278.0 million in the same period of 2020.

    Live streaming revenues in the first quarter of 2021 were RMB1,998.6 million (US$305.1 million), compared with RMB2,113.0 million in the same period of 2020. This decrease was primarily due to the reversion of paying users' consumption of the virtual items to that of the pre-pandemic level, as the pandemic was gradually brought under control in China. This decline was partially offset by our implementation of more effective operational strategies, which helped improve the participation levels and paying behaviors of key paying users on our platform in the period.

    Advertising and other revenues in the first quarter of 2021 were RMB154.1 million (US$23.5 million), compared with RMB165.0 million in the same period of 2020. The year-over-year decrease was primarily attributable to the trend of game advertisers normalizing their marketing expenditures, which were relatively higher in the same period last year due to the COVID-19 pandemic.

    Cost of revenues in the first quarter of 2021 was RMB1,892.5 million (US$288.9 million), compared with RMB1,792.2 million in the same period of 2020, primarily due to increased revenue sharing fees and content costs.

    Revenue sharing fees and content costs in the first quarter of 2021 increased by 5.4% to RMB1,659.6 million (US$253.3 million) from RMB1,574.8 million in the same period of 2020. This was because of the Company's increased investments in the broadcasting rights for eSports tournaments, in-house production of proprietary events, and quality streamers in the overseas market.

    Bandwidth costs in the first quarter of 2021 were RMB172.1 million (US$26.3 million), compared with RMB152.9 million in the same period of 2020. This was mainly due to the promotion of high-quality viewing options offered on the Company's platform and was partially offset by improved bandwidth efficiency as a result of in-house technology upgrades.

    Gross profit in the first quarter of 2021 was RMB260.2 million (US$39.7 million), compared with RMB485.9 million in the same period of 2020. Gross margin in the first quarter of 2021 was 12.1%, compared with 21.3% in the same period of 2020. This decrease was primary due to the increase in content costs for eSports tournaments and bandwidth costs, together with the decrease in revenues.

    Sales and marketing expenses in the first quarter of 2021 were RMB209.9 million (US$32.0 million), compared with RMB107.4 million in the same period of 2020. This was mainly attributable to the increased sponsorships and promotions of eSports tournaments compared to the same period of 2020 during the COVID-19 pandemic as well as increased promotional activities for user acquisition.

    Research and development expenses in the first quarter of 2021 were RMB111.3 million (US$17.0 million), compared with RMB92.9 million in the same period of 2020. This increase was primarily due to our additional investments in technical personnel.

    General and administrative expenses in the first quarter of 2021 were RMB88.1 million (US$13.4 million), compared with RMB84.6 million in the same period of 2020.

    Other operating income, net in the first quarter of 2021 was RMB23.9 million (US$3.7 million), compared with RMB16.6 million in the same period of 2020.

    Loss from operations in the first quarter of 2021 was RMB125.1 million (US$19.1 million), compared with a profit from operations of RMB217.6 million in the same period of 2020.

    Adjusted operating loss in the first quarter of 2021, which adds back share-based compensation expenses, was RMB91.8 million (US$14.0 million), compared with an adjusted operating income of RMB259.5 million in the same period of 2020.

    Income tax expenses in the first quarter of 2021 and 2020 were nil due to the Company's cumulative net losses and the resulting tax loss carryforward.

    Net loss in the first quarter of 2021 was RMB101.8 million (US$15.5 million), compared with a net income of RMB254.5 million in the same period of 2020.

    Adjusted net loss in the first quarter of 2021, which excludes share-based compensation expenses, share of income in equity method investments, and impairment loss of investments, was RMB70.7 million (US$10.8 million), compared with an adjusted net income of RMB296.9 million in the same period of 2020.

    Basic and diluted net loss per ADS[1] in the first quarter of 2021 were RMB0.19 (US$0.03) and RMB0.19 (US$0.03) respectively. Adjusted basic and diluted net loss per ADS in the first quarter of 2021 were RMB0.10 (US$0.01) and RMB0.10 (US$0.01) respectively.

    Conference Call Information

    The Company will hold a conference call on Tuesday, May 18, 2021, at 8:00 am Eastern Time (or 8:00 pm Beijing Time on the same day) to discuss the financial results. Listeners may access the call by dialing the following numbers:

    International:                                                                       

    1-412-317-6061

    United States Toll Free:                                                     

    1-888-317-6003

    Mainland China Toll Free:                                                 

    4001-206115

    Hong Kong Toll Free:                                                          

    800-963976

    Singapore Toll Free:                                                           

    800-120-5863

    Conference ID:                                                                    

    6148890

    The replay will be accessible through May 25, 2021, by dialing the following numbers:

    International:                                                                       

    1-412-317-0088

    United States Toll Free:                                                     

    1-877-344-7529

    Conference ID:                                                                    

    10156140

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

    [1] Every ten ADSs represent one ordinary share.

    About DouYu International Holdings Limited

    Headquartered in Wuhan, China, DouYu International Holdings Limited (Nasdaq: DOYU) is a leading game-centric live streaming platform in China and a pioneer in the eSports value chain. DouYu operates its platform on both PC and mobile apps, through which users can enjoy immersive and interactive games and entertainment live streaming. DouYu's platform brings together a deep pool of top live streamers. By providing a sustainable streamer development system built on advanced technology infrastructure and capabilities, DouYu helps ensure a consistent supply of quality content. Through collaborations with a variety of participants across the eSports value chain, the Company has gained coveted access to a wide variety of premium eSports content, which further attracts viewers and enhances user experience. For more information, please see http://ir.douyu.com/.

    Use of Non-GAAP Financial Measures

    Adjusted operating income (loss) is calculated as operating income (loss) adjusted for share-based compensation expenses. Adjusted net income is calculated as net loss adjusted for share-based compensation expenses, share of income (loss) in equity method investments, gain on disposal of investment or subsidiaries and impairment loss on investments. Adjusted net income attributable to DouYu is calculated as net income attributable to DouYu adjusted for share-based compensation expenses, share of income (loss) in equity method investments, gain on disposal of investment or subsidiaries and impairment loss of investments. Adjusted basic and diluted net income per ordinary share is non-GAAP net income attributable to ordinary shareholders divided by weighted average number of ordinary shares used in the calculation of non-GAAP basic and diluted net income per ordinary share. The Company adjusted the impact of (i) share-based compensation expenses, (ii) share of income (loss) in equity method investments, (iii) gain on disposal of investment or subsidiaries and (iv)impairment loss of investments to understand and evaluate the Company's core operating performance. The non-GAAP financial measures are presented to enhance investors' overall understanding of the Company's financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. Investors are encouraged to review the reconciliation of the historical non-GAAP financial measures to its most directly comparable GAAP financial measures. As non-GAAP financial measures have material limitations as analytical metrics and may not be calculated in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measures as a substitute for, or superior to, such metrics in accordance with U.S. GAAP.

    For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of Non-GAAP Results" near the end of this release.

    Exchange Rate Information

    This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.5518 to US$1.00, the noon buying rate in effect on March 31, 2021, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB amounts could have been, or could be, converted, realized or settled in U.S. dollars at that rate on March 31, 2021, or at any other rate.

    Safe Harbor Statement

    This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the Securities Exchange Commission. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.

    In addition to factors previously disclosed in Huya and DouYu's documents filed with the SEC, the following factors, among others, could cause actual results to differ materially from forward-looking statements and information or historical performance: the occurrence of any event, change or other circumstances that could give rise to the right of one or both of Huya and DouYu to terminate the definitive merger agreement between Huya and DouYu; the outcome of any legal proceedings that may be instituted against Huya, DouYu or their respective shareholders or directors; the ability to obtain regulatory approvals and meet other closing conditions to the merger, including the risk that regulatory approvals required for the merger are not obtained or are obtained subject to conditions that are not anticipated or that are material and adverse to Huya's or DouYu's business; a delay in closing the merger; the ability to obtain approval by DouYu's shareholders on the expected terms and schedule; business disruptions from the proposed merger that will harm Huya's or DouYu's business, including current plans and operations; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the merger; certain restrictions during the pendency of the merger that may impact Huya's or DouYu's ability to pursue certain business opportunities or strategic transactions; the ability of Huya or DouYu to retain and hire key personnel; uncertainty as to the long-term value of the Class A ordinary shares of Huya following the merger; the continued availability of capital and financing following the merger; the business, economic and political conditions in the markets in which Huya and DouYu operate; changes in Huya's or DouYu's anticipated revenue and income; changes in DouYu's operating or other expenses; the degree to which Huya or DouYu encounters competition; and general political, economic and market conditions.

    Investor Relations Contact

    Mao Mao
    DouYu International Holdings Limited
    Email: ir@douyu.tv
    Phone: +1 (646) 224-6934

    Xinran Rao
    ICR, Inc.
    Email: DouYu.IR@icrinc.com
    Phone: +1 (646) 224-6934

    Media Relations Contact

    Iris Ding
    DouYu International Holdings Limited
    Email: pr_douyu@douyu.tv
    Phone: +1 (646) 308-1475

    Edmond Lococo
    ICR, Inc.
    Email: DouYu.PR@icrinc.com
    Phone: +1 (646) 308-1475

     

     

    UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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



    As of December 31

    As of March 31


    2020

    2021

    2021


    RMB

    RMB

    US$(1)

    ASSETS

    Current assets




    Cash and cash equivalents

    5,279,902

    5,027,654

    767,370

    Restricted cash

    11,875

    11,841

    1,807

    Short-term bank deposits

    2,230,229

    2,439,973

    372,413

    Accounts receivable, net

    199,744

    176,378

    26,921

    Prepayments

    66,257

    60,618

    9,252

    Amounts due from related parties

    9,045

    10,024

    1,530

    Other current assets

    236,704

    382,446

    58,373

    Total current assets

    8,033,756

    8,108,934

    1,237,666





    Property and equipment, net

    37,792

    34,410

    5,252

    Intangible assets, net

    141,672

    120,867

    18,448

    Long-term bank deposits

    100,000

    100,000

    15,263

    Investments

    500,659

    533,729

    81,463

    Goodwill

    12,933

    13,025

    1,988

    Right-of-use assets

    62,141

    51,242

    7,821

    Other non-current assets

    19,004

    14,552

    2,221

    Total non-current assets

    874,201

    867,825

    132,456

    TOTAL ASSETS

    8,907,957

    8,976,759

    1,370,122





     

    LIABILITIES AND SHAREHOLDERS' EQUITY

    LIABILITIES

    Current liabilities

    Accounts payable

    986,073

    1,019,272

    155,571

    Advances from customers

    10,911

    12,541

    1,914

    Deferred revenue

    242,013

    199,441

    30,441

    Accrued expenses and other current liabilities

    384,041

    372,551

    56,862

    Amounts due to related parties

       223,525

         36,281

      353,923

        31,698  

    54,019  

      4,838  

    Lease liabilities due within one year

    Total current liabilities

    1,882,844

    1,989,426

    303,645





    Lease liabilities

    16,952

    13,433

    2,050

    Deferred revenue

    30,779

    27,898

    4,258

    Total non-current liabilities

    47,731

    41,331

    6,308

    TOTAL LIABILITIES

    1,930,575

    2,030,757

    309,953

     

    (1) Translations of certain RMB amounts into U.S. dollars at a specified rate are solely for the convenience of the reader. Unless otherwise noted, all
    translations from RMB to U.S. dollars are made at a rate of RMB6.5518 to US$1.00, the noon buying rate in effect on March 31, 2021, in the H.10
    statistical release of the Federal Reserve Board.

     

     

    UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

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



    As of December 31

    As of March 31


    2020

    2021

    2021


    RMB

    RMB

    US$(1)

    SHAREHOLDERS' EQUITY




    Ordinary shares

    23

    23

    4

    Treasury shares

    (695,098)

    (695,098)

    (106,093)

    Additional paid-in capital

    10,486,398

    10,519,715

    1,605,622

    Accumulated deficit

    (2,863,219)

    (2,925,238)

    (446,479)

    Accumulated other comprehensive income

    10,911

    49,379

    7,539

    Total DouYu Shareholders' Equity

    6,939,015

    6,948,781

    1,060,593

    Noncontrolling interests

    38,367

    (2,779)

    (424)

    Total Shareholders' Equity

    6,977,382

    6,946,002

    1,060,169

    TOTAL LIABILITIES




       AND SHAREHOLDERS' EQUITY

    8,907,957

    8,976,759

    1,370,122

     

    (1) Translations of certain RMB amounts into U.S. dollars at a specified rate are solely for the convenience of the reader. Unless otherwise noted,
    all translations from RMB to U.S. dollars are made at a rate of RMB6.5518 to US$1.00, the noon buying rate in effect on March 31, 2021, in the
    H.10 statistical release of the Federal Reserve Board.   

     

     

    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

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



    Three Months Ended


    March 31,

    December 31,

    March 31,

    March 31,


    2020

    2020

    2021

    2021


    RMB

    RMB

    RMB

    US$(1)

    Net revenues

    2,278,035

    2,269,197

    2,152,687

    328,564

    Cost of revenues

    (1,792,181)

    (2,087,022)

    (1,892,499)

    (288,852)

    Gross profit

    485,854

    182,175

    260,188

    39,712

    Operating income (expense) (2)





    Sales and marketing expenses

    (107,357)

    (170,708)

    (209,877)

    (32,033)

    General and administrative expenses

    (84,580)

    (117,699)

    (88,074)

    (13,443)

    Research and development expenses

    (92,888)

    (118,879)

    (111,264)

    (16,982)

    Other operating income (expense), net

    16,578

    (7,272)

    23,924

    3,652

    Total operating expenses

    (268,246)

    (414,558)

    (385,291)

    (58,806)

    Income (loss) from operations

    217,608

    (232,383)

    (125,103)

    (19,094)

    Other expenses, net

    (10,018)

    (3,403)

    127

    19

    Interest income, net

    45,044

    23,104

    20,930

    3,195

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

    252,634

    (212,682)

    (104,046)

    (15,880)

    Income tax expense

    -

    -

    -

    -

    Share of income (loss) in equity method investments

    1,892

    (15,982)

    2,213

    338

    Net income (loss)

    254,526

    (228,664)

    (101,833)

    (15,542)

    Less: Net loss attributable to noncontrolling interest

    (5,924)

    (31,807)

    (39,814)

    (6,077)

    Net income (loss) attributable to ordinary
       shareholders of the Company

    260,450

    (196,857)

    (62,019)

    (9,465)

    Net income (loss) per ordinary share





    Basic

    8.18

    (6.12)

    (1.92)

    (0.29)

    Diluted

    7.90

    (6.12)

    (1.92)

    (0.29)

    Net income (loss) per ADS(3)





    Basic

    0.82

    (0.61)

    (0.19)

    (0.03)

    Diluted

    0.79

    (0.61)

    (0.19)

    (0.03)






    Weighted average number of ordinary shares used in calculating net income (loss) per ordinary share

    Basic

    31,848,831

    32,175,361

    32,349,764

    32,349,764

    Diluted

    32,976,034

    32,175,361

    32,349,764

    32,349,764






    Weighted average number of ADS used in calculating net income (loss) per ADS(3)

    Basic

    318,488,308

    321,753,609

    323,497,638

    323,497,638

    Diluted

    329,760,341

    321,753,609

    323,497,638

    323,497,638






     

    (1) Translations of certain RMB amounts into U.S. dollars at a specified rate are solely for the convenience of the reader. Unless otherwise noted, all
    translations from RMB to U.S. dollars are made at a rate of RMB6.5518 to US$1.00, the noon buying rate in effect on March 31, 2021, in the H.10
    statistical release of the Federal Reserve Board.

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

     


    Three Months Ended


    March 31,

    December 31,

    March 31,

    March 31,


    2020

    2020

    2021

    2021


    RMB

    RMB

    RMB

    US$(1)

    Research and development expenses

    5,563

    5,504

    5,468

    835

    Sales and marketing expenses

    1,174

    1,232

    1,217

    186

    General and administrative expenses

    35,114

    26,506

    26,632

    4,065






     

    (3) Every ten ADSs represent one ordinary share.

     

     

    RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS

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



    Three Months Ended


    March 31,

    December 31,

    March 31,

    March 31,


    2020

    2020

    2021

    2021


    RMB

    RMB

    RMB

    US$(1)

    Income (loss) from operations

    217,608

    (232,383)

    (125,103)

    (19,094)

    Add:





    Share-based compensation expenses

    41,850

    33,242

    33,317

    5,086

    Adjusted operating income (loss)

    259,458

    (199,141)

    (91,786)

    (14,008)






    Net income (loss)

    254,526

    (228,664)

    (101,833)

    (15,542)

    Add:





    Share-based compensation expenses

    41,850

    33,242

    33,317

    5,086

    Share of (income) loss in equity method investments

    (1,892)

    15,982

    (2,213)

    (338)

    Impairment losses and fair value adjustments on
       investments

    2,446

    2,500

    -

    -

    Adjusted net income (loss)

    296,931

    (176,940)

    (70,729)

    (10,794)






    Net income (loss) attributable to DouYu

    260,450

    (196,857)

    (62,019)

    (9,465)

    Add:





    Share-based compensation expenses

    41,850

    33,242

    33,317

    5,086

    Share of income (loss) in equity method investments

    (1,892)

    15,982

    (2,213)

    (338)

    Impairment losses and fair value adjustments on
       investments

    2,446

    2,500

    -

    -

    Adjusted net income (loss) attributable to DouYu

    302,855

    (145,133)

    (30,915)

    (4,717)






    Adjusted net income (loss) per ordinary share





    Basic

    9.51

    (4.51)

    (0.96)

    (0.15)

    Diluted

    9.51

    (4.51)

    (0.96)

    (0.15)






    Adjusted net income (loss) per ADS(2)





    Basic

    0.95

    (0.45)

    (0.10)

    (0.01)

    Diluted

    0.95

    (0.45)

    (0.10)

    (0.01)






    Weighted average number of ordinary shares used in calculating adjusted net income (loss) per ordinary share

    Basic

    31,848,831

    32,175,361

    32,349,764

    32,349,764

    Diluted

    31,848,831

    32,175,361

    32,349,764

    32,349,764






    Weighted average number of ordinary shares used in calculating adjusted net income per ADS(2)

    Basic

    318,488,308

    321,753,609

    323,497,638

    323,497,638

    Diluted

    318,488,308

    321,753,609

    323,497,638

    323,497,638

     

    (1) Translations of certain RMB amounts into U.S. dollars at a specified rate are solely for the convenience of the reader. Unless otherwise noted, all
    translations from RMB to U.S. dollars are made at a rate of RMB6.5518 to US$1.00, the noon buying rate in effect on March 31, 2021, in the H.10
    statistical release of the Federal Reserve Board.

    (2) Every ten ADSs represent one ordinary share.

     

     


    Related Links :

    https://www.douyu.com/

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