DouYu International Holdings Limited Reports Second Quarter 2021 Unaudited Financial Results

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WUHAN, China, Aug. 16, 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 second quarter ended June 30, 2021.

Second Quarter 2021 Financial and Operational Highlights

  • Total net revenues in the second quarter of 2021 were RMB2,336.8 million (US$361.9 million), compared with RMB2,508.2 million in the same period of 2020.
  • Gross profit in the second quarter of 2021 was RMB306.5 million (US$47.5 million), compared with RMB522.9 million in the same period of 2020.
  • Net loss in the second quarter of 2021 was RMB181.7 million (US$28.1 million), compared with a net income of RMB319.3 million in the same period of 2020.
  • Adjusted net loss in the second quarter of 2021 was RMB145.1 million (US$22.5 million), compared with an adjusted net income of RMB322.9 million in the same period of 2020.
  • Average mobile MAUs in the second quarter of 2021 increased by 3.9% to 60.7 million from 58.4 million in the same period of 2020.
  • Quarterly average paying user count in the second quarter of 2021 was 7.2 million, compared with 7.6 million in the same period of 2020.

Mr. Shaojie Chen, Chief Executive Officer of DouYu, commented, “Our core operating metric continued to grow at a steady pace in the second quarter of 2021, with our quarterly average mobile MAUs increased by 3.9% year over year to 60.7 million. Looking ahead, we plan to continue expanding our content ecosystem both upstream and downstream to cover each link of the game industry value chain. We will also bolster our industry leadership through the continuous execution of our live streaming, video, content, and community strategies.”

Mr. Hao Cao, Vice President of DouYu, commented, “In the second quarter of 2021, our total revenues were RMB2.34 billion and gross profit was RMB307 million, representing a gross margin of 13.1%. During the quarter, we continued to increase our investments in proprietary content production while further upgrading the functions and content of our video and community related products. Going forward, we will continue exploring new methods to improve our monetization capabilities and generate long-term shareholder value.”

Second Quarter 2021 Financial Results

Total net revenues in the second quarter of 2021 were RMB2,336.8 million (US$361.9 million), compared with RMB2,508.2 million in the same period of 2020.

Live streaming revenues in the second quarter of 2021 were RMB2,178.1 million (US$337.3 million), compared with RMB2,319.9 million in the same period of 2020. The decrease in year-over-year comparison was mostly due to the decrease in user time as a result of the recovery from the COVID-19 pandemic and less stay-at-home time. This decline was partially offset by increased mobile MAU and improvements in user engagement as a result of the Company’s increased sales and marketing initiatives.

Advertising and other revenues in the second quarter of 2021 were RMB158.7 million (US$24.6 million), compared with RMB188.3 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 second quarter of 2021 was RMB2,030.2 million (US$314.4 million), compared with RMB1,985.3 million in the same period of 2020. This increase was primarily due to revenue sharing fees and content costs increased by RMB51.9 million, partially offset by bandwidth costs decreased by RMB6.6 million.

Revenue sharing fees and content costs in the second quarter of 2021 increased by 3.0% to RMB1,806.8 million (US$279.8 million) from RMB1,754.9 million in the same period of 2020. This increase was due to the Company’s increased investments in the broadcasting rights for eSports tournaments, in-house production of PGC contents, and quality streamers in the overseas market.

Bandwidth costs in the second quarter of 2021 decreased by 3.9% to RMB161.8 million (US$25.1 million) from RMB168.4 million in the same period of 2020. This decrease was mainly due to continuous in-house technology upgrades, which led to higher bandwidth efficiency and lower bandwidth usage costs.

Gross profit in the second quarter of 2021 was RMB306.5 million (US$47.5 million), compared with RMB522.9 million in the same period of 2020. Gross margin in the second quarter of 2021 was 13.1%, compared with 20.8% in the same period of 2020. This decrease was primarily due to the increase in content costs and the decrease in revenues, partially offset by the decrease in bandwidth costs.

Sales and marketing expenses in the second quarter of 2021 were RMB295.0 million (US$45.7 million), compared with RMB142.1 million in the same period of 2020. This increase was mainly attributable to the increased promotional channels for user acquisition and increased promotions and branding activities.

Research and development expenses in the second quarter of 2021 were RMB123.0 million (US$19.1 million), compared with RMB94.9 million in the same period of 2020. This increase was primarily attributable to additional investments in technical personnel due to Company’s further overseas expansion and technology infrastructure upgrade to enhance user experience.

General and administrative expenses in the second quarter of 2021 were RMB102.6 million (US$15.9 million), compared with RMB79.5 million in the same period of 2020. This increase was primarily due to the increase in professional service fees during the quarter.

Other operating income, net in the second quarter of 2021 was RMB16.7 million (US$2.6 million), compared with RMB32.5 million in the same period of 2020.

Loss from operations in the second quarter of 2021 was RMB197.4 million (US$30.6 million), compared with a profit from operations of RMB238.9 million in the same period of 2020.

Adjusted operating loss in the second quarter of 2021, which adds back share-based compensation expenses, was RMB165.1 million (US$25.6 million), compared with an adjusted operating income of RMB272.7 million in the same period of 2020.

Income tax expenses in the second quarter of 2021 and 2020 were nil due to the Company’s cumulative net losses and the resulting tax loss carry forward.

Net loss in the second quarter of 2021 was RMB181.7 million (US$28.1 million), compared with a net income of RMB319.3 million in the same period of 2020.

Adjusted net loss in the second quarter of 2021, which excludes share-based compensation expenses, share of income in equity method investments, and impairment loss of investments, was RMB145.1 million (US$22.5 million), compared with an adjusted net income of RMB322.9 million in the same period of 2020.2

Basic and diluted net loss per ADS[1] in the second quarter of 2021 were RMB0.45 (US$0.07) and RMB0.45 (US$0.07) respectively. Adjusted basic and diluted net loss per ADS in the second quarter of 2021 were RMB0.35 (US$0.05) and RMB0.35 (US$0.05) respectively.

[1] Every ten ADSs represent one ordinary share.

Conference Call Information

The Company will hold a conference call on Monday, Aug 16, 2021, at 7:00 am Eastern Time (or 7:00 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:

1268939

The replay will be accessible through Monday, Aug 23, 2021, by dialing the following numbers:

International:

1-412-317-0088

United States Toll Free:

1-877-344-7529

Conference ID:

10159457

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/.

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.

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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 RMB6.4566 to US$1.00, the noon buying rate in effect on June 30, 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 June 30, 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.

Investor Relations Contact

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

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

Media Relations Contact

Doris Li
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 June 30

2020

2021

2021

ASSETS

RMB

RMB

US$ (1)

Current assets:

Cash and cash equivalents

5,279,902

5,372,180

832,045

Restricted cash

11,875

10,703

1,658

Short-term bank deposits

2,230,229

1,260,000

195,149

Accounts receivable, net

199,744

176,970

27,409

Prepayments

66,257

65,826

10,195

Amounts due from related parties

9,045

11,519

1,784

Other current assets

236,704

394,574

61,112

Total current assets

8,033,756

7,291,772

1,129,352

Property and equipment, net

37,792

31,274

4,844

Intangible assets, net

141,672

101,439

15,711

Long-term bank deposits

100,000

746,010

115,542

Investments

500,659

538,955

83,473

Goodwill

12,933

12,804

1,983

Right-of-use assets, net

62,141

41,497

6,427

Other non-current assets

19,004

41,460

6,422

Total non-current assets

874,201

1,513,439

234,402

TOTAL ASSETS

8,907,957

8,805,211

1,363,754

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

LIABILITIES

Current liabilities:

Accounts payable

986,073

922,029

142,804

Advances from customers

10,911

7,956

1,232

Deferred revenue

242,013

201,638

31,230

Accrued expenses and other current liabilities

384,041

483,302

74,854

Amounts due to related parties

223,525

431,019

66,756

Lease liabilities due within one year

36,281

29,112

4,509

Total current liabilities

1,882,844

2,075,056

321,385

Lease liabilities

16,952

10,124

1,568

Deferred revenue

30,779

24,378

3,776

Total non-current liabilities

47,731

34,502

5,344

TOTAL LIABILITIES

1,930,575

2,109,558

326,729

(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 RMB6.4566 to US$1.00, the noon buying rate in effect on June 30, 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 June 30

2020

2021

2021

RMB

RMB

US$ (1)

SHAREHOLDERS’ EQUITY

Ordinary shares

23

23

4

Treasury shares

(695,098)

(695,098)

(107,657)

Additional paid-in capital

10,486,398

10,552,003

1,634,297

Accumulated deficit

(2,863,219)

(3,072,246)

(475,830)

Accumulated other comprehensive income

10,911

(52,435)

(8,121)

Total DouYu Shareholders’ Equity

6,939,015

6,732,247

1,042,693

Noncontrolling interests

38,367

(36,594)

(5,668)

Total Shareholders’ Equity

6,977,382

6,695,653

1,037,025

TOTAL LIABILITIES  AND SHAREHOLDERS’ EQUITY

8,907,957

8,805,211

1,363,754

(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 RMB6.4566 to US$1.00, the noon buying rate in effect on June 30, 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

Six Months Ended

June 30,

2020

March 31,

2021

June 30,

2021

June 30,

2021

June 30,

2020

June 30,

2021

June 30,

2021

RMB

RMB

RMB

US$ (1)

RMB

RMB

US$ (1)

Net revenues

2,508,152

2,152,687

2,336,771

361,920

4,786,187

4,489,459

695,329

Cost of revenues

(1,985,270)

(1,892,499)

(2,030,223)

(314,442)

(3,777,451)

(3,922,722)

(607,552)

Gross profit

522,882

260,188

306,548

47,478

1,008,736

566,737

87,777

Operating income (expenses)(2)

Sales and marketing expenses

(142,058)

(209,877)

(294,953)

(45,682)

(249,414)

(504,829)

(78,188)

General and administrative expenses

(79,470)

(88,074)

(102,624)

(15,894)

(164,050)

(190,698)

(29,535)

Research and development expenses

(94,920)

(111,264)

(123,015)

(19,053)

(187,808)

(234,280)

(36,285)

Other operating income, net

32,454

23,924

16,681

2,584

49,032

40,605

6,289

Total operating expenses

(283,994)

(385,291)

(503,911)

(78,045)

(552,240)

(889,202)

(137,719)

Income (loss) from operations

238,888

(125,103)

(197,363)

(30,567)

456,496

(322,465)

(49,942)

Other income (expenses), net

(8,382)

127

178

28

(18,400)

305

47

Interest income, net

50,106

20,930

19,768

3,062

95,150

40,697

6,303

Gain on disposal of subsidiary

23,526

23,526

Income (loss) before income taxes and share of

    income (loss) in equity method investments

304,138

(104,046)

(177,417)

(27,477)

556,772

(281,463)

(43,592)

Income tax expense

Share of income (loss) in equity method investments

15,132

2,213

(4,243)

(657)

17,024

(2,029)

(314)

Net income (loss)

319,270

(101,833)

(181,660)

(28,134)

573,796

(283,492)

(43,906)

Less: Net loss attributable to noncontrolling interest

(16,775)

(39,814)

(34,651)

(5,367)

(22,699)

(74,465)

(11,533)

Net income (loss) attributable to ordinary 

    shareholders of the Company

336,045

(62,019)

(147,009)

(22,767)

596,495

(209,027)

(32,373)

Net income (loss) per ordinary share

Basic

10.56

(1.92)

(4.52)

(0.70)

18.73

(6.44)

(1.00)

Diluted

10.23

(1.92)

(4.52)

(0.70)

18.12

(6.44)

(1.00)

Net income (loss) per ADS(3)

Basic

1.06

(0.19)

(0.45)

(0.07)

1.87

(0.64)

(0.10)

Diluted

1.02

(0.19)

(0.45)

(0.07)

1.81

(0.64)

(0.10)

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

Basic

31,828,405

32,349,764

32,520,221

32,520,221

31,838,618

32,434,992

32,434,992

Diluted

32,864,145

32,349,764

32,520,221

32,520,221

32,920,090

32,434,992

32,434,992

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

Basic

318,284,051

323,497,638

325,202,212

325,202,212

318,386,179

324,349,925

324,349,925

Diluted

328,641,453

323,497,638

325,202,212

325,202,212

329,200,897

324,349,925

324,349,925

(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 RMB6.4566 to US$1.00, the noon buying rate in effect on June 30, 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

Six Months Ended

June 30,

2020

March 31,

2021

June 30,

2021

June 30,

2021

June 30,

2020

June 30,

2021

June 30,

2021

RMB

RMB

RMB

US$ (1)

RMB

RMB

US$ (1)

Research and development expenses

5,575

5,468

5,300

821

11,137

10,768

1,668

Sales and marketing expenses

1,148

1,217

1,177

182

2,322

2,395

371

General and administrative expenses

27,130

26,632

25,810

3,997

62,244

52,442

8,122

(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

Six Months Ended

June 30,

2020

March 31,

2021

June 30,

2021

June 30,

2021

June 30,

2020

June 30,

2021

June 30,

2021

RMB

RMB

RMB

US$ (1)

RMB

RMB

US$ (1)

Income (loss) from operations

238,888

(125,103)

(197,363)

(30,567)

456,496

(322,465)

(49,942)

Add:

Share-based compensation expenses

33,853

33,317

32,287

5,000

75,703

65,605

10,161

Adjusted Operating income (loss)

272,741

(91,786)

(165,076)

(25,567)

532,199

(256,860)

(39,781)

Net income (loss)

319,270

(101,833)

(181,660)

(28,134)

573,796

(283,492)

(43,906)

Add:

Share-based compensation expenses

33,853

33,317

32,287

5,000

75,703

65,605

10,161

Share of (income) loss in equity method investments

(15,132)

(2,213)

4,243

657

(17,024)

2,029

314

Gain on disposal of subsidiary

(23,526)

(23,526)

Impairment loss of investment

8,400

10,846

Adjusted net income (loss)

322,865

(70,729)

(145,130)

(22,477)

619,795

(215,858)

(33,431)

Net income (loss) attributable to DouYu

336,045

(62,019)

(147,009)

(22,767)

596,495

(209,027)

(32,373)

Add:

Share-based compensation expenses

33,853

33,317

32,287

5,000

75,703

65,605

10,161

Share of (income) loss in equity method investments

(15,132)

(2,213)

4,243

657

(17,024)

2,029

314

Gain on disposal of subsidiary

(23,526)

(23,526)

Impairment loss of investment

8,400

10,846

Adjusted net income (loss) attributable to DouYu

339,640

(30,915)

(110,479)

(17,110)

642,494

(141,393)

(21,898)

Adjusted Net income (loss) per ordinary share

Basic

10.67

(0.96)

(3.47)

(0.54)

20.18

(4.44)

(0.69)

Diluted

10.67

(0.96)

(3.47)

(0.54)

20.18

(4.44)

(0.69)

Adjusted net income (loss) per ADS(2)

 

Basic

1.07

(0.10)

(0.35)

(0.05)

2.02

(0.44)

(0.07)

Diluted

1.07

(0.10)

(0.35)

(0.05)

2.02

(0.44)

(0.07)

Weighted average number of ordinary shares used in calculating Adjusted net income per ordinary share

Basic

31,828,405

32,349,764

32,520,221

32,520,221

31,838,618

32,434,992

32,434,992

Diluted

31,828,405

32,349,764

32,520,221

32,520,221

31,838,618

32,434,992

32,434,992

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

Basic

318,284,051

323,497,638

325,202,212

325,202,212

318,386,179

324,349,925

324,349,925

Diluted

318,284,051

323,497,638

325,202,212

325,202,212

318,386,179

324,349,925

324,349,925

(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 RMB6.4566 to US$1.00, the noon buying rate in effect on June 30, 2021, in the H.10 statistical release of the
Federal Reserve Board.

(2) Every ten ADSs represent one ordinary share.

Cision View original content:https://www.prnewswire.com/news-releases/douyu-international-holdings-limited-reports-second-quarter-2021-unaudited-financial-results-301355610.html

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