JOYY Reports Third Quarter 2022 Unaudited Financial Results

Nov 28th, 2022 19:00 EST

SINGAPORE, Nov. 29, 2022 (GLOBE NEWSWIRE) -- JOYY Inc. (NASDAQ: YY) (“JOYY” or the “Company,” formerly known as YY Inc.), a global video-based social media company, today announced its unaudited financial results for the third quarter of 2022.

Third Quarter 2022 Financial Highlights1

  • Net revenues were US$586.7 million, compared to US$650.5 million in the corresponding period of 2021.
  • Net income from continuing operations attributable to controlling interest of JOYY2 was US$515.3 million, compared to net income of US$7.5 million in the corresponding period of 2021.
  • Non-GAAP net income from continuing operations attributable to controlling interest and common shareholders of JOYY3 was US$76.9 million, compared to non-GAAP net income of US$35.1 million in the corresponding period of 2021, primarily as a result of improved gross margin, disciplined marketing spending and enhanced operating efficiency at the group level.

Third Quarter 2022 Operational Highlights

  • Average mobile MAUs4 of Bigo Live increased by 14.2% to 35.4 million from 31.0 million in the corresponding period of 2021.
  • Average mobile MAUs of Likee decreased by 34.1% to 50.6 million from 76.8 million in the corresponding period of 2021, primarily due to reduced spending on user acquisition via advertisement.
  • Average mobile MAUs of Hago decreased by 29.6% to 7.6 million from 10.8 million in the corresponding period of 2021, primarily due to reduced spending on user acquisition via advertisement.
  • Global average mobile MAUs decreased by 6.6% to 269.8 million from 288.8 million in the corresponding period of 2021, primarily due to the decrease in average mobile MAUs of Likee and Hago.
  • Total number of paying users of BIGO (including Bigo Live, Likee and imo)5 decreased by 0.5% to 1.51 million from 1.52 million in the corresponding period of 2021.
  • Average revenue per paying user of BIGO (including Bigo Live, Likee and imo)6 decreased to US$259.8 from US$307.9 in the corresponding period of 2021.

Mr. David Xueling Li, Chairman and Chief Executive Officer of JOYY, commented, “Our forward-looking strategic planning and effective execution of our optimization measures delivered another quarter of improved profitability in spite of the volatile macro environment. We continued to execute our long-term growth strategy, focusing on product upgrades and emphasizing diverse localized content offerings. As a result, we achieved a steady and efficient expansion of Bigo Live’s user community, growing Bigo Live’s MAUs by 14.2% year over year to 35.4 million.”

“We remain focused on building our long-term capabilities and delivering value to users and creators by iterating and evolving our diversified global product matrix,” said Mr. David Xueling Li. “We are confident that our long-term efforts will further enhance our users’ social and entertainment experience, and ultimately boost the growth of our user community and global business. Looking ahead, we will be adaptive and responsive to the macro environment and continue to bolster our resilience and optimize our efficiency. As we are becoming increasingly efficient, we will be better positioned to capture long-term growth opportunities and generate sustainable shareholder value.”

Third Quarter 2022 Financial Results

NET REVENUES

Net revenues were US$586.7 million in the third quarter of 2022, compared to US$650.5 million in the corresponding period of 2021.

Live streaming revenues were US$542.8 million in the third quarter of 2022, compared to US$612.2 million in the corresponding period of 2021, primarily due to the decrease in the average revenue per paying user of BIGO, as global macroeconomic uncertainties and the appreciation of U.S. dollars against certain other local currencies negatively affected users’ paying activities.

Other revenues increased by 14.6% to US$44.0 million in the third quarter of 2022 from US$38.4 million in the corresponding period of 2021.

COST OF REVENUES AND GROSS PROFIT

Cost of revenues decreased by 16.7% to US$366.5 million in the third quarter of 2022 from US$439.8 million in the corresponding period of 2021. Revenue-sharing fees and content costs were US$245.8 million in the third quarter of 2022, compared to US$290.1 million in the corresponding period of 2021.

Gross profit increased by 4.5% to US$220.2 million in the third quarter of 2022 from US$210.8 million in the corresponding period of 2021. Gross margin improved to 37.5% in the third quarter of 2022 from 32.4% in the corresponding period of 2021, primarily due to optimization of revenue sharing cost and other operational costs.

OPERATING EXPENSES AND INCOME

Operating expenses decreased by 3.1% to US$202.2 million in the third quarter of 2022 from US$208.7 million in the corresponding period of 2021. Among the operating expenses, sales and marketing expenses decreased to US$96.8 million in the third quarter of 2022 from US$106.3 million in the corresponding period of 2021, primarily due to the Company’s reduced spending on user acquisition via advertisement for Likee and Hago.

Operating income was US$19.8 million in the third quarter of 2022, compared to US$6.9 million in the corresponding period of 2021. Operating income margin was 3.4% in the third quarter of 2022, compared to 1.1% in the corresponding period of 2021, primarily as a result of disciplined marketing spending and enhanced operating efficiency at the group level.

Non-GAAP operating income7 was US$43.1 million in the third quarter of 2022, compared to US$31.3 million in the corresponding period of 2021. Non-GAAP operating income margin8 was 7.4% in the third quarter of 2022, compared to 4.8% in the corresponding period of 2021.

NET INCOME

Net income from continuing operations attributable to controlling interest of JOYY was US$515.3 million in the third quarter of 2022, compared to US$7.5 million in the corresponding period of 2021, mainly due to the one-off remeasurement gain of the Company’s previously held equity investment accounted under equity method recorded upon the Company’s consolidation of the investee as announced on August 22, 2022, as part of the “gain on fair value change of investments.” Net income margin was 87.8% in the third quarter of 2022, compared to net income margin of 1.2% in the corresponding period of 2021.

Non-GAAP net income from continuing operations attributable to controlling interest and common shareholders of JOYY was US$76.9 million in the third quarter of 2022, compared to non-GAAP net income of US$35.1 million in the corresponding period of 2021. Non-GAAP net income margin9 was 13.1% in the third quarter of 2022, compared to non-GAAP net income margin of 5.4% in the corresponding period of 2021.

NET INCOME PER ADS

Diluted net income from continuing operations per ADS10 was US$6.28 in the third quarter of 2022, compared to US$0.07 in the corresponding period of 2021.

Non-GAAP diluted net income from continuing operations per ADS11 was US$0.96 in the third quarter of 2022, compared to US$0.42 in the corresponding period of 2021.

BALANCE SHEET AND CASH FLOWS

As of September 30, 2022, the Company had cash and cash equivalents, restricted cash and cash equivalents, short-term deposits, restricted short-term deposits and short-term investments of US$4,276.7 million. For the third quarter of 2022, net cash inflow from operating activities was US$117.1 million.

SHARES OUTSTANDING

As of September 30, 2022, the Company had a total of 1,416.9 million common shares, or the equivalent of 70.8 million ADSs, outstanding.

Business Outlook

For the fourth quarter of 2022, the Company expects net revenues to be between US$594 million and US$619 million. This forecast 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 from increasing macroeconomic uncertainties.

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 fourth quarter of 2020. On November 16, 2020, the Company’s board of directors announced an additional quarterly dividend policy. Based on these two dividend policies, the board of directors has accordingly declared a dividend of US$0.51 per ADS, or US$0.0255 per common share, for the third quarter of 2022, which is expected to be paid on January 6, 2023 to shareholders of record as of the close of business on December 23, 2022. The ex-dividend date will be December 22, 2022. 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

Share Repurchase Program

In November 2021, the Company announced that its board of directors has authorized an additional share repurchase plan under which the Company may repurchase up to US$1 billion of its shares between November 2021 and November 2022. (the “2021 Share Repurchase Program”). During the third quarter of 2022, the Company had repurchased approximately US$14.1 million of its shares pursuant to the 2021 Share Repurchase Program. In November 2022, the Company's board of directors has authorized the continued usage of the unutilized quota under the 2021 Share Repurchase Program, which amounted to US$800 million, for another 12-month period beginning from the date hereof.

Conference Call Information

The Company will hold a conference call at 9:00 PM U.S. Eastern Time on Monday, November 28, 2022 (10:00 AM Singapore/Hong Kong Time on Tuesday, November 29, 2022). Details for the conference call are as follows:  

Event Title:JOYY Inc. Third Quarter 2022 Earnings Conference Call
Conference ID:#10027104

All participants may use the link provided below to complete the online registration process in advance of the conference call. Upon registration, 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: https://s1.c-conf.com/diamondpass/10027104-dyft5d.html 

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

The replay will be accessible through December 6, 2022, by dialing the following numbers:

United States:1-855-883-1031
Singapore:800-101-3223
Hong Kong:800-930-639
Conference ID:#10027104

  

About JOYY Inc.

JOYY is a leading global social media company 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 products, including Bigo Live for live streaming, Likee for short-form videos, Hago for multiplayer social networking, and instant messaging product and others. The Company has created a highly engaging and vibrant user community 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 third 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 global online communication social platform market; the expectation regarding the rate at which to gain active users, especially paying users; JOYY’s ability to monetize the user base; fluctuations in global economic and business conditions; the impact of the COVID-19 to JOYY’s business operations and the global economy; 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.

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 (loss) margin, non-GAAP net income (loss) from continuing operations attributable to controlling interest of JOYY, non-GAAP net (loss) margin attributable to controlling interest of JOYY, non-GAAP net income (loss) from continuing operations attributable to common shareholders of JOYY, and basic and diluted non-GAAP net income (loss) per ADS, which are non-GAAP financial measures. Non-GAAP operating income (loss) is operating income (loss) 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 (loss) margin is non-GAAP operating income as a percentage of net revenues. Non-GAAP net income (loss) from continuing operations is net income (loss) 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(refers to share of income (loss) from equity method investments resulting from non-recurring or non-cash items of the equity method investments), gain (loss) on extinguishment of debt and derivative, 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 (loss) from continuing operations attributable to controlling interest of JOYY is net income (loss) 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, gain (loss) on extinguishment of debt and derivative, 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 (loss) margin is non-GAAP net income (loss) from continuing operations attributable to controlling interest of JOYY as a percentage of net revenues. Non-GAAP net income (loss) from continuing operations attributable to common shareholders of JOYY is net income (loss) 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, gain (loss) on extinguishment of debt and derivative, 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 (loss) from continuing operations attributable to controlling interests of JOYY is equal to the non-GAAP net income (loss) from continuing operations attributable to common shareholders of JOYY. Basic and diluted non-GAAP net income (loss) from continuing operations per ADS is non-GAAP net income (loss) 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, gain (loss) on extinguishment of debt and derivative, 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 income (loss) 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 (loss) for the period. In addition, because non-GAAP financial measures are not measured in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measure in isolation from or as an alternative to the financial measure prepared in accordance with U.S. GAAP.

The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned “JOYY Inc. Unaudited Reconciliation of GAAP and Non-GAAP Results” near the end of this release.

Investor Relations ContactJOYY Inc.Jane Xie/Maggie YanEmail: [email protected]

ICR, Inc.Robin YangEmail: [email protected]

1   On November 16, 2020, the Company entered into definitive agreements with Baidu, Inc. (“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 future, including necessary regulatory approvals from government authorities. As a result, the historical financial results of YY Live are reflected in the Company’s consolidated financial statements as discontinued operations and the Company ceased consolidation of YY Live business since February 8, 2021. The financial information and non-GAAP financial information disclosed in this press release is presented on a continuing operations basis, unless otherwise specifically stated.

For the avoidance of confusion, the continuing operations for the three months ended September 30, 2021, June 30, 2022 and September 30, 2022 as well as the continuing operations for the nine months ended September 30, 2021 and September 30, 2022 as presented in this press release primarily consisted of BIGO, excluding YY Live.

2   Net income (loss) from continuing operations attributable to controlling interest of JOYY, is net income (loss) 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 (loss) from continuing operations attributable to controlling interest of JOYY is a non-GAAP financial measure, which is defined as net loss 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 (loss) on disposal and deemed 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, gain (loss) on extinguishment of debt and derivative, 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 US$438.3 million and US$27.6 million in the third quarter of 2022 and 2021, respectively. Please refer to the section titled “Unaudited Reconciliation of GAAP and Non-GAAP Results” for more details.

4   Refers to mobile average monthly active users. Average mobile MAU for any period is calculated by dividing (i) the sum of the Company’s mobile active users for each month of such period, by (ii) the number of months in such period.

5   The paying users are calculated by number of paying users during a given period as the cumulative number of registered user accounts that have purchased virtual items or other products and services on platforms including Bigo Live, Likee and imo at least once during the relevant period.

6   Average revenue per user is calculated by dividing our total revenues from live streaming on platforms including Bigo Live, Likee and imo during a given period by the number of paying users for our live streaming services on these platforms for that period.

7   Non-GAAP operating income (loss) is a non-GAAP financial measure, which is defined as operating income (loss) 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 “Unaudited Reconciliation of GAAP and Non-GAAP Results” for details.

8   Non-GAAP operating income (loss) margin is a non-GAAP financial measure, which is defined as non-GAAP operating income (loss) as a percentage of net revenues. Please refer to the section titled “Unaudited Reconciliation of GAAP and Non-GAAP Results” for details.

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

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

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

JOYY INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(All amounts in thousands, except share, ADS and per ADS data)
     
  December31,2021 September30,2022
  US$ US$
Assets    
Current assets    
Cash and cash equivalents 1,837,185 1,226,602
Restricted cash and cash equivalents 297,022 301,983
Short-term deposits 1,604,198 2,219,295
Restricted short-term deposits 285 47,493
Short-term investments 946,543 481,324
Accounts receivable, net 114,372 113,268
Amounts due from related parties 56,984 609
Prepayments and other current assets(1) 213,733 208,680
     
Total current assets 5,070,322 4,599,254
     
Non-current assets    
Investments 1,022,455 1,025,374
Property and equipment, net 365,392 335,690
Land use rights, net 370,052 326,181
Intangible assets, net 312,082 414,341
Right-of-use assets, net 16,565 29,878
Goodwill 1,958,263 2,656,137
Other non-current assets 4,881 6,388
     
Total non-current assets 4,049,690 4,793,989
     
Total assets 9,120,012 9,393,243
     
Liabilities, mezzanine equity and shareholders’ equity    
Short-term loan - 36,536
Accounts payable 18,011 42,616
Deferred revenue 60,910 81,859
Advances from customers 3,426 4,395
Income taxes payable 65,738 74,299
Accrued liabilities and other current liabilities(1) 2,345,838 2,316,555
Amounts due to related parties 6,931 2,943
Lease liabilities due within one year 11,041 10,635
Convertible bonds - 447,581
     
Total current liabilities 2,511,895 3,017,419
     
Non-current liabilities    
Convertible bonds 924,077 402,534
Lease liabilities 5,734 19,758
Deferred revenue 6,422 8,037
Deferred tax liabilities 36,214 61,266
Other non-current liabilities 7,372 428
     
Total non-current liabilities 979,819 492,023
     
Total liabilities 3,491,714 3,509,442
     

JOYY INC.UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)(All amounts in thousands, except share, ADS and per ADS data)
     
  December31,2021  September30,2022 
  US$  US$ 
       
Mezzanine equity 65,833  89,766 
       
Shareholders’ equity      
Class A common shares (US$0.00001 par value; 10,000,000,000 and 10,000,000,000 shares authorized, 1,317,840,464 shares issued and 1,146,336,305 shares outstanding as of December 31, 2021; 1,317,840,464 shares issued and 1,090,350,191 shares outstanding as of September 30, 2022, respectively) 13  13 
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, 2021 and September 30, 2022, respectively) 3  3 
Treasury Shares (US$0.00001 par value; 171,504,159 and 227,490,273 shares held as of December 31, 2021 and September 30, 2022, respectively) (526,724) (626,458)
Additional paid-in capital 3,246,523  3,276,112 
Statutory reserves 26,804  26,804 
Retained earnings 2,712,534  3,105,040 
Accumulated other comprehensive income 69,175  (229,129)
       
Total JOYY Inc.’s shareholders’ equity 5,528,328  5,552,385 
       
Non-controlling interests 34,137  241,650 
       
Total shareholders’ equity 5,562,465  5,794,035 
       
Total liabilities, mezzanine equity and shareholders’ equity 9,120,012  9,393,243 
       
       

(1)  JOYY has ceased consolidation of YY Live business since February 8, 2021 and classified and presented all the related assets and liabilities related to YY Live business on a net basis within prepayments and other current assets. The considerations received by the Company so far were recorded as advance payments received within accrued liabilities and other current liabilities.

 
JOYY INC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(All amounts in thousands, except share, ADS and per ADS data)
 
  Three Months Ended Nine Months Ended
  September30,2021 June30,2022 September30,2022  September30,2021 September30,2022 
  US$ US$ US$  US$ US$ 
             
Net revenues            
Live streaming(1) 612,163 565,239 542,757  1,855,922 1,698,095 
Others 38,382 30,859 43,972  99,420 108,512 
             
Total net revenues 650,545 596,098 586,729  1,955,342 1,806,607 
             
Cost of revenues(2) (439,761)(377,671)(366,514) (1,340,963)(1,166,809)
             
Gross profit 210,784 218,427 220,215  614,379 639,798 
             
Operating expenses(2)            
Research and development expenses (62,726)(62,876)(61,207) (250,475)(188,181)
Sales and marketing expenses (106,275)(98,415)(96,841) (355,830)(299,623)
General and administrative expenses (39,674)(23,680)(44,165) (195,388)(99,940)
             
Total operating expenses (208,675)(184,971)(202,213) (801,693)(587,744)
             
Gain on disposal of subsidiaries - - -  4,959 - 
Other income 4,755 5,286 1,825  15,099 12,852 
             
Operating income (loss) 6,864 38,742 19,827  (167,256)64,906 
             
Interest expenses (3,450)(3,356)(3,163) (11,210)(9,588)
Interest income and investment income 24,462 17,942 24,967  69,961 61,128 
Foreign currency exchange (losses) gain, net (3,776)12,509 15,564  (11,194)24,709 
(Loss) gain on disposal and deemed disposal of investments (26,708)(393)223  (21,689)1,748 
(Loss) gain on fair value change of investments (12,549)1,282 430,622  (28,541)411,772 
Gain on extinguishment of debt and derivative 1 4,017 56,159  1,267 62,291 
Other non-operating expenses - - -  (381)- 
             
(Loss) income before income tax expenses (15,156)70,743 544,199  (169,043)616,966 
             
Income tax expenses (4,215)(22,944)(7,881) (22,664)(30,020)
             
(Loss) income before share of income (loss) in equity method investments, net of income taxes (19,371)47,799 536,318  (191,707)586,946 
             
Share of income (loss) in equity method investments, net of income taxes 23,496 (32,837)(26,800) (5,929)(95,326)
             
Net income (loss) from continuing operations 4,125 14,962 509,518  (197,636)491,620 
             
Net income from discontinued operations - - -  35,567 - 
             
Net income (loss) 4,125 14,962 509,518  (162,069)491,620 
             
Net loss attributable to the non-controlling interest shareholders and the mezzanine equity classified as non-controlling interest shareholders 3,416 3,689 5,735  8,530 14,807 
             
Net income (loss) attributable to controlling interest of JOYY Inc. 7,541 18,651 515,253  (153,539)506,427 
             
Net income (loss) from continuing operations attributable to controlling interest of JOYY Inc. 7,541 18,651 515,253  (189,106)506,427 
Net income from discontinued operations attributable to controlling interest of JOYY Inc. - - -  35,567 - 
             
Accretion of subsidiaries’ redeemable convertible preferred shares to redemption value (1,250)(1,250)(1,396) (3,986)(3,896)
Cumulative dividend on subsidiary’s Series A Preferred Shares (1,000)(1,000)(1,000) (3,000)(3,000)
             
Net income (loss) attributable to common shareholders of JOYY Inc. 5,291 16,401 512,857  (160,525)499,531 
             
             
Including:            
Net income (loss) from continuing operations attributable to common shareholders of JOYY Inc. 5,291 16,401 512,857  (196,092)499,531 
Net income from discontinued operations attributable to common shareholders of JOYY Inc. - - -  35,567 - 
             

JOYY INC.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)(All amounts in thousands, except share, ADS and per ADS data)
     
  Three Months Ended Nine Months Ended
  September30,2021 June30,2022 September30,2022 September30,2021  September30,2022
  US$ US$ US$ US$  US$
            
Net income (loss) per ADS           
—Basic 0.07 0.23 7.12 (2.05) 6.90
Continuing operations 0.07 0.23 7.12 (2.50) 6.90
Discontinued operations - - - 0.45  -
—Diluted 0.07 0.23 6.28 (2.05) 6.15
Continuing operations 0.07 0.23 6.28 (2.50) 6.15
Discontinued operations - - - 0.45  -
            
Weighted average number of ADS used in calculating net income (loss) per ADS           
—Basic 78,362,550 71,893,282 72,060,234 78,517,918  72,421,032
—Diluted 79,241,210 72,586,310 82,157,570 78,517,918  82,731,200

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

      
  Three Months Ended  Nine Months Ended
  September30,2021 June30,2022 September30,2022  September30,2021 September30,2022
  US$ US$ US$  US$ US$
            
PRC 123,486 137,246 133,292  346,525 404,668
Non-PRC 488,677 427,993 409,465  1,509,397 1,293,427
            

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

  Three Months EndedNine Months Ended
  September30,2021 June30,2022 September30,2022  September30,2021 September30,2022
  US$ US$ US$  US$ US$
            
Cost of revenues 1,554 1,344 1,056  6,117 6,945
Research and development expenses 5,319 5,093 6,649  18,242 18,152
Sales and marketing expenses 143 282 (62) 1,002 471
General and administrative expenses 1,877 2,026 2,182  (2,505)7,538
            

JOYY INC.UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS(All amounts in thousands, except share, ADS and per ADS data)
     
  Three Months Ended Nine Months Ended
  September30,2021 June30,2022 September30,2022  September30,2021 September30,2022 
  US$ US$ US$  US$ US$ 
             
Operating income (loss) 6,864 38,742 19,827  (167,256)64,906 
Share-based compensation expenses 8,893 8,745 9,825  22,856 33,106 
Amortization of intangible assets from business acquisitions 12,388 12,365 13,474  44,374 38,248 
Impairment of investments 3,133 - -  93,632 - 
Gain on disposal of subsidiaries - - -  (4,959)- 
             
Non-GAAP operating income (loss) 31,278 59,852 43,126  (11,353)136,260 
             
Net income (loss) from continuing operations 4,125 14,962 509,518  (197,636)491,620 
Share-based compensation expenses 8,893 8,745 9,825  22,856 33,106 
Amortization of intangible assets from business acquisitions 12,388 12,365 13,474  44,374 38,248 
Impairment of investments 3,133 - -  93,632 - 
Gain on disposal of subsidiaries - - -  (4,959)- 
Loss (gain) on disposal and deemed disposal of investments 26,708 393 (223) 21,689 (1,748)
Loss (gain) on fair value change of investments 12,549 (1,282)(430,622) 28,541 (411,772)
Reconciling items on the share of equity method investments (35,682)12,774 26,679  (5,972)50,596 
Gain on extinguishment of debt and derivative (1)(4,017)(56,159) (1,267)(62,291)
Interest expenses related to the convertible bonds’ amortization to face value 714 619 601  2,121 1,849 
Income tax effects on non-GAAP adjustments (765)3,833 (2,591) (740)(3,276)
             
Non-GAAP net income from continuing operations 32,062 48,392 70,502  2,639 136,332 
             
Net income (loss) from continuing operations attributable to common shareholders of JOYY Inc. 5,291 16,401 512,857  (196,092)499,531 
Share-based compensation expenses 8,893 8,745 9,825  22,856 33,106 
Amortization of intangible assets from business acquisitions 12,388 12,365 13,474  44,374 38,248 
Impairment of investments 3,133 - -  93,632 - 
Gain on disposal of subsidiaries - - -  (4,959)- 
Loss (gain) on disposal and deemed disposal of investments 26,708 393 (223) 21,689 (1,748)
Loss (gain) on fair value change of investments 12,549 (1,282)(430,622) 28,541 (411,772)
Reconciling items on the share of equity method investments (35,682)12,774 26,679  (5,972)50,596 
Gain on extinguishment of debt and derivative (1)(4,017)(56,159) (1,267)(62,291)
Interest expenses related to the convertible bonds’ amortization to face value 714 619 601  2,121 1,849 
Accretion, cumulative dividend and deemed dividend to subsidiaries’ preferred shareholders 2,250 2,250 2,396  6,986 6,896 
Income tax effects on non-GAAP adjustments (765)3,833 (2,591) (740)(3,276)
Non-GAAP adjustments for net loss attributable to the non-controlling interest shareholders (342)(629)698  (565)(1,861)
             
Non-GAAP net income from continuing operations attributable tocontrolling interest and common shareholders of JOYY Inc. 35,136 51,452 76,935  10,604 149,278 
             
Non-GAAP net income from continuing operations per ADS            
—Basic 0.45 0.72 1.07  0.14 2.06 
—Diluted 0.42 0.65 0.96  0.13 1.89 
Weighted average number of ADS used in calculating Non-GAAP net income from continuing operations per ADS            
—Basic 78,362,550 71,893,282 72,060,234  78,517,918 72,421,032 
—Diluted 89,920,289 82,225,273 82,157,570  80,936,552 82,731,200 
             

JOYY INC.UNAUDITED SEGMENT REPORT(All amounts in thousands, except share, ADS and per ADS data)
   
  Three Months Ended
  September 30, 2022
             
  Bigo  All other  Elimination(1)  Total 
  US$  US$  US$  US$ 
             
Net revenues            
Live streaming 459,020  83,737  -  542,757 
Others 24,312  19,709  (49) 43,972 
             
Total net revenues 483,332  103,446  (49) 586,729 
             
Cost of revenues(2) (292,662) (73,901) 49  (366,514)
             
Gross profit 190,670  29,545  -  220,215 
Operating expenses(2)            
Research and development expenses (35,618) (25,589) -  (61,207)
Sales and marketing expenses (75,460) (21,381) -  (96,841)
General and administrative expenses (22,715) (21,450) -  (44,165)
Total operating expenses (133,793) (68,420) -  (202,213)
             
Other income 1,088  737  -  1,825 
             
Operating income (loss) 57,965  (38,138) -  19,827 
             
Interest expenses (1,242) (2,873) 952  (3,163)
Interest income and investment income 2,439  23,480  (952) 24,967 
Foreign currency exchange gains, net 15,388  176  -  15,564 
Gain on extinguishment of debt and derivative -  56,159  -  56,159 
Gain on disposal and deemed disposal of investments -  223  -  223 
Gain on fair value change of investments 367  430,255  -  430,622 
             
Income before income tax expenses 74,917  469,282  -  544,199 
             
Income tax expenses (4,435) (3,446) -  (7,881)
             
Income before share of loss in equity method investments, net of income taxes 70,482  465,836  -  536,318 
             
Share of loss in equity method investments, net of income taxes -  (26,800) -  (26,800)
             
Net income from continuing operations 70,482  439,036  -  509,518 

(1)  The elimination mainly consists of revenues and expenses generated from services among Bigo and all other segments, and 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, 2022
         
  Bigo  All other Total 
  US$  US$ US$ 
         
Cost of revenues 357  699 1,056 
Research and development expenses 3,231  3,418 6,649 
Sales and marketing expenses (158) 96 (62)
General and administrative expenses 766  1,416 2,182 
         

JOYY INC.UNAUDITED 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, 2022
          
  Bigo  All other  Total 
  US$  US$  US$ 
          
Operating income (loss) 57,965  (38,138) 19,827 
Share-based compensation expenses 4,196  5,629  9,825 
Amortization of intangible assets from business acquisitions 11,225  2,249  13,474 
          
Non-GAAP operating income (loss) 73,386  (30,260) 43,126 
          
Net income from continuing operations 70,482  439,036  509,518 
Share-based compensation expenses 4,196  5,629  9,825 
Amortization of intangible assets from business acquisitions 11,225  2,249  13,474 
Gain on fair value change of investments (367) (430,255) (430,622)
Gain on disposal and deemed disposal of investments -  (223) (223)
Reconciling items on the share of equity method investments -  26,679  26,679 
Gain on extinguishment of debt and derivative -  (56,159) (56,159)
Interest expenses related to the convertible bonds’ amortization to face value -  601  601 
Income tax effects on non-GAAP adjustments (1,415) (1,176) (2,591)
          
Non-GAAP net income (loss) from continuing operations 84,121  (13,619) 70,502 
          

JOYY INC.UNAUDITED SEGMENT REPORT(All amounts in thousands, except share, ADS and per ADS data)
   
  Three Months Ended
  June 30, 2022
             
  Bigo  All other  Elimination(1)  Total 
  US$  US$  US$  US$ 
             
Net revenues            
Live streaming 480,446  84,793  -  565,239 
Others 22,197  8,795  (133) 30,859 
             
Total net revenues 502,643  93,588  (133) 596,098 
             
Cost of revenues(2) (309,271) (68,533) 133  (377,671)
             
Gross profit 193,372  25,055  -  218,427 
             
Operating expenses(2)            
Research and development expenses (45,997) (16,879) -  (62,876)
Sales and marketing expenses (78,690) (19,725) -  (98,415)
General and administrative expenses (11,100) (12,580) -  (23,680)
             
Total operating expenses (135,787) (49,184) -  (184,971)
             
Other income 3,601  1,685  -  5,286 
             
Operating income (loss) 61,186  (22,444) -  38,742 
             
Interest expenses (1,117) (3,096) 857  (3,356)
Interest income and investment income 1,750  17,049  (857) 17,942 
Foreign currency exchange gain (losses), net 12,839  (330) -  12,509 
Gain  on extinguishment of debt and derivative -  4,017  -  4,017 
Loss  on disposal and deemed disposal of investments -  (393) -  (393)
Gain  on fair value change of investments -  1,282  -  1,282 
             
Income (loss) before income tax expenses 74,658  (3,915) -  70,743 
             
Income tax expenses (8,583) (14,361) -  (22,944)
             
Income (loss) before share of loss in equity method investments, net of income taxes 66,075  (18,276) -  47,799 
             
Share of loss in equity method investments, net of income taxes -  (32,837) -  (32,837)
             
Net income (loss) from continuing operations 66,075  (51,113) -  14,962 
             

(1)  The elimination mainly consists of revenues and expenses generated from services among Bigo and all other segments, and 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
  June 30, 2022
   
  Bigo All other Total
  US$ US$ US$
       
Cost of revenues 918 426 1,344
Research and development expenses 2,994 2,099 5,093
Sales and marketing expenses 193 89 282
General and administrative expenses 1,357 669 2,026
       

JOYY INC.UNAUDITED 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, 2022
   
  Bigo All other  Total 
  US$ US$  US$ 
         
Operating income (loss) 61,186 (22,444) 38,742 
Share-based compensation expenses 5,462 3,283  8,745 
Amortization of intangible assets from business acquisitions 11,225 1,140  12,365 
      
Non-GAAP operating income (loss) 77,873 (18,021) 59,852 
      
Net income (loss) from continuing operations 66,075 (51,113) 14,962 
Share-based compensation expenses 5,462 3,283  8,745 
Amortization of intangible assets from business acquisitions 11,225 1,140  12,365 
Gain on fair value change of investments - (1,282) (1,282)
Loss on disposal and deemed disposal of investments - 393  393 
Reconciling items on the share of equity method investments - 12,774  12,774 
Gain on extinguishment of debt and derivative - (4,017) (4,017)
Interest expenses related to the convertible bonds’ amortization to face value - 619  619 
Income tax effects on non-GAAP adjustments 3,578 255  3,833 
      
Non-GAAP net income (loss) from continuing operations 86,340 (37,948) 48,392 
      

JOYY INC.UNAUDITED SEGMENT REPORT(All amounts in thousands, except share, ADS and per ADS data)
             
  Three Months Ended
  September 30, 2021
             
  Bigo  All other  Elimination(1)  Total 
  US$  US$  US$  US$ 
             
Net revenues            
Live streaming 544,718  67,445  -  612,163 
Others 24,031  14,351  -  38,382 
             
Total net revenues 568,749  81,796  -  650,545 
             
Cost of revenues(2) (373,534) (66,227) -  (439,761)
             
Gross profit 195,215  15,569  -  210,784 
Operating expenses(2)            
Research and development expenses (51,281) (11,445) -  (62,726)
Sales and marketing expenses (88,945) (17,330) -  (106,275)
General and administrative expenses (20,959) (18,715) -  (39,674)
             
Total operating expenses (161,185) (47,490) -  (208,675)
             
Other income 4,024  731  -  4,755 
             
Operating income (loss) 38,054  (31,190) -  6,864 
             
Interest expenses (393) (3,392) 335  (3,450)
Interest income and investment income 344  24,453  (335) 24,462 
Foreign currency exchange losses, net (2,689) (1,087) -  (3,776)
Gain on extinguishment of debt and derivative 1  -  -  1 
Loss on disposal and deemed disposal of investments -  (26,708) -  (26,708)
Loss on fair value change of investments -  (12,549) -  (12,549)
             
Income (lossbefore income tax expenses 35,317  (50,473) -  (15,156)
             
Income tax expenses (2,451) (1,764) -  (4,215)
             
Income (loss) before share of income in equity method investments, net of income taxes 32,866  (52,237) -  (19,371)
             
Share of income in equity method investments, net of income taxes -  23,496  -  23,496 
             
Net income (loss) from continuing operations 32,866  (28,741) -  4,125 
             

(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, 2021
   
  Bigo  All other Total
  US$  US$ US$
        
Cost of revenues 915  639 1,554
Research and development expenses 2,579  2,740 5,319
Sales and marketing expenses (7) 150 143
General and administrative expenses 669  1,208 1,877
        

JOYY INC.UNAUDITED 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, 2021
   
  Bigo  All other  Total 
  US$  US$  US$ 
          
Operating income (loss) 38,054  (31,190) 6,864 
Share-based compensation expenses 4,156  4,737  8,893 
Amortization of intangible assets from business acquisitions 11,225  1,163  12,388 
Impairment of investments -  3,133  3,133 
          
Non-GAAP operating income (loss) 53,435  (22,157) 31,278 
          
Net income (loss) from continuing operations 32,866  (28,741) 4,125 
Share-based compensation expenses 4,156  4,737  8,893 
Amortization of intangible assets from business acquisitions 11,225  1,163  12,388 
Impairment of investments -  3,133  3,133 
Loss on fair value change of investments -  12,549  12,549 
Loss on disposal and deemed disposal of investments -  26,708  26,708 
Reconciling items on the share of equity method investments -  (35,682) (35,682)
Gain on extinguishment of debt and derivative (1) -  (1)
Interest expenses related to the convertible bonds’ amortization to face value -  714  714 
Income tax effects on non-GAAP adjustments 1,388  (2,153) (765)
          
Non-GAAP net income (loss) from continuing operations 49,634  (17,572) 32,062 
          

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