Release Date: March 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- JOYY Inc (YY, Financial) successfully completed the sale of its live streaming business for mainland China, marking a new chapter for the company.
- The company's global market revenue, excluding mainland China, accounted for 89.6% of total revenue in 2024, with developed countries seeing a 24.6% year-over-year revenue increase.
- JOYY Inc (YY) achieved a non-GAAP net profit of $96.1 million in Q4 2024, up 57.1% quarter over quarter.
- The BIGO segment achieved revenues of $480 million in Q4 2024, with a non-GAAP operating profit of $81 million, up 11.2% quarter over quarter.
- The company announced a quarterly cash dividend program for the next three years, with an aggregate amount of $600 million, demonstrating a commitment to shareholder returns.
Negative Points
- JOYY Inc (YY) experienced a decline in live streaming revenue due to adjustments in BIGO's non-core audio live streaming product and a temporary removal from platforms.
- The company's total net revenues for Q4 2024 were $549.4 million, compared to $569.8 million in the same period last year, indicating a year-over-year decline.
- BIGO's gross margin decreased due to a shift in revenue mix, with increased contribution from lower margin advertising revenues.
- The company recorded a non-cash goodwill impairment charge of $454.9 million, primarily due to lower valuation amid current market conditions.
- JOYY Inc (YY) expects a stronger than usual negative seasonality impact in Q1 2025 due to the coinciding Lunar New Year and Ramadan.
Q & A Highlights
Q: Can you provide insights into the user and revenue trends for 2025?
A: Ting Li, CEO, explained that in Q4, non-live streaming revenues grew significantly, while live streaming revenues declined due to adjustments in BIGO's non-core audio live streaming product and a temporary removal from platforms. Despite these challenges, the annual gala delivered strong results. For 2025, they expect a stronger negative seasonality impact due to Lunar New Year and Ramadan. BIGO Live is expected to resume normal operations, and non-live streaming revenue is anticipated to maintain strong growth. They plan to focus on developed countries and premium users for better monetization.
Q: What is the outlook for 2025 in terms of expenses and profitability?
A: Alex Liu, VP of Finance, noted that in Q4, BIGO's non-GAAP gross margin was 36.5%, with an operating margin increase to 16.9%. For 2025, they expect a decline in non-GAAP operating profit for BIGO due to seasonality but anticipate improvement in other segments. They aim to optimize costs and operational expenses, with potential growth in BIGO's non-GAAP operating profit. Overall, they expect an improving trend in the group's non-GAAP operating profit for 2025.
Q: Can you elaborate on the new shareholder return plan?
A: Alex Liu highlighted that in 2024, JOYY repurchased 9.21 million ADS for $309 million, representing 15.1% of total shares. The board approved a $600 million dividend policy and a $300 million buyback program for the next three years, totaling $900 million. This represents about 35% of their current market cap. They aim to demonstrate commitment to sustainable shareholder returns and confidence in the company's long-term prospects.
Q: What are the strategic priorities and positioning for future initiatives, particularly in advertising?
A: Ting Li stated that BIGO's advertising revenue grew robustly, contributing 16.6% to the segment's total revenue. They expect continued strong growth in the BIGO audience network, driven by DAU pool expansion, advertiser base growth, and new verticals. They aim to enhance monetization efficiency and optimize cost structures for positive cash flow and break-even as soon as possible.
Q: How did the adjustments to BIGO's non-core audio live streaming product impact the business?
A: Ting Li explained that adjustments were made to enhance compliance, which, along with a temporary platform removal, caused a decline in live streaming revenue. However, the annual gala delivered strong results, reflecting the resilience of their core paying user group. They expect these adjustments to provide a healthier foundation for 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
