DouYu beats Q2 estimates despite revenue decline and swing to loss

On Thursday, China-based game streaming platform DouYu reported second quarter results that beat analysts' expectations, despite a decline in revenue and a move to a loss, reports wire service. The company's stock held steady in after-hours trading after the figures were released. DouYu disclosed an adjusted loss of $0.45 per ADS for the quarter, outpacing the forecasted $1.12 loss.

The company reported revenues of RMB981.1 million ($144.6 million), which was higher than analysts' prediction of $946.6 million. However, revenues contracted by 6.9% year-over-year from RMB1,053.9 million during the same period last year. The business reported an adjusted net loss of RMB13.5 million ($2.0 million) for the quarter, as opposed to an adjusted net income of RMB25.3 million a year prior.

The company attributed the poorer financials to a tough macro environment and reduced consumer spending, which impacted paying user numbers. Livestreaming revenues fell 13.0% year-over-year to RMB503.0 million, while advertising and other revenues grew by 0.4% to RMB478.1 million. Despite the revenue drop, gross profit increased by 12.0% year-over-year to RMB159.0 million, as gross margin rose to 16.2% from 13.5%, thanks to lower revenue-sharing fees, content costs, and bandwidth expenses.

Nevertheless, sales and marketing costs jumped 102.6% year-over-year to RMB124.8 million due to heightened branding and promotional spending on major content initiatives like the DouYu Carnival. DouYu CEO Simin Ren stated that despite a challenging external environment, the company made steady improvements across several fronts in the second quarter.

Livestreaming revenues bounced back to sequential growth, and user engagement improved, showcasing the robustness of their core livestreaming ecosystem. The platform's average monthly active users for the livestreaming platform reached 45.4 million, a 2.6% increase sequentially. The quarterly average paying users for the livestreaming business were 2.3 million, with an average revenue per paying user of RMB283.