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JOYY Reports Third Quarter 2022 Unaudited Financial Results

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 Contact

JOYY Inc.

Jane Xie/Maggie Yan

Email: joyy-ir@joyy.com

ICR, Inc.

Robin Yang

Email: joyy@icrinc.com

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)
         
    December

31,

2021
  September

30,

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)
         
    December

31,

2021
    September

30,

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
    September

30,

2021
  June

30,

2022
  September

30,

2022
    September

30,

2021
  September

30,

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
    September

30,

2021
  June

30,

2022
  September

30,

2022
  September

30,

2021
    September

30,

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
    September

30,

2021
  June

30,

2022
  September

30,

2022
    September

30,

2021
  September

30,

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 Ended

Nine Months Ended

    September

30,

2021
  June

30,

2022
  September

30,

2022
    September

30,

2021
  September

30,

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
    September

30,

2021
  June

30,

2022
  September

30,

2022
    September

30,

2021
  September

30,

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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