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Huya posts strong Q2 results ahead of further partnership with Tencent

Huya’s paying users remained fairly stable after a significant surge during the COVID-19 lockdown in the first quarter.

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Guangzhou-based video game livestreaming platform Huya (NYSE:HUYA) generated RMB 2.7 billion (USD 381.8 million) in total revenue during the second quarter, beating analyst expectations of RMB 2.6 billion (USD 377.9 million), per the company’s latest earnings release.

The 34.2% year-on-year (YoY) growth in total revenues was largely attributable to Huya Live’s growing user base, as mobile monthly active users (MAU) climbed by 35.2% YoY to 75.6 million, while the average spending per paying user of Huya Live also increased during the second quarter.

During the COVID-19 outbreak, Huya’s number of paying users spiked from 5.1 million in the fourth quarter of 2019 to 6.1 million in the first quarter of 2020, while that growth has leveled off as the number of paying users grew to just 6.2 million in the latest June quarter.

Huya’s chief executive officer (CEO) Dong Rongjie commented on the company’s deepening collaboration with gaming giant Tencent (HKG: 0700), “Since Tencent became our largest shareholder, our cooperation has deepened in many aspects. For example, Huya’s live streaming content is now available in an increasing number of Tencent’s games and products, tapping into an expanded pool of viewers. We are in the process of building one-click streaming services within some of Tencent’s games to attract more broadcasters.”

Huya’s advertising activities continued to generate robust revenues in the second quarter, growing by 48.6% YoY to RMB 132.2 billion (USD 18.7 million) in the second quarter but still was slightly below the RMB 137.5 million (USD 19.4 million) Huya made from advertising in the first quarter as the COVID-19 lockdown funneled advertising budgets to spend in certain sectors including gaming.

Huya’s share price showed little movement on Tuesday closing at USD 24.06.