HUYA Inc. Reports Second Quarter 2021 Unaudited Financial Results

GUANGZHOU,China,Aug. 17,2021 -- HUYA Inc. ("Huya" or the "Company") (NYSE: HUYA),a leading game live streaming platform in China,today announced its unaudited financial results for the second quarter ended June 30,2021.

Second Quarter 2021 Highlights

Total net revenues for the second quarter of 2021 increased by 9.8% to RMB2,962.4 million (US$458.8 million),from RMB2,697.2 million for the same period of 2020.

Net income attributable to HUYA Inc. was RMB186.3 million (US$28.8 million) for the second quarter of 2021,compared with RMB206.8 million for the same period of 2020.

Non-GAAP net income attributable to HUYA Inc.[1] was RMB250.1 million (US$38.7 million) for the second quarter of 2021,compared with RMB331.0 million for the same period of 2020.

Average mobile MAUs[2]of Huya Live in the second quarter of 2021 increased by 2.6% to 77.6 million,from 75.6 million in the same period of 2020.

Total number of paying users[3] of Huya Live in the second quarter of 2021 reached 5.6 million,compared with 6.2 million in the same period of 2020.

"In the second quarter,we amplified our efforts in enriching our content offerings and attracting users,which drove steady growth of mobile users. Average mobile MAUs of Huya Live reached 77.6 million in the second quarter of 2021," said Mr. Rongjie Dong,Chief Executive Officer of Huya. "Going forward,it is crucial for us to continue to expand our content ecosystem and optimize user experience in order to solidify our foundation for future growth opportunities."

Ms. Catherine Liu,Chief Financial Officer of Huya,commented,"Our strong execution capabilities sustained our top-line growth in the quarter,resulting in a 9.8% year-over-year increase in total net revenues to RMB2,962.4 million. We will remain firmly committed to our corporate strategy of investing in quality content,growing user base and improving monetization to maintain and strengthen our leading position in the game live streaming industry."

[1] "Non-GAAP net income attributable to HUYA Inc." is defined as net income attributable to HUYA Inc. before share-based compensation expenses,gain on fair value change of investments and equity investee's investments,and equity investee's partial disposal of its investment,net of income taxes. For more information,please refer to "Use of Non-GAAP Financial Measures" and "Reconciliations of GAAP and Non-GAAP Results" at the end of this press release.

[2]Refers to average monthly active users on mobile apps. Average mobile MAUs for any period is calculated by dividing (i) the sum of active users on the mobile apps for each month during such relevant period,by (ii) the number of months during such relevant period.

[3]Refers to the sum of user accounts that purchased various products and services on our platform at least once during such relevant period.

Second Quarter 2021 Financial Results

Total net revenues for the second quarter of 2021 increased by 9.8% to RMB2,697.2 million for the same period of 2020.

Live streaming revenues increased by 0.6% to RMB2,579.2 million (US$399.5 million) for the second quarter of 2021,565.1 million for the same period of 2020,primarily due to the increase in the overseas live streaming revenues.

Advertising and other revenues increased by 189.9% to RMB383.2 million (US$59.4 million) for the second quarter of 2021,from RMB132.2 million for the same period of 2020,primarily driven by the revenues from licensing of content.

Cost of revenues increased by 12.2% to RMB2,381.1 million (US$368.8 million) for the second quarter of 2021 from RMB2,122.2 million for the same period of 2020,primarily attributable to the increase in revenue sharing fees and content costs.

Revenue sharing fees and content costs increased by 21.2% to RMB2,039.2 million (US$315.8 million) for the second quarter of 2021 from RMB1,682.9 million for the same period of 2020,primarily due to the increase in revenue sharing fees,and the increase in spending in e-sports content and on content creators.

Bandwidth costs decreased by 35.3% to RMB171.4 million (US$26.5 million) for the second quarter of 2021 from RMB264.8 million for the same period of 2020,primarily due to improved bandwidth cost management and continued technology enhancement efforts.

Gross profit increased by 1.1% to RMB581.3 million (US$90.0 million) for the second quarter of 2021 from RMB575.0 million for the same period of 2020. Gross margin was 19.6% for the second quarter of 2021,compared with 21.3% for the same period of 2020.

Research and development expenses increased by 15.6% to RMB207.9 million (US$32.2 million) for the second quarter of 2021 from RMB179.9 million for the same period of 2020,primarily attributable to increased personnel-related expenses.

Sales and marketing expenses increased by 45.9% to RMB167.0 million (US$25.9 million) for the second quarter of 2021 from RMB114.5 million for the same period of 2020,primarily attributable to increased marketing expenses to promote the Company's content,products,services and brand name.

General and administrative expenses decreased by 48.5% to RMB72.1 million (US$11.2 million) for the second quarter of 2021 from RMB140.0 million for the same period of 2020,primarily due to lower share-based compensation expenses.

Operating income increased by 0.3% to RMB181.9 million (US$28.2 million) for the second quarter of 2021 from RMB181.4 million for the same period of 2020. Operating margin was 6.1% for the second quarter of 2021,compared with 6.7% for the same period of 2020.

Interest and short-term investments income was RMB57.7 million (US$8.9 million) for the second quarter of 2021,compared with RMB77.7 million for the same period of 2020,primarily attributable to decreased interest rates.

Income tax expenses increased by 13.7% to RMB58.3 million (US$9.0 million) for the second quarter of 2021 from RMB51.3 million for the same period of 2020.

Net income attributable to HUYA Inc. for the second quarter of 2021 was RMB186.3 million (US$28.8 million),compared with RMB206.8 million for the same period of 2020.

Non-GAAP net income attributable to HUYA Inc. for the second quarter of 2021,which excludes share-based compensation expenses,net of income taxes,was RMB250.1 million (US$38.7 million),compared with RMB331.0 million for the same period of 2020.

Diluted net income per American depositary share ("ADS") was RMB0.77 (US$0.12) for the second quarter of 2021,compared with RMB0.87 for the same period of 2020. Each ADS represents one Class A ordinary share of the Company.

Non-GAAP diluted net income per ADS was RMB1.04 (US$0.16) for the second quarter of 2021,compared with RMB1.40 for the same period of 2020.

Balance Sheets and Cash Flow

As of June 30,2021,the Company had cash and cash equivalents,short-term deposits and short-term investments of RMB10,738.2 million (US$1,663.1 million),compared with RMB10,651.1 million as of March 31,2021. The increase was primarily due to net cash provided by operating activities of RMB173.6 million (US$26.9 million) for the second quarter of 2021.

Conference Call

The Company's management will host an earnings conference call at 7:00 a.m. U.S. Eastern Time on August 17,2021 (7:00 p.m. Beijing/Hong Kong time on August 17,2021).

For participants who wish to join the call,please complete online registration using the link provided below at least 20 minutes prior to the scheduled call start time. Upon registration,participants will receive the conference call access information,including dial-in numbers,Direct Event passcode,a unique registrant ID and an e-mail with detailed instructions to join the conference call.

Participant Online Registration: https://apac.directeventreg.com/registration/event/4068808

After registration is complete,please dial-in at least 10 minutes before the scheduled start time of the earnings call and enter the Direct Event passcode and registrant ID as instructed to connect to the call.

Additionally,a live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.huya.com.

A replay of the conference call will be accessible approximately two hours after the conclusion of the live call until August23,by dialing the following telephone numbers:

United States:

+1-646-254-3697

International:

+61-2-8199-0299

Hong Kong,China:

+852-3051-2780

Replay Access Code:

4068808

About HUYA Inc.

HUYA Inc. is a leading game live streaming platform in China with a large and active game live streaming community. The Company cooperates with e-sports event organizers,as well as major game developers and publishers,and has developed e-sports live streaming as one of the most popular content genres on its platform. The Company has created an engaged,interactive and immersive community for game enthusiasts of China's young generation. Building on its success in game live streaming,Huya has also extended its content to other entertainment content genres. Huya's open platform also functions as a marketplace for broadcasters and talent agencies to congregate and closely collaborate with the Company.

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"),except that the consolidated statement of changes in shareholders' equity,consolidated statements of cash flows,and the detailed notes have not been presented. Huya uses non-GAAP gross profit,non-GAAP operating income,non-GAAP net income attributable to HUYA Inc.,non-GAAP net income attributable to ordinary shareholders,and non-GAAP basic and diluted net income per ADS,which are non-GAAP financial measures. Non-GAAP gross profit is gross profit excluding share-based compensation expenses allocated in cost of revenues. Non-GAAP operating income is operating income excluding share-based compensation expenses. Non-GAAP net income attributable to HUYA Inc. is net income attributable to HUYA Inc. excluding share-based compensation expenses,net of income taxes. Non-GAAP net income attributable to ordinary shareholders is net income attributable to ordinary shareholders excluding share-based compensation expenses,net of income taxes. Non-GAAP basic and diluted net income per ADS is non-GAAP net income attributable to ordinary shareholders divided by weighted average number of ordinary shares used in the calculation of non-GAAP basic and diluted net income per ADS. The Company believes that separate analysis and exclusion of the impact of (i) share-based compensation expenses,and (ii) gain on fair value change of investments and equity investee's investments,net of income taxes add 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 effect of (i) share-based compensation expenses,which have been and will continue to be significant recurring expenses in its business,which both may recur when there is observable price change in the future. 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 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 "HUYA Inc. Reconciliations of GAAP and Non-GAAP Results" near the end of this release.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader.Unless otherwise noted,all translations from RMB to U.S. dollars are made at a rate of RMB6.4566 to US$1.00,the rate in effect as of June 30,2021 as certified for customs purposes by the Federal Reserve Bank of New York.

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 Huya's strategic and operational plans,contain forward-looking statements. Huya 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 Huya'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: Huya's goals and strategies; Huya's future business development,results of operations and financial condition; the expected growth of the game live streaming market; the expectation regarding the rate at which to gain active users,especially paying users; Huya's ability to monetize the user base; fluctuations in general economic and business conditions in China; the impact of the COVID-19 to Huya's business operations and the economy in China and elsewhere generally; any adverse changes in laws,regulations,rules,policies or guidelines applicable to Huya; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Huya'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 Huya does not undertake any obligation to update any forward-looking statement,except as required under applicable law.

For investor and media inquiries,please contact:

In China:

HUYA Inc.

Investor Relations

Tel: +86-20-2290-7829

E-mail: ir@huya.com

The Piacente Group,Inc.

Jenny Cai

Tel: +86-10-6508-0677

E-mail: huya@tpg-ir.com

In the United States:

The Piacente Group,Inc.

Brandi Piacente

Tel: +1-212-481-2050

E-mail: huya@tpg-ir.com

HUYA INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands,except share,ADS,per share data and per ADS data)

As of December 31,

As of June 30,

2020

2021

2021

RMB

RMB

US$

Assets

Current assets

Cash and cash equivalents

3,293,573

3,262,190

505,249

Restricted cash and short-term deposits

164,889

110,341

17,090

Short-term deposits

5,974,790

6,371,240

986,779

Short-term investments

1,206,539

1,104,743

171,103

Accounts receivable,net

71,237

91,819

14,220

Amounts due from related parties,net

64,802

193,915

30,034

Prepayments and other current assets,net

495,108

639,344

99,022

Total current assets

11,270,938

11,773,592

1,823,497

Non-current assets

Deferred tax assets

48,313

57,425

8,894

Investments

467,206

504,944

78,206

Property and equipment,net

94,555

86,905

13,460

Intangible assets,net

62,796

94,915

14,700

Right-of-use assets,net

87,418

95,145

14,736

Prepayments and other non-current assets

379,461

393,789

60,990

Total non-current assets

1,139,749

1,233,123

190,986

Total assets

12,410,687

13,006,715

2,014,483

Liabilities and shareholders' equity

Current liabilities

Accounts payable

10,083

56,130

8,693

Advances from customers and deferred revenue

485,878

375,636

58,179

Income taxes payable

56,861

18,619

2,884

Accrued liabilities and other current liabilities

1,707,289

1,775,771

275,030

Amounts due to related parties

95,457

266,219

41,232

Lease liabilities due within one year

29,227

36,421

5,641

Total current liabilities

2,384,795

2,528,796

391,659

Non-current liabilities

Lease liabilities

57,620

59,460

9,209

Deferred tax liabilities

13,350

11,900

1,843

Deferred revenue

178,144

170,845

26,461

Total non-current liabilities

249,114

242,205

37,513

Total liabilities

2,633,909

2,771,001

429,172

HUYA INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(All amounts in thousands,

2020

2021

2021

RMB

RMB

US$

Shareholders' equity

Class A ordinary shares (US$0.0001 par value;

750,000,000 shares authorized as of December

31,2020 and June 30,respectively;

83,490,841 and 84,742,413 shares issued and

outstanding as of December 31,2020 and June

30,respectively)

55

56

9

Class B ordinary shares (US$0.0001 par value; 2

00,respectively;

152,357,321 and 152,321 shares issued and

outstanding as of December 31,respectively)

100

100

15

Additional paid-in capital

11,465,575

11,617,578

1,799,334

Statutory reserves

122,429

122,429

18,962

Accumulated deficit

(1,883,643)

(1,511,854)

(234,156)

Accumulated other comprehensive income

72,262

7,405

1,147

Total shareholders' equity

9,776,778

10,235,714

1,585,311

Total liabilities and shareholders' equity

12,483

HUYA INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(All amounts in thousands,per share data and per ADS data)

Three Months Ended

Six Months Ended

June 30,

2020

March 31,

2021

June 30,

2020

June 30,

2021

RMB

RMB

RMB

US$

RMB

RMB

US$

Net revenues

Live streaming

2,565,057

2,392,275

2,579,178

399,464

4,839,547

4,971,453

769,980

Advertising and others

132,187

212,509

383,197

59,350

269,645

595,706

92,263

Total net revenues

2,697,244

2,604,784

2,962,375

458,814

5,109,192

5,567,159

862,243

Cost of revenues(1)

(2,122,219)

(2,090,896)

(2,381,056)

(368,779)

(4,059,364)

(4,471,952)

(692,617)

Gross profit

575,025

513,888

581,319

90,035

1,049,828

1,095,207

169,626

Operating expenses(1)

Research and development expenses

(179,856)

(199,071)

(207,899)

(32,199)

(335,914)

(406,970)

(63,032)

Sales and marketing expenses

(114,520)

(144,585)

(167,045)

(25,872)

(221,056)

(311,630)

(48,265)

General and administrative expenses

(140,006)

(84,091)

(72,130)

(11,172)

(230,212)

(156,221)

(24,196)

Total operating expenses

(434,382)

(427,747)

(447,074)

(69,243)

(787,182)

(874,821)

(135,493)

Other income,net

40,710

75,968

47,643

7,379

52,037

123,611

19,145

Operating income

181,353

162,109

181,888

28,171

314,683

343,997

53,278

Interest and short-term investments income

77,714

65,130

57,729

8,941

163,454

122,859

19,028

Gain on fair value change of investments

-

-

3,593

556

2,160

3,593

556

Other non-operating expenses

-

-

-

-

(10,010)

-

-

Foreign currency exchange (losses) gains,

net

(975)

(2,260)

722

112

(2,400)

(1,538)

(238)

Income before income tax expenses

258,092

224,979

243,932

37,780

467,887

468,911

72,624

Income tax expenses

(51,286)

(39,410)

(58,291)

(9,028)

(88,842)

(97,701)

(15,132)

Income before share of (loss) income in

equity method investments,net of

income taxes

206,806

185,569

185,641

28,752

379,045

371,210

57,492

Share of (loss) income in equity method

investments,net of income taxes

(48)

(31)

610

94

(1,061)

579

90

Net income attributable to HUYA Inc.

206,758

185,538

186,251

28,846

377,984

371,789

57,582

Net income attributable to ordinary

shareholders

206,582

HUYA INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(All amounts in thousands,

2021

RMB

RMB

RMB

US$

RMB

RMB

US$

Net income per ADS*

—Basic

0.93

0.78

0.78

0.12

1.71

1.57

0.24

—Diluted

0.87

0.77

0.77

0.12

1.60

1.54

0.24

Net income per ordinary share

—Basic

0.93

0.78

0.78

0.12

1.71

1.57

0.24

—Diluted

0.87

0.77

0.77

0.12

1.60

1.54

0.24

Weighted average number of ADS used in

calculating net income per ADS

—Basic

221,599,311

236,602,426

238,105,367

238,367

220,766,682

237,358,048

237,048

—Diluted

236,295,396

241,872,722

241,536,071

241,071

236,183,381

241,727,114

241,114

** Each ADS represents one Class A ordinary share.

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

Three Months Ended

Six Months Ended

June 30,

2021

RMB

RMB

RMB

US$

RMB

RMB

US$

Cost of revenues

15,707

16,621

12,969

2,009

30,587

29,590

4,583

Research and development expenses

35,195

36,741

32,226

4,991

71,518

68,967

10,682

Sales and marketing expenses

2,540

1,891

1,670

259

5,118

3,561

552

General and administrative expenses

70,784

25,124

20,636

3,196

110,834

45,760

7,087

HUYA INC.

RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS

(All amounts in thousands,

2021

RMB

RMB

RMB

US$

RMB

RMB

US$

Gross profit

575,626

Share-based compensation expenses allocated

in cost of revenues

15,583

Non-GAAP gross profit

590,732

530,509

594,288

92,044

1,080,415

1,124,797

174,209

Operating income

181,278

Share-based compensation expenses

124,226

80,377

67,501

10,455

218,057

147,878

22,904

Non-GAAP operating income

305,579

242,486

249,389

38,626

532,740

491,875

76,182

Net income attributable to HUYA Inc.

206,582

Gain on fair value change of investments and

equity investee's investments,and equity

investee's partial disposal of its investment,

net of income taxes

-

-

(3,619)

(561)

(1,620)

(3,619)

(561)

Share-based compensation expenses

124,904

Non-GAAP net income attributable to

HUYA Inc.

330,984

265,915

250,133

38,740

594,421

516,048

79,925

Net income attributable to ordinary

shareholders

206,904

Non-GAAP net income attributable to

ordinary shareholders

330,925

Non-GAAP net income per ordinary share

—Basic

1.49

1.12

1.05

0.16

2.69

2.17

0.34

—Diluted

1.40

1.10

1.04

0.16

2.52

2.13

0.33

Non-GAAP net income per ADS

—Basic

1.49

1.12

1.05

0.16

2.69

2.17

0.34

—Diluted

1.40

1.10

1.04

0.16

2.52

2.13

0.33

Weighted average number of ADS used in

calculatingNon-GAAP net income per

ADS

—Basic

221,114

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