HUYA Inc. Reports Third Quarter 2021 Unaudited Financial Results

GUANGZHOU,China,Nov. 9,2021 -- HUYA Inc. ("Huya" or the "Company") (NYSE: HUYA),a leading game live streaming platform in China,today announced its unaudited financial results for the third quarter ended September 30,2021.

Third Quarter 2021 Highlights

Total net revenues for the third quarter of 2021 increased by 5.7% to RMB2,975.5 million (US$461.8 million),from RMB2,814.8 million for the same period of 2020.

Net income attributable to HUYA Inc. was RMB524.4 million (US$81.4 million) for the third quarter of 2021,compared with RMB253.0 million for the same period of 2020.

Non-GAAP net income attributable to HUYA Inc.[1]was RMB180.0 million (US$27.9 million) for the third quarter of 2021,compared with RMB361.2 million for the same period of 2020.

Average mobile MAUs[2] of Huya Live in the third quarter of 2021 increased by 14.7% to 85.1 million,from 74.2 million in the same period of 2020.

Total number of paying users[3] of Huya Live in the third quarter of 2021 reached 6.0 million,compared with 6.0 million in the same period of 2020.

"During the recent summer period,we saw robust growth in mobile users based on our comprehensive content offerings,strong operational capabilities and continued promotion efforts. Huya Live's average mobile MAUs reached 85.1 million in the third quarter of 2021,representing a year-over-year increase of 14.7% and a quarter-over-quarter increase of 9.7%," said Mr. Rongjie Dong,Chief Executive Officer of Huya. "In light of the dynamic business environment,reinforcing our competitive advantages is pivotal to our continuing success. In this spirit,we will strive to promote new game launches,further enrich our content library,and advance product and service upgrades through innovation to meet diverse user demands as we continue to ensure a great user experience."

Ms. Ashley Xin Wu,Vice President of Finance of Huya,commented,"We continued our sustained growth pathway in the third quarter by achieving 5.7% year-over-year top-line growth. And,against the backdrop of an evolving landscape,we strengthened our investment in quality content and content creators to cement our leading market position. Going forward,we will remain dedicated to driving user growth,improving monetization and enhancing our ecosystem."

[1]"Non-GAAP net income attributable to HUYA Inc." is defined as net income attributable to HUYA Inc. before share-based compensation expenses,and gain on fair value change and disposal of equity investments,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.

Third Quarter 2021 Financial Results

Total net revenues for the third quarter of 2021 increased by 5.7% to RMB2,814.8 million for the same period of 2020.

Live streaming revenues decreased by 2.1% to RMB2,601.9 million (US$403.8 million) for the third quarter of 2021,657.2 million for the same period of 2020,primarily due to lower average spending per paying user on Huya Live.

Advertising and other revenues increased by 137.1% to RMB373.7 million (US$58.0 million) for the third quarter of 2021,from RMB157.6 million for the same period of 2020,primarily driven by the revenues from licensing of content.

Cost of revenues increased by 12.6% to RMB2,471.5 million (US$383.6 million) for the third quarter of 2021 from RMB2,194.3 million for the same period of 2020,primarily due to the increase in revenue sharing fees and content costs.

Revenue sharing fees and content costs increased by 16.3% to RMB2,123.6 million (US$329.6 million) for the third quarter of 2021 from RMB1,826.7 million for the same period of 2020,primarily due to the increase in revenue sharing fees in relation to certain broadcaster incentive programs,and the increase in spending on e-sports content and content creators.

Bandwidth costs decreased by 14.2% to RMB178.0 million (US$27.6 million) for the third quarter of 2021 from RMB207.6 million for the same period of 2020,primarily due to improved bandwidth cost management and continued technology enhancement efforts.

Gross profit decreased by 18.8% to RMB504.0 million (US$78.2 million) for the third quarter of 2021 from RMB620.6 million for the same period of 2020,primarily due to the increased cost of revenues driven by higher revenue sharing fees and content costs. Gross margin was 16.9 % for the third quarter of 2021,comparedwith 22.0% for the same period of 2020.

Research and development expenses increased by 12.9% to RMB206.2 million (US$32.0 million) for the third quarter of 2021 from RMB182.7 million for the same period of 2020,primarily due to increased personnel-related expenses.

Sales and marketing expenses increased by 59.5% to RMB229.4 million (US$35.6 million) for the third quarter of 2021 from RMB143.8 million for the same period of 2020,primarily due to increased marketing expenses to promote the Company's content,products,services and brand name,particularly including promotional activities for e-sports events and cooperation with various marketing channels during the summer vacations.

General and administrative expenses decreased by 32.6% to RMB80.1 million (US$12.4 million) for the third quarter of 2021 from RMB118.7 million for the same period of 2020,primarily due to lower share-based compensation expenses.

Operating income decreased by 62.7% to RMB83.1 million (US$12.9 million) for the third quarter of 2021 from RMB222.9 million for the same period of 2020. Operating margin was 2.8% for the third quarter of 2021,compared with 7.9% for the same period of 2020.

Interest and short-term investments income were RMB62.6 million (US$9.7 million) for the third quarter of 2021,compared with RMB75.9 million for the same period of 2020,primarily due to decreased interest rates.

Income tax expenses decreased by 19.9% to RMB40.6 million (US$6.3 million) for the third quarter of 2021 from RMB50.7 million for the same period of 2020.

Share of income in equity method investments,net of income taxes was RMB378.7 million (US$58.8 million) for the third quarter of 2021,compared with RMB0.2 million for the same period of 2020,primarily due to the investment income related to a disposal of equity investment.

Net income attributable to HUYA Inc. for the third quarter of 2021 was RMB524.4 million (US$81.4 million),compared with RMB253.0 million for the same period of 2020.

Non-GAAP net income attributable to HUYA Inc. for the third quarter of 2021,which excludes share-based compensation expenses,net of income taxes,was RMB180.0 million (US$27.9 million),compared with RMB361.2 million for the same period of 2020.

Diluted net income per American depositary share ("ADS") was RMB2.17 (US$0.34) for the third quarter of 2021,compared with RMB1.05 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 RMB0.75 (US$0.12) for the third quarter of 2021,compared with RMB1.50 for the same period of 2020.

As of September 30,2021,the Company had cash and cash equivalents,short-term deposits and short-term investments of RMB11,119.6 million (US$1,725.7 million),compared with RMB10,738.2 million as of June 30,primarily due to a cash inflow from a disposal of equity investment.

Conference Call

The Company's management will host an earnings conference call at 7:00 a.m. U.S. Eastern Time on November 9,2021 (8:00 p.m. Beijing/Hong Kong time on November 9,2021).

For participants who wish to join the call,please complete online registration using the link provided below 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: http://apac.directeventreg.com/registration/event/4691866

After registration is complete,please dial-in 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 November 16,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:

4691866

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 and disposal of equity 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" at the end of this announcement.

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 RMB6.4434 to US$1.00,the noon buying rate in effect on September 30,in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the Renminbi or U.S. dollars amounts referred to in this announcement could have been or could be converted into U.S. dollars or Renminbi,as the case may be,at any particular rate or at all.

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; Huya's efforts in complying with applicable data privacy and security regulations; 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 regulatory developments 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 September 30,

2020

2021

2021

RMB

RMB

US$

Assets

Current assets

Cash and cash equivalents

3,293,573

3,103,779

481,699

Restricted cash

164,889

2,741

425

Short-term deposits

5,974,790

7,006,098

1,087,329

Short-term investments

1,206,539

1,009,720

156,706

Accounts receivable,net

71,237

74,692

11,592

Amounts due from related parties,net

64,802

211,301

32,793

Prepayments and other current assets,net

495,108

934,951

145,102

Total current assets

11,270,938

12,343,282

1,915,646

Non-current assets

Deferred tax assets

48,313

26,451

4,105

Investments

467,206

582,213

90,358

Property and equipment,net

94,555

82,438

12,794

Intangible assets,net

62,796

90,717

14,079

Right-of-use assets,net

87,418

404,929

62,844

Prepayments and other non-current assets

379,461

150,542

23,364

Total non-current assets

1,139,749

1,337,290

207,544

Total assets

12,410,687

13,680,572

2,123,190

Liabilities and shareholders' equity

Current liabilities

Accounts payable

10,083

18,918

2,936

Advances from customers and deferred revenue

485,878

399,607

62,018

Income taxes payable

56,861

74,613

11,580

Accrued liabilities and other current liabilities

1,707,289

1,759,490

273,066

Amounts due to related parties

95,457

333,812

51,807

Lease liabilities due within one year

29,227

36,812

5,713

Total current liabilities

2,384,795

2,623,252

407,120

Non-current liabilities

Lease liabilities

57,620

51,216

7,949

Deferred tax liabilities

13,350

4,597

713

Deferred revenue

178,144

145,174

22,531

Total non-current liabilities

249,114

200,987

31,193

Total liabilities

2,633,909

2,824,239

438,313

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 September 30,respectively;

83,490,841 and 86,195,765 shares issued and

outstanding as of December 31,2020 and

September 30,respectively)

55

56

9

Class B ordinary shares (US$0.0001 par value;

200,respectively;

152,357,321 and 151,136,517 shares issued and

outstanding as of December 31,respectively)

100

100

16

Additional paid-in capital

11,465,575

11,688,697

1,814,057

Statutory reserves

122,429

122,429

19,001

Accumulated deficit

(1,883,643)

(987,475)

(153,254)

Accumulated other comprehensive income

72,262

32,526

5,048

Total shareholders' equity

9,776,778

10,856,333

1,684,877

Total liabilities and shareholders' equity

12,190

HUYA INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

Three Months Ended

Nine Months Ended

September 30,

2020

June 30,

2021

September 30,

2020

September 30,

2021

RMB

RMB

RMB

US$

RMB

RMB

US$

Net revenues

Live streaming

2,657,208

2,579,178

2,601,854

403,801

7,496,755

7,573,307

1,175,359

Advertising and others

157,632

383,197

373,692

57,996

427,277

969,398

150,448

Total net revenues

2,840

2,962,375

2,975,546

461,797

7,924,032

8,542,705

1,325,807

Cost of revenues(1)

(2,194,263)

(2,381,056)

(2,471,536)

(383,576)

(6,253,627)

(6,943,488)

(1,077,612)

Gross profit

620,577

581,319

504,010

78,221

1,670,405

1,599,217

248,195

Operating expenses(1)

Research and development expenses

(182,683)

(207,899)

(206,203)

(32,002)

(518,597)

(613,173)

(95,163)

Sales and marketing expenses

(143,846)

(167,045)

(229,404)

(35,603)

(364,902)

(541,034)

(83,967)

General and administrative expenses

(118,741)

(72,130)

(80,073)

(12,427)

(348,953)

(236,294)

(36,672)

Total operating expenses

(445,270)

(447,074)

(515,680)

(80,032)

(1,232,452)

(1,390,501)

(215,802)

Other income,net

47,613

47,643

94,804

14,713

99,650

218,415

33,897

Operating income

222,920

181,888

83,134

12,902

537,603

427,131

66,290

Interest and short-term investments income

75,919

57,729

62,561

9,709

239,373

185,420

28,777

Gain on fair value change of investments

-

3,593

40,568

6,296

2,160

44,161

6,854

Other non-operating expenses

-

-

-

-

(10,010)

-

-

Foreign currency exchange gains (losses),net

4,677

722

(31)

(5)

2,277

(1,569)

(244)

Income before income tax expenses

303,516

243,932

186,232

28,902

771,403

655,143

101,677

Income tax expenses

(50,657)

(58,291)

(40,577)

(6,297)

(139,499)

(138,278)

(21,460)

Income before share of income (loss) in

equity method investments,net of

income taxes

252,859

185,641

145,655

22,605

631,904

516,865

80,217

Share of income (loss) in equity method

investments,net of income taxes

154

610

378,724

58,777

(907)

379,303

58,867

Net income attributable to HUYA Inc.

253,013

186,251

524,379

81,382

630,997

896,168

139,084

Net income attributable to ordinary

shareholders

253,084

HUYA INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)

(All amounts in thousands,

2021

RMB

RMB

RMB

US$

RMB

RMB

US$

Net income per ADS*

—Basic

1.10

0.78

2.20

0.34

2.82

3.77

0.58

—Diluted

1.05

0.77

2.17

0.34

2.65

3.71

0.58

Net income per ordinary share

—Basic

1.10

0.78

2.20

0.34

2.82

3.77

0.58

—Diluted

1.05

0.77

2.17

0.34

2.65

3.71

0.58

Weighted average number of ADS used in

calculating net income per ADS

—Basic

230,554,718

238,105,367

238,217

238,217

224,053,176

237,848,772

237,772

—Diluted

240,474,833

241,536,071

241,449,111

241,111

237,807,379

241,774,727

241,727

* 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

Nine Month Ended

September 30,

2021

RMB

RMB

RMB

US$

RMB

RMB

US$

Cost of revenues

17,352

12,969

11,883

1,844

47,939

41,473

6,437

Research and development expenses

42,552

32,226

34,720

5,388

114,070

103,687

16,092

Sales and marketing expenses

2,711

1,670

2,512

390

7,829

6,073

943

General and administrative expenses

45,549

20,636

21,714

3,370

156,383

67,474

10,472

HUYA INC.

RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS

(All amounts in thousands,

2021

RMB

RMB

RMB

US$

RMB

RMB

US$

Gross profit

620,195

Share-based compensation expenses allocated

in cost of revenues

17,437

Non-GAAP gross profit

637,929

594,288

515,893

80,065

1,718,344

1,640,690

254,632

Operating income

222,290

Share-based compensation expenses

108,164

67,501

70,829

10,992

326,221

218,707

33,944

Non-GAAP operating income

331,084

249,389

153,963

23,894

863,824

645,838

100,234

Net income attributable to HUYA Inc.

253,084

Gain on fair value change and disposal of e

quity investments,net of income taxes

-

(3,619)

(415,190)

(64,436)

(1,620)

(418,809)

(64,998)

Share-based compensation expenses

108,944

Non-GAAP net income attributable to HUYA Inc.

361,177

250,133

180,018

27,938

955,598

696,066

108,030

Net income attributable to ordinary

shareholders

253,084

Gain on fair value change and disposal of

equity investments,944

Non-GAAP net income attributable to

ordinary shareholders

361,030

Non-GAAP net income per ordinary share

—Basic

1.57

1.05

0.75

0.12

4.27

2.93

0.45

—Diluted

1.50

1.04

0.75

0.12

4.02

2.88

0.45

Non-GAAP net income per ADS

—Basic

1.57

1.05

0.75

0.12

4.27

2.93

0.45

—Diluted

1.50

1.04

0.75

0.12

4.02

2.88

0.45

Weighted average number of ADS used in

calculatingNon-GAAP net income per ADS

—Basic

230,727

View original content:https://www.prnewswire.com/news-releases/huya-inc-reports-third-quarter-2021-unaudited-financial-results-301419432.html