DouYu International Holdings Limited Reports Second Quarter 2022 Unaudited Financial Results

WUHAN,China,Aug. 15,2022 --DouYu International Holdings Limited ("DouYu" or the "Company") (Nasdaq: DOYU),a leading game-centric live streaming platform inChinaand a pioneer in the eSports value chain,today announced its unaudited financial results for the second quarter ended June 30,2022.

Second Quarter 2022 Financial and Operational Highlights

Total net revenues in the second quarter of 2022 were RMB1,833.2million (US$273.7 million),compared with RMB2,336.8 million in the same period of 2021.

Gross profit in the second quarter of 2022 was RMB309.0 million (US$46.1million),compared with RMB306.5 million in the same period of 2021.

Net loss in the second quarter of 2022 was RMB38.8 million (US$5.8 million),compared with RMB181.7million in the same period of 2021.

Adjusted net income[1] in the second quarter of 2022 was RMB23.5 million (US$3.5 million),compared with adjusted net loss of RMB145.1 million in the same period of 2021.

Average mobile MAUs[2] in the second quarter of 2022 were 55.7 million,compared with 60.7 million in the same period of 2021.

Quarterly average paying user[3] count in the second quarter of 2022 was 6.6 million,compared with 7.2 million in the same period of 2021.

Mr. Shaojie Chen,Chief Executive Officer of DouYu,commented,"During the second quarter,we maintained our focus on enriching our platform's content ecosystem and increased our investment and innovation in self-produced content. At the same time,we optimized our cost control mechanisms and carried out structural adjustments to enhance the quality of our revenue streams. We achieved substantial progress in this quarter,as demonstrated by our stable average mobile MAUs of 55.7 million and our improved financial performance,as our adjusted net income[1]reached RMB23.5 million. Going forward,we will remain committed to executing our business strategy in developing our game-centric comprehensive content platform by leveraging our deeper understanding of the preferences and characteristics of different user categories. Furthermore,we will continue to enrich our innovative tailor-made content in livestreaming,videos,graphics,and interactive communities. We will maintain our leading position in the traditional livestreaming industry by augmenting and developing our game-centric ecosystem and exploring new growth drivers to achieve sustainable and healthy growth."

Mr. Hao Cao,Vice President of DouYu,"Our total revenue in the second quarter reached RMB1.83 billion and gross profit was RMB309.0 million,representing a gross margin of 16.9%. We also achieved adjusted net income[1] of RMB23.5 million. During this quarter,while we further invested into new business initiatives and self-produced content,we continued to optimize our operational efficiency and successfully implemented additional cost control measures. Our attention to operating efficiency has delivered tangible results with improved returns for each game,generating a sequential improvement of gross margin and a turnaround in our adjusted net profit in this quarter. As of the end of the second quarter,we have cash and cash equivalents,restricted cash,short-term and long-term bank deposits of RMB6,685 million. These abundant cash reserves will provide us with ample support to stabilize our core business operations as we navigate through the challenging macro environment. Looking ahead,we remain focused on enhancing our monetization capabilities and developing our operating model to improve operating efficiency as we strive to deliver long-term value to our shareholders."

Second Quarter 2022 Financial Results

Total net revenues in the second quarter of 2022 decreased by 21.6% to RMB1,833.2million (US$273.7million),336.8million in the same period of 2021.

Livestreaming revenuesin the second quarter of 2022 decreased by 18.8% to RMB1,768.3million (US$264.0million) from RMB2,178.1million in the same period of 2021. The decrease was due to the ongoing implementation of prudent operating strategies which primarily included the Company's adjustments to certain interactive features and related operations to promote the long-term development of its platform.

Advertising and other revenuesin the second quarter of 2022 were RMB64.9million (US$9.7million),compared with RMB158.7million in the same period of 2021. The decrease was primarily due to the continued exploration of new commercialization models by using a portion of advertising traffic that could have been directly monetized,as well as the soft demand for advertisements coupled with the resurgence of COVID-19 in China.

Cost of revenuesin the second quarter of 2022 was RMB1,524.2million (US$227.6million),a decrease of 24.9% compared with RMB2,030.2 million in the same period of 2021.

Revenue sharing fees and content costsin the second quarter of 2022 decreased by 27.2% to RMB1,314.7million (US$196.3million) from RMB1,806.8million in the same period of 2021. The decrease was primarily due to decreased revenue sharing fees which outpaced the decrease in livestreaming revenues as a result of our effective implementation of prudent and ROI-focused operating strategies,as well as a significant decrease in copyright costs.

Bandwidth costsin the second quarter of 2022 decreased by 11.2% to RMB143.7million (US$21.5 million) from RMB161.8million in the same period of 2021. The decrease was mainly due to less peak bandwidth usage for fewer purchased eSports tournaments,as well as lower per unit bandwidth costs as a result of improved procurement efficiency.

Gross profitin the second quarter of 2022 was RMB309.0million (US$46.1million),compared with RMB306.5million in the same period of 2021. Gross margin in the second quarter of 2022 improved to 16.9%from 13.1% in the same period of 2021. The increase in gross margin was primarily due to the decreases in both revenue sharing fees and copyright costs as a percentage of total net revenues.

Sales and marketing expensesin the second quarter of 2022 decreased 43.2% to RMB167.5 million (US$25.0million) from RMB295.0 million in the same period of 2021. The decrease was mainly attributable to the significant decrease in marketing expenses for user acquisition and decreased personnel-related expenses.

Research and development expensesin the second quarter of 2022 decreased 17.2% to RMB101.9 million (US$15.2million) from RMB123.0 million in the same period of 2021. The decrease was primarily attributable to the decrease in personnel-related expenses.

General and administrative expensesin the second quarter of 2022 decreased 11.7% to RMB90.7million (US$13.5million) from RMB102.6million in the same period of 2021. The decrease was primarily due to the decreased professional service fees.

Other operating income,net in the second quarter of 2022was RMB20.4 million (US$3.0 million),compared with other operating income of RMB16.7million in the same period of 2021.

Loss from operationsin the second quarter of 2022 was RMB30.6 million (US$4.6million),compared with RMB197.4 million in the same period of 2021.

Adjusted operating income in the second quarter of 2022,which adds back share-based compensation expenses,was RMB0.3million (US$0.0 million),compared with adjusted operating loss of RMB165.1 million in the same period of 2021.

Net lossin the second quarter of 2022 was RMB38.8 million (US$5.8million),compared with RMB181.7million in the same period of 2021.

Adjusted net incomein the second quarter of 2022,which excludes share-based compensation expenses,share of loss in equity method investments,and impairment loss of investments,was RMB23.5 million (US$3.5million),compared with adjusted net loss of RMB145.1 million in the same period of 2021.

Basic and diluted net loss per ADS[4]in the second quarter of 2022 were RMB0.10 (US$0.01) and RMB0.10(US$0.01,respectively. Adjusted basic and diluted net income per ADS in the second quarter of 2022 were RMB0.10 (US$0.01) and RMB0.10(US$0.01),respectively.

Cash and cash equivalents,restricted cash and bank deposits

As of June 30,2022,the Company had cash and cash equivalents,685million (US$998.0million),compared with RMB6,643 million as of December 31,2021.

Conference Call Information

The Company will hold a conference call on August 15,at 7:00am Eastern Time (or 7:00pmBeijing Time on the same day) to discuss the financial results. Listeners may access the call by dialing the following numbers:

International:

1-412-317-6061

United States Toll Free:

1-888-317-6003

Mainland China Toll Free:

4001-206115

Hong Kong Toll Free:

800-963976

Singapore Toll Free:

800-120-5863

Conference ID:

8396492

The replay will be accessible through August 22,by dialing the following numbers:

International:

1-412-317-0088

United States Toll Free:

1-877-344-7529

Conference ID:

7633533

A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.douyu.com/.

[1]"Adjusted net income" is calculated as net loss before share-based compensation expenses,and share of loss in equity method investments,and impairment loss on investments. 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 the number of mobile devices that launched the Company's mobile apps in a given period. Average mobile MAUs for a given period is calculated by dividing (i) the sum of active mobile users for each month of such period,by (ii) the number of months in such period.

[3]"Quarterly average paying users" refers to the average paying users for each quarter during a given period of time calculated by dividing (i) the sum of paying users for each quarter of such period,by (ii) the number of quarters in such period. "Paying user" refers to a registered user that has purchased virtual gifts on the Company's platform at least once during the relevant period.

[4]Every ten ADSs represent one ordinary share.

About DouYu International Holdings Limited

Headquartered in Wuhan,DouYu International Holdings Limited (Nasdaq: DOYU) is a leading game-centric live streaming platform in China and a pioneer in the eSports value chain. DouYu operates its platform on both PC and mobile apps to bring users access to immersive and interactive games and entertainment livestreaming,a wide array of video and graphic contents,as well as opportunities to participate in community events and discussions. By nurturing a sustainable technology-based talent development system and relentlessly producing high-quality content,DouYu consistently delivers premium content through integration of livestreaming,video,and virtual communities with a primary focus on games,especially on eSports. This enables DouYu to continuously expand its user base and enhance its user experience. For more information,please see http://ir.douyu.com/.

Use of Non-GAAP Financial Measures

Adjusted operating (loss) income is calculated as loss from operation adjusted for share-based compensation expenses. Adjusted net (loss) income is calculated as net loss adjusted for share-based compensation expenses,and impairment loss on investments. Adjusted net (loss) income attributable to DouYu is calculated as net loss attributable to DouYu adjusted for share-based compensation expenses,and impairment loss of investments. Adjusted basic and diluted net (loss) income per ordinary share 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 (loss) income per ordinary share. The Company adjusted the impact of (i) share-based compensation expenses,(ii) share of loss in equity method investments,(iii) impairment loss of investments to understand and evaluate the Company's core operating performance. The non-GAAP financial measures are presented to enhance investors' overall understanding of the Company's financial performance and should not be considered a substitute for,or superior to,the financial information prepared and presented in accordance with U.S. GAAP. Investors are encouraged to review the reconciliation of the historical non-GAAP financial measures to its most directly comparable GAAP financial measures. As non-GAAP financial measures have material limitations as analytical metrics and may not be calculated in the same manner by all companies,they may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations,you should not consider non-GAAP financial measures as a substitute for,such metrics in accordance with U.S. GAAP.

For more information on these non-GAAP financial measures,please see the table captioned "Reconciliations of 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 RMB6.6981 to US$1.00,the noon buying rate in effect on June 30,in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB amounts could have been,or could be,converted,realized or settled in U.S. dollars at that rate on June 30,or at any other rate.

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts,including statements about the Company's beliefs and expectations,are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties,and 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: the Company's results of operations and financial condition; the Company's business strategies; general market conditions,in particular the game live streaming market; the ability of the Company to retain and grow active and paying users; changes in general economic and business conditions in China; the impact of the COVID-19 to the Company's business operations and the economy in China and globally; any adverse changes in laws,regulations,rules,policies or guidelines applicable to the Company; and assumptions underlying or related to any of the foregoing. In some cases,forward-looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "target," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. Further information regarding these and other risks,uncertainties or factors is included in the Company's filings with the Securities Exchange Commission. All information provided in this press release is as of the date of this press release,and the Company does not undertake any duty to update such information,except as required under applicable law.

Investor Relations Contact

Lingling Kong

|DouYu International Holdings Limited

Email: ir@douyu.tv

Phone: +1 (646) 224-6934

Robin Yang

ICR,LLC

Email: DouYu.IR@icrinc.com

Phone: +1 (646) 224-6934

Media Relations Contact

Lingling Kong

DouYu International Holdings Limited

Email: pr_douyu@douyu.tv

Phone: +1 (646) 308-1475

Edmond Lococo

ICR,LLC

Email: DouYu.PR@icrinc.com

Phone: +1 (646) 308-1475

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

As of December 31

As of June 30

2021

2022

2022

ASSETS

RMB

RMB

US$ (1)

Current assets:

Cash and cash equivalents

4,456,406

3,793,782

566,397

Restricted cash

10,703

6,057

904

Short-term bank deposits

2,076,355

2,784,964

415,784

Accounts receivable,net

191,389

143,435

21,414

Prepayments

80,717

51,240

7,650

Amounts due from related parties

37,159

37,957

5,667

Other current assets

376,367

323,551

48,305

Total current assets

7,229,096

7,140,986

1,066,121

Property and equipment,net

25,111

19,323

2,885

Intangible assets,net

161,540

139,528

20,831

Long-term bank deposits

100,000

100,000

14,930

Investments

491,425

504,956

75,388

Goodwill

12,637

13,302

1,986

Right-of-use assets,net

72,309

68,560

10,236

Other non-current assets

64,785

66,738

9,964

Total non-current assets

927,807

912,407

136,220

TOTAL ASSETS

8,156,903

8,053,393

1,202,341

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES

Current liabilities:

Accounts payable

824,128

731,448

109,202

Advances from customers

7,476

3,649

545

Deferred revenue

235,134

238,545

35,614

Accrued expenses and other current liabilities

458,328

371,740

55,499

Amounts due to related parties

293,508

308,565

46,068

Lease liabilities due within one year

30,417

36,700

5,479

Total current liabilities

1,848,991

1,690,647

252,407

Lease liabilities

31,278

27,342

4,082

Deferred revenue

18,045

12,663

1,891

Total non-current liabilities

49,323

40,005

5,973

TOTAL LIABILITIES

1,898,314

1,730,652

258,380

(1)Translations of of certainRMBamounts into U.S. dollars at a specified rate are solely for the convenience of the reader.

Unless otherwise noted,all translations fromRMBto U.S. dollars are made at a rate of RMB6.6981 to US$1.00,the noon

buying rate in effect on June 30,in theH.10 statistical release of the Federal Reserve Board.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

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

As of December 31

As of June 30

2021

2022

2022

RMB

RMB

US$ (1)

SHAREHOLDERS' EQUITY

Ordinary shares

23

23

3

Treasury shares

(802,250)

(911,217)

(136,041)

Additional paid-in capital

10,618,538

10,667,589

1,592,629

Accumulated deficit

(3,445,102)

(3,562,873)

(531,923)

Accumulated other comprehensive loss

(112,621)

122,067

18,225

Total DouYu Shareholders' Equity

6,258,588

6,315,589

942,893

Noncontrolling interests

1

7,152

1,068

Total Shareholders' Equity

6,589

6,322,741

943,961

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

8,341

(1)Translations of certainRMBamounts into U.S. dollars at a specified rate are solely for the convenience of the reader.

Unless otherwise noted,the noon

buying rate in effect on June30,in theH.10 statistical release of the Federal Reserve Board.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

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

Three Months Ended

Six Months Ended

June 30,

2021

March 31,

2022

June 30,

2021

June 30,

2022

RMB

RMB

RMB

US$ (1)

RMB

RMB

US$ (1)

Net revenues

2,336,771

1,795,646

1,833,205

273,690

4,489,459

3,628,851

541,773

Cost of revenues

(2,030,223)

(1,551,872)

(1,524,167)

(227,552)

(3,922,722)

(3,039)

(459,241)

Gross profit

306,548

243,774

309,038

46,138

566,737

552,812

82,532

Operating (expenses) income (2)

Sales and marketing expenses

(294,953)

(186,358)

(167,463)

(25,002)

(504,829)

(353,822)

(52,824)

General and administrative expenses

(102,624)

(90,100)

(90,659)

(13,535)

(190,698)

(180,758)

(26,986)

Research and development expenses

(123,015)

(116,308)

(101,847)

(15,205)

(234,280)

(218,155)

(32,570)

Other operating income,net

16,681

47,801

20,375

3,042

40,605

68,175

10,178

Total operating expenses

(503,911)

(344,965)

(339,594)

(50,700)

(889,202)

(684,560)

(102,202)

Loss from operations

(197,363)

(101,191)

(30,556)

(4,562)

(322,465)

(131,748)

(19,670)

Other income (expenses),net

178

(1,149)

(28,884)

(4,312)

305

(30,032)

(4,484)

Interest income,net

19,768

16,632

23,570

3,519

40,697

40,201

6,002

Loss before income taxes and share of

Loss in equity method investments

(177,417)

(85,708)

(35,870)

(5,355)

(281,463)

(121,579)

(18,152)

Income tax expense

-

-

-

-

-

-

-

Share of loss in equity method investments

(4,243)

(1,146)

(2,887)

(431)

(2,029)

(4,033)

(602)

Net loss

(181,660)

(86,854)

(38,757)

(5,786)

(283,492)

(125,612)

(18,754)

Less: Net loss attributable to noncontrolling interest

(34,651)

-

(7,841)

(1,171)

(74,465)

(7,171)

Net loss attributable to ordinary

shareholders of the Company

(147,009)

(86,854)

(30,916)

(4,615)

(209,027)

(117,771)

(17,583)

Net loss per ordinary share

Basic

(4.52)

(2.71)

(0.97)

(0.15)

(6.44)

(3.69)

(0.55)

Diluted

(4.52)

(2.71)

(0.97)

(0.15)

(6.44)

(3.69)

(0.55)

Net loss per ADS(3)

Basic

(0.45)

(0.45)

(0.27)

(0.10)

(0.01)

(0.64)

(0.37)

(0.06)

Diluted

(0.27)

(0.10)

(0.01)

(0.64)

(0.37)

(0.06)

Weighted average number of ordinary shares used in calculating net loss per ordinary share

Basic

32,520,221

32,065,147

31,827,240

31,240

32,434,992

31,947,461

31,461

Diluted

32,461

Weighted average number of ADS used in calculating net loss per ADS(3)

Basic

325,212

320,651,471

318,272,401

318,401

324,349,925

319,474,607

319,607

Diluted

325,607

(1)Translations of certainRMBamounts into U.S. dollars at a specified rate are solely for the convenience of the reader.

Unless otherwise noted,in theH.10 statistical release of the Federal Reserve Board.

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

Three Months Ended

Six Months Ended

June 30,

2022

RMB

RMB

RMB

US$ (1)

RMB

RMB

US$ (1)

Research and development expenses

5,300

5,435

5,437

812

10,768

10,872

1,623

Sales and marketing expenses

1,177

1,212

1,213

181

2,395

2,425

362

General and administrative expenses

25,810

26,563

24,184

3,611

52,442

50,747

7,576

(3)Every tenADSsrepresent one ordinary share.

RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS

(All amounts in thousands,

2022

RMB

RMB

RMB

US$ (1)

RMB

RMB

US$ (1)

Loss from operations

(197,670)

Add:

Share-based compensation expenses

32,287

33,210

30,834

4,604

65,605

64,044

9,561

Adjusted Operating (loss) income

(165,076)

(67,981)

278

42

(256,860)

(67,704)

(10,109)

Net Loss

(181,754)

Add:

Share-based compensation expenses

32,561

Share of loss in equity method investments

4,243

1,146

2,887

431

2,029

4,033

602

Impairment loss of investment

-

-

28,571

4,266

-

28,266

Adjusted net (loss) income

(145,130)

(52,498)

23,535

3,515

(215,858)

(28,964)

(4,325)

Net loss attributable to DouYu

(147,583)

Add:

Share-based compensation expenses

32,266

Adjusted net (loss) income attributable to DouYu

(110,479)

(52,498)

31,376

4,686

(141,393)

(21,123)

(3,154)

Adjusted Net (loss) income per ordinary share

Basic

(3.47)

(1.64)

0.99

0.15

(4.44)

(0.66)

(0.10)

Diluted

(3.47)

(1.64)

0.99

0.15

(4.44)

(0.66)

(0.10)

Adjusted net (loss) income per ADS(2)

Basic

(0.35)

(0.16)

0.10

0.01

(0.44)

(0.07)

(0.01)

Diluted

(0.35)

(0.16)

0.10

0.01

(0.44)

(0.07)

(0.01)

Weighted average number of ordinary shares used in calculating Adjusted net (loss) income per ordinary share

Basic

32,461

Weighted average number of ADS used in calculating net (loss) income per ADS(2)

Basic

325,in theH.10 statistical release of the Federal Reserve Board.

(2)Every tenADSsrepresent one ordinary share.

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