GUANGZHOU, China, March 14, 2017 (GLOBE NEWSWIRE) -- YY Inc. (NASDAQ:YY) ("YY" or the "Company"), a live streaming platform, today announced its unaudited financial results for the fourth quarter and full year 2016.
Fourth Quarter 2016 Highlights
Net revenues increased by 30.8% to RMB2,484.2 million (US$357.8 million) from RMB1,899.8 million in the corresponding period of 2015.
Net income attributable to YY increased by 59.3% to RMB572.3 million (US$82.4 million) from RMB359.2 million in the corresponding period of 2015.
Non-GAAP net income attributable to YY increased by 42.4% to RMB598.6 million (US$86.2 million) from RMB420.4 million in the corresponding period of 2015.
Full Year 2016 Highlights
Net revenues increased by 39.1% to RMB8,204.1 million (US$1,181.6 million) from RMB5,897.2 million in 2015.
Net income attributable to YY increased by 47.5% to RMB1,523.9 million (US$219.5 million) from RMB1,033.2 million in 2015.
Non-GAAP net income attributable to YY increased by 38.0% to RMB1,681.2 million (US$242.1 million) from RMB1,218.6 million in 2015.
“We are delighted to have delivered another quarter of solid results in the fourth quarter of 2016,” said Mr. Zhou Chen, Chief Executive Officer of YY. “In addition to our robust financial performance in the fourth quarter, our mobile MAU reached 56.0 million, representing a 4.8% increase from the previous quarter, and our PC MAU was stable at 96.1 million. Our solid financial results and user numbers are due to the continued strengthening of our product and content offerings and our dedication to the development of new and diverse market content. For example, the introduction of new vertical content like YY Live’s outdoor and travel and the expansion of our mobile game live broadcasting content for the Huya broadcasting platform are key components for expanding our content offering. Additionally, in order to further strengthen user stickiness across our platform, we began to encourage more users from both YY Live and Huya broadcasting to share more live broadcasting sessions based on social relationships and locations. Going forward, we will introduce even more content verticals to YY, and in turn, we are confident that we can further expand our market share and maintain our leading position in this massive growth industry.”
Mr. Eric He, Chief Financial Officer of YY, further commented, “In the fourth quarter of 2016, we continued to see strong growth momentum in our revenues, with total net revenues increasing by 30.8% year over year to RMB2.5 billion, primarily attributable to the healthy growth in our total number of live streaming paying users which grew by 91.9% year over year to 5.2 million. Importantly, despite the intense competitive landscape in the live streaming industry, our live streaming revenues for the full year of 2016 witnessed a remarkable 54.8% year over year growth to over seven billion, and our Non-GAAP profit margin for the year exceeded 20%, which is a testament to the solid strength and long-term competitiveness of both of our platforms. As Huya broadcasting’s revenue growth continues to accelerate, its margins continue to improve, which ultimately strengthens our long-term profitability.”
Fourth Quarter 2016 Financial Results
NET REVENUES1 Net revenues increased by 30.8% to RMB2,484.2 million (US$357.8 million) in the fourth quarter of 2016 from RMB1,899.8 million in the corresponding period of 2015, primarily driven by the increase in live streaming revenues. Live streaming revenues increased by 41.7% to RMB2,218.2 million (US$319.5 million) in the fourth quarter of 2016 from RMB1,565.2 million in the corresponding period of 2015. Live streaming revenues from the YY Live segment in the fourth quarter of 2016 was RMB1,883.8 million (US$271.3 million) and live streaming revenues from the Huya segment in the fourth quarter of 2016 was RMB334.3 million (US$48.2 million).
Revenues from online games were RMB125.4 million (US$18.1 million) in the fourth quarter of 2016, as compared to RMB172.4 million in the corresponding period of 2015, which primarily reflected the continued softness in China’s web game market.
Revenues from membership were RMB74.7 million (US$10.8 million) in the fourth quarter of 2016, as compared to RMB80.8 million in the corresponding period of 2015.
Other revenues, mainly including revenues from the Company's online education platform and online advertising revenues, were RMB65.9 million (US$9.5 million) in the fourth quarter of 2016, compared with RMB81.4 million in the corresponding period of 2015.
COST OF REVENUES AND GROSS PROFIT Cost of revenues increased by 33.5% to RMB1,559.6 million (US$224.6 million) in the fourth quarter of 2016 from RMB1,168.2 million in the corresponding period of 2015, primarily attributable to an increase in revenue-sharing fees and content costs to RMB1,222.2 million (US$176.0 million) in the fourth quarter of 2016 from RMB807.3 million in the corresponding period of 2015. The increase in revenue-sharing fees and content costs paid to performers, channel owners and content providers was slightly higher than the increase in live streaming revenues due to more diverse content offerings in the fourth quarter. In addition, bandwidth costs slightly increased to RMB168.9 million (US$24.3 million) in the fourth quarter of 2016 from RMB161.1 million in the corresponding period of 2015, primarily reflecting the continued user base expansion and video quality improvements, but partially offset by the Company’s improved efficiency and pricing terms.
Gross profit increased by 26.4% to RMB924.6 million (US$133.2 million) in the fourth quarter of 2016 from RMB731.6 million in the corresponding period of 2015. Gross margin was 37.2% in the fourth quarter of 2016, as compared to 38.5% in the corresponding period of 2015.
OPERATING INCOME Operating expenses for the fourth quarter of 2016 were RMB495.5 million (US$71.4 million), as compared to RMB354.6 million in the corresponding period of 2015.
Operating income in the fourth quarter of 2016 increased by 51.7% to RMB621.5 million (US$89.5 million) from RMB409.8 million in the corresponding period of 2015. Operating margin in the fourth quarter of 2016 was 25.0%, as compare to 21.6% in the corresponding period of 2015.
Non-GAAP operating income2 increased by 37.6% to RMB647.9 million (US$93.3 million) in the fourth quarter of 2016 from RMB471.0 million in the corresponding period of 2015. Non-GAAP operating margin3 was 26.1% in the fourth quarter of 2016, as compared to 24.8% in the corresponding period of 2015.
NET INCOME Net income attributable to YY Inc. increased by 59.3% to RMB572.3 million (US$82.4 million) in the fourth quarter of 2016 from RMB359.2 million in the corresponding period of 2015. Net margin in the fourth quarter of 2016 increased to 23.0% from 18.9% in the corresponding period of 2015.
Non-GAAP net income attributable to YY Inc.4 increased by 42.4% to RMB598.6 million (US$86.2 million) from RMB420.4 million in the corresponding period of 2015. Non-GAAP net margin5 in the fourth quarter of 2016 increased to 24.1% from 22.1% in the corresponding period of 2015.
NET INCOME PER ADS Diluted net income per ADS6 increased by 56.1% to RMB9.74 (US$1.40) in the fourth quarter of 2016 from RMB6.24 in the corresponding period of 2015.
Non-GAAP diluted net income per ADS7 increased by 40.3% to RMB10.17 (US$1.46) in the fourth quarter of 2016 from RMB7.25 in the corresponding period of 2015.
BALANCE SHEET AND CASH FLOWS As of December 31, 2016, the Company had cash and cash equivalents of RMB1,579.7 million (US$227.5 million) and short-term deposits of RMB3,751.5 million (US$540.3 million). For the fourth quarter of 2016, net cash from operating activities was RMB996.5 million (US$143.5 million).
SHARES OUTSTANDING As of December 31, 2016, the Company had a total of 1,109.7 million common shares outstanding, or the equivalent of 55.5 million ADSs outstanding.
FULL YEAR 2016 FINANCIAL RESULTS For the full year of 2016, net revenues increased by 39.1% to RMB8,204.1 million (US$1,181.6 million) from RMB5,897.2 million in 2015, primarily driven by a 54.8% year-over-year increase in live streaming revenues.
Net income attributable to YY Inc. for the full year of 2016 increased by 47.5% to RMB1,523.9 million (US$219.5 million) from RMB1,033.2 million in 2015. Net margin for the full year of 2016 increased to 18.6% from 17.5% in 2015.
Non-GAAP net income attributable to YY Inc. for the full year of 2016 increased by 38.0% to RMB1,681.2 million (US$242.1 million) from RMB1,218.6 million in 2015. Non-GAAP net margin was 20.5% for the full year of 2016, as compared to 20.7% for the full year of 2015.
Diluted net income per ADS for the full year of 2016 increased to RMB26.40 (US$3.80) from RMB17.96 in the prior year. Non-GAAP diluted net income per ADS for the full year of 2016 increased to RMB28.98 (US$4.17) from RMB21.18 in the prior year.
For the full year of 2016, net cash from operating activities was RMB2,421.1 million (US$348.7 million).
Business Outlook For the first quarter of 2017, the Company expects its net revenues to be between RMB2.2 billion and RMB2.3 billion, representing a year-over-year growth of approximately 33.4% to 39.5%. These forecasts reflect the Company's current and preliminary view on the market and operational conditions, which are subject to change.
Conference Call Information The Company will hold a conference call on March 14, 2017 at 8:00 am Eastern Time or 8:00 pm Beijing Time to discuss the financial results. Participants may access the call by dialing the following numbers:
United States:
+1-845-675-0438
International Toll Free:
+1-855-500-8701
China Domestic:
400-1200-654
Hong Kong:
+852-3018-6776
Conference ID:
# 80888723
The replay will be accessible through March 22, 2017 by dialing the following numbers:
United States Toll Free:
+1-855-452-5696
International:
+61-2-9003-4211
Conference ID:
# 80888723
A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://investors.yy.com/.
Exchange Rate This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars, in this press release, were made at a rate of RMB6.9430 to US$1.00, the noon buying rate in effect on December 31, 2016 in the City of New York for cable transfers in Renminbi per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York.
About YY Inc. YY Inc. (“YY” or the “Company”) is a live streaming platform that enables users to interact in live online group activities through voice, text and video. Launched in July 2008, YY Client, the Company’s core product, empowers users to create and organize groups of varying sizes to discover and participate in a wide range of activities, including online music and entertainment, online games, online dating, live game broadcasting and education. YY Inc. was listed on NASDAQ in November 2012 and generated revenues of US$910 million in the fiscal year 2015.
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 YY's strategic and operational plans, contain forward-looking statements. YY 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 YY’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: YY’s goals and strategies; YY's future business development, results of operations and financial condition; the expected growth of the online communication social platform market in China; the expectation regarding the rate at which to gain registered user accounts, active users, especially paying users; YY’s ability to monetize the user base; YY’s ability to continue attracting advertisers and offering popular online games; fluctuations in general economic and business conditions in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in YY’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 YY 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”), except that the consolidated statement of changes in shareholders’ equity, consolidated statements of cash flows, and the detailed notes have not been presented. YY uses non-GAAP operating income, non-GAAP operating margin, non-GAAP net income attributable to YY Inc., non-GAAP net margin, non-GAAP net income attributable to common shareholders, and basic and diluted non-GAAP net income per ADS, which are non-GAAP financial measures. Non-GAAP operating income is operating income excluding share-based compensation expenses. Non-GAAP operating margin is non-GAAP operating income as a percentage of net revenues. Non-GAAP net income attributable to YY Inc. is net income attributable to YY Inc. excluding share-based compensation expenses. Non-GAAP net margin is non-GAAP net income attributable to YY Inc. as a percentage of net revenues. Non-GAAP net income attributable to common shareholders is net income attributable to common shareholders excluding share-based compensation expenses. Basic and diluted non-GAAP net income per ADS is non-GAAP net income attributable to common shareholders 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 share-based compensation 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 effect of non-cash share-based compensation expenses, which have been and will continue to be significant recurring expenses in its business. 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 “YY Inc. Reconciliations of GAAP and Non-GAAP Results” near the end of this release.
1From the third quarter of 2016, the Company changed revenue segmenting to live streaming, online games, membership and others. The Company believes this new method better captures the way it generates revenues and is more transparent and reliable than breaking down revenues by business lines as previously presented.
2Non-GAAP operating income is a non-GAAP financial measure, which is defined as operating income excluding share-based compensation expenses.
3Non-GAAP operating margin is a non-GAAP financial measure, which is defined as non-GAAP operating income as a percentage of net revenues.
4Non-GAAP net income attributable to YY Inc. is a non-GAAP financial measure, which is defined as net income attributable to YY Inc. excluding share-based compensation expenses.
5Non-GAAP net margin is a non-GAAP financial measure, which is defined as non-GAAP net income attributable to YY Inc. as a percentage of net revenues.
6ADS is American Depositary Share. Each ADS represents twenty Class A common shares of the Company. Diluted net income per ADS is net income attributable to common shareholders divided by weighted average number of diluted ADS.
7Non-GAAP diluted net income per ADS is a non-GAAP financial measure, which is defined as non-GAAP net income attributable to common shareholders divided by weighted average number of ADS used in the calculation of diluted net income per ADS.
YY INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (All amounts in thousands, except share, ADS and per ADS data)
December 31, 2015
December 31, 2016
December 31, 2016
RMB
RMB
US$
Assets
Current assets
Cash and cash equivalents
928,934
1,579,743
227,530
Short-term deposits
1,894,946
3,751,519
540,331
Restricted short-term deposits
389,221
-
-
Accounts receivable, net
132,353
169,571
24,423
Inventory
14,385
2,266
326
Amount due from related parties
5,297
135,245
19,479
Prepayments and other current assets
147,823
224,732
32,369
Deferred tax assets
116,921
107,309
15,456
Total current assets
3,629,880
5,970,385
859,914
Non-current assets
Deferred tax assets
3,363
10,502
1,513
Investments
567,557
918,602
132,306
Property and equipment, net
843,449
838,750
120,805
Land use rights, net
-
1,872,394
269,681
Intangible assets, net
146,437
58,926
8,487
Goodwill
151,638
14,300
2,060
Other non-current assets
1,960,430
101,933
14,681
Total non-current assets
3,672,874
3,815,407
549,533
Total assets
7,302,754
9,785,792
1,409,447
Liabilities ,mezzanine equity and shareholders’ equity
Current liabilities
Convertible bonds(1)
-
2,768,469
398,742
Accounts payable
129,819
137,107
19,748
Deferred revenue
385,300
430,683
62,031
Advances from customers
55,086
56,152
8,088
Income taxes payable
107,403
140,754
20,273
Accrued liabilities and other current liabilities
681,889
1,066,038
153,541
Amounts due to related parties
24,917
91,245
13,142
Total current liabilities
1,384,414
4,690,448
675,565
Non-current liabilities
Convertible bonds(2)
2,572,119
-
-
Deferred revenue
20,752
25,459
3,667
Deferred tax liabilities
16,817
8,058
1,161
Total non-current liabilities
2,609,688
33,517
4,828
Total liabilities
3,994,102
4,723,965
680,393
YY INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) (All amounts in thousands, except share, ADS and per ADS data)
December 31, 2015
December 31, 2016
December 31, 2016
RMB
RMB
US$
Mezzanine equity
61,833
9,272
1,335
Shareholders’ equity
Class A common shares (US$0.00001 par value; 10,000,000,000 and 10,000,000,000 shares authorized, 728,227,848 and 750,115,028 shares issued and outstanding as of December 31, 2015 and December 31, 2016, respectively)
43
44
6
Class B common shares (US$0.00001 par value; 1,000,000,000 and 1,000,000,000 shares authorized, 369,557,976 and 359,557,976 shares issued and outstanding as of December 31, 2015 and December 31, 2016, respectively)
27
26
4
Additional paid-in capital
2,011,799
2,165,766
311,935
Statutory reserves
56,507
58,857
8,477
Retained earnings
1,207,168
2,728,736
393,020
Accumulated other comprehensive (loss) income
(36,385
)
93,066
13,404
Non-controlling interests
7,660
6,060
873
Total shareholders’ equity
3,246,819
5,052,555
727,719
Total liabilities,mezzanine equity and
shareholders’ equity
7,302,754
9,785,792
1,409,447
_______________________________________________
(1) Convertible bonds represent Convertible Senior Notes which may be redeemed within one year. (2) Effectively January 2016, ASU 2015-3 issued by FASB requires entities to present the issuance costs of bonds in the balance sheet as a direct deduction from the related bonds rather than assets. Accordingly, the Company retrospectively reclassified RMB25.3 million of issuance cost of bonds from other non-current assets into convertible bonds as of December 31, 2015.
YY INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (All amounts in thousands, except share, ADS and per ADS data)
Three Months Ended
Twelve Months Ended
December 31, 2015
September 30, 2016
December 31, 2016
December 31, 2016
December 31, 2015
December 31, 2016
December 31, 2016
RMB
RMB
RMB
US$
RMB
RMB
US$
Net revenues
Live streaming
1,565,230
1,790,373
2,218,190
319,486
4,539,857
7,027,227
1,012,131
Online games
172,398
149,530
125,424
18,065
771,882
634,325
91,362
Membership
80,828
68,768
74,650
10,752
291,310
284,860
41,028
Others
81,388
81,134
65,886
9,490
294,200
257,638
37,108
Total net revenue
1,899,844
2,089,805
2,484,150
357,793
5,897,249
8,204,050
1,181,629
Cost of revenues(1)
(1,168,239
)
(1,275,002
)
(1,559,557
)
(224,623
)
(3,579,744
)
(5,103,430
)
(735,047
)
Gross profit
731,605
814,803
924,593
133,170
2,317,505
3,100,620
446,582
Operating expenses(1)
Research and development expenses
(152,678
)
(163,236
)
(160,118
)
(23,062
)
(548,799
)
(675,230
)
(97,253
)
Sales and marketing expenses
(114,174
)
(109,075
)
(111,533
)
(16,064
)
(312,870
)
(387,268
)
(55,778
)
General and administrative expenses
(87,788
)
(102,683
)
(206,192
)
(29,698
)
(358,474
)
(482,437
)
(69,485
)
Goodwill impairment
-
-
(17,665
)
(2,544
)
(310,124
)
(17,665
)
(2,544
)
Fair value change of contingent consideration
-
-
-
-
292,471
-
-
Total operating expenses
(354,640
)
(374,994
)
(495,508
)
(71,368
)
(1,237,796
)
(1,562,600
)
(225,060
)
Gain on deconsolidation and disposal of subsidiaries
-
-
127,434
18,354
-
103,960
14,973
Other income
32,814
33,065
65,027
9,366
82,300
129,504
18,652
Operating income
409,779
472,874
621,546
89,522
1,162,009
1,771,484
255,147
Gain on partial disposal of associates
-
-
25,061
3,610
-
25,061
3,610
Interest expense
(32,016
)
(20,357
)
(20,758
)
(2,990
)
(97,125
)
(81,085
)
(11,679
)
Interest income
26,185
17,162
26,480
3,814
137,892
67,193
9,678
Foreign currency exchange gains (losses), net
187
(16
)
385
55
(38,099
)
1,158
167
Other non-operating expense
-
-
-
-
(2,165
)
-
-
Income before income tax expenses
404,135
469,663
652,714
94,011
1,162,512
1,783,811
256,923
Income tax expenses
(51,561
)
(69,909
)
(85,804
)
(12,358
)
(178,327
)
(280,514
)
(40,402
)
Income before share of income (loss) in equity method investments, net of income taxes
352,574
399,754
566,910
81,653
984,185
1,503,297
216,521
Share of income (loss) in equity method investments, net of income taxes
3,233
(1,867
)
4,400
634
14,120
8,279
1,192
Net Income
355,807
397,887
571,310
82,287
998,305
1,511,576
217,713
Less: Net loss attributable to the non-controlling interest shareholders and the mezzanine classified non-controlling interest shareholders
(3,409
)
(2,152
)
(944
)
(136
)
(34,938
)
(12,342
)
(1,778
)
Net income attributable to YY Inc.
359,216
400,039
572,254
82,423
1,033,243
1,523,918
219,491
YY INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (CONTINUED) (All amounts in thousands, except share, ADS and per ADS data)
Three Months Ended
Twelve Months Ended
December 31, 2015
September 30, 2016
December 31, 2016
December 31, 2016
December 31, 2015
December 31, 2016
December 31, 2016
RMB
RMB
RMB
US$
RMB
RMB
US$
Net income attributable to YY Inc.
359,216
400,039
572,254
82,423
1,033,243
1,523,918
219,491
Other comprehensive income :
Unrealized gain (loss) of available-for-sales securities
-
13,354
(55,738
)
(8,028
)
-
134,768
19,411
Foreign currency translation adjustments, net of nil tax
(360
)
(562
)
(3,646
)
(525
)
4,414
(5,317
)
(766
)
Comprehensive income attributable to YY Inc.
358,856
412,831
512,870
73,870
1,037,657
1,653,369
238,136
Net income per ADS
—Basic
6.42
7.07
10.11
1.46
18.37
27.04
3.89
—Diluted
6.24
6.90
9.74
1.40
17.96
26.40
3.80
Weighted average number of ADS used in calculating net income per ADS
—Basic
55,976,338
56,560,174
56,613,257
56,613,257
56,259,499
56,367,166
56,367,166
—Diluted
60,655,008
60,814,662
60,914,063
60,914,063
57,541,558
60,805,566
60,805,566
(1) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
Three Months Ended
Twelve Months Ended
December 31, 2015
September 30, 2016
December 31, 2016
December 31, 2016
December 31, 2015
December 31, 2016
December 31, 2016
RMB
RMB
RMB
US$
RMB
RMB
US$
Cost of revenues
8,871
3,701
3,440
495
23,963
15,894
2,289
Research and development expenses
29,240
11,120
13,923
2,005
70,951
78,816
11,352
Sales and marketing expenses
1,089
612
715
103
3,283
3,107
448
General and administrative expenses
22,009
20,086
8,270
1,191
87,175
59,469
8,565
YY INC. RECONCILIATION OF GAAP AND NON-GAAP RESULTS (All amounts in thousands, except share, ADS and per ADS data)
Three Months Ended
Twelve Months Ended
December 31, 2015
September 30, 2016
December 31, 2016
December 31, 2016
December 31, 2015
December 31, 2016
December 31, 2016
RMB
RMB
RMB
US$
RMB
RMB
US$
Operating income
409,779
472,874
621,546
89,522
1,162,009
1,771,484
255,147
Share-based compensation expenses
61,209
35,519
26,348
3,794
185,372
157,286
22,654
Non-GAAP operating income
470,988
508,393
647,894
93,316
1,347,381
1,928,770
277,801
Net income attributable to YY Inc.
359,216
400,039
572,254
82,423
1,033,243
1,523,918
219,491
Share-based compensation expenses
61,209
35,519
26,348
3,794
185,372
157,286
22,654
Non-GAAP net income attributable to YY Inc.
420,425
435,558
598,602
86,217
1,218,615
1,681,204
242,145
Non-GAAP net income per ADS
—Basic
7.51
7.70
10.57
1.52
21.66
29.83
4.30
—Diluted
7.25
7.48
10.17
1.46
21.18
28.98
4.17
Weighted average number of ADS used in calculating Non-GAAP net income per ADS
—Basic
55,976,338
56,560,174
56,613,257
56,613,257
56,259,499
56,367,166
56,367,166
—Diluted
60,655,008
60,814,662
60,914,063
60,914,063
57,541,558
60,805,566
60,805,566
YY INC. UNAUDITED SEGMENT REPORT (All amounts in thousands, except share, ADS and per ADS data)
Three Months Ended
December 31, 2016
YY Live
Huya broadcasting
100 Education
Total
Total
RMB
RMB
RMB
RMB
US$
Net revenues
Live streaming
1,883,841
334,349
-
2,218,190
319,486
Online games
125,424
-
-
125,424
18,065
Membership
74,650
-
-
74,650
10,752
Others
12,952
4,926
48,008
65,886
9,490
Total net revenue
2,096,867
339,275
48,008
2,484,150
357,793
Cost of revenues(1)
(1,160,084
)
(374,178
)
(25,295
)
(1,559,557
)
(224,623
)
Gross profit (loss)
936,783
(34,903
)
22,713
924,593
133,170
Operating expenses(1)
Research and development expenses
(120,243
)
(35,831
)
(4,044
)
(160,118
)
(23,062
)
Sales and marketing expenses
(82,327
)
(16,281
)
(12,925
)
(111,533
)
(16,064
)
General and administrative expenses
(186,731
)
(11,206
)
(8,255
)
(206,192
)
(29,698
)
Goodwill impairment
(3,861
)
-
(13,804
)
(17,665
)
(2,544
)
Total operating expenses
(393,162
)
(63,318
)
(39,028
)
(495,508
)
(71,368
)
Gain on deconsolidation and disposal of subsidiaries
127,434
127,434
18,354
Other income
65,027
-
-
65,027
9,366
Operating income (loss)
736,082
(98,221
)
(16,315
)
621,546
89,522
(1) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
Three Months Ended
December 31, 2016
YY Live
Huyabroadcasting
100 Education
Total
Total
RMB
RMB
RMB
RMB
US$
Cost of revenues
2,271
1,105
64
3,440
495
Research and development expenses
10,302
2,618
1,003
13,923
2,005
Sales and marketing expenses
708
7
-
715
103
General and administrative expenses
5,263
2,999
8
8,270
1,191
YY INC. 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
December 31, 2016
YY Live
Huya broadcasting
100 Education
Total
Total
RMB
RMB
RMB
RMB
US$
Operating income (loss)
736,082
(98,221
)
(16,315
)
621,546
89,522
Share-based compensation expenses
18,544
6,729
1,075
26,348
3,794
Non-GAAP operating income (loss)
754,626
(91,492
)
(15,240
)
647,894
93,316
YY INC. UNAUDITED SEGMENT REPORT (All amounts in thousands, except share, ADS and per ADS data)
Three Months Ended
September 30, 2016
YY Live
Huya broadcasting
100 Education
Total
Total
RMB
RMB
RMB
RMB
US$
Net revenues
Live streaming
1,593,495
196,878
-
1,790,373
268,482
Online games
149,530
-
-
149,530
22,423
Membership
68,768
-
-
68,768
10,312
Others
20,240
-
60,894
81,134
12,167
Total net revenue
1,832,033
196,878
60,894
2,089,805
313,384
Cost of revenues(1)
(972,553
)
(269,407
)
(33,042
)
(1,275,002
)
(191,198
)
Gross profit (loss)
859,480
(72,529
)
27,852
814,803
122,186
Operating expenses(1)
Research and development expenses
(125,637
)
(31,409
)
(6,190
)
(163,236
)
(24,479
)
Sales and marketing expenses
(80,373
)
(10,174
)
(18,528
)
(109,075
)
(16,357
)
General and administrative expenses
(70,514
)
(11,557
)
(20,612
)
(102,683
)
(15,398
)
Total operating expenses
(276,524
)
(53,140
)
(45,330
)
(374,994
)
(56,234
)
Other income
33,065
-
-
33,065
4,958
Operating income (loss)
616,021
(125,669
)
(17,478
)
472,874
70,910
(1) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
Three Months Ended
September 30, 2016
YY Live
Huyabroadcasting
100 Education
Total
Total
RMB
RMB
RMB
RMB
US$
Cost of revenues
2,726
934
41
3,701
555
Research and development expenses
7,985
2,357
778
11,120
1,668
Sales and marketing expenses
586
26
-
612
92
General and administrative expenses
4,383
2,229
13,474
20,086
3,012
YY INC. 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, 2016
YY Live
Huya broadcasting
100 Education
Total
Total
RMB
RMB
RMB
RMB
US$
Operating income (loss)
616,021
(125,669
)
(17,478
)
472,874
70,910
Share-based compensation expenses
15,680
5,546
14,293
35,519
5,327
Non-GAAP operating income (loss)
631,701
(120,123
)
(3,185
)
508,393
76,237
YY INC. UNAUDITED SEGMENT REPORT (All amounts in thousands, except share, ADS and per ADS data)
Three Months Ended
December 31, 2015
YY Live
Huya broadcasting
100 Education
Total
Total
RMB
RMB
RMB
RMB
US$
Net revenues
Live streaming
1,431,584
133,646
-
1,565,230
241,630
Online games
172,398
-
-
172,398
26,614
Membership
80,828
-
-
80,828
12,478
Others
45,034
-
36,354
81,388
12,564
Total net revenue
1,729,844
133,646
36,354
1,899,844
293,286
Cost of revenues(1)
(930,954
)
(203,297
)
(33,988
)
(1,168,239
)
(180,345
)
Gross profit (loss)
798,890
(69,651
)
2,366
731,605
112,941
Operating expenses(1)
Research and development expenses
(124,330
)
(20,131
)
(8,217
)
(152,678
)
(23,569
)
Sales and marketing expenses
(94,192
)
(11,215
)
(8,767
)
(114,174
)
(17,625
)
General and administrative expenses
(71,847
)
(6,926
)
(9,015
)
(87,788
)
(13,552
)
Total operating expenses
(290,369
)
(38,272
)
(25,999
)
(354,640
)
(54,746
)
Other income
32,814
-
-
32,814
5,066
Operating income (loss)
541,335
(107,923
)
(23,633
)
409,779
63,261
(1) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
Three Months Ended
December 31, 2015
YY Live
Huyabroadcasting
100 Education
Total
Total
RMB
RMB
RMB
RMB
US$
Cost of revenues
8,104
639
128
8,871
1,369
Research and development expenses
24,373
2,246
2,621
29,240
4,514
Sales and marketing expenses
938
151
-
1,089
168
General and administrative expenses
17,430
146
4,433
22,009
3,398
YY INC. 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
December 31, 2015
YY Live
Huya broadcasting
100 Education
Total
Total
RMB
RMB
RMB
RMB
US$
Operating income (loss)
541,335
(107,923
)
(23,633
)
409,779
63,261
Share-based compensation expenses
50,845
3,182
7,182
61,209
9,449
Non-GAAP operating income (loss)
592,180
(104,741
)
(16,451
)
470,988
72,710
Investor Relations Contact
YY Inc.
Yuffie Fu
Tel: +86 (20) 8212-0000
Email: [email protected]
ICR, Inc.
Jessie Fan
Tel: +1 (646) 915-1611
Email: [email protected]