HUYA Inc. 2026 Q2 Earnings Call

2026 earnings webinar. I'm Zichen Liu from the HUYA Investor Relations. At this time, all participants are in listen-only mode. Please be advised that today's webinar is being recorded. The company's financial and operational results were issued earlier today and are posted online. You can also view the earnings press release by visiting the IR website at ir.huya.com. A replay of the call will be available on the IR website soon. Participants of management on today's call will be Mr. Vincent Junhong Huang, our Acting CEO, Mr. Raymond Teng Lei, our CFO, and Ms. Margaret Shi, Head of Capital Markets. Management will begin with prepared remarks, and the call will conclude with a Q&A session. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties.

As such, the company's results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the company's latest annual report on Form 20-F, and other public filings as filed with the U.S. Securities and Exchange Commission. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law. Please also note that HUYA's earnings press release and this conference call include discussions of unaudited GAAP financial information, as well as unaudited non-GAAP financial measures. HUYA's press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. With that, I'm pleased to turn the call over to Mr. Huang.

Please go ahead. Okay. Hello, everyone.

I'm Vincent, and thank you for joining our earnings call today. Let me begin with a brief overview of our second quarter performance. We deliver another quarter of sustainable growth, with total net revenues increasing by 11% year-over-year to CNY 1.74 billion. Game-related services, advertising, and other revenues maintain strong momentum, growing by 54% year-over-year to CNY 638 million and contributing approximately 37% of total net revenues. Behind this growth is our long-term positioning along the game industry value chain, which is steadily translating into sustainable growth momentum. Over the past three years, we have steadily expanded our presence across the game industry value chain, evolving from game distribution to in-game item sales, advertising and marketing, and now game publishing.

Throughout this journey, we have built differentiated user acquisition capabilities that have been increasingly recognized and validated by both our partners and the market. This give us the confidence to extend beyond our capacity as a publishing partner and take on the full game publisher role, which allow us to participate more deeply across the entire game life cycle. Our publishing model is built around content rather than paid traffic acquisition, leveraging our strengths in content creation, streamer network, and user communities. We foster high-quality UGC, expand our reach, and generate social buzz across platforms such as Douyin, Xiaohongshu, and WeChat Channels. This differentiated approach to publishing let us acquire users more efficiently while reducing our reliance on traditional paid traffic channels. Goose Goose Duck Mobile is our first success story published under this framework, maintaining an active user base and a vibrant content ecosystem.

Since July, we have stepped up our efforts to improve the in-game voice environment, launching an AI-powered voice moderation system and a tiered matchmaking system under the Goose Goose Alliance program. These measures have laid a solid foundation for a healthy in-game environment and sustained user engagement. On July 20, we launched a collaboration with the classic IP Journey to the West, together with a new party game play mode that expands player interaction across multiple sim spaces. The update expanded the experience beyond the game's core social deduction game play into a broader range of immersive social experiences, resulting in enthusiastic reception by players. Supported by our ongoing efforts to improve the in-game environment and introduce compelling content updates, Goose Goose Duck Mobile returned to the number 1 position on the iOS free game chart in the Chinese mainland at the end of July.

The performance of Goose Goose Duck Mobile has demonstrated the effectiveness of HUYA's content-driven marketing approach, while also helping us develop a repeatable publishing playbook and build valuable operational expertise for future titles. Next up in our pipeline are two titles we are publishing exclusively: The Legend of Swordsman: Reunion, the classic martial arts MMORPG, and Xiao Xiao Qi Yu, a 3D match-based casual mobile game. Our transition from co-publishing to exclusive publishing marks another step forward in the evolution of our publishing strategy. Officially licensed from Xishanju, The Legend of Swordsman: Reunion is the latest entry in the renowned Legend of Swordsman franchise, building on more than two decades of rich heritage. It was developed by the original core team behind the PC game Jian Xia World, and offers a seamless cross-platform experience featuring synchronized account data and gameplay across mobile app, PC, and mini-program platforms.

The game has completed its first round of testing and received encouraging user feedback. By combining our content marketing capabilities with the reach of our streamer network, we aim to bring this classic franchise to a broader audience while preserving the authentic gameplay that has made it a fan favorite for generations. Xiao Xiao Qi Yu is a 3D match-based casual mobile game featuring the official licensed Tian Meng Lu Pi IP and represents an expansion into the match category for HUYA. The title is well-aligned with our content-driven publishing model, with strong potential to generate user-created content, social engagement, and organic traffic across live-streaming and short-form video platforms. On the self-developed game front, we were pleased to see our first self-developed title, Zhe Dao You Huan Shou, receive regulatory approval for publication in July.

As a casual SLG centered on islands and pet collection, the game represents another important step in building an in-house game development capabilities. We are now actively preparing for its upcoming testing and look forward to sharing more updates as development progresses. On the advertising side, we continue to strengthen our content-driven integrated marketing solution for game developers during the quarter while broadening our advertiser base. Hearthstone has emerged as an important new customer this quarter. We partnered with leading streamers to deliver a series of tournaments and content collaborations for Hearthstone, highlighted by Da Men Global Invitational, the first global third-party platform tournament for Hearthstone Battlegrounds. It debuted in China and generated more than 200 million impressions across online platforms during tournament play, and received strong recognition from the client.

On the in-game item sales front, revenues maintained triple-digit year-over-year growth with Peacekeeper Elite, PUBG Mobile, Genshin Impact, and Arena Breakout as key contributors. For Peacekeeper Elite, we continue to invest in the broader game ecosystem. In particular, our coverage and commentary around PEL tournaments generated strong audience interest and engagement, enhanced the appeal of our in-game item offerings, and contributed to continued growth in related sales. In our live-streaming business, the outdoor entertainment content category continued to perform well during the quarter, while our overall streamer ecosystem remains stable. We are also exploring ways to drive greater synergies between game streaming and our entertainment verticals to boost the revenue contribution from top streamers.

Since the beginning of the second half of the year, we have also been proactively reviewing the economics of our live streamer partnership, aiming to improve the efficiency of our content investment and support a healthier, more sustainable live-streaming ecosystem. In terms of tournament content, we offer more than 100 licensed tournaments and approximately 20 self-produced tournaments on the HUYA platform during the quarter. Our self-produced events continued to grow in scale and build stronger proprietary event brands. For the CF Grand Master Cup, we officially partnered with CrossFire to stage an international invitational featuring eight professional teams and four leading overseas teams. The tournament also featured a crossover with the film Kung Fu Hustle, further integrating e-sport and broader entertainment content. The Dota 2 Immortal Cup Season 2 generated widespread online buzz and more than 2.5 billion impressions across online platforms.

In July, we launched both the Dota 4 Streamer Championship and the Peacekeeper Elite Mengnan Superstar Cup. Together, these events expanded our presence across leading shooter titles, strengthened our portfolio of self-produced tournaments, and enhanced HUYA's appeal among core gamers. We also helped host the Valorant National Tournament, earning further recognition from game developers for our tournament hosting and product capabilities. On product and AI, we continue to apply AI technologies across our game content ecosystem to improve both our products and overall platform experience. For popular titles such as Dota 4, League of Legends, and Teamfight Tactics, we have launched a range of AI-powered game tools, including map navigation and combat assistance features. These tools have driven solid user engagement and retention.

Users of this tool have also shown higher activity levels, longer viewing time, and greater monetization potential on the HUYA platform, reinforcing our view that AI-powered game tools will play an increasingly important role in reaching our live-streaming ecosystem and creating long-term value. In July, we released VAM 1.0, our self-developed real-time multi-modal digital human model. VAM can rapidly generate AI-powered virtual hosts with natural speech, thinking capabilities, and expressive body movements, enabling highly realistic real-time interaction. We believe VAM has the potential to meaningfully improve the economics of live-streaming content. Unlike traditional live streaming, where content supply is inherently constrained by the number and availability of human streamers, VAM enables us to scale content production more efficiently. As development expands, deployment expands, we expect operating leverage to increase with our marginal content creation cost declining while content supply become more scalable.

Looking back at the quarter, we continue to make steady progress in executing our long-term strategy across publishing, self-development, AI innovation, and game-related services. We have further strengthened our capabilities and expanded our role across the game industry value chain. Looking ahead, we remain focused on executing our content-driven strategy, deepening our partnership across the gaming ecosystem, and investing in the capabilities that will support our next phase of growth. We believe these efforts will further strengthen HUYA's competitive position and create sustainable long-term value for our shareholders. Thank you. With that, I will now turn the call over to our CFO, Raymond Li. He will share more details on our results.