I'm LongbridgeAI, I can summarize articles.Huya Inc reported Q2 total net revenues of RMB 1.74 billion, an 11% year-over-year increase driven by a 54% surge in game-related services. Gross profit rose 20% to RMB 255 million with improved margins. While core live-streaming revenue declined slightly and non-GAAP net income fell due to higher marketing costs, the company achieved non-GAAP operating profitability and expanded its share buyback program to $100 million.
Huya Inc ((HUYA)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Huya Inc’s latest earnings call struck a cautiously upbeat note, as strong growth in game-related services and improving margins offset lingering weakness in the core live-streaming business. Management highlighted double-digit revenue growth, expanding gross profit, a swing to non-GAAP operating profitability and a larger buyback program, while acknowledging higher marketing costs and softer non-GAAP net income.
Top-Line Growth
Huya reported total net revenues of RMB 1.74 billion for the second quarter, an 11% year-over-year increase that reflects growing diversification beyond pure live streaming. The improvement was driven mainly by stronger performance in game-related services, advertising and other revenues, signaling healthier underlying demand across its newer business lines.
Strong Game-Related Revenue Expansion
Game-related services, advertising and other revenues jumped to RMB 638 million, up 54% year-over-year and accounting for roughly 37% of total net revenues. This surge was powered by robust in-game item sales, expanding advertising income and the commercial success of Goose Goose Duck, underscoring Huya’s progress in building a broader gaming ecosystem.
Gross Profit and Margin Expansion
Gross profit rose 20% year-over-year to RMB 255 million, reflecting better cost efficiency and revenue mix. Gross margin improved to 14.7% from 13.5% a year earlier, with non-GAAP gross margin at 14.8%, highlighting the contribution of higher-margin game-related activities to overall profitability.
Operating Performance Improvement
Operating loss narrowed sharply to RMB 7 million from RMB 24 million a year ago, showing improving operating discipline even amid growth investments. On a non-GAAP basis, operating income climbed to RMB 16 million from just RMB 0.4 million, marking both sequential and annual progress in turning Huya’s operations profitable.
Publishing Success and Product Pipeline
Goose Goose Duck Mobile returned to the top spot on the iOS free game chart in mainland China at the end of July, confirming Huya’s ability to drive successful titles. The company is also shifting to exclusive publishing for The Legend of Swordsman: Reunion and Xiao Xiao Qi Yu, and a self-developed game has gained regulatory approval, creating a fuller pipeline but also heightening execution risk.
AI and Product Innovation Momentum
Huya launched VAM v1.0, a real-time multi-modal digital human model, alongside multiple AI-powered game tools aimed at enhancing user experience and creator productivity. These tools, including the Hextech ARAM assistant, attracted more than 1 million users in six months and more than doubled monthly active days for some users, boosting engagement and monetization.
Expanded Shareholder Returns
The company repurchased about 3.2 million ADS during the quarter, roughly 1.4% of its outstanding shares, signaling confidence in its valuation. The board also expanded Huya’s 2026 buyback program from $50 million to $100 million, complementing dividends and implying a potentially high annualized shareholder yield at current market capitalization levels.
Tournament and Marketing Reach
Huya hosted more than 100 licensed tournaments and around 20 self-produced events, leveraging esports and game competitions to deepen user engagement. Flagship events such as the Dota 2 Immortal Cup Season 2, with over 2.5 billion impressions, and a Hearthstone tournament with more than 200 million impressions showcased the platform’s marketing reach and branding power.
Live-Streaming Revenue Pressure
Despite overall revenue growth, Huya’s core live-streaming business remained under pressure, with segment revenues at RMB 1.1 billion, down slightly from RMB 1.15 billion a year ago. Management cited softer user spending and intensifying competition among platforms as headwinds, reinforcing the need to diversify income sources beyond traditional streaming.
Decline in Interest Income and Cash Position
Interest income fell sharply to RMB 26 million from RMB 59 million a year earlier, a roughly 56% drop tied to lower average deposit balances and reduced interest rates. Cash and short- and long-term deposits declined to RMB 3.21 billion from RMB 3.46 billion at the prior quarter-end, reflecting capital returns and a leaner balance sheet that makes operating progress more critical.
Higher Marketing Spend
Sales and marketing expenses surged 58% year-over-year to RMB 91 million, driven largely by promotional campaigns for Goose Goose Duck Mobile. While these investments helped fuel user growth and monetization for key titles, they added near-term pressure on operating expenses and highlight Huya’s willingness to spend aggressively to support hits.
Non-GAAP Net Income Decline
Non-GAAP net income attributable to Huya came in at RMB 36 million, down from RMB 48 million in the same quarter last year, suggesting that adjusted profitability remains modest. The decline, despite better operating metrics, reflects the combined impact of higher marketing spend and reduced interest income, leaving net results more fragile.
Dependence on Publishing Execution
Management emphasized that while Goose Goose Duck is a standout success, Huya’s expanding role as a game publisher carries execution risk. Future performance will depend on how upcoming exclusive titles and self-developed games perform, meaning the sustainability of rapid game-related revenue growth will hinge on consistent hits.
Residual Operating Loss and Fragile GAAP Profit
Huya still posted a GAAP operating loss of RMB 7 million in the quarter, indicating that profitability is not yet firmly established under standard accounting. GAAP net income attributable to Huya was a slim RMB 1.6 million, underscoring its sensitivity to interest income and other non-operating items despite operational improvement.
Guidance and Strategic Outlook
Looking ahead, management expects further gross and operating margin improvement as higher-margin publishing and game-related services scale and AI tools help lower content costs. The strategy centers on content-driven publishing, AI-led product innovation and monetization from new titles and tournaments, supported by a robust capital return framework that includes expanded buybacks and ongoing dividends.
Huya’s earnings call painted a picture of a platform in transition, moving from a pure live-streaming model toward a broader publishing and AI-enhanced gaming ecosystem. For investors, the key takeaway is that momentum in game-related services and technology innovation currently outweighs streaming softness, but sustained execution on the content pipeline and disciplined spending will be vital to turning early operating gains into durable, scalable profits.