HUYA (NYSE:HUYA) reported second-quarter 2026 revenue growth and a narrower operating loss, supported by expanding game-related services, advertising, in-game item sales and the commercialization of its mobile game, Goose Goose Duck Mobile.
Total net revenue rose 11% year over year to RMB1.74 billion. Game-related services, advertising and other revenue increased 54% to RMB638 million, accounting for about 37% of total revenue. Live-streaming revenue declined to RMB1.1 billion from RMB1.15 billion a year earlier, which management attributed to the current live-streaming industry environment.
Margins Improve as Revenue Mix Shifts
Chief Financial Officer Raymond Peng Lei said the increased contribution from higher-margin game-related services, advertising and other businesses helped lift gross margin to 14.7% from 13.5% a year earlier. Gross profit increased 20% to RMB255 million.
HUYA’s operating loss narrowed to RMB7 million from RMB24 million in the prior-year quarter. Non-GAAP operating income, excluding share-based compensation and amortization of acquisition-related intangible assets, increased to RMB16 million from RMB0.4 million.
- Cost of revenue rose 10% to RMB1.48 billion, primarily due to higher revenue-sharing fees and costs of in-game virtual items.
- Sales and marketing expense increased 58% to RMB91 million, mainly reflecting promotion for Goose Goose Duck Mobile.
- Research and development expense declined 1% to RMB120 million.
- General and administrative expense fell 8% to RMB58 million, primarily due to lower professional service fees.
Net income attributable to HUYA was RMB1.6 million, compared with a RMB5.5 million net loss a year earlier. Non-GAAP net income attributable to the company was RMB36 million, down from RMB48 million in the prior-year period. Basic and diluted net income per ADS was RMB0.01, while non-GAAP net income per ADS was RMB0.16.
Cash and cash equivalents, short-term deposits and long-term deposits totaled RMB3.21 billion as of June 30, down from RMB3.46 billion at the end of the first quarter. Lei said interest income declined to RMB26 million from RMB59 million, reflecting a lower average deposit balance following special cash dividends and lower interest rates.
Goose Goose Duck Drives Publishing Strategy
Huang said Goose Goose Duck Mobile continued to maintain a healthy and engaged player base in the second quarter, with users aged 18 to 25 forming its core demographic. Management said long-term retention remained stable and user churn was limited.
The company introduced an AI-powered voice moderation system in July and a tiered matchmaking system under its Goose Goose Alliance program, aimed at improving the game’s voice-chat and community environment. A July collaboration with the Journey to the West intellectual property and a new party gameplay mode helped the title return to the No. 1 position on the iOS free-game chart in mainland China at the end of July, Huang said.
HUYA also cited collaborations with Empresses in the Palace, Fox Spirit Matchmaker and B.Duck as new monetization opportunities. Management said it plans additional themed events, including a planned JX3 collaboration in August, and is developing a WeChat mini-game version of Goose Goose Duck Mobile.
The company said it is advancing two titles for exclusive publication: The Legend of Swordsman: Reunion, a martial arts MMORPG licensed from Xishanju, and Xiao Xiao Qi Yu, a 3D match-based casual mobile game. Its first self-developed title, Zhe Dao You Huan Shou, received regulatory approval for publication in July and is being prepared for testing.
AI Tools and Live-Streaming Efficiency
Huang said HUYA’s AI priorities include live streaming, game tools, IP-based companionship and AI-assisted game development. In July, the company launched VAM 1.0, its self-developed real-time multimodal digital-human model. Management said the technology could allow it to expand AI-powered content supply more efficiently and reduce marginal content-creation costs over time.
The company said its Delta Force map tool and Hextech ARAM assistant had attracted more than 1 million users within six months and maintained healthy retention. Huang said users of the Hextech ARAM assistant more than doubled their monthly active days on the HUYA platform after adopting the tool.
For live streaming, management said paying users and average revenue per paying user remained relatively stable over the past several quarters, despite softer spending and intensifying platform competition. HUYA is reviewing streamer contracts and tournament licensing agreements to improve returns on content investments, while pursuing advertising, joint game operations and live-stream commerce opportunities.
Buyback Program Expanded
HUYA repurchased about 3.2 million ADSs during the second quarter, representing about 1.4% of outstanding shares, Lei said. The board also approved an expansion of the company’s 2026 share-repurchase program to $100 million from $50 million.
Lei said the company intends to continue returning capital through cash dividends and repurchases. Based on the company’s current market capitalization cited on the call, a potential two-year repurchase pace and at least $30 million in annual cash dividends, he estimated a shareholder yield of roughly 14% to 15% annually.
About HUYA (NYSE:HUYA)
HUYA Inc is a leading interactive live streaming platform based in Guangzhou, China, primarily focused on video game and esports content. The company operates a proprietary technology platform that enables users to broadcast and view live gameplay, participate in real-time chat, and engage with hosts through virtual gifting. Its services are accessible via web browsers, desktop applications and mobile apps for both iOS and Android.
At the core of HUYA’s business are user-generated live streams hosted by professional gamers, influencers and esports organizations.
