JOYY Inc. (NASDAQ:YY) is coming off an impressive third-quarter, having shrugged off geopolitical headwinds to post outstanding financial results. The company is reaping the rewards of remaining focused and executing on a dual-engine growth strategy.
Underlying Growth
During the quarter, the company felt the full force of tensions between China and India. The standoff resulted in the blocking of some of the company’s apps in India. Amid the stalemate, the company was still able to grow its monthly active users as expansion in other regions offset losses in India.
The company’s flagship live streaming app Big Live continued its robust growth trajectory on diversifying its geographic coverage. Likewise, the platform achieved 270% revenue growth in Europe and 231% growth in the East pacific regions.
Short-form video social platform, Likee, was also on a roll in the quarter as it continued to gain momentum through a measured approach that focuses on balancing user expansion and user retention. Joyy introduced multiple functions on video production tools that helped enhance user engagement in the platform.
Similarly, the global video-based social media platform has inked a deal for the sale of its live-streaming business YY Live to Baidu Inc. (NASDAQ:BIDU). The company is to receive $3.6 billion from the transaction subject to certain adjustments. The deal should close in the first half of 2021.
JOYY Outlook
Joyy Chief Executive Officer Xueling Li expects Baidu's strategic acquisition to benefit both parties as it will accelerate the live streaming platform business growth and unlock more value. Following the sale, the focus shifts to expanding the remaining live streaming and short-form video content ecosystem in key overseas markets.
Plans are already underway to explore new business lines as management looks to pursue growth opportunities around the burgeoning industrial AI internet sector.
The third quarter's net revenues increased 36% to $925 million as net income from continuing operations came in at $339.2 million. The global average mobile active users decreased 4% to 390.1 million, attributed to the Indian government blocking a number of Chinese apps.