Huya Inc. (HUYA), a leading live streaming platform for video games, is set to unveil its second-quarter 2024 financial results on August 13th. The market eagerly awaits this report, as it will offer insights into the company’s performance amidst a dynamic gaming landscape.
Analysts anticipate a slight decline in revenues for the quarter, with the Zacks Consensus Estimate pegged at $218.6 million, representing a year-over-year drop of 12.96%. However, earnings are projected to demonstrate growth, with the consensus mark for the second quarter remaining unchanged at 7 cents, indicating a year-over-year increase of 16.67%. Notably, HUYA has a track record of exceeding earnings expectations, beating the Zacks Consensus Estimate in three out of the last four quarters, with an average earnings surprise of 113.2%.
Several key factors are expected to influence Huya’s second-quarter performance. A significant contributor is anticipated to be the company’s growing user base, fueled by the increasing popularity of live streaming and the rise of mobile gaming. Huya’s robust in-game services, which include virtual items, subscriptions, and other in-app purchases, have been a primary driver of revenue growth. In the first quarter of 2024, game-related services, advertising, and other revenues soared by 137.6% year-over-year and 30.7% sequentially to RMB 244 million, accounting for 16% of total revenues.
Huya’s focus on catering to a diverse range of popular games, particularly in the MIMO and SLG categories, is likely to have boosted in-game spending. The company’s strategy of offering customized virtual items for broadcasters strengthens the connection between streamers and viewers, further enhancing engagement. In the first quarter of 2024, Huya broadcasted over 65 licensed professional esports tournaments, demonstrating its commitment to the burgeoning esports scene.
Huya’s ongoing efforts to enhance its platform through ecology updates, commercialization initiatives, and technological advancements are expected to have contributed positively to the second quarter. The company’s collaboration with Tencent, a leading technology giant, has enabled Huya to leverage AI-related services and real-time game data, providing a competitive edge in the market.
However, according to the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) typically increases the odds of an earnings beat. Huya, with an Earnings ESP of 0.00% and a Zacks Rank #3, does not meet this criteria, suggesting a more neutral outlook for the earnings beat.
While Huya’s second-quarter results are anticipated to be closely watched by investors, it’s important to consider the broader trends within the gaming and live streaming industries. The growth of mobile gaming, the rise of esports, and the increasing popularity of live streaming platforms are all factors that could impact Huya’s future performance. The company’s ability to navigate these trends effectively will be crucial to its long-term success.
