On August 28th, Joyful Group (NASDAQ: YY) released its Q2 2024 financial report. During the reporting period, the revenue of Joyful Group reached 565 million US dollars, a year-on-year increase of 3.3%, while the revenue of its core segment BIGO increased by 7.7% year-on-year to 507 million US dollars. Under non GAAP accounting standards, the net profit of Joyful Group increased by 10.2% month on month to reach $74 million, and recorded a positive operating cash flow of $71.1 million.
According to the financial report, the core sector BIGO remains the main contributor to the revenue of Joyful Group. In the second quarter of 2024, the core sector BIGO generated revenue of $507 million, accounting for 89.7% of Joyful Group's total revenue. This quarter, BIGO's operating profit reached $69.4 million, an increase of 10.1% compared to the previous quarter. Among them, the live streaming revenue of BIGO's core overseas products (including Bigo Live, Likee, imo) increased by 2.3% year-on-year, with 1.66 million paying users, a year-on-year increase of 8.6% from 1.53 million in the same period last year; The average revenue of paying users was $233.5, compared to $248.0 in the same period last year.
The management of Joyful Group stated during the conference call that the global business of Joyful Group continues to recover, and the BIGO sector has achieved positive growth for four consecutive quarters. In the second quarter of 2024, the live streaming revenue of BIGO's three core products maintained positive growth year-on-year, mainly driven by the growth of paying users, with the number of paying users maintaining high single digit growth year-on-year.
From a business perspective, the live streaming revenue of Joyful Group slightly declined in this quarter. In the second quarter of 2024, the live streaming revenue of Joyful Group was 460 million US dollars, compared to 477 million US dollars in the same period last year, a year-on-year decrease of 3.6%. Among them, Bigo Live's MAU (monthly active users) was 37.7 million, down slightly from 38.5 million in the same period last year. The Joyful Group stated that this was mainly due to control measures in advertising and marketing.
However, the other revenue of Joyful Group reached 105 million US dollars in the second quarter of 2024, a 49.8% increase from 70.4 million US dollars in the same period last year. Joyful Group stated that the main reason is the company's strategic expansion of diversified monetization. In the quarter, BIGO's advertising revenue maintained a high-speed growth year-on-year, while Likee's advertising revenue recorded a 34.7% increase year-on-year. The revenue growth rate of the advertising alliance was significant compared to the previous quarter.
The contribution of advertising revenue to BIGO's revenue has now increased to 13.4%. With the arrival of the traditional advertising peak season in the second half of the year, advertising revenue is expected to maintain a trend of month on month growth. It is worth mentioning that the advertising alliance business is a product cultivated and polished under the platform's internal traffic system. Joyful will continue to explore some differentiated advantageous categories for breakthroughs and steadily promote the increase of core market share, "the management of Joyful Group said in a conference call.
Since the end of 2020, when Joyful Group sold its domestic live streaming business YY Live to Baidu for 3.6 billion US dollars, Joyful Group has focused more on the international market.
The financial report shows that in the second quarter of 2024, Huanju Group's revenue in Chinese Mainland was $59.8 million, compared with $81.59 million in the same period of the previous year, a year-on-year decline of 26.7%. The main reason is that the remaining small and medium-sized voice services in China will gradually shrink from the second quarter of 2023.
On January 1st of this year, Baidu announced the termination of its acquisition of YY live streaming business under the Joyful Group. Joyful Group stated in its financial report that it will cease to merge with YY Live's business from February 8, 2021. However, since Baidu terminated its acquisition of YY Live on January 1 this year until the release of the financial report, Joyful Group has not yet gained control of YY Live, and this transaction has not affected Joyful Group's business and financial performance.
However, in developed countries and Southeast Asia, the Joyful Group has maintained a certain level of growth. According to the financial report, in the second quarter of 2024, the revenue of Joyful Group in developed countries and regions was 291 million US dollars, compared to 232 million US dollars in the same period last year, a year-on-year increase of 25.4%; In Southeast Asia and other regions, it was $126 million, compared to $123 million in the same period last year.
The management of Joyful Group stated that BIGO's three core products have shown better year-on-year and quarter on quarter growth rates than other regions in developed countries and regions for multiple consecutive quarters. In the second half of the year, with the arrival of the peak season for operational activities, the activity level of regional anchors and users will increase.
The research report of Bank of Communications International also pointed out that "BIGO's three core products have a good development momentum in the United States and Southeast Asia, but the recovery of the Middle East market still needs more time. We are optimistic about the positive growth of revenue recovery for the 2024 fiscal year of Joyful Group
According to the financial report, in the second quarter of 2024, the revenue of Joyful Group in the Middle East region was 87.46 million US dollars, a year-on-year decrease of 21.2% from 111 million US dollars in the same period last year.
The management of Joyful Group stated, "There are currently some signs of recovery in the Middle East, and live streaming in some regions has become an existing opportunity to restore month on month growth
On August 2nd, shortly before the release of the financial report, Joyful Group also announced a management change, in which Li Ting took over as the Chairman and CEO of Joyful Group's Board of Directors, and the former Chairman and CEO Li Xueling remained a member of the Board of Directors. According to the information, Li Ting previously worked at Tencent and joined the Joyful Group in 2011. Since 2016, she has served as the Chief Operating Officer of Joyful Group.
During the earnings conference call, Li Ting stated, "The company will continue its previous strategy. Firstly, Joyful Group will firmly focus on global business as its sole development focus. Secondly, in terms of product operation strategy, the company will continuously deepen the differentiated value of global social platforms. Thirdly, based on the current market environment and the operational characteristics of the enterprise, the group's requirements and level of refinement in the entire operation will be further improved, continuously improving efficiency, driving long-term business profits, and steadily increasing. Fourthly, Joyful Group will continue to explore new revenue and profit growth points
In the second quarter of 2024, Joyful Group achieved a net profit of 47.79 million US dollars, a year-on-year decrease of 68% from 147 million US dollars in the same period last year, and a month on month increase of 19% from 40.15 million US dollars in the previous quarter. Under non US GAAP, the net profit of Joyful Group increased by 10.2% month on month, with the operating profit margin of BIGO segment increasing by 10.1% month on month. Mainly due to the cost optimization of Bigo Live's live streaming content, the gross profit of the BIGO sector has improved month on month. In terms of operating expenses, the Joyful Group has further strengthened its requirements for ROI, resulting in a reduction in marketing expenses compared to the previous period.
As of June 30, 2024, Joyful Group had cash and cash equivalents, restricted cash and cash equivalents, short-term deposits, restricted short-term deposits, and short-term investments of $3.257 billion. In the second quarter of 2024, the net cash flow generated from operating activities was $71.1 million.
Looking ahead to the second half of the year, the management of Joyful Group stated that due to continuous efforts to optimize content costs and advertising strategies, Bigo Live expects a certain increase in profit margin while maintaining stability. For other business segments, the expected non GAAP operating loss for the full year will further narrow compared to last year.