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GUANGZHOU, China, Nov. 17, 2020 (GLOBE NEWSWIRE) — JOYY Inc. (NASDAQ: YY) (“JOYY” or the “Company”, formerly known as YY Inc.), a global video-based social media platform, today announced its unaudited financial results for the third quarter of 2020. 

Third Quarter 2020 Financial Highlights1

  • Net revenues increased by 36.1% to RMB6,286.4 million (US$925.9 million) from RMB4,617.3 million in the corresponding period of 2019.
  • Net income from continuing operations attributable to controlling interest of JOYY Inc.2 was RMB2,303.2 million (US$339.2 million), compared to RMB61.8 million in the corresponding period of 2019, primarily due to the impact of gain from partial disposal of investments in Huya.
  • Non-GAAP net income from continuing operations attributable to controlling interest and common shareholders of JOYY Inc.3 increased by 64.0% to RMB809.4 million (US$119.2 million) from RMB493.4 million in the corresponding period of 2019, primarily due to the decrease in the operation loss of Bigo Inc (“Bigo”).

Third Quarter 2020 Operational Highlights

  • Global average mobile MAUs4 decreased by 4.0% to 390.1 million from 406.3 million in the corresponding period of 2019, mainly due to the impact of Indian government’s measures to block certain Chinese-owned apps in its local market, which included Bigo Live, Likee and Hago.
  • Average mobile MAUs of Likee increased by 3.8% to 104.0 million from 100.2 million in the corresponding period of 2019.
  • Average mobile MAUs of global live streaming services decreased by 2.3% to 92.0 million from 94.1 million in the corresponding period of 2019, among that (i) 41.3 million were from YY, which increased by 3.4% year over year; and (ii) 50.7 million were from outside of China, which decreased by 6.5% year over year, including 28.0 million from Bigo Live, which increased by 27.7% year over year, and 22.7 million from HAGO, which decreased by 29.7% year over year primarily due to the impact of Indian government’s measures to block such app in its local market.
  • Total number of paying users5 of YY decreased by 4.7% to 4.1 million from 4.3 million in the corresponding period of 2019, mainly due to COVID-19 impacts.

Mr. David Xueling Li, Chairman and Chief Executive Officer of JOYY, commented, “Despite uncertainties from macro perspective, we remained focused on executing our dual-engine growth strategy in the third quarter of 2020. Through a combination of globalized market reach and localized operations management, we continued to achieve solid growth in our financial results. Despite the negative impact from Indian government’s measures to block certain Chinese-owned apps in its local market and other geopolitical risks, our global MAU remained relatively stable, thanks to rapid expansion of our business in other regions. During the quarter, Bigo Live maintained its robust growth trajectory and further diversified its geographic coverage, accomplishing 270% and 231% revenue growth in Europe and East Pacific regions, respectively. Likee continued to gain momentum through a measured approach of balancing its user expansion and user retention, with continuous improvement in user engagement level by introducing multiple functions of its video production tools, dynamic community and thematic functionalities, as reflected by increase in content creator engagement.”

Mr. Li continued, “We believe Baidu’s strategic acquisition of YY Live is a true win-win for both parties, as it will accelerate YY Live’s business growth and unlock more value across the domestic entertainment live streaming sector. Going forward, we will continue to expand our live streaming and short-form video content ecosystem in key overseas markets around the world, and explore new business lines, aiming to further enter into the industrial AI internet sector.”

Mr. Bing Jin, Chief Financial Officer of JOYY, further commented, “Despite the impact of geopolitical headwinds, we grew our total revenues by 36.1% year over year to RMB6,286.4 million during the third quarter of 2020 and exceeded the high end of our previous guidance. More specifically, revenues from Bigo grew by 120.8% year over year to RMB3,394.8 million, mostly driven by the uptick in its live streaming revenues. It is also the first quarter for Bigo to achieve a positive non-GAAP operating margin. As we remain in an abundant cash position after recent transaction with Baidu, we will continue to invest in business development efforts to further expand our global market reach, and cultivate new business to enhance our service offerings. We will also actively explore other ways to return value to our shareholders to maximize shareholder value.”

Third Quarter 2020 Financial Results

NET REVENUES
Net revenues increased by 36.1% to RMB6,286.4 million (US$925.9 million) in the third quarter of 2020 from RMB4,617.3 million in the corresponding period of 2019, primarily driven by continued growth in user base and expansion of global footprint in Bigo .

Live streaming revenues increased by 40.1% to RMB6,049.1 million (US$890.9 million) in the third quarter of 2020 from RMB4,317.8 million in the corresponding period of 2019, primarily attributable to the continued live streaming revenues growth in Bigo segment.

Other revenues decreased by 20.8% to RMB237.3 million (US$34.9 million) in the third quarter of 2020 from RMB299.4 million in the corresponding period of 2019, primarily due to the decrease in other revenues in YY segment.

COST OF REVENUES AND GROSS PROFIT
Cost of revenues increased by 38.8% to RMB3,961.7 million (US$583.5 million) in the third quarter of 2020 from RMB2,854.5 million in the corresponding period of 2019. Revenue-sharing fees and content costs increased to RMB2,840.3 million (US$418.3 million) in the third quarter of 2020 from RMB1,951.0 million in the corresponding period of 2019 as a result of the increase in live streaming revenues of the Company. Bandwidth costs decreased to RMB236.9 million (US$34.9 million) in the third quarter of 2020 from RMB286.3 million in the corresponding period of 2019, primarily related to the termination of service and access to users in India after its measures to block certain Chinese-owned apps in late June.

Gross profit increased by 31.9% to RMB2,324.7 million (US$342.4 million) in the third quarter of 2020 from RMB1,762.7 million in the corresponding period of 2019. Gross margin was 37.0% in the third quarter of 2020, compared to 38.2% in the corresponding period of 2019. The gross margin contraction was primarily caused by the fact that Bigo segment had lower gross margin but contributed significantly greater portions of net revenues in the third quarter of 2020, compared to the corresponding period of 2019.

OPERATING INCOME
Operating expenses were RMB1,999.9 million (US$294.6 million) in the third quarter of 2020, compared to RMB1,807.9 million in the corresponding period of 2019. Among the operating expenses, sales and marketing expenses increased to RMB1,083.0 million (US$159.5 million) in the third quarter of 2020 from RMB957.3 million in the corresponding period of 2019, primarily due to the Company’s increased efforts in sales and marketing activities in overseas markets. Research and development expenses increased to RMB636.0 million (US$93.7 million) in the third quarter of 2020 from RMB538.1 million in the corresponding period of 2019, mostly due to the increasing headcount and investments in talent recruitment as part of the Company’s efforts to enhance its research and development capabilities. General and administrative expenses were RMB280.8 million (US$41.4 million) in the third quarter of 2020, compared to RMB312.5 million in the corresponding period of 2019. The decrease of general and administrative expenses was mainly attributable to a decrease in provision for loss allowances of receivables.

Operating income was RMB466.6 million (US$68.7 million) in the third quarter of 2020, compared to RMB96.4 million in the corresponding period of 2019. Operating margin was 7.4% in the third quarter of 2020, compared to 2.1% in the corresponding period of 2019, primarily due to the decrease in operation loss of Bigo segment.

Non-GAAP operating income6 increased by 77.8% to RMB825.8 million (US$121.6 million) in the third quarter of 2020 from RMB464.4 million in the corresponding period of 2019. Non-GAAP operating margin7 was 13.1% in the third quarter of 2020, compared to 10.1% in the corresponding period of 2019.

NET INCOME
Net income from continuing operations attributable to controlling interest of JOYY Inc. was RMB2,303.2 million (US$339.2 million) in the third quarter of 2020, compared to RMB61.8 million in the corresponding period of 2019. Net margin was 36.6% in the third quarter of 2020, compared to 1.3% in the corresponding period of 2019, mainly due to the gain from partial disposal of investments in Huya.

Non-GAAP net income from continuing operations attributable to controlling interest and common shareholders of JOYY Inc. increase by 64.0% to RMB809.4 million (US$119.2 million) in the third quarter of 2020 from RMB493.4 million in the corresponding period of 2019. Non-GAAP net margin8 increased to 12.9% in the third quarter of 2020 from 10.7% in the corresponding period of 2019.

NET INCOME PER ADS
Diluted net income from continuing operations per ADS9 was RMB25.92 (US$3.82) in the third quarter of 2020, compared to RMB 0.56 in the corresponding period of 2019.

Non-GAAP diluted net income from continuing operations per ADS10 increased by 58.8% to RMB8.89 (US$1.31) in the third quarter of 2020 from RMB5.60 in the corresponding period of 2019.

BALANCE SHEET AND CASH FLOWS
As of September 30, 2020, the Company had cash and cash equivalents, restricted cash and cash equivalents, short-term deposits, restricted short-term deposits and short-term investments of RMB24,469.7 million (US$3,604.0 million). For the third quarter of 2020, net cash from operating activities was RMB1,029.9 million (US$151.7 million).

SHARES OUTSTANDING
As of September 30, 2020, the Company had a total of 1,619.7 million common shares, or the equivalent of 81.0 million ADSs, outstanding.

Quarterly Dividend
On August 11, 2020, the Company’s board of directors approved a quarterly dividend policy for the next three years commencing in the third quarter of 2020. Under the policy, quarterly dividends will be set at approximately US$25.0 million in each fiscal quarter. The board of directors has accordingly declared a dividend of US$0.31 per ADS, or US$0.0155 per common share, for the third quarter of 2020, which is expected to be paid on December 23, 2020 to shareholders of record as of the close of business on December 11, 2020. The ex-dividend date will be December 10, 2020. Under the policy, the board of directors of the Company reserves the discretion relating to the determination to make dividend distributions and the amount of such distributions in any particular quarter, depending on the Company’s operations and earnings, cash flow, financial condition and other relevant factors.

Recent Developments
On November 16, 2020, the Company entered into definitive agreements with Baidu, Inc. (“Baidu”). Pursuant to the agreements, Baidu will acquire JOYY’s domestic video-based entertainment live streaming business (“YY Live”), which includes YY mobile app, YY.com website and PC YY, among others, for an aggregate purchase price of approximately US$3.6 billion in cash, subject to certain adjustments. The closing of the transaction is subject to certain conditions and is currently expected to occur in the first half of 2021.

Conference Call Information
The Company will hold a conference call on 9:00 PM U.S. Eastern Time on Monday, November 16, 2020 (10:00 AM Beijing/Hong Kong Time on Tuesday, November 17, 2020). Details for the conference call are as follows:

Event Title: JOYY’s Third Quarter 2020 Earnings Conference Call
Conference ID: #8576720

All participants must use the link provided below to complete the online registration process in advance of the conference call. Upon registering, each participant will receive a set of participant dial-in numbers, the Direct Event passcode, and a unique registrant ID by email.
PRE-REGISTER LINK: 
http://apac.directeventreg.com/registration/event/8576720

A live and archived webcast of the conference call will also be available at the Company’s investor relations website at http://ir.yy.com/.

The replay will be accessible through November 24, 2020 by dialing the following numbers:

United States:   +1-646-254-3697
International:    +61-2-8199-0299
Conference ID: #8576720

Exchange Rate
This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars, in this press release, were made at a rate of RMB6.7896 to US$1.00, the noon buying rate in effect on September 30, 2020 in the City of New York for cable transfers in Renminbi per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York.

About JOYY Inc.
JOYY Inc. is a global social media platform. The Company’s highly engaged users contribute to a vibrant social community by creating, sharing, and enjoying a vast range of entertainment content and activities. JOYY enables users to interact with each other in real time through online live media and offers users a uniquely engaging and immersive entertainment experience. JOYY owns Bigo, a fast-growing global tech company headquartered in Singapore. Bigo owns several popular video based social platforms including Bigo Live, a leading global live streaming platform outside China; Likee, a leading global short-form video social platform; and video communication service and others. JOYY has created an online community for global video and live streaming users. JOYY Inc. was listed on the NASDAQ in November 2012.

Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates” and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as JOYY’s strategic and operational plans, contain forward-looking statements. JOYY may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (“SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to fourth parties. Statements that are not historical facts, including statements about JOYY’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: JOYY’s goals and strategies; JOYY’s future business development, results of operations and financial condition; the expected growth of the online communication social platform market in China; the expectation regarding the rate at which to gain active users, especially paying users; JOYY’s ability to monetize the user base; fluctuations in general economic and business conditions in China; the impact of the COVID-19 to JOYY’s business operations and the economy in China and elsewhere generally; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in JOYY’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and JOYY does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Use of Non-GAAP Financial Measures
The unaudited condensed consolidated financial information is prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). JOYY uses non-GAAP operating income, non-GAAP operating margin, non-GAAP net income from continuing operations attributable to controlling interest of JOYY Inc., non-GAAP net margin attributable to controlling interest of JOYY Inc., non-GAAP net income from continuing operations attributable to common shareholders of JOYY Inc., and basic and diluted non-GAAP net income per ADS, which are non-GAAP financial measures. Non-GAAP operating income is operating income excluding share-based compensation expenses, impairment of goodwill and investments, amortization of intangible assets from business acquisitions, and gain on disposal of subsidiaries and business. Non-GAAP operating margin is non-GAAP operating income as a percentage of net revenues. Non-GAAP net income from continuing operations is net income from continuing operations excluding share-based compensation expenses, impairment of goodwill and investments, amortization of intangible assets from business acquisitions, gain on disposal of subsidiaries and business, (loss) gain on disposal and deemed disposal of investments, gain (loss) on fair value change of investments, reconciling items on the share of equity method investments, fair value change on derivatives, interest expenses related to the convertible bonds’ amortization to face value, and income tax effects of above non-GAAP reconciling items. Non-GAAP net income from continuing operations attributable to controlling interest of JOYY Inc. is net income from continuing operations attributable to controlling interest of JOYY Inc. excluding share-based compensation expenses, impairment of goodwill and investments, amortization of intangible assets from business acquisitions, (loss) gain on disposal and deemed disposal of subsidiaries and business, gain on disposal of investments, gain (loss) on fair value change of investments, reconciling items on the share of equity method investments, fair value change on derivatives, interest expenses related to the convertible bonds’ amortization to face value, income tax effects of above non-GAAP reconciling items and adjustments for non-GAAP reconciling items for the net (loss) income from continuing operations attributable to non-controlling interest shareholders. Non-GAAP net margin is non-GAAP net income from continuing operations attributable to controlling interest of JOYY Inc. as a percentage of net revenues. Non-GAAP net income from continuing operations attributable to common shareholders of JOYY Inc. is net income from continuing operations attributable to common shareholders of JOYY Inc. excluding share-based compensation expenses, impairment of goodwill and investments, amortization of intangible assets from business acquisitions, (loss) gain on disposal and deemed disposal of subsidiaries and business, gain on disposal of investments, gain (loss) on fair value change of investments, reconciling items on the share of equity method investments, fair value change on derivatives, interest expenses related to the convertible bonds’ amortization to face value, accretion, cumulative dividend and deemed dividend to subsidiaries’ preferred shareholders and income tax effects of above non-GAAP reconciling items and adjustments for non-GAAP reconciling items for the net (loss) income from continuing operations attributable to non-controlling interest shareholders. After the non-GAAP reconciliation, non-GAAP net income from continuing operations attributable to controlling interests of JOYY Inc. is equal to the non-GAAP net income from continuing operations attributable to common shareholders of JOYY Inc. Basic and diluted non-GAAP net income from continuing operations per ADS is non-GAAP net income from continuing operations attributable to common shareholders of JOYY Inc. divided by weighted average number of ADS used in the calculation of basic and diluted net income per ADS. The Company believes that separate analysis and exclusion of the non-cash impact of above reconciling items adds clarity to the constituent parts of its performance. The Company reviews these non-GAAP financial measures together with GAAP financial measures to obtain a better understanding of its operating performance. It uses the non-GAAP financial measure for planning, forecasting and measuring results against the forecast. The Company believes that non-GAAP financial measure is useful supplemental information for investors and analysts to assess its operating performance without the non-cash effect of (i) share-based compensation expenses and amortization of intangible assets from business acquisitions, fair value change on derivatives, interest expenses related to the convertible bonds’ amortization to face value, which have been and will continue to be significant recurring expenses in its business, (ii) impairment of goodwill and investments, gain on disposal of subsidiaries and business, (loss) gain on disposal and deemed disposal of investments, gain (loss) on fair value change of investments, reconciling items on the share of equity method investments, and accretion, cumulative dividend and deemed dividend to subsidiaries’ preferred shareholders, which may not be recurring in its business, and (iii) income tax expenses and non-GAAP adjustments for net (loss) income from continuing operations attributable to non-controlling interest shareholders, which are affected by above non-GAAP reconciling items. However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact the Company’s net income for the period. In addition, because non-GAAP financial measures are not measured in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measure in isolation from or as an alternative to the financial measure prepared in accordance with U.S. GAAP.

The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned “JOYY Inc. Reconciliation of GAAP and Non-GAAP Results” near the end of this release.

Investor Relations Contact
JOYY Inc.
Jane Xie/Maggie Yan
Tel: +86 (20) 8212-0000
Email: [email protected]

ICR, Inc.
Jack Wang
Tel: +1 (646) 915-1611
Email: [email protected]


1 Starting from the second quarter of 2020, the Company deconsolidated HUYA Inc. (“Huya”) and Huya’s historical financial results are and will be reflected in the Company’s consolidated financial statements as discontinued operations accordingly. The financial information and non-GAAP financial information of the Company disclosed in this press release is presented on a continuing operations basis, unless otherwise specifically stated. After the deconsolidation of Huya, the Company accounts for its investment in Huya as an equity method investment and applies the equity method accounting one quarter in arrears. Share of income or loss from the investment in Huya will be included in net income or loss from continuing operations.

2 Net income from continuing operations attributable to controlling interest of JOYY Inc., is net income from continuing operations less net (loss) income from continuing operations attributable to the non-controlling interest shareholders and the mezzanine equity classified as non-controlling interest shareholders.

3 Non-GAAP net income from continuing operations attributable to controlling interest of JOYY Inc. is a non-GAAP financial measure, which is defined as net income from continuing operations attributable to controlling interest of JOYY Inc. excluding share-based compensation expenses, impairment of goodwill and investment, amortization of intangible assets from business acquisitions, gain on disposal of subsidiaries and business, gain on disposal of investments, gain (loss) on fair value change of investments, reconciling items on the share of equity method investments which refer to those similar non-GAAP reconciling items of the Company, fair value change on derivatives, interest expenses related to the convertible bonds amortization to face value, income tax effects on non-GAAP adjustments and non-GAAP adjustments for net (loss) income attributable to non-controlling interest shareholders. These adjustments amounted to reversal of RMB1,493.8 million (US$220.0 million) and RMB431.7 million in the third quarter of 2020 and 2019, respectively. Please refer to the section titled “Reconciliation of GAAP and Non-GAAP Results” for more details.

4 Refers to mobile average monthly active users. Average mobile MAU for any period is calculated by dividing (i) the sum of the Company’s mobile active users for each month of such period, by (ii) the number of months in such period.

5 Refers to a registered user that has purchased virtual items on YY’s platforms at least once during the period presented.

6 Non-GAAP operating income is a non-GAAP financial measure, which is defined as operating income excluding share-based compensation expenses, amortization of intangible assets from business acquisitions, impairment of goodwill and investments and gain on disposal of subsidiaries and business. Please refer to the section titled “Reconciliation of GAAP and Non-GAAP Results” for details.

7 Non-GAAP operating margin is a non-GAAP financial measure, which is defined as non-GAAP operating income as a percentage of net revenues. Please refer to the section titled “Reconciliation of GAAP and Non-GAAP Results” for details.

8 Non-GAAP net margin is non-GAAP net income from continuing operations attributable to controlling interest of JOYY Inc. as a percentage of net revenues.

9 ADS is American Depositary Share. Each ADS represents twenty Class A common shares of the Company. Diluted net income per ADS is net income attributable to common shareholders of JOYY Inc. divided by weighted average number of diluted ADS.

10 Non-GAAP diluted net income from continuing operations per ADS is a non-GAAP financial measure, which is defined as non-GAAP net income from continuing operations attributable to common shareholders of JOYY Inc. divided by weighted average number of ADS used in the calculation of diluted net income per ADS. Please refer to the section titled “Reconciliation of GAAP and Non-GAAP Results” for details.

JOYY INC.
 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except share, ADS and per ADS data)

    December
 31,
2019
  September
30,
2020
  September
30,
2020
    RMB   RMB   US$
Assets            
Current assets            
Cash and cash equivalents   2,780,345   12,466,359   1,836,096
Restricted cash and cash equivalents   3,500   3,500   515
Short-term deposits   10,027,440   8,190,367   1,206,311
Restricted short-term deposits   653,034   504,312   74,277
Short-term investments   3,402,658   3,305,128   486,793
Accounts receivable, net   675,196   1,049,931   154,638
Amounts due from related parties   1,709   2,279   336
Financing receivables, net   105,344   1,469   216
Prepayments and other current assets   569,730   617,810   90,994
Assets held for sale   10,581,013    
             
Total current assets   28,799,969   26,141,155   3,850,176
             
Non-current assets            
Deferred tax assets   81,819   77,429   11,404
Investments(1)   1,983,483   8,375,126   1,233,523
Property and equipment, net   2,159,674   2,511,631   369,923
Land use rights, net   1,736,544   1,700,472   250,452
Intangible assets, net   3,134,778   2,544,297   374,734
Right-of-use assets, net   172,783   143,381   21,118
Goodwill   12,947,192   12,639,182   1,861,550
Financing receivables, net   129,380   128,627   18,945
Other non-current assets   289,131   157,274   23,164
Assets held for sale   774,730    
             
Total non-current assets   23,409,514   28,277,419   4,164,813
             
Total assets   52,209,483   54,418,574   8,014,989
             
Liabilities, mezzanine equity and shareholders’ equity            
Current liabilities            
Accounts payable   120,826   108,245   15,943
Deferred revenue   548,303   579,704   85,381
Advances from customers   99,130   69,314   10,209
Income taxes payable   425,572   452,729   66,680
Accrued liabilities and other current liabilities   3,150,303   3,610,862   531,821
Amounts due to related parties   205,921   30,672   4,517
Lease liabilities due within one year   83,686   94,581   13,930
Short-term loans   557,203   1,004,125   147,892
Liabilities held for sale   2,446,677    
             
Total current liabilities   7,637,621   5,950,232   876,373
             
Non-current liabilities            
Convertible bonds   5,008,571   5,197,691   765,537
Lease liabilities   92,669   53,849   7,931
Deferred revenue   75,628   68,238   10,050
Deferred tax liabilities   264,639   302,708   44,584
Other non-current liabilities   11,495    
Liabilities held for sale   235,023    
             
Total non-current liabilities   5,688,025   5,622,486   828,102
             
Total liabilities   13,325,646   11,572,718   1,704,475


JOYY INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(All amounts in thousands, except share, ADS and per ADS data)

    December
31,
2019
    September
 30,
2020
    September
 30,
2020
 
    RMB     RMB     US$  
             
Mezzanine equity   466,071     484,638     71,379  
               
Shareholders’ equity              
Class A common shares (US$0.00001 par value; 10,000,000,000 and 10,000,000,000 shares authorized, 1,301,845,404 shares issued and 1,293,162,504 shares outstanding as of December 31, 2019; 1,312,572,924 shares issued and 1,293,160,576 shares outstanding as of September 30, 2020, respectively)   80     80     12  
Class B common shares (US$0.00001 par value; 1,000,000,000 and 1,000,000,000 shares authorized, 326,509,555 and 326,509,555 shares issued and outstanding as of December 31, 2019 and September 30, 2020, respectively)   24     24     4  
Treasury Shares (US$0.00001 par value; 8,682,900 and 19,412,348 shares held as of December 31, 2019 and September 30, 2020, respectively)   (168,072 )   (320,858 )   (47,257 )
Additional paid-in capital   21,921,562     22,601,191     3,328,796  
Statutory reserves   149,961     85,282     12,561  
Retained earnings   10,272,122     19,834,864     2,921,360  
Accumulated other comprehensive income   890,209     150,707     22,197  
               
Total JOYY Inc.’s shareholders’ equity   33,065,886     42,351,290     6,237,673  
               
Non-controlling interests   5,351,880     9,928     1,462  
               
Total shareholders’ equity(2)   38,417,766     42,361,218     6,239,135  
               
Total liabilities, mezzanine equity and shareholders’ equity   52,209,483     54,418,574     8,014,989  
               

(1) Increase in the amounts of investments was mainly attributable to the Group’s investment in Huya. On April 3rd, 2020, Huya ceased to be a subsidiary of the Company and the Company recognized its investment in Huya as an equity method investment.
   
(2) On January 1, 2020, the Company adopted ASC326, “Financial Instruments-Credit Losses” using modified-retrospective transition approach. Following the adoption of this guidance, a cumulative-effect adjustment to shareholders’ equity, amounting to RMB12.1 million, was recognized as of January 1, 2020.

JOYY INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(All amounts in thousands, except share, ADS and per ADS data)

    Three Months Ended   Nine Months Ended
    September
30,
2019
    June
30,
2020
    September
 30,
2020
    September
30,
2020
    September
30,
2019
    September
30,
2020
    September
30,
2020
 
    RMB     RMB     RMB     US$     RMB     RMB     US$  
                   
Net revenues                  
Live streaming(1)   4,317,840     5,607,748     6,049,090     890,935     11,251,654     16,138,599     2,376,959  
Others   299,425     232,344     237,285     34,948     799,503     725,365     106,835  
                   
Total net revenues   4,617,265     5,840,092     6,286,375     925,883     12,051,157     16,863,964     2,483,794  
                                           
Cost of revenues(2)   (2,854,546 )   (3,769,095 )   (3,961,719 )   (583,498 )   (7,155,814 )   (10,739,492 )   (1,581,756 )
                                       
Gross profit   1,762,719     2,070,997     2,324,656     342,385     4,895,343     6,124,472     902,038  
                                           
Operating expenses(2)                  
Research and development expenses   (538,089 )   (693,458 )   (636,015 )   (93,675 )   (1,402,791 )   (1,895,637 )   (279,197 )
Sales and marketing expenses   (957,261 )   (909,825 )   (1,083,038 )   (159,514 )   (2,393,235 )   (2,925,127 )   (430,825 )
General and administrative expenses   (312,516 )   (412,714 )   (280,831 )   (41,362 )   (764,774 )   (891,681 )   (131,330 )
                                       
Total operating expenses   (1,807,866 )   (2,015,997 )   (1,999,884 )   (294,551 )   (4,560,800 )   (5,712,445 )   (841,352 )
                   
Other income   141,570     40,243     141,801     20,885     211,469     202,854     29,877  
                               
Operating income   96,423     95,243     466,573     68,719     546,012     614,881     90,563  
                                       
Interest expenses   (123,456 )   (131,656 )   (135,193 )   (19,912 )   (141,943 )   (391,364 )   (57,642 )
Interest income and investment income   116,598     162,519     152,429     22,450     291,900     429,341     63,235  
Foreign currency exchange gains (losses), net   15,748     3,246     (55,002 )   (8,101 )   30,469     (63,735 )   (9,387 )
(Loss) gain on disposal and deemed disposal of investments(3)       (13,444 )   2,040,359     300,512         2,135,818     314,572  
(Loss) gain on fair value change of investments   (11,492 )   708,633     (39,792 )   (5,861 )   2,652,642     1,002,635     147,672  
Fair value change on derivatives   (1,753 )   2,174     (29,664 )   (4,369 )   (1,753 )   (17,144 )   (2,525 )
Other non-operating expenses       (4,257 )   (1,000 )   (147 )       (17,257 )   (2,542 )
                                         
Income before income tax expenses   92,068     822,458     2,398,710     353,291     3,377,327     3,693,175     543,946  
                                       
Income tax expenses   (58,692 )   (187,246 )   (127,215 )   (18,737 )   (285,959 )   (458,917 )   (67,591 )
                                         
Income before share of income in equity method investments, net of income taxes   33,376     635,212     2,271,495     334,554     3,091,368     3,234,258     476,355  
                                         
Share of income (loss) in equity method investments, net of income taxes   21,189     (23,544 )   26,550     3,910     35,337     (9,085 )   (1,338 )
                                         
Net income from continuing operations   54,565     611,668     2,298,045     338,464     3,126,705     3,225,173     475,017  
                                       
Net income from discontinued operations(4)   123,242     6,343,255             308,503     6,514,481     959,480  
                                       
Net income   177,807     6,954,923     2,298,045     338,464     3,435,208     9,739,654     1,434,497  
                                       
Less: Net income (loss) attributable to the non-controlling interest shareholders and the mezzanine equity classified as non-controlling interest shareholders   67,879     (43,062 )   (5,148 )   (758 )   162,770     51,811     7,631  
                   
Net income attributable to controlling interest of JOYY Inc.   109,928     6,997,985     2,303,193     339,222     3,272,438     9,687,843     1,426,866  
                   
Including:                  
Net income from continuing operations attributable to controlling interest of JOYY Inc.   61,757     619,426     2,303,193     339,222     3,148,022     3,242,757     477,606  
Net income from discontinued operations attributable to controlling interest of JOYY Inc.   48,171     6,378,559             124,416     6,445,086     949,260  
                   
Less: Accretion of subsidiaries’ redeemable convertible preferred shares to redemption value   9,715     9,865     9,642     1,420     28,556     29,212     4,302  
Cumulative dividend on subsidiary’s Series A Preferred Shares   6,982     7,090     6,930     1,021     20,523     20,995     3,092  
                   
Net income attributable to common shareholders of JOYY Inc.   93,231     6,981,030     2,286,621     336,781     3,223,359     9,637,636     1,419,472  
                   
Including:                  
Net income from continuing operations attributable to common shareholders of JOYY Inc.   45,060     602,471     2,286,621     336,781     3,098,943     3,192,550     470,212  
Net income from discontinued operations attributable to common shareholders of JOYY Inc.   48,171     6,378,559             124,416     6,445,086     949,260  

JOYY INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED)
(All amounts in thousands, except share, ADS and per ADS data)

    Three Months Ended   Nine Months Ended
    September
 30,
2019
  June
 30,
2020
  September
30,
2020
  September
30,
2020
  September
 30,
2019
  September
 30,
2020
  September
30,
2020
    RMB   RMB   RMB   US$   RMB   RMB   US$
                             
Net income per ADS                            
—Basic   1.16   87.69   28.49   4.20   42.24   120.55   17.76
Continuing operations   0.56   7.57   28.49   4.20   40.61   39.93   5.88
Discontinued operations   0.60   80.12       1.63   80.62   11.88
—Diluted   1.11   85.68   25.92   3.82   41.20   108.54   15.99
Continuing operations   0.56   7.39   25.92   3.82   39.79   38.67   5.70
Discontinued operations   0.55   78.29       1.41   69.87   10.29
                             
Weighted average number of ADS used in calculating net income per ADS                            
—Basic   80,033,607   79,609,517   80,262,892   80,262,892   76,310,648   79,949,342   79,949,342
—Diluted   80,973,447   81,477,788   93,076,688   93,076,688   81,040,767   92,186,612   92,186,612

(1)      Live streaming revenues by geographical areas were as follows:

 

    Three Months Ended   Nine Months Ended
    September
 30,
2019
  June
 30,
2020
  September
 30,
2020
  September
30,
2020
  September
 30,
2019
  September
30,
2020
  September
30,
2020
    RMB   RMB   RMB   US$   RMB   RMB   US$
                             
PRC   3,138,668   2,965,737   3,110,451   458,120   8,886,950   8,895,787   1,310,208
Non-PRC   1,179,172   2,642,011   2,938,639   432,815   2,364,704   7,242,812   1,066,751

(2) Share-based compensation was allocated in cost of revenues and operating expenses as follows:

   

    Three Months Ended   Nine Months Ended
    September
 30,
2019
  June
 30,
2020
  September
 30,
2020
  September
30,
2020
  September
 30
2019
  September
 30,
2020
  September
 30,
2020
    RMB   RMB   RMB   US$   RMB   RMB   US$
                             
Cost of revenues   12,111   9,637   13,676   2,014   33,734   34,962   5,149
Research and development expenses   105,002   92,465   86,504   12,741   309,883   266,969   39,320
Sales and marketing expenses   1,175   2,024   2,744   404   4,792   6,683   984
General and administrative expenses   46,223   91,019   85,254   12,557   145,718   221,475   32,620

(3) (Loss) gain on disposal and deemed disposal of investments mainly represented the gain from our further disposal of our equity interest in Huya in the third quarter of 2020.
   
(4) Gain from the disposal and deconsolidation amounted to around RMB6.4 billion was reported as part of the net income from discontinued operations in the second quarter of 2020.


JOYY INC.

RECONCILIATION OF GAAP AND NON-GAAP RESULTS
(All amounts in thousands, except share, ADS and per ADS data)

    Three Months Ended   Nine Months Ended
    September 30,
2019
  June
30,
2020
  September 30,
2020
  September
30,
2020
  September 30,
2019
  September 30,
2020
  September 30,
2020
    RMB   RMB   RMB   US$   RMB   RMB   US$
                             
Operating income   96,423   95,243   466,573   68,719   546,012   614,881   90,563
Share-based compensation expenses   164,511   195,145   188,178   27,716   494,127   530,089   78,073
Impairment of goodwill and investments   10,000   43,861       10,000   43,861   6,460
Amortization of intangible assets from business acquisitions   193,487   175,043   171,085   25,198   444,227   532,317   78,402
                             
Non-GAAP operating income   464,421   509,292   825,836   121,633   1,494,366   1,721,148   253,498

Net income from continuing operations   54,565     611,668     2,298,045     338,464     3,126,705     3,225,173   475,017  
Share-based compensation expenses   164,511     195,145     188,178     27,716     494,127     530,089   78,073  
Impairment of goodwill and investments   10,000     43,861        –        –     10,000     43,861   6,460  
Amortization of intangible assets from business acquisitions   193,487     175,043     171,085     25,198     444,227     532,317   78,402  
(Loss) gain on disposal and deemed disposal of investments       13,444     (2,040,359 )   (300,512 )       (2,135,818 ) (314,572 )
(Loss) gain on fair value change of investments(1)   11,492     (708,633 )   39,792     5,861     (2,652,642 )   (1,002,635 ) (147,672 )
Reconciling items on the share of equity method investments(1)   (9,461 )   8,805     25,879     3,812     (13,997 )   37,117   5,467  
Fair value change on derivatives   1,753     (2,174 )   29,664     4,369     1,753     17,144   2,525  
Interest expenses related to the convertible bonds’ amortization to face value   100,885     106,908     107,728     15,867     105,172     316,878   46,671  
Income tax effects on non-GAAP adjustments   (40,166 )   42,452     (15,241 )   (2,245 )   (89,053 )   47,766   7,035  
                                         
Non-GAAP net income from continuing operations   487,066     486,519     804,771     118,530     1,426,292     1,611,892   237,406  

Net income from continuing operations attributable to common shareholders of JOYY Inc.   45,060     602,471     2,286,621     336,781     3,098,943     3,192,550     470,212  
Share-based compensation expenses   164,511     195,145     188,178     27,716     494,127     530,089     78,073  
Impairment of goodwill and investments   10,000     43,861             10,000     43,861     6,460  
Amortization of intangible assets from business acquisitions   193,487     175,043     171,085     25,198     444,227     532,317     78,402  
(Loss) gain on disposal and deemed disposal of investments       13,444     (2,040,359 )   (300,512 )       (2,135,818 )   (314,572 )
(Loss) gain on fair value change of investments   11,492     (708,633 )   39,792     5,861     (2,652,642 )   (1,002,635 )   (147,672 )
Reconciling items on the share of equity method investments   (9,461 )   8,805     25,879     3,812     (13,997 )   37,117     5,467  
Fair value change on derivatives   1,753     (2,174 )   29,664     4,369     1,753     17,144     2,525  
Interest expenses related to the convertible bonds’ amortization to face value   100,885     106,908     107,728     15,867     105,172     316,878     46,671  
Accretion, cumulative dividend and deemed dividend to subsidiaries’ preferred shareholders   16,697     16,955     16,572     2,441     49,079     50,207     7,394  
Income tax effects on non-GAAP adjustments   (40,166 )   42,452     (15,241 )   (2,245 )   (89,053 )   47,766     7,035  
Non-GAAP adjustments for net income (loss) attributable to the non-controlling interest shareholders   (847 )   (688 )   (569 )   (84 )   (1,666 )   19     3  
                                           
Non-GAAP net income from continuing operations attributable to controlling interest and common shareholders of JOYY Inc.   493,411     493,589     809,350     119,204     1,445,943     1,629,495     239,998  

 

Non-GAAP net income from continuing operations per ADS

                           
—Basic   6.17   6.20   10.08   1.49   18.95   20.38   3.00
—Diluted   5.60   5.57   8.89   1.31   18.09   18.28   2.69
Weighted average number of ADS used in calculating Non-GAAP  net income from continuing operations per ADS                            
—Basic   80,033,607   79,609,517   80,262,892   80,262,892   76,310,648   79,949,342   79,949,342
—Diluted   91,400,547   91,904,888   93,076,688   93,076,688   81,040,767   92,186,612   92,186,612

    

(1) (Loss) gain on fair value change of equity investees’ investments was reclassified to the reconciling items on the equity method investments from gain on fair value change of investments


JOYY INC.
UNAUDITED SEGMENT REPORT
(All amounts in thousands, except share, ADS and per ADS data)

    Three Months Ended
    September 30, 2020
             
    YY Bigo Elimination(1) Total Total
    RMB RMB RMB RMB US$
             
Net revenues            
Live streaming   2,770,876     3,278,214         6,049,090     890,935  
Others   120,661     116,624         237,285     34,948  
             
Total net revenues   2,891,537     3,394,838         6,286,375     925,883  
             
Cost of revenues(2)   (1,624,172 )   (2,337,547 )       (3,961,719 )   (583,498 )
             
Gross profit   1,267,365     1,057,291         2,324,656     342,385  
Operating expenses(2)            
Research and development expenses   (303,147 )   (332,868 )       (636,015 )   (93,675 )
Sales and marketing expenses   (230,230 )   (852,808 )       (1,083,038 )   (159,514 )
General and administrative expenses   (90,752 )   (190,079 )       (280,831 )   (41,362 )
             
Total operating expenses   (624,129 )   (1,375,755 )       (1,999,884 )   (294,551 )
             
Other income   135,286     6,515         141,801     20,885  
             
Operating income (loss)   778,522     (311,949 )       466,573     68,719  
             
Other non-operating expenses   (1,000 )           (1,000 )   (147 )
Interest expenses   (127,167 )   (12,516 )   4,490     (135,193 )   (19,912 )
Interest income and investment income   156,780     139     (4,490 )   152,429     22,450  
Foreign currency exchange gains (loss), net   1,014     (56,016 )       (55,002 )   (8,101 )
Fair value change on derivatives   (29,664 )           (29,664 )   (4,369 )
Gain on disposal and deemed disposal of investments   2,040,359             2,040,359     300,512  
Loss on fair value change of investments   (39,792 )           (39,792 )   (5,861 )
             
Income (loss) before income tax expenses   2,779,052     (380,342 )       2,398,710     353,291  
             
Income tax expenses   (124,579 )   (2,636 )       (127,215 )   (18,737 )
             
Income (loss) before share of loss in equity method investments, net of income taxes   2,654,473     (382,978 )       2,271,495     334,554  
             
Share of gain in equity method investments, net of income taxes   26,550             26,550     3,910  
             
Net income (loss) from continuing operations   2,681,023     (382,978 )       2,298,045     338,464  

(1)  The elimination mainly consists of interest income and interest expenses generated from the loan between YY and Bigo segments.
(2)  Share-based compensation was allocated in cost of revenues and operating expenses as follows:

    Three Months Ended
    September 30, 2020
     
    YY   Bigo Total Total
    RMB   RMB RMB US$
           
Cost of revenues   9,738   3,938 13,676 2,014
Research and development expenses   36,643   49,861 86,504 12,741
Sales and marketing expenses   1,772   972 2,744 404
General and administrative expenses   (7,860 ) 93,114 85,254 12,557


JOYY INC.
RECONCILIATION OF GAAP AND NON-GAAP RESULTS OF UNAUDITED SEGMENT REPORT
 (All amounts in thousands, except share, ADS and per ADS data)

    Three Months Ended
    September 30, 2020
     
    YY   Bigo
  Total
  Total
 
    RMB   RMB   RMB   US$  
           
Operating income (loss)   778,522     (311,949 )   466,573     68,719  
Share-based compensation expenses   40,293     147,885     188,178     27,716  
Amortization of intangible assets from business acquisitions       171,085     171,085     25,198  
                         
Non-GAAP operating income   818,815     7,021     825,836     121,633  
                         
Net income (loss) from continuing operations   2,681,023     (382,978 )   2,298,045     338,464  
Share-based compensation expenses   40,293     147,885     188,178     27,716  
Amortization of intangible assets from business acquisitions       171,085     171,085     25,198  
Gain on disposal and deemed disposal of investments   (2,040,359 )       (2,040,359 )   (300,512 )
Loss on fair value change of investments   39,792         39,792     5,861  
Reconciling items on the share of equity method investments   25,879         25,879     3,812  
Fair value change on derivatives   29,664         29,664     4,369  
Interest expenses related to the convertible bonds’ amortization to face value   107,728         107,728     15,867  
Income tax effects on non-GAAP adjustments   (7,248 )   (7,993 )   (15,241 )   (2,245 )
                         
Non-GAAP net income (loss) from continuing operations   876,772     (72,001 )   804,771     118,530  


JOYY INC.

UNAUDITED SEGMENT REPORT
(All amounts in thousands, except share, ADS and per ADS data)

    Three Months Ended
    June 30, 2020
             
    YY   Bigo
  Elimination(1)
  Total
  Total
 
    RMB   RMB   RMB   RMB   US$  
             
Net revenues            
Live streaming   2,661,788     2,945,960         5,607,748     793,725  
Others   115,618     116,726         232,344     32,886  
                           
Total net revenues   2,777,406     3,062,686         5,840,092     826,611  
                             
Cost of revenues(2)   (1,583,125 )   (2,185,970 )       (3,769,095 )   (533,481 )
                               
Gross profit   1,194,281     876,716         2,070,997     293,130  
Operating expenses(2)                              
Research and development expenses   (292,459 )   (400,999 )       (693,458 )   (98,153 )
Sales and marketing expenses   (224,955 )   (684,870 )       (909,825 )   (128,777 )
General and administrative expenses   (232,427 )   (180,287 )       (412,714 )   (58,416 )
                       
Total operating expenses   (749,841 )   (1,266,156 )       (2,015,997 )   (285,346 )
                               
Other income   31,679     8,564         40,243     5,696  
                               
Operating income (loss)   476,119     (380,876 )       95,243     13,480  
                               
Other non-operating expenses       (4,257 )       (4,257 )   (603 )
Interest expenses   (126,282 )   (14,231 )   8,857     (131,656 )   (18,635 )
Interest income and investment income   171,299     77     (8,857 )   162,519     23,003  
Foreign currency exchange gains, net   2,839     407         3,246     459  
Fair value change on derivatives   2,174             2,174     308  
Loss on disposal and deemed disposal of investments   (13,444 )           (13,444 )   (1,903 )
Gain on fair value change of investments   708,633             708,633     100,300  
                               
Income (loss) before income tax expenses   1,221,338     (398,880 )       822,458     116,409  
                               
Income tax (expenses) benefits   (203,468 )   16,222         (187,246 )   (26,503 )
               
Income (loss) before share of loss in equity method investments, net of income taxes   1,017,870     (382,658 )       635,212     89,906  
                               
Share of loss in equity method investments, net of income taxes   (23,544 )           (23,544 )   (3,332 )
             
Net income (loss) from continuing operations   994,326     (382,658 )       611,668     86,574  
             

(1) The elimination mainly consists of interest income and interest expenses generated from the loan between YY and Bigo segments.
(2) Share-based compensation was allocated in cost of revenues and operating expenses as follows:

    Three Months Ended
    June 30, 2020
     
    YY Bigo Total Total
    RMB RMB RMB US$
           
Cost of revenues   1,103 8,534 9,637 1,364
Research and development expenses   26,528 65,937 92,465 13,088
Sales and marketing expenses   816 1,208 2,024 286
General and administrative expenses                  53,199 37,820 91,019 12,883

JOYY INC.
RECONCILIATION OF GAAP AND NON-GAAP RESULTS OF UNAUDITED SEGMENT REPORT
 (All amounts in thousands, except share, ADS and per ADS data)

    Three Months Ended
    June 30, 2020
     
    YY   Bigo
  Total
  Total
 
    RMB   RMB   RMB   US$  
           
Operating income (loss)   476,119     (380,876 )   95,243     13,480  
Share-based compensation expenses   81,646     113,499     195,145     27,621  
Impairment of goodwill and investments   43,861         43,861     6,208  
Amortization of intangible assets from business acquisitions       175,043     175,043     24,776  
                         
Non-GAAP operating income (loss)   601,626     (92,334 )   509,292     72,085  
                         
Net income (loss) from continuing operations   994,326     (382,658 )   611,668     86,574  
Share-based compensation expenses   81,646     113,499     195,145     27,621  
Impairment of goodwill and investments   43,861         43,861     6,208  
Amortization of intangible assets from business acquisitions       175,043     175,043     24,776  
Loss on disposal and deemed disposal of investments   13,444         13,444     1,903  
Gain on fair value change of investments   (708,633 )       (708,633 )   (100,300 )
Reconciling items on the share of equity method investments   8,805         8,805     1,246  
Fair value change on derivatives   (2,174 )       (2,174 )   (308 )
Interest expenses related to the convertible bonds’ amortization to face value   106,908         106,908     15,132  
Income tax effects on non-GAAP adjustments   65,180     (22,728 )   42,452     6,009  
                         
Non-GAAP net income (loss) from continuing operations   603,363     (116,844 )   486,519     68,861  
           

JOYY INC.
UNAUDITED SEGMENT REPORT
(All amounts in thousands, except share, ADS and per ADS data)

    Three Months Ended  
    September 30, 2019  
               
    YY   Bigo
  Elimination(1)
  Total
  Total
   
    RMB   RMB   RMB   RMB   US$    
               
Net revenues              
Live streaming   2,899,044     1,418,796         4,317,840     604,088    
Others   181,006     118,419         299,425     41,891    
               
Total net revenues   3,080,050     1,537,215         4,617,265     645,979    
               
Cost of revenues(2)   (1,729,389 )   (1,125,157 )       (2,854,546 )   (399,366 )  
               
Gross profit   1,350,661     412,058         1,762,719     246,613    
Operating expenses(2)              
Research and development expenses   (249,620 )   (288,469 )       (538,089 )   (75,281 )  
Sales and marketing expenses   (340,619 )   (616,642 )       (957,261 )   (133,926 )  
General and administrative expenses   (225,281 )   (87,235 )       (312,516 )   (43,723 )  
               
Total operating expenses   (815,520 )   (992,346 )       (1,807,866 )   (252,930 )  
               
Other income   136,535     5,035         141,570     19,806    
               
Operating income (loss)   671,676     (575,253 )       96,423     13,489    
               
Interest expenses   (123,456 )   (11,078 )   11,078     (123,456 )   (17,272 )  
Interest income and investment income   127,068     608     (11,078 )   116,598     16,313    
Foreign currency exchange (losses) gains, net   2,798     12,950         15,748     2,203    
Fair value change on derivatives   (1,753 )      –         (1,753 )   (245 )  
Loss on fair value change of investments   (11,492 )      –         (11,492 )   (1,608 )  
               
Income (loss) before income tax expenses   664,841     (572,773 )       92,068     12,880    
               
Income tax (expenses) benefits   (146,835 )   88,143         (58,692 )   (8,211 )  
               
Income (loss) before share of income in equity method investments, net of income taxes   518,006     (484,630 )       33,376     4,669    
               
Share of income in equity method investments, net of income taxes   21,189        –         21,189     2,964    
               
Net income (loss) from continuing operations   539,195     (484,630 )       54,565     7,633    
               

(1) The elimination mainly consists of interest income and interest expenses generated from the loan between YY and Bigo segments.
(2) Share-based compensation was allocated in cost of revenues and operating expenses as follows:

    Three Months Ended
    September 30, 2019
     
    YY Bigo Total Total
    RMB RMB RMB US$
           
Cost of revenues   5,043 7,068 12,111 1,694
Research and development expenses   26,848 78,154 105,002 14,690
Sales and marketing expenses   419 756 1,175 164
General and administrative expenses   41,265 4,958 46,223 6,467


JOYY INC.
RECONCILIATION OF GAAP AND NON-GAAP RESULTS OF UNAUDITED SEGMENT REPORT
 (All amounts in thousands, except share, ADS and per ADS data)

    Three Months Ended
    September 30, 2019
     
    YY   Bigo
  Total
  Total
 
    RMB   RMB   RMB   US$  
           
Operating income (loss)   671,676     (575,253 )   96,423     13,489  
Share-based compensation expenses   73,575     90,936     164,511     23,015  
Impairment of goodwill and investments   10,000         10,000     1,399  
Amortization of intangible assets from business acquisitions       193,487     193,487     27,070  
           
Non-GAAP operating income (loss)   755,251     (290,830 )   464,421     64,973  
           
Net income (loss) from continuing operations   539,195     (484,630 )   54,565     7,633  
Share-based compensation expenses   73,575     90,936     164,511     23,015  
Impairment of goodwill and investments   10,000         10,000     1,399  
Amortization of intangible assets from business acquisitions       193,487     193,487     27,070  
Gain on fair value change of investments   11,492         11,492     1,608  
Reconciling items on the share of equity method investments   (9,461 )       (9,461 )   (1,324 )
Fair value change on derivatives   1,753         1,753     245  
Interest expenses related to the convertible bonds’ amortization to face value   100,885         100,885     14,114  
Income tax effects on non-GAAP adjustments   (188 )   (39,978 )   (40,166 )   (5,619 )
           
Non-GAAP net income (loss) from continuing operations   727,251     (240,185 )   487,066     68,141  
           

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