DouYu International Holdings Limited reported a net income of RMB 11.3 million (US$1.6 million) for the third quarter ended September 30 2025, a 232.8 % year‑over‑year jump that marks the company’s first profitable quarter in two years. Total net revenues fell 12.3 % to RMB 899.1 million (US$126.3 million) as livestreaming revenue dropped 30.6 % to RMB 522.1 million, while the company’s innovative business segment—primarily voice‑based social networking and game‑related services—generated RMB 275.9 million, up from RMB 210.5 million in the same quarter last year, representing roughly 30 % of total revenue.
The decline in livestreaming revenue reflects a broader contraction in the core live‑streaming market, driven by regulatory tightening and a slowdown in user spending. In contrast, the innovative segment’s growth is fueled by higher‑margin voice‑based social networking and game membership programs, which have attracted a growing base of paying users and benefited from lower content‑delivery costs. The segment’s 31 % share of revenue underscores the company’s successful shift toward higher‑margin services.
Operating income swung to a positive RMB 11.9 million (US$1.7 million) from a loss of RMB 94.2 million in Q3 2024, largely due to a 21.9 % reduction in cost of revenues to RMB 783.0 million and a 34.0 % cut in sales and marketing expenses to RMB 52.3 million. Gross profit rose 90.9 % to RMB 116.1 million, lifting the gross margin to 12.9 % from 5.7 % in the prior year. The margin expansion reflects both the higher‑margin mix and disciplined cost management.
Earnings per share beat analyst expectations by $0.11 on a Non‑GAAP basis, surpassing the consensus estimate of $0.08. Revenue, however, missed the consensus of $128.3 million by $1.7 million (about 1.3 %). The revenue miss is attributable to the 30.6 % decline in livestreaming sales, which outweighed the 31 % growth in the innovative segment. The EPS beat demonstrates that cost controls and the shift to higher‑margin services more than compensated for the revenue shortfall.
Management highlighted the company’s focus on cost discipline and strategic diversification. “We are tightening our operating costs while accelerating the monetization of our voice‑based social networking and game‑membership platforms,” said the chief financial officer. The comments signal confidence that the company’s pivot will sustain profitability even as core livestreaming revenue continues to contract.
The results illustrate a mixed outlook: headwinds from a shrinking livestreaming market and declining average mobile MAUs (down 27.5 % YoY) are offset by tailwinds from cost optimization and the growth of higher‑margin innovative services. While the company remains cautious about near‑term revenue growth, the profitability turnaround and margin expansion position DouYu to pursue a more sustainable growth trajectory in the coming quarters.
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