GUANGZHOU, China, March 21, 2016 (GLOBE NEWSWIRE) -- YY Inc. (NASDAQ:YY) ("YY" or the "Company"), a revolutionary real-time interactive social platform, today announced its unaudited financial results for the fourth quarter and full year 2015.

Fourth Quarter 2015 Highlights

• Net revenues increased by 62.3% to RMB1,899.8 million (US$293.3 million) from RMB1,170.6 million in the corresponding period of 2014. 
  
  

Full Year 2015 Highlights

• Net revenues increased by 60.3% to RMB5,897.2 million (US$910.4 million) from RMB3,678.4 million in 2014. 
  
  

Mr. David Xueling Li, Chief Executive Officer of YY, stated, "We are pleased to report another strong quarter as we saw continued top-line growth momentum across our core business segments, namely online music and entertainment, online dating, and Huya broadcasting. Furthermore, in our online music and entertainment business, revenues from mobile grew at an impressive rate of 452% year over year and accounted for 45% of total revenues in the fourth quarter of 2015. Going forward, we will continue to build up our mobile offering and introduce other innovative services as we strive to meet the evolving demands of users in the dynamic mobile internet market. As we continue to augment and adapt the services across our healthy ecosystem, we are confident in our ability to strengthen our position as the leading real-time internet platform in China."

Mr. Eric He, Chief Financial Officer of YY, commented, "In the fourth quarter of 2015, we continued to see strong top-line growth with our net revenues increasing by 62.3% year over year, primarily reflecting our core business growth, but partially offset by the expected ongoing softness of the online game business. In addition, we further increased our paying users by 29.9% year over year to 3.2 million as of December 31, 2015. The mobile-end was a strong driver of our overall growth in the fourth quarter. Particularly in our core online music and entertainment business, mobile ARPU increased by 139% year over year to RMB388, and mobile paying users increased by 131% year over year to 1.4 million. As we move forward, we remain confident in our ability to roll out new, innovative services to our massive community of users and strengthen our ecosystem."

Fourth Quarter 2015 Financial Results

NET REVENUES 

Net revenues increased by 62.3% to RMB1,899.8 million (US$293.3 million) in the fourth quarter of 2015 from RMB1,170.6 million in the corresponding period of 2014, primarily driven by the increase in IVAS revenues. IVAS revenues, which mainly consisted of revenues from online music and entertainment, online games, online dating, Huya broadcasting and YY's membership program, increased by 60.7% to RMB1,832.0 million (US$282.8 million) in the fourth quarter of 2015 from RMB1,140.2 million in the corresponding period of 2014. The increase in IVAS revenues was primarily driven by a 29.9% year-over-year increase in the number of paying users and a 24.3% year-over-year increase in average revenue per user ("ARPU").

Revenues from online music and entertainment increased by 69.3% to RMB1,145.0 million (US$176.8 million) in the fourth quarter of 2015 from RMB676.2 million in the corresponding period of 2014. This increase was driven by a year-over-year increase of 44.5% in the number of paying users to 2,157,000, and a year-over-year increase of 17.2% in ARPU to RMB531. Moreover, mobile ARPU continues to experience solid acceleration, having grown 139% to RMB388 in the fourth quarter of 2015 from RMB162 in the corresponding period of 2014. In addition, the Company held its 2015 YY Entertainment Annual Event Competition in December 2015, which, as in prior years, proved to be a successful iconic event in the industry and boosted the Company's online music and entertainment revenues.

Revenues from online games were RMB172.4 million (US$26.6 million) in the fourth quarter of 2015, as compared to RMB229.4 million in the corresponding period of 2014. This decline was primarily caused by a 32.5% year-over-year decrease in paying users to 340,000, which reflects the continued softness in China's web game market, but was partially offset by an 11.4% year-over-year increase in ARPU of online games.  

Revenues from online dating increased by 102.4% to RMB189.2 million (US$29.2 million) in the fourth quarter of 2015 from RMB93.5 million in the corresponding period of 2014. This increase primarily resulted from a 109.3% year-over-year increase in ARPU to RMB837 in the fourth quarter of 2015, partially driven by the contribution from the 2015 YY Online Dating Annual Event Competition, which was held for the first time in December 2015.

Other IVAS revenues, mainly including Huya broadcasting and membership subscription fees, increased by 130.6% to RMB325.4 million (US$50.2 million) in the fourth quarter of 2015 from RMB141.1 million in the corresponding period of 2014. Revenues from Huya broadcasting increased by 152.2% to RMB133.6 million (US$20.6 million) in the fourth quarter of 2015 from RMB53.0 million in the corresponding period of 2014. Revenues from membership subscription fees increased by 36.4% to RMB80.8 million (US$12.5 million) in the fourth quarter of 2015 from RMB59.3 million in the corresponding period of 2014, which reflected a 3.3% increase in the number of members to 1,086,000 as of December 31, 2015 from 1,051,000 as of December 31, 2014.

Other revenues, mainly including revenues from the Company's online education platform, 100 Education, online advertising revenues from Duowan.com, and e-commerce, increased by 123.1% to RMB67.8 million (US$10.5 million) in the fourth quarter of 2015 from RMB30.4 million in the corresponding period of 2014.

COST OF REVENUES AND GROSS PROFIT 

Cost of revenues increased by 87.1% to RMB1,168.2 million (US$180.3 million) in the fourth quarter of 2015 from RMB624.5 million in the corresponding period of 2014, primarily attributable to an increase in revenue-sharing fees and content costs to RMB807.3 million (US$124.6 million) in the fourth quarter of 2015 from RMB397.8 million in the corresponding period of 2014. The increase in revenue-sharing fees and content costs paid to performers, channel owners and content providers was in line with the increase in revenues and was primarily due to the higher level of user engagement and spending driven by promotional activities, as well as the Company's investments in expanding the amount of new and innovative content it provides to users. In addition, bandwidth costs increased to RMB161.1 million (US$24.9 million) in the fourth quarter of 2015 from RMB117.8 million in the corresponding period of 2014, primarily reflecting the continued user base expansion and the video quality improvements.

Gross profit increased by 34.0% to RMB731.6 million (US$112.9 million) in the fourth quarter of 2015 from RMB546.1 million in the corresponding period of 2014. Gross margin was 38.5% in the fourth quarter of 2015 compared with 46.7% in the corresponding period of 2014. The year-over-year decrease in gross margin was primarily attributable to the change in the Company's business mix to include new business lines involving user-generated content, and higher revenue-sharing fees and content costs.

OPERATING INCOME

Operating expenses for the fourth quarter of 2015 increased by 59.6% to RMB354.6 million (US$54.7 million) from RMB222.2 million in the corresponding period of 2014. This increase was primarily attributable to an increase in sales and marketing expenses, particularly those associated with mobile product promotion, as well as general and administrative expenses, driven by the Company's overall business expansion.

Operating income in the fourth quarter of 2015 increased by 25.6% to RMB409.8 million (US$63.3 million), as compared to RMB326.3 million in the corresponding period of 2014. Operating margin in the fourth quarter of 2015 was 21.6%, as compared to 27.9% in the corresponding period of 2014.

Non-GAAP operating income¹ increased by 29.3% to RMB471.0 million (US$72.7 million) in the fourth quarter of 2015 from RMB364.3 million in the corresponding period of 2014. Non-GAAP operating margin² decreased to 24.8% in the fourth quarter of 2015 from 31.1% in the corresponding period of 2014.

NET INCOME

Net income attributable to YY Inc. was RMB359.2 million (US$55.5 million) in the fourth quarter of 2015, as compared to RMB372.8 million in the corresponding period of 2014. Net margin in the fourth quarter of 2015 was 18.9%, as compared to 31.8% in the corresponding period of 2014. Non-GAAP net income attributable to YY Inc.³ increased by 2.3% to RMB420.4 million (US$64.9 million), as compared to RMB410.8 million in the corresponding period of 2014. Non-GAAP net margin⁴ was 22.1% in the fourth quarter of 2015, as compared to 35.1% in the corresponding period of 2014. 

NET INCOME PER ADS

Diluted net income per ADS⁵ increased by 1.5% to RMB6.24 (US$0.96) in the fourth quarter of 2015 from RMB6.15 in the corresponding period of 2014.

Non-GAAP diluted net income per ADS⁶ increased by 7.6% to RMB7.25 (US$1.12) in the fourth quarter of 2015 from RMB6.74 in the corresponding period of 2014.

BALANCE SHEET AND CASH FLOWS 

As of December 31, 2015, the Company had cash and cash equivalents of RMB928.9 million (US$143.4 million) and short-term deposits and restricted short-term deposits of RMB2,284.2 million (US$352.6 million). For the fourth quarter of 2015, net cash from operating activities was RMB707.6 million (US$109.2 million).

SHARES OUTSTANDING 

As of December 31, 2015, the Company had a total of 1,097.8 million common shares outstanding, or the equivalent of 54.9 million ADSs outstanding.

FULL YEAR 2015 FINANCIAL RESULTS

For the full year of 2015, net revenues increased by 60.3% to RMB5,897.2 million (US$910.4 million) from RMB3,678.4 million in 2014, primarily driven by a 60.3% increase in IVAS revenues.

Net income attributable to YY Inc. for the full year of 2015 was RMB1,033.2 million (US$159.5 million), compared with RMB1,064.5 million in 2014. Net margin for the full year of 2015 was 17.5%, compared with 28.9% in 2014.

Non-GAAP net income attributable to YY Inc. for the full year of 2015 increased by 1.6% to RMB1,218.6 million (US$188.1 million) from RMB1,199.1 million in 2014. Non-GAAP net margin was 20.7% for the full year of 2015, compared to 32.6% for the full year of 2014.

Diluted net income per ADS for the full year of 2015 increased to RMB17.96 (US$2.77) from RMB17.76 in the prior year. Non-GAAP diluted net income per ADS for the full year of 2015 increased to RMB21.18 (US$3.27) from RMB20.01 in the prior year.

For the full year of 2015, net cash from operating activities was RMB1,780.2 million (US$274.8  million).

Recent Development

In the fourth quarter of 2015, the Company invested RMB1,860.5 million (US$287.2 million) in purchasing land for future office space in the Pazhou Internet Innovation Zone in order to accommodate future work force expansion and reduce long-term operating costs.

Conference Call Information

The Company will hold a conference call on Monday, March 21, 2016 at 8:00 pm Eastern Daylight Time or Tuesday, March 22, 2016 at 8:00 am Beijing Time to discuss the financial results. Participants may access the call by dialing the following numbers:

United States:	+1-845-675-0438
International Toll Free:	+1-855-500-8701
China Domestic:	400-1200654
Hong Kong:	+852-3018-6776
Conference ID:	#68691605

The replay will be accessible through March 29, 2016 by dialing the following numbers:

United States Toll Free:	+1-855-452-5696
International:	+61-2-9003-4211
Conference ID:	#68691605

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

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 RMB6.4778 to US$1.00, the noon buying rate in effect on December 31, 2015 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 YY Inc.

YY Inc. ("YY" or the "Company") is a revolutionary real-time interactive social platform that engages users in real-time online group activities through voice, text and video. Launched in July 2008, YY Client, the Company's core product, empowers users to create and organize groups of varying sizes to discover and participate in a wide range of online activities, including online music and entertainment, online games, online dating, live game broadcasting and education. YY Inc. was listed on NASDAQ in November 2012 and generated revenues of US$910 million in the fiscal year 2015.

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 YY's strategic and operational plans, contain forward-looking statements. YY 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 third parties. Statements that are not historical facts, including statements about YY'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: YY's goals and strategies; YY'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 registered user accounts, active users, especially paying users; YY's ability to monetize the user base; YY's ability to continue attracting advertisers and offering popular online games; fluctuations in general economic and business conditions in China and assumptions underlying or related to any of the foregoing, as well as uncertainties relating to the proposed "going-private" transaction. Further information regarding these and other risks is included in YY'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 YY 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"), except that the consolidated statement of changes in shareholders' equity, consolidated statements of cash flows, and the detailed notes have not been presented. YY uses non-GAAP operating income, non-GAAP operating margin, non-GAAP net income attributable to YY Inc., non-GAAP net margin, non-GAAP net income attributable to common shareholders, 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. Non-GAAP operating margin is non-GAAP operating income as a percentage of net revenues. Non-GAAP net income attributable to YY Inc. is net income attributable to YY Inc. excluding share-based compensation expenses. Non-GAAP net margin is non-GAAP net income attributable to YY Inc. as a percentage of net revenues. Non-GAAP net income attributable to common shareholders is net income attributable to common shareholders excluding share-based compensation expenses. Basic and diluted non-GAAP net income per ADS is non-GAAP net income attributable to common shareholders 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 share-based compensation 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 effect of non-cash share-based compensation expenses, which have been and will continue to be significant recurring expenses in its business. 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 "YY Inc. Reconciliations of GAAP and Non-GAAP Results" at the end of this release. 

__________________
¹ Non-GAAP operating income is a non-GAAP financial measure, which is defined as operating income excluding share-based compensation expenses. 

² Non-GAAP operating margin is a non-GAAP financial measure, which is defined as non-GAAP operating income as a percentage of net revenues. 

³ Non-GAAP net income attributable to YY Inc. is a non-GAAP financial measure, which is defined as net income attributable to YY Inc. excluding share-based compensation expenses.

⁴ Non-GAAP net margin is a non-GAAP financial measure, which is defined as non-GAAP net income attributable to YY Inc. as a percentage of net revenues.

⁵ 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 divided by weighted average number of diluted ADS.

⁶ Non-GAAP diluted net income per ADS is a non-GAAP financial measure, which is defined as non-GAAP net income attributable to common shareholders divided by weighted average number of ADS used in the calculation of diluted net income per ADS. 

YY INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except share, ADS and per ADS data)
		December 31,		December 31,		December 31,
		2014		2015		2015
		RMB		RMB		US$
Assets
Current assets
Cash and cash equivalents		475,028		928,934		143,403
Short-term deposits		4,214,576		1,894,946		292,529
Restricted short-term deposits		100,000		389,221		60,085
Accounts receivable, net		257,436		132,353		20,432
Inventory		1,445		14,385		2,221
Amount due from related parties		61,073		5,297		818
Prepayments and other current assets		204,139		147,823		22,822
Deferred tax assets		111,436		116,921		18,049
Total current assets		5,425,133		3,629,880		560,359
Non-current assets
Deferred tax assets		1,392		3,363		519
Investments		186,654		567,557		87,616
Property and equipment, net		234,228		843,449		130,206
Intangible assets, net		154,034		146,437		22,606
Goodwill		300,382		151,638		23,409
Other non-current assets		560,971		1,985,714		306,541
Total non-current assets		1,437,661		3,698,158		570,897
Total assets		6,862,794		7,328,038		1,131,256
Liabilities and shareholders' equity
Current liabilities
Accounts payable		101,525		129,819		20,041
Deferred revenue		356,150		385,300		59,480
Advances from customers		34,127		55,086		8,504
Income taxes payable		89,161		107,403		16,580
Accrued liabilities and other current liabilities		478,703		681,889		105,266
Amounts due to related parties		30,892		24,917		3,847
Total current liabilities		1,090,558		1,384,414		213,718
Non-current liabilities
Convertible debt		2,447,980		2,597,403		400,970
Long-term payable		183,000		-		-
Deferred revenue		24,383		20,752		3,204
Deferred tax liabilities		26,709		16,817		2,596
Total non-current liabilities		2,682,072		2,634,972		406,770
Total liabilities		3,772,630		4,019,386		620,488

YY INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(All amounts in thousands, except share, ADS and per ADS data)
		December 31,				December 31,				December 31,
		2014				2014				2015
		RMB				RMB				US$
Mezzanine equity		-				61,833				9,545
Shareholders' equity
Class A common shares (US$0.00001 par value; 10,000,000,000 shares authorized, 706,173,568 shares issued and outstanding as of December 31, 2014 and 728,227,848  shares issued and outstanding as of December 31, 2015,  respectively)		43				43				7
Class B common shares (US$0.00001 par value; 1,000,000,000 shares authorized, 427,352,696 shares issued and outstanding as of December 31, 2014 and 369,557,976 shares issued and outstanding as of December 31, 2015, respectively)		30				27				4
Additional paid-in capital		2,900,458				2,011,799				310,568
Statutory reserves		56,469				56,507				8,723
Retained earnings		173,963				1,207,168				186,355
Accumulated other comprehensive losses		(40,799	)			(36,385	)			(5,617	)
Noncontrolling interests		-				7,660				1,183
Total shareholders' equity		3,090,164				3,246,819				501,223
Total liabilities, mezzanine equity and shareholders' equity		6,862,794				7,328,038				1,131,256

YY INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(All amounts in thousands, except share, ADS and per ADS data)
	Three Months Ended																Twelve Months Ended
		December				September				December				December				December				December				December
		31,				30,				31,				31,				31,				31,				31,
		2014				2015				2015				2015				2014				2015				2015
		RMB				RMB				RMB				US$				RMB				RMB				US$
Net revenues
Internet value-added service
—Online music and entertainment		676,192				854,306				1,144,998				176,757				2,109,503				3,320,052				512,528
—Online games		229,398				168,332				172,398				26,614				811,699				771,882				119,158
—Online dating		93,497				172,641				189,194				29,207				194,134				651,019				100,500
—Other IVAS		141,146				222,797				325,427				50,237				415,689				918,006				141,716
Other revenues		30,405				71,886				67,827				10,471				147,343				236,290				36,477
Total net revenue		1,170,638				1,489,962				1,899,844				293,286				3,678,368				5,897,249				910,379
Cost of revenues(1)		(624,494	)			(905,489	)			(1,168,239	)			(180,345	)			(1,849,149	)			(3,579,744	)			(552,617	)
Gross profit		546,144				584,473				731,605				112,941				1,829,219				2,317,505				357,762
Operating expenses(1)
Research and development expenses		(115,425	)			(153,008	)			(152,678	)			(23,569	)			(431,188	)			(548,799	)			(84,720	)
Sales and marketing expenses		(49,021	)			(84,074	)			(114,174	)			(17,625	)			(102,527	)			(312,870	)			(48,299	)
General and administrative expenses		(57,762	)			(147,312	)			(87,788	)			(13,552	)			(223,019	)			(358,474	)			(55,339	)
Goodwill impairment		-				(199,425	)			-				-				-				(310,124	)			(47,875	)
Fair value change of contingent consideration		-				182,476				-				-				-				292,471				45,150
Total operating expenses		(222,208	)			(401,343	)			(354,640	)			(54,746	)			(756,734	)			(1,237,796	)			(191,083	)
Other income		2,355				17,156				32,814				5,066				6,319				82,300				12,705
Operating income		326,291				200,286				409,779				63,261				1,078,804				1,162,009				179,384
Other non-operating income/(expenses)		36,714				-				-				-				36,714				(2,165	)			(334	)
Gain on disposal of an equity investment		-				-				-				-				999				-				-
Foreign currency exchange gains (losses), net		4,096				(37,119	)			187				29				(10,399	)			(38,099	)			(5,881	)
Interest expense		(18,610	)			(24,983	)			(32,016	)			(4,942	)			(56,607	)			(97,125	)			(14,994	)
Interest income		48,595				30,555				26,185				4,042				164,969				137,892				21,287
Income before income tax expenses		397,086				168,739				404,135				62,390				1,214,480				1,162,512				179,462
Income tax expenses		(29,079	)			(45,862	)			(51,561	)			(7,960	)			(154,283	)			(178,327	)			(27,529	)
Income before share of income in equity method investments, net of income taxes		368,007				122,877				352,574				54,430				1,060,197				984,185				151,933
Share of income in equity method investments, net of income taxes		4,790				3,567				3,233				499				4,275				14,120				2,180
Net income		372,797				126,444				355,807				54,929				1,064,472				998,305				154,113
Less: Net loss attributable to non-controlling interest		-				(29,930	)			(3,409	)			(526	)			-				(34,938	)			(5,393	)
Net income attributable to YY Inc.		372,797				156,374				359,216				55,455				1,064,472				1,033,243				159,506
Other comprehensive (loss)  income :
Foreign currency translation adjustments, net of nil tax		(5,799	)			673				(360	)			(56	)			3,638				4,414				681
Comprehensive income attributable to YY Inc.		366,998				157,047				358,856				55,399				1,068,110				1,037,657				160,187
Net income per ADS
—basic		6.42				2.80				6.42				0.99				18.46				18.37				2.84
—diluted		6.15				2.75				6.24				0.96				17.76				17.96				2.77
Weighted average number of ADS used in calculating net income per ADS
—basic		58,081,100				55,918,954				55,976,338				55,976,338				57,657,035				56,259,499				56,259,499
—diluted		63,684,904				56,884,168				60,655,008				60,655,008				59,927,174				57,541,558				57,541,558
(1)  Share-based compensation was allocated in cost of revenues and operating expenses as follows:
	Three Months Ended																Twelve Months Ended
		December				September				December				December				December				December				December
		31,				30,				31,				31,				31,				31,				31,
		2014				2015				2015				2015				2014				2015				2015
		RMB				RMB				RMB				US$				RMB				RMB				US$
Cost of revenues		5,658				8,723				8,871				1,369				18,037				23,963				3,699
Research and development expenses		14,492				27,121				29,240				4,514				54,141				70,951				10,953
Sales and marketing expenses		1,070				1,191				1,089				168				2,807				3,283				507
General and administrative expenses		16,802				43,695				22,009				3,398				59,647				87,175				13,458

YY INC.
Reconciliations of GAAP and Non-GAAP Results
(All amounts in thousands, except share, ADS and per ADS data)
	Three Months Ended								Twelve Months Ended
	December		September		December		December		December		December		December
	31,		30,		31,		31,		31,		31,		31,
	2014		2015		2015		2015		2014		2015		2015
	RMB		RMB		RMB		US$		RMB		RMB		US$
Operating income	326,291		200,286		409,779		63,261		1,078,804		1,162,009		179,384
Share-based compensation expenses	38,022		80,730		61,209		9,449		134,632		185,372		28,617
Non-GAAP operating income	364,313		281,016		470,988		72,710		1,213,436		1,347,381		208,001
Net income attributable to YY Inc.	372,797		156,374		359,216		55,455		1,064,472		1,033,243		159,506
Share-based compensation expenses	38,022		80,730		61,209		9,449		134,632		185,372		28,617
Non-GAAP net income attributable to YY Inc.	410,819		237,104		420,425		64,904		1,199,104		1,218,615		188,123
Non-GAAP net income per ADS
—Basic	7.07		4.24		7.51		1.16		20.80		21.66		3.34
—Diluted	6.74		4.17		7.25		1.12		20.01		21.18		3.27
Weighted average numbers of ADS used in calculating Non-GAAP net income per ADS:
—Basic	58,081,100		55,918,954		55,976,338		55,976,338		57,657,035		56,259,499		56,259,499
—Diluted	63,684,904		56,884,168		60,655,008		60,655,008		59,927,174		57,541,558		57,541,558

YY INC.
UNAUDITED SEGMENT REPORT
(All amounts in thousands, except share, ADS and per ADS data)
	Three Months Ended
	December 31, 2015
						YY IVAS				Huya				100
	YY IVAS		Others			and others				broadcasting				Education				Total				Total
	RMB		RMB			RMB				RMB				RMB				RMB				US$
Net revenues
Internet value-added service
—Online music and entertainment	1,144,998		-			1,144,998				-				-				1,144,998				176,757
—Online games	172,398		-			172,398				-				-				172,398				26,614
—Online dating	189,194		-			189,194				-				-				189,194				29,207
—Other IVAS	191,781		-			191,781				133,646				-				325,427				50,237
Other revenues	-		31,473			31,473				-				36,354				67,827				10,471
Total net revenue	1,698,371		31,473			1,729,844				133,646				36,354				1,899,844				293,286
Cost of revenues(1)						(930,954	)			(203,297	)			(33,988	)			(1,168,239	)			(180,345	)
Gross profit (loss)						798,890				(69,651	)			2,366				731,605				112,941
Operating expenses(1)
Research and development expenses						(124,330	)			(20,131	)			(8,217	)			(152,678	)			(23,569	)
Sales and marketing expenses						(94,192	)			(11,215	)			(8,767	)			(114,174	)			(17,625	)
General and administrative expenses						(71,847	)			(6,926	)			(9,015	)			(87,788	)			(13,552	)
Total operating expenses						(290,369	)			(38,272	)			(25,999	)			(354,640	)			(54,746	)
Other income						32,814				-				-				32,814				5,066
Operating income (loss)						541,335				(107,923	)			(23,633	)			409,779				63,261
(1)  Share-based compensation was allocated in cost of revenues and operating expenses as follows:
	Three Months Ended
	December 31, 2015
						YY IVAS				Huya				100
						and others				broadcasting				Education				Total				Total
						RMB				RMB				RMB				RMB				US$
Cost of revenues						8,104				639				128				8,871				1,369
Research and development expenses						24,373				2,246				2,621				29,240				4,514
Sales and marketing expenses						938				151				-				1,089				168
General and administrative expenses						17,430				146				4,433				22,009				3,398
YY 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
					December 31, 2015
						YY IVAS				Huya				100
						and others				broadcasting				Education				Total				Total
						RMB				RMB				RMB				RMB				US$
Operating income (loss)						541,335				(107,923	)			(23,633	)			409,779				63,261
Share-based compensation expenses						50,845				3,182				7,182				61,209				9,449
Non-GAAP operating income (loss)						592,180				(104,741	)			(16,451	)			470,988				72,710
YY INC.
UNAUDITED SEGMENT REPORT
(All amounts in thousands, except share, ADS and per ADS data)
	Three Months Ended
	September 30, 2015
						YY IVAS				Huya				100
	YY IVAS		Others			and others				broadcasting				Education				Total				Total
	RMB		RMB			RMB				RMB				RMB				RMB				US$
Net revenues
Internet value-added service
—Online music and entertainment	854,306		-			854,306				-				-				854,306				134,418
—Online games	168,332		-			168,332				-				-				168,332				26,486
—Online dating	172,641		-			172,641				-				-				172,641				27,164
—Other IVAS	140,420		-			140,420				82,377				-				222,797				35,055
Other revenues	-		32,222			32,222				-				39,664				71,886				11,311
Total net revenue	1,335,699		32,222			1,367,921				82,377				39,664				1,489,962				234,434
Cost of revenues(1)						(695,373	)			(171,212	)			(38,904	)			(905,489	)			(142,471	)
Gross profit (loss)						672,548				(88,835	)			760				584,473				91,963
Operating expenses(1)
Research and development expenses						(123,378	)			(18,233	)			(11,397	)			(153,008	)			(24,075	)
Sales and marketing expenses						(62,754	)			(8,788	)			(12,532	)			(84,074	)			(13,228	)
General and administrative expenses						(72,254	)			(6,021	)			(69,037	)			(147,312	)			(23,178	)
Goodwill impairment						(128,034	)			-				(71,391	)			(199,425	)			(31,378	)
Fair value change of contingent consideration						108,858				-				73,618				182,476				28,711
Total operating expenses						(277,562	)			(33,042	)			(90,739	)			(401,343	)			(63,148	)
Other income						17,156				-				-				17,156				2,699
Operating income (loss)						412,142				(121,877	)			(89,979	)			200,286				31,514
(1)  Share-based compensation was allocated in cost of revenues and operating expenses as follows:
	Three Months Ended
	September 30, 2015
						YY IVAS				Huya				100
						and others				broadcasting				Education				Total				Total
						RMB				RMB				RMB				RMB				US$
Cost of revenues						8,194				367				162				8,723				1,372
Research and development expenses						23,065				1,559				2,497				27,121				4,267
Sales and marketing expenses						1,189				2				-				1,191				187
General and administrative expenses						15,381				130				28,184				43,695				6,875
YY 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, 2015
						YY IVAS				Huya				100
						and others				broadcasting				Education				Total				Total
						RMB				RMB				RMB				RMB				US$
Operating income (loss)						412,142				(121,877	)			(89,979	)			200,286				31,514
Share-based compensation expenses						47,829				2,058				30,843				80,730				12,701
Non-GAAP operating income (loss)						459,971				(119,819	)			(59,136	)			281,016				44,215

 

Investor Relations Contact

YY Inc.
Yuffie Fu
Tel: +86 (20) 2916-2000
Email:IR@YY.com

ICR, Inc. 
Charles Eveslage
Tel: +1 (646) 915-1611
Email:IR@YY.com