GUANGZHOU, China, March 14, 2017 (GLOBE NEWSWIRE) -- YY Inc. (NASDAQ:YY) ("YY" or the "Company"), a live streaming platform, today announced its unaudited financial results for the fourth quarter and full year 2016.

Fourth Quarter 2016 Highlights

• Net revenues increased by 30.8% to RMB2,484.2 million (US$357.8 million) from RMB1,899.8 million in the corresponding period of 2015.
• Net income attributable to YY increased by 59.3% to RMB572.3 million (US$82.4 million) from RMB359.2 million in the corresponding period of 2015.
• Non-GAAP net income attributable to YY increased by 42.4% to RMB598.6 million (US$86.2 million) from RMB420.4 million in the corresponding period of 2015.

Full Year 2016 Highlights

• Net revenues increased by 39.1% to RMB8,204.1 million (US$1,181.6 million) from RMB5,897.2 million in 2015.
• Net income attributable to YY increased by 47.5% to RMB1,523.9 million (US$219.5 million) from RMB1,033.2 million in 2015.
• Non-GAAP net income attributable to YY increased by 38.0% to RMB1,681.2 million (US$242.1 million) from RMB1,218.6 million in 2015.

"We are delighted to have delivered another quarter of solid results in the fourth quarter of 2016," said Mr. Zhou Chen, Chief Executive Officer of YY. "In addition to our robust financial performance in the fourth quarter, our mobile MAU reached 56.0 million, representing a 4.8% increase from the previous quarter, and our PC MAU was stable at 96.1 million. Our solid financial results and user numbers are due to the continued strengthening of our product and content offerings and our dedication to the development of new and diverse market content. For example, the introduction of new vertical content like YY Live's outdoor and travel and the expansion of our mobile game live broadcasting content for the Huya broadcasting platform are key components for expanding our content offering. Additionally, in order to further strengthen user stickiness across our platform, we began to encourage more users from both YY Live and Huya broadcasting to share more live broadcasting sessions based on social relationships and locations. Going forward, we will introduce even more content verticals to YY, and in turn, we are confident that we can further expand our market share and maintain our leading position in this massive growth industry."

Mr. Eric He, Chief Financial Officer of YY, further commented, "In the fourth quarter of 2016, we continued to see strong growth momentum in our revenues, with total net revenues increasing by 30.8% year over year to RMB2.5 billion, primarily attributable to the healthy growth in our total number of live streaming paying users which grew by 91.9% year over year to 5.2 million. Importantly, despite the intense competitive landscape in the live streaming industry, our live streaming revenues for the full year of 2016 witnessed a remarkable 54.8% year over year growth to over seven billion, and our Non-GAAP profit margin for the year exceeded 20%, which is a testament to the solid strength and long-term competitiveness of both of our platforms. As Huya broadcasting's revenue growth continues to accelerate, its margins continue to improve, which ultimately strengthens our long-term profitability."

Fourth Quarter 2016 Financial Results

NET REVENUES¹
Net revenues increased by 30.8% to RMB2,484.2 million (US$357.8 million) in the fourth quarter of 2016 from RMB1,899.8 million in the corresponding period of 2015, primarily driven by the increase in live streaming revenues. Live streaming revenues increased by 41.7% to RMB2,218.2 million (US$319.5 million) in the fourth quarter of 2016 from RMB1,565.2 million in the corresponding period of 2015. Live streaming revenues from the YY Live segment in the fourth quarter of 2016 was RMB1,883.8 million (US$271.3 million) and live streaming revenues from the Huya segment in the fourth quarter of 2016 was RMB334.3 million (US$48.2 million).

Revenues from online games were RMB125.4 million (US$18.1 million) in the fourth quarter of 2016, as compared to RMB172.4 million in the corresponding period of 2015, which primarily reflected the continued softness in China's web game market.

Revenues from membership were RMB74.7 million (US$10.8 million) in the fourth quarter of 2016, as compared to RMB80.8 million in the corresponding period of 2015.

Other revenues, mainly including revenues from the Company's online education platform and online advertising revenues, were RMB65.9 million (US$9.5 million) in the fourth quarter of 2016, compared with RMB81.4 million in the corresponding period of 2015.

COST OF REVENUES AND GROSS PROFIT
Cost of revenues increased by 33.5% to RMB1,559.6 million (US$224.6 million) in the fourth quarter of 2016 from RMB1,168.2 million in the corresponding period of 2015, primarily attributable to an increase in revenue-sharing fees and content costs to RMB1,222.2 million (US$176.0 million) in the fourth quarter of 2016 from RMB807.3 million in the corresponding period of 2015. The increase in revenue-sharing fees and content costs paid to performers, channel owners and content providers was slightly higher than the increase in live streaming revenues due to more diverse content offerings in the fourth quarter. In addition, bandwidth costs slightly increased to RMB168.9 million (US$24.3 million) in the fourth quarter of 2016 from RMB161.1 million in the corresponding period of 2015, primarily reflecting the continued user base expansion and video quality improvements, but partially offset by the Company's improved efficiency and pricing terms.

Gross profit increased by 26.4% to RMB924.6 million (US$133.2 million) in the fourth quarter of 2016 from RMB731.6 million in the corresponding period of 2015. Gross margin was 37.2% in the fourth quarter of 2016, as compared to 38.5% in the corresponding period of 2015.

OPERATING INCOME
Operating expenses for the fourth quarter of 2016 were RMB495.5 million (US$71.4 million), as compared to RMB354.6 million in the corresponding period of 2015.

Operating income in the fourth quarter of 2016 increased by 51.7% to RMB621.5 million (US$89.5 million) from RMB409.8 million in the corresponding period of 2015. Operating margin in the fourth quarter of 2016 was 25.0%, as compare to 21.6% in the corresponding period of 2015.

Non-GAAP operating income² increased by 37.6% to RMB647.9 million (US$93.3 million) in the fourth quarter of 2016 from RMB471.0 million in the corresponding period of 2015. Non-GAAP operating margin³ was 26.1% in the fourth quarter of 2016, as compared to 24.8% in the corresponding period of 2015.

NET INCOME
Net income attributable to YY Inc. increased by 59.3% to RMB572.3 million (US$82.4 million) in the fourth quarter of 2016 from RMB359.2 million in the corresponding period of 2015. Net margin in the fourth quarter of 2016 increased to 23.0% from 18.9% in the corresponding period of 2015.

Non-GAAP net income attributable to YY Inc.⁴ increased by 42.4% to RMB598.6 million (US$86.2 million) from RMB420.4 million in the corresponding period of 2015. Non-GAAP net margin⁵ in the fourth quarter of 2016 increased to 24.1% from 22.1% in the corresponding period of 2015.

NET INCOME PER ADS
Diluted net income per ADS⁶ increased by 56.1% to RMB9.74 (US$1.40) in the fourth quarter of 2016 from RMB6.24 in the corresponding period of 2015.

Non-GAAP diluted net income per ADS⁷ increased by 40.3% to RMB10.17 (US$1.46) in the fourth quarter of 2016 from RMB7.25 in the corresponding period of 2015.

BALANCE SHEET AND CASH FLOWS
As of December 31, 2016, the Company had cash and cash equivalents of RMB1,579.7 million (US$227.5 million) and short-term deposits of RMB3,751.5 million (US$540.3 million). For the fourth quarter of 2016, net cash from operating activities was RMB996.5 million (US$143.5 million).

SHARES OUTSTANDING
As of December 31, 2016, the Company had a total of 1,109.7 million common shares outstanding, or the equivalent of 55.5 million ADSs outstanding.

FULL YEAR 2016 FINANCIAL RESULTS
For the full year of 2016, net revenues increased by 39.1% to RMB8,204.1 million (US$1,181.6 million) from RMB5,897.2 million in 2015, primarily driven by a 54.8% year-over-year increase in live streaming revenues.

Net income attributable to YY Inc. for the full year of 2016 increased by 47.5% to RMB1,523.9 million (US$219.5 million) from RMB1,033.2 million in 2015. Net margin for the full year of 2016 increased to 18.6% from 17.5% in 2015.

Non-GAAP net income attributable to YY Inc. for the full year of 2016 increased by 38.0% to RMB1,681.2 million (US$242.1 million) from RMB1,218.6 million in 2015. Non-GAAP net margin was 20.5% for the full year of 2016, as compared to 20.7% for the full year of 2015.

Diluted net income per ADS for the full year of 2016 increased to RMB26.40 (US$3.80) from RMB17.96 in the prior year. Non-GAAP diluted net income per ADS for the full year of 2016 increased to RMB28.98 (US$4.17) from RMB21.18 in the prior year.

For the full year of 2016, net cash from operating activities was RMB2,421.1 million (US$348.7 million).

Business Outlook
For the first quarter of 2017, the Company expects its net revenues to be between RMB2.2 billion and RMB2.3 billion, representing a year-over-year growth of approximately 33.4% to 39.5%. These forecasts reflect the Company's current and preliminary view on the market and operational conditions, which are subject to change.

Conference Call Information
The Company will hold a conference call on March 14, 2017 at 8:00 am Eastern Time or 8:00 pm 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:	400-1200-654
Hong Kong:	+852-3018-6776
Conference ID:	# 80888723

The replay will be accessible through March 22, 2017 by dialing the following numbers:

United States Toll Free:	+1-855-452-5696
International:	+61-2-9003-4211
Conference ID:	# 80888723

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 RMB6.9430 to US$1.00, the noon buying rate in effect on December 31, 2016 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 live streaming platform that enables users to interact in live 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 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. 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" near the end of this release.

¹From the third quarter of 2016, the Company changed revenue segmenting to live streaming, online games, membership and others. The Company believes this new method better captures the way it generates revenues and is more transparent and reliable than breaking down revenues by business lines as previously presented.

²Non-GAAP operating income is a non-GAAP financial measure, which is defined as operating income excluding share-based compensation expenses.

³Non-GAAP operating margin is a non-GAAP financial measure, which is defined as non-GAAP operating income as a percentage of net revenues.

⁴Non-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.

⁵Non-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.

⁶ADS 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.

⁷Non-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, 2015		December 31, 2016		December 31, 2016
		RMB		RMB		US$
Assets
Current assets
Cash and cash equivalents		928,934		1,579,743		227,530
Short-term deposits		1,894,946		3,751,519		540,331
Restricted short-term deposits		389,221		-		-
Accounts receivable, net		132,353		169,571		24,423
Inventory		14,385		2,266		326
Amount due from related parties		5,297		135,245		19,479
Prepayments and other current assets		147,823		224,732		32,369
Deferred tax assets		116,921		107,309		15,456
Total current assets		3,629,880		5,970,385		859,914
Non-current assets
Deferred tax assets		3,363		10,502		1,513
Investments		567,557		918,602		132,306
Property and equipment, net		843,449		838,750		120,805
Land use rights, net		-		1,872,394		269,681
Intangible assets, net		146,437		58,926		8,487
Goodwill		151,638		14,300		2,060
Other non-current assets		1,960,430		101,933		14,681
Total non-current assets		3,672,874		3,815,407		549,533
Total assets		7,302,754		9,785,792		1,409,447
Liabilities ,mezzanine equity and shareholders' equity
Current liabilities
Convertible bonds(1)		-		2,768,469		398,742
Accounts payable		129,819		137,107		19,748
Deferred revenue		385,300		430,683		62,031
Advances from customers		55,086		56,152		8,088
Income taxes payable		107,403		140,754		20,273
Accrued liabilities and other current liabilities		681,889		1,066,038		153,541
Amounts due to related parties		24,917		91,245		13,142
Total current liabilities		1,384,414		4,690,448		675,565
Non-current liabilities
Convertible bonds(2)		2,572,119		-		-
Deferred revenue		20,752		25,459		3,667
Deferred tax liabilities		16,817		8,058		1,161
Total non-current liabilities		2,609,688		33,517		4,828
Total liabilities		3,994,102		4,723,965		680,393

YY INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED) (All amounts in thousands, except share, ADS and per ADS data)
		December 31, 2015			December 31, 2016			December 31, 2016
		RMB			RMB			US$
Mezzanine equity		61,833			9,272			1,335
Shareholders' equity
Class A common shares (US$0.00001 par value; 10,000,000,000 and 10,000,000,000 shares authorized, 728,227,848 and  750,115,028 shares issued and outstanding as of December 31, 2015 and December 31, 2016, respectively)		43			44			6
Class B common shares (US$0.00001 par value; 1,000,000,000 and 1,000,000,000 shares authorized, 369,557,976 and 359,557,976 shares issued and outstanding as of December 31, 2015 and December 31, 2016, respectively)		27			26			4
Additional paid-in capital		2,011,799			2,165,766			311,935
Statutory reserves		56,507			58,857			8,477
Retained earnings		1,207,168			2,728,736			393,020
Accumulated other comprehensive (loss) income		(36,385	)		93,066			13,404
Non-controlling interests		7,660			6,060			873
Total shareholders' equity		3,246,819			5,052,555			727,719
Total liabilities, mezzanine equity and
shareholders' equity		7,302,754			9,785,792			1,409,447

^{_______________________________________________}

⁽¹⁾  Convertible bonds represent Convertible Senior Notes which may be redeemed within one year.
⁽²⁾ Effectively January 2016, ASU 2015-3 issued by FASB requires entities to present the issuance costs of bonds in the balance sheet as a direct deduction from the related bonds rather than assets. Accordingly, the Company retrospectively reclassified RMB25.3 million of issuance cost of bonds from other non-current assets into convertible bonds as of December 31, 2015.

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 31, 2015		September 30, 2016			December 31, 2016			December 31, 2016				December  31, 2015		December 31, 2016			December 31, 2016
		RMB		RMB			RMB			US$				RMB		RMB			US$
Net revenues
Live streaming		1,565,230			1,790,373			2,218,190			319,486			4,539,857			7,027,227			1,012,131
Online games		172,398			149,530			125,424			18,065			771,882			634,325			91,362
Membership		80,828			68,768			74,650			10,752			291,310			284,860			41,028
Others		81,388			81,134			65,886			9,490			294,200			257,638			37,108
Total net revenue		1,899,844			2,089,805			2,484,150			357,793			5,897,249			8,204,050			1,181,629
Cost of revenues(1)		(1,168,239	)		(1,275,002	)		(1,559,557	)		(224,623	)		(3,579,744	)		(5,103,430	)		(735,047	)
Gross profit		731,605			814,803			924,593			133,170			2,317,505			3,100,620			446,582
Operating expenses(1)
Research and development expenses		(152,678	)		(163,236	)		(160,118	)		(23,062	)		(548,799	)		(675,230	)		(97,253	)
Sales and marketing expenses		(114,174	)		(109,075	)		(111,533	)		(16,064	)		(312,870	)		(387,268	)		(55,778	)
General and administrative expenses		(87,788	)		(102,683	)		(206,192	)		(29,698	)		(358,474	)		(482,437	)		(69,485	)
Goodwill impairment		-			-			(17,665	)		(2,544	)		(310,124	)		(17,665	)		(2,544	)
Fair value change of contingent consideration		-			-			-			-			292,471			-			-
Total operating expenses		(354,640	)		(374,994	)		(495,508	)		(71,368	)		(1,237,796	)		(1,562,600	)		(225,060	)
Gain on deconsolidation and disposal of  subsidiaries		-			-			127,434			18,354			-			103,960			14,973
Other income		32,814			33,065			65,027			9,366			82,300			129,504			18,652
Operating income		409,779			472,874			621,546			89,522			1,162,009			1,771,484			255,147
Gain on partial disposal of associates		-			-			25,061			3,610			-			25,061			3,610
Interest expense		(32,016	)		(20,357	)		(20,758	)		(2,990	)		(97,125	)		(81,085	)		(11,679	)
Interest income		26,185			17,162			26,480			3,814			137,892			67,193			9,678
Foreign currency exchange gains (losses), net		187			(16	)		385			55			(38,099	)		1,158			167
Other non-operating expense		-			-			-			-			(2,165	)		-			-
Income before income tax expenses		404,135			469,663			652,714			94,011			1,162,512			1,783,811			256,923
Income tax expenses		(51,561	)		(69,909	)		(85,804	)		(12,358	)		(178,327	)		(280,514	)		(40,402	)
Income before share of income (loss) in equity method investments, net of income taxes		352,574			399,754			566,910			81,653			984,185			1,503,297			216,521
Share of  income (loss)  in equity method investments, net of income taxes		3,233			(1,867	)		4,400			634			14,120			8,279			1,192
Net Income		355,807			397,887			571,310			82,287			998,305			1,511,576			217,713
Less: Net loss attributable to the non-controlling interest shareholders and the mezzanine classified non-controlling interest shareholders		(3,409	)		(2,152	)		(944	)		(136	)		(34,938	)		(12,342	)		(1,778	)
Net income attributable to YY Inc.		359,216			400,039			572,254			82,423			1,033,243			1,523,918			219,491

YY INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (CONTINUED) (All amounts in thousands, except share, ADS and per ADS data)
		Three Months Ended												Twelve Months Ended
		December 31, 2015		September 30, 2016			December 31, 2016			December 31, 2016				December 31, 2015	December 31, 2016			December 31, 2016
		RMB		RMB			RMB			US$				RMB	RMB			US$
Net income attributable to YY Inc.		359,216			400,039			572,254			82,423			1,033,243		1,523,918			219,491
Other comprehensive income :
Unrealized gain (loss) of available-for-sales securities		-			13,354			(55,738	)		(8,028	)		-		134,768			19,411
Foreign currency translation adjustments, net of nil tax		(360	)		(562	)		(3,646	)		(525	)		4,414		(5,317	)		(766	)
Comprehensive income attributable to YY Inc.		358,856			412,831			512,870			73,870			1,037,657		1,653,369			238,136
Net income per ADS
—Basic		6.42			7.07			10.11			1.46			18.37		27.04			3.89
—Diluted		6.24			6.90			9.74			1.40			17.96		26.40			3.80
Weighted average number of ADS used in calculating net income per ADS
—Basic		55,976,338			56,560,174			56,613,257			56,613,257			56,259,499		56,367,166			56,367,166
—Diluted		60,655,008			60,814,662			60,914,063			60,914,063			57,541,558		60,805,566			60,805,566

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

		Three Months Ended					Twelve Months Ended
		December 31, 2015	September 30, 2016	December 31, 2016	December 31, 2016			December 31, 2015	December 31, 2016	December 31, 2016
		RMB	RMB	RMB	US$			RMB	RMB	US$
Cost of revenues		8,871	3,701	3,440	495			23,963	15,894	2,289
Research and development expenses		29,240	11,120	13,923	2,005			70,951	78,816	11,352
Sales and marketing expenses		1,089	612	715	103			3,283	3,107	448
General and administrative expenses		22,009	20,086	8,270	1,191			87,175	59,469	8,565

YY INC. RECONCILIATION OF GAAP AND NON-GAAP RESULTS (All amounts in thousands, except share, ADS and per ADS data)
		Three Months Ended									Twelve Months Ended
		December 31, 2015		September 30, 2016		December 31, 2016		December 31, 2016			December 31, 2015		December 31, 2016		December 31, 2016
		RMB		RMB		RMB		US$			RMB		RMB		US$
Operating income		409,779		472,874		621,546		89,522			1,162,009		1,771,484		255,147
Share-based compensation expenses		61,209		35,519		26,348		3,794			185,372		157,286		22,654
Non-GAAP operating income		470,988		508,393		647,894		93,316			1,347,381		1,928,770		277,801
Net income attributable to YY Inc.		359,216		400,039		572,254		82,423			1,033,243		1,523,918		219,491
Share-based compensation expenses		61,209		35,519		26,348		3,794			185,372		157,286		22,654
Non-GAAP net income attributable to YY Inc.		420,425		435,558		598,602		86,217			1,218,615		1,681,204		242,145
Non-GAAP net income per ADS
—Basic		7.51		7.70		10.57		1.52			21.66		29.83		4.30
—Diluted		7.25		7.48		10.17		1.46			21.18		28.98		4.17
Weighted average number of ADS used in calculating Non-GAAP  net income per ADS
—Basic		55,976,338		56,560,174		56,613,257		56,613,257			56,259,499		56,367,166		56,367,166
—Diluted		60,655,008		60,814,662		60,914,063		60,914,063			57,541,558		60,805,566		60,805,566

YY INC. UNAUDITED SEGMENT REPORT (All amounts in thousands, except share, ADS and per ADS data)
		Three Months Ended
		December 31, 2016
		YY Live			Huya broadcasting			100 Education			Total			Total
		RMB			RMB			RMB			RMB			US$
Net revenues
Live streaming		1,883,841			334,349			-			2,218,190			319,486
Online games		125,424			-			-			125,424			18,065
Membership		74,650			-			-			74,650			10,752
Others		12,952			4,926			48,008			65,886			9,490
Total net revenue		2,096,867			339,275			48,008			2,484,150			357,793
Cost of revenues(1)		(1,160,084	)		(374,178	)		(25,295	)		(1,559,557	)		(224,623							)
Gross profit (loss)		936,783			(34,903	)		22,713			924,593			133,170
Operating expenses(1)
Research and development expenses		(120,243	)		(35,831	)		(4,044	)		(160,118	)		(23,062							)
Sales and marketing expenses		(82,327	)		(16,281	)		(12,925	)		(111,533	)		(16,064							)
General and administrative expenses		(186,731	)		(11,206	)		(8,255	)		(206,192	)		(29,698							)
Goodwill impairment		(3,861	)		-			(13,804	)		(17,665	)		(2,544							)
Total operating expenses		(393,162	)		(63,318	)		(39,028	)		(495,508	)		(71,368							)
Gain on deconsolidation  and disposal of  subsidiaries		127,434									127,434			18,354
Other income		65,027			-			-			65,027			9,366
Operating income (loss)		736,082			(98,221	)		(16,315	)		621,546			89,522

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

		Three Months Ended
		December 31, 2016
		YY Live	Huya broadcasting	100 Education	Total	Total
		RMB	RMB	RMB	RMB	US$
Cost of revenues		2,271	1,105	64	3,440	495
Research and development expenses		10,302	2,618	1,003	13,923	2,005
Sales and marketing expenses		708	7	-	715	103
General and administrative expenses		5,263	2,999	8	8,270	1,191

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, 2016
			YY Live	Huya  broadcasting			100 Education				Total		Total
			RMB	RMB				RMB			RMB		US$
Operating income (loss)			736,082		(98,221	)		(16,315	)		621,546		89,522
Share-based compensation expenses			18,544		6,729			1,075			26,348		3,794
Non-GAAP operating income (loss)			754,626		(91,492	)		(15,240	)		647,894		93,316

YY INC. UNAUDITED SEGMENT REPORT (All amounts in thousands, except share, ADS and per ADS data)
		Three Months Ended
		September 30, 2016
		YY Live			Huya broadcasting			100 Education			Total			Total
		RMB			RMB			RMB			RMB			US$
Net revenues
Live streaming		1,593,495			196,878			-			1,790,373			268,482
Online games		149,530			-			-			149,530			22,423
Membership		68,768			-			-			68,768			10,312
Others		20,240			-			60,894			81,134			12,167
Total net revenue		1,832,033			196,878			60,894			2,089,805			313,384
Cost of revenues(1)		(972,553	)		(269,407	)		(33,042	)		(1,275,002	)		(191,198				)
Gross profit (loss)		859,480			(72,529	)		27,852			814,803			122,186
Operating expenses(1)
Research and development expenses		(125,637	)		(31,409	)		(6,190	)		(163,236	)		(24,479				)
Sales and marketing expenses		(80,373	)		(10,174	)		(18,528	)		(109,075	)		(16,357				)
General and administrative expenses		(70,514	)		(11,557	)		(20,612	)		(102,683	)		(15,398				)
Total operating expenses		(276,524	)		(53,140	)		(45,330	)		(374,994	)		(56,234				)
Other income		33,065			-			-			33,065			4,958
Operating income (loss)		616,021			(125,669	)		(17,478	)		472,874			70,910

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

		Three Months Ended
		September 30, 2016
		YY Live	Huya broadcasting	100 Education	Total	Total
		RMB	RMB	RMB	RMB	US$
Cost of revenues		2,726	934	41	3,701	555
Research and development expenses		7,985	2,357	778	11,120	1,668
Sales and marketing expenses		586	26	-	612	92
General and administrative expenses		4,383	2,229	13,474	20,086	3,012

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, 2016
			YY Live		Huya  broadcasting			100 Education			Total		Total
			RMB		RMB			RMB			RMB		US$
Operating income (loss)			616,021		(125,669	)		(17,478	)		472,874		70,910
Share-based compensation expenses			15,680		5,546			14,293			35,519		5,327
Non-GAAP operating income (loss)			631,701		(120,123	)		(3,185	)		508,393		76,237

YY INC. UNAUDITED SEGMENT REPORT (All amounts in thousands, except share, ADS and per ADS data)
		Three Months Ended
		December 31, 2015
		YY Live			Huya broadcasting			100 Education			Total			Total
		RMB			RMB			RMB			RMB			US$
Net revenues
Live streaming		1,431,584			133,646			-			1,565,230			241,630
Online games		172,398			-			-			172,398			26,614
Membership		80,828			-			-			80,828			12,478
Others		45,034			-			36,354			81,388			12,564
Total net revenue		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 Live	Huya broadcasting	100 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 Live		Huya  broadcasting		100 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

 

Investor Relations Contact

YY Inc.

Yuffie Fu

Tel: +86 (20) 8212-0000

Email: IR@YY.com



ICR, Inc.

Jessie Fan

Tel: +1 (646) 915-1611

Email: IR@YY.com

Source: YY Inc.

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