UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of August 2014

 


 

Commission File Number: 001-35729

 


 

YY INC.

 

Building 3-08, Yangcheng Creative Industry Zone

No. 309 Huangpu Avenue Middle

Tianhe District

Guangzhou 510655

The People’s Republic of China

(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x

 

Form 40-F o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

 

 



 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

YY INC.

 

 

 

 

 

By:

/s/ Eric He

 

Name:

Eric He

 

Title:

Chief Financial Officer

 

 

 

 

 

 

Date:   August 18, 2014

 

 

 

2



 

EXHIBIT INDEX

 

Exhibit No.

 

Description

 

 

 

99.1

 

Press Release

 

3


Exhibit 99.1

 

YY Reports Second Quarter 2014 Unaudited Financial Results

 

2Q14 Net Revenues Up 105.6% YOY to RMB841.0 Million

2Q14 Net Income Up139.0% YOY to RMB221.9 Million

2Q14 Non-GAAP Net Income Up 106.6% YOY to RMB258.4 Million

 

Guangzhou, China, August 6, 2014 — YY Inc. (NASDAQ: YY) (“YY” or the “Company”), a revolutionary real-time interactive social platform, today announced its unaudited financial results for the second quarter ended June 30, 2014.

 

Second Quarter 2014 Highlights

 

·                  Net revenues increased by 105.6% to RMB841.0 million (US$135.6 million) from RMB409.0 million in the corresponding period of 2013, primarily driven by a 118.3% increase in revenues from internet value-added services, or IVAS revenues.

·                  Net income attributable to YY Inc. increased by 139.0% to RMB221.9 million (US$35.8 million) from RMB92.8 million in the corresponding period of 2013.

·                  Non-GAAP net income attributable to YY Inc.1 increased by 106.6% to RMB258.4 million (US$41.6 million) from RMB125.1 million in the corresponding period of 2013.

 

Mr. David Xueling Li, Chief Executive Officer of YY, stated, “We are excited about our strong performance in the second quarter of 2014, as we continue to grow and strengthen our interactive social platform. Our online music and entertainment business once again exceeded our expectations, as revenues grew by 202.7% year-over-year and paying users grew by 77.6% year-over-year. In addition, this quarter witnessed the ascension of our online dating business, with revenues surging by 299.2% quarter-over-quarter. By utilizing our unique and powerful online communication capabilities, we continue to build new business lines that will broaden our product offering, elevate our brand and pave the way for further growth.  Having attracted over 100 million average monthly active users through the second quarter of 2014, we are tirelessly working to build new and innovative products, providing a comprehensive services marketplace that caters to our users’ ever-changing demands.”

 

Mr. Eric He, Chief Financial Officer of YY, commented, “In the second quarter, we once again achieved results which eclipsed our expectations on top line growth, driven primarily by increased user engagement and spending. In addition to music and entertainment, online game broadcasting continues to grow at a tremendous pace, with revenues increasing by 243.2% year-over-year. Moreover, net income attributable to YY grew by 139.0% year-over-year due to the expanding scale and leverage of our business operations. We also saw our non-GAAP operating margins improve slightly year-over-year, which we believe will remain stable going forward. Seeking to capitalize on the economies of scale inherent in both our unique business model and technology platform, we will continue to develop and introduce new services for our users.”

 

Second Quarter 2014 Financial Results

 

NET REVENUES

 

Net revenues increased by 105.6% to RMB841.0 million (US$135.6 million) in the second quarter of 2014 from RMB409.0 million in the corresponding period of 2013, primarily driven by an increase in IVAS revenues.

 


1  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.

 

1



 

IVAS revenues, which consisted of revenues from online music and entertainment, online games and other sources including the Company’s membership program, live game broadcasting and online dating, increased by 118.3% to RMB800.7 million (US$129.1 million) in the second quarter of 2014 from RMB366.7 million in the corresponding period of 2013. The overall increase primarily reflected increases in the number of paying users and average revenue per user (“ARPU”).

 

Revenues from online music and entertainment increased by 202.7% to RMB516.4 million (US$83.2 million) in the second quarter of 2014 from RMB170.6 million in the corresponding period of 2013. This increase primarily reflected a 77.6% year-over-year increase in the number of paying users to 1,128,000 and an increase in ARPU of 70.3% to RMB458 in the second quarter of 2014.

 

Revenues from online games increased by 9.5% to RMB166.9 million (US$26.9 million) in the second quarter of 2014 from RMB152.4 million in the corresponding period of 2013. This increase primarily reflected a year-over-year increase in ARPU of 10.1% to RMB381 from 438,000 paying users. The number of online games operated by the Company increased to 150 as of June 30, 2014 from 96 as of June 30, 2013.

 

Other IVAS revenues, which primarily consisted of the membership subscription fees, live game broadcasting and online dating, increased by 168.6% to RMB117.4 million (US$18.9 million) in the second quarter of 2014 from RMB43.7 million in the corresponding period of 2013. Revenues from the membership subscription fees increased by 53.8% to RMB48.6 million (US$7.8 million) in the second quarter of 2014 from RMB31.6 million in the corresponding period of 2013. This increase primarily reflected a 43.2% increase in the number of members to 921,000 as of June 30, 2014 from 643,000 as of June 30, 2013. Revenues from live game broadcasting increased by 243.2% to RMB31.1 million (US$5.0 million) in the second quarter of 2014 from RMB9.1 million in the corresponding period of 2013. Revenues from online dating increased by 299.2% to RMB29.2 million (US$4.7 million) in the second quarter of 2014 from RMB7.3 million in the first quarter of 2014.

 

Online advertising revenues decreased by 4.6% to RMB40.4 million (US$6.5 million) in the second quarter of 2014 from RMB42.3 million in the corresponding period of 2013.

 

COST OF REVENUES AND GROSS PROFIT

 

Cost of revenues increased by 122.5% to RMB424.8 million (US$68.5 million) in the second quarter of 2014 from RMB190.9 million in the corresponding period of 2013. This increase was primarily attributable to an increase in revenue-sharing fees and content costs to RMB256.0 million (US$41.3 million) in the second quarter of 2014 from RMB89.0 million in the corresponding period of 2013. This increase in revenue-sharing fees and content costs paid to performers, channel owners and content providers was primarily due to higher levels of user engagement and spending. In addition, bandwidth costs increased to RMB77.3 million (US$12.5 million) in the second quarter of 2014 from RMB45.1 million in the corresponding period of 2013.

 

Gross profit increased by 90.9% to RMB416.3 million (US$67.1 million) in the second quarter of 2014 from RMB218.1 million in the corresponding period of 2013. Gross margin was 49.5% in the second quarter of 2014 compared with 53.3% in the corresponding period of 2013. The decrease in gross margin was mainly attributable to the fact that a larger portion of revenues came from online music and entertainment, which led to higher corresponding revenue-sharing fees and content costs.

 

OPERATING INCOME

 

Operating expenses for the second quarter of 2014 increased by 30.7% to RMB179.5 million (US$28.9 million) from RMB137.4 million in the corresponding period of 2013. This increase was primarily attributable to an increase in research and development expenses and sales and marketing expenses which were associated with the general growth of the Company’s overall business.

 

2



 

Operating income in the second quarter of 2014 increased by 189.0% to RMB238.6 million (US$38.5 million) from RMB82.6 million in the corresponding period of 2013. Operating margin increased to 28.4% in the second quarter of 2014 from 20.2% in the corresponding period of 2013. The increase in operating margin was primarily due to increased operating leverage associated with the Company’s expansion.

 

Non-GAAP operating income2 increased by 139.7% to RMB275.1 million (US$44.3 million) in the second quarter of 2014 from RMB114.8 million in the corresponding period of 2013. Non-GAAP operating margin3 increased to 32.7% in the second quarter of 2014 from 28.1% in the corresponding period of 2013.

 

NET INCOME

 

Net income attributable to YY Inc. increased by 139.0% to RMB221.9 million (US$35.8 million) in the second quarter of 2014 from RMB92.8 million in the corresponding period of 2013. Net margin in the second quarter of 2014 increased to 26.4% from 22.7% in the corresponding period of 2013. Non-GAAP net income attributable to YY Inc.4 increased by 106.6% to RMB258.4 million (US$41.6 million) from RMB125.1 million in the corresponding period of 2013. Non-GAAP net margin5 increased slightly to 30.7% in the second quarter of 2014 from 30.6% in the corresponding period of 2013.

 

NET INCOME PER ADS

 

Diluted net income per ADS6 in the second quarter of 2014 increased by 134.8% to RMB3.71 (US$0.60), from RMB1.58 in the corresponding period of 2013.

 

Non-GAAP diluted net income per ADS7 in the second quarter of 2014 increased by 102.8% to RMB4.32 (US$0.70) from RMB2.13 in the corresponding period of 2013.

 

BALANCE SHEET AND CASH FLOWS

 

As of June 30, 2014, the Company had cash and cash equivalents of RMB0.9 billion (US$148.4 million) and short term deposits and restricted short-term deposits of RMB4.1 billion (US$658.5 million). For the second quarter of 2014, net cash from operating activities was RMB361.7 million (US$58.3 million).

 

SHARES OUTSTANDING

 

As of June 30, 2014, the Company had a total of 1.1 billion common shares outstanding, or the equivalent of 55.9 million ADSs outstanding.

 


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

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

4 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.

5 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.

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

7 Non-GAAP diluted net income (loss) per ADS is a non-GAAP financial measure, which is defined as non-GAAP net income (loss) attributable to common shareholders divided by weighted average number of diluted ADS.

 

3



 

Business Outlook

 

For the third quarter of 2014, the Company expects its net revenues to be between RMB925 million and RMB935 million, representing a year-over-year growth of approximately 90% to 92%. 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 Wednesday, August 6, 2014 at 9:00 pm Eastern Time or August 7, 2014 at 9:00 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:

+852-3051-2745

Conference ID:

#78522071

 

 

The replay will be accessible through August 14, 2014 by dialing the following numbers:

 

 

United States Toll Free:

+1-855-452-5696

International:

+61-2-9003-4211

Conference ID:

#78522071

 

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 RMB6.2036 to US$1.00, the noon buying rate in effect on June 30, 2014 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 games, karaoke, music concerts, education, live shows and conference calls.

 

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 YYs 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: YYs 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; YYs ability to monetize the user base; YYs 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.

 

4



 

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 (deficits), 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(loss)attributable to common shareholders, and basic and diluted non-GAAP net income(loss) 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 (loss) attributable to YY Inc. is net income (loss) 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 (loss) attributable to common shareholders is net income (loss) attributable to common shareholders excluding share-based compensation expenses. Basic and diluted non-GAAP net income (loss) per ADS is non-GAAP net income (loss) attributable to common shareholders divided by weighted average number of basic and diluted 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 (loss) 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.

 

Investor Relations Contact

 

YY Inc.

Yuffie Fu

Tel: (+86) 2029162000

 

5



 

Email:IR@YY.com

 

ICR, Inc.

Calvin Jiang

Tel: +1 (646) 915-1611

Email:IR@YY.com

 

6



 

YY INC.

UNAUDITED CONDENSEDCONSOLIDATED BALANCE SHEETS

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

 

 

 

December 31,
2013

 

June 30,
2014

 

June 30,
2014

 

 

 

RMB

 

RMB

 

US$

 

Assets

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Cash and cash equivalents

 

729,598

 

920,426

 

148,370

 

Short-term deposits

 

1,432,863

 

4,030,064

 

649,633

 

Restricted short-term deposits

 

 

55,000

 

8,866

 

Accounts receivable, net

 

100,101

 

129,076

 

20,807

 

Amount due from a related party

 

73

 

73

 

12

 

Prepayments and other current assets

 

67,533

 

89,694

 

14,458

 

Deferred tax assets

 

66,921

 

80,024

 

12,900

 

 

 

 

 

 

 

 

 

Total current assets

 

2,397,089

 

5,304,357

 

855,046

 

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

 

Deferred tax assets

 

625

 

735

 

118

 

Investments

 

62,029

 

100,828

 

16,253

 

Property and equipment, net

 

102,636

 

149,574

 

24,111

 

Intangible assets, net

 

29,127

 

30,926

 

4,985

 

Goodwill

 

1,577

 

1,585

 

255

 

Other non-current assets

 

4,864

 

56,632

 

9,129

 

 

 

 

 

 

 

 

 

Total non-current assets

 

200,858

 

340,280

 

54,851

 

 

 

 

 

 

 

 

 

Total assets

 

2,597,947

 

5,644,637

 

909,897

 

 

 

 

 

 

 

 

 

Liabilities and shareholders’ equity

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Accounts payable

 

56,391

 

74,813

 

12,060

 

Deferred revenue

 

293,866

 

346,963

 

55,929

 

Advances from customers

 

19,549

 

26,089

 

4,205

 

Income taxes payable

 

78,107

 

67,100

 

10,816

 

Accrued liabilities and other current liabilities

 

250,760

 

286,743

 

46,222

 

Amounts due to related parties

 

2,640

 

5,979

 

964

 

 

 

 

 

 

 

 

 

Total current liabilities

 

701,313

 

807,687

 

130,196

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Convertible Bonds

 

 

2,461,538

 

396,792

 

Deferred revenue

 

9,425

 

12,700

 

2,047

 

 

 

 

 

 

 

 

 

Total liabilities

 

710,738

 

3,281,925

 

529,035

 

 

7



 

YY INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

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

 

 

 

December 31,
2013

 

June 30,
2014

 

June 30,
2014

 

 

 

RMB

 

RMB

 

US$

 

Shareholders’ equity

 

 

 

 

 

 

 

Class A common shares (US$0.00001 par value; 10,000,000,000 shares authorized, 622,658,738 shares issued and outstanding as of December 31, 2013 and 690,552,628shares issued and outstanding as of June 30, 2014, respectively)

 

38

 

42

 

7

 

Class B common shares (US$0.00001 par value; 1,000,000,000shares authorized, 485,831,386 shares issued and outstanding as of December 31, 2013 and 427,352,696 shares issued and outstanding as of June 30, 2014, respectively)

 

34

 

30

 

5

 

Additional paid-in capital

 

2,765,614

 

2,826,195

 

455,573

 

Statutory reserves

 

40,657

 

40,657

 

6,554

 

Accumulated deficits

 

(874,697

)

(469,259

)

(75,643

)

Accumulated other comprehensive losses

 

(44,437

)

(34,953

)

(5,634

)

 

 

 

 

 

 

 

 

Total shareholders’ equity

 

1,887,209

 

2,362,712

 

380,862

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

2,597,947

 

5,644,637

 

909,897

 

 

8



 

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

 

Six Months Ended

 

 

 

June
30,
2013

 

March
31,
2014

 

June
30,
2014

 

June
30,
2014

 

June
30,
2013

 

June
30,
2014

 

June
30,
2014

 

 

 

RMB

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Internet value-added service

 

366,735

 

642,108

 

800,663

 

129,064

 

649,515

 

1,442,771

 

232,570

 

—Online music and entertainment

 

170,588

 

383,114

 

516,376

 

83,238

 

287,389

 

899,490

 

144,995

 

—Online games

 

152,445

 

180,320

 

166,900

 

26,904

 

284,755

 

347,220

 

55,971

 

—Others

 

43,702

 

78,674

 

117,387

 

18,922

 

77,371

 

196,061

 

31,604

 

Online advertising

 

42,309

 

24,219

 

40,375

 

6,508

 

74,490

 

64,594

 

10,412

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total net revenue

 

409,044

 

666,327

 

841,038

 

135,572

 

724,005

 

1,507,365

 

242,982

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues(1)

 

(190,942

)

(316,984

)

(424,753

)

(68,469

)

(336,635

)

(741,737

)

(119,566

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

218,102

 

349,343

 

416,285

 

67,103

 

387,370

 

765,628

 

123,416

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development expenses

 

(70,599

)

(81,710

)

(107,454

)

(17,321

)

(124,718

)

(189,164

)

(30,493

)

Sales and marketing expenses

 

(7,726

)

(6,564

)

(13,634

)

(2,198

)

(13,242

)

(20,198

)

(3,256

)

General and administrative expenses

 

(59,043

)

(56,951

)

(58,405

)

(9,415

)

(104,694

)

(115,356

)

(18,595

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

(137,368

)

(145,225

)

(179,493

)

(28,934

)

(242,654

)

(324,718

)

(52,344

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income

 

1,835

 

883

 

1,836

 

296

 

2,341

 

2,719

 

438

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

82,569

 

205,001

 

238,628

 

38,465

 

147,057

 

443,629

 

71,510

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency exchange gains (losses), net

 

13,833

 

(8,683

)

(6,001

)

(967

)

16,249

 

(14,684

)

(2,367

)

Interest expense

 

 

 

(1,379

)

(18,003

)

(2,902

)

 

(19,382

)

(3,124

)

Interest income

 

13,609

 

23,124

 

43,643

 

7,035

 

24,139

 

66,767

 

10,763

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax expenses

 

110,011

 

218,063

 

258,267

 

41,631

 

187,445

 

476,330

 

76,782

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expenses

 

(17,416

)

(33,701

)

(37,356

)

(6,022

)

(31,402

)

(71,057

)

(11,454

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before share of income (loss)in equity method investments, net of income taxes

 

92,595

 

184,362

 

220,911

 

35,609

 

156,043

 

405,273

 

65,328

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share of income (loss)in equity method investments net of income taxes

 

225

 

(795

)

960

 

155

 

704

 

165

 

27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to YY Inc.

 

92,820

 

183,567

 

221,871

 

35,764

 

156,747

 

405,438

 

65,355

 

 

9



 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June
30,
2013

 

March
31,
2014

 

June
30,
2014

 

June
30,
2014

 

June
30,
2013

 

June
30,
2014

 

June
30,
2014

 

 

 

RMB

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

92,820

 

183,567

 

221,871

 

35,764

 

156,747

 

405,438

 

65,355

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments, net of nil tax

 

(14,568

)

9,483

 

1

 

 

(17,139

)

9,484

 

1,529

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income attributable to YY Inc.

 

78,252

 

193,050

 

221,872

 

35,764

 

139,608

 

414,922

 

66,884

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per ADS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—basic

 

1.66

 

3.21

 

3.87

 

0.62

 

2.81

 

7.08

 

1.14

 

—diluted

 

1.58

 

3.06

 

3.71

 

0.60

 

2.69

 

6.77

 

1.09

 

Weighted average number of ADS used in calculating net income per ADS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—basic

 

55,859,862

 

57,157,398

 

57,387,988

 

57,387,988

 

55,851,298

 

57,270,119

 

57,270,119

 

—diluted

 

58,578,043

 

60,442,973

 

59,854,610

 

59,854,610

 

58,166,873

 

59,858,441

 

59,858,441

 

 


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

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June
30,
2013

 

March
31,
2014

 

June
30,
2014

 

June
30,
2014

 

June
30,
2013

 

June
30,
2014

 

June
30,
2014

 

 

 

RMB

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

2,441

 

2,408

 

4,691

 

756

 

3,427

 

7,099

 

1,144

 

Research and development expenses

 

10,039

 

8,879

 

15,339

 

2,473

 

15,357

 

24,218

 

3,904

 

Sales and marketing expenses

 

333

 

337

 

656

 

106

 

441

 

993

 

160

 

General and administrative expenses

 

19,417

 

12,414

 

15,803

 

2,547

 

31,137

 

28,217

 

4,548

 

 

10



 

YY INC.

Reconciliations of GAAP and Non-GAAP Results

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

 

 

 

Three Months Ended

 

Six Months Ended

 

 

 

June
30,
2013

 

March
31,
2014

 

June
30,
2014

 

June
30,
2014

 

June
30,
2013

 

June
30,
2014

 

June
30,
2014

 

 

 

RMB

 

RMB

 

RMB

 

US$

 

RMB

 

RMB

 

US$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

82,569

 

205,001

 

238,628

 

38,465

 

147,057

 

443,629

 

71,510

 

Share-based compensation expenses

 

32,230

 

24,038

 

36,489

 

5,882

 

50,362

 

60,527

 

9,756

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP operating income

 

114,799

 

229,039

 

275,117

 

44,347

 

197,419

 

504,156

 

81,266

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to YY Inc.

 

92,820

 

183,567

 

221,871

 

35,764

 

156,747

 

405,438

 

65,355

 

Share-based compensation expenses

 

32,230

 

24,038

 

36,489

 

5,882

 

50,362

 

60,527

 

9,756

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income attributable to YY Inc.

 

125,050

 

207,605

 

258,360

 

41,646

 

207,109

 

465,965

 

75,111

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income per ADS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—Basic

 

2.24

 

3.63

 

4.50

 

0.73

 

3.71

 

8.14

 

1.31

 

—Diluted

 

2.13

 

3.46

 

4.32

 

0.70

 

3.56

 

7.78

 

1.25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP weighted average numbers of ADS used in calculating net income per ADS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

—Basic

 

55,859,862

 

57,157,398

 

57,387,988

 

57,387,988

 

55,851,298

 

57,270,119

 

57,270,119

 

—Diluted

 

58,578,043

 

60,442,973

 

59,854,610

 

59,854,610

 

58,166,873

 

59,858,441

 

59,858,441

 

 

11