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 March 2016
Commission File Number: 001-35729
YY Inc.
Building 3-08, Yangcheng Creative Industry Zone
No. 309 Huangpu Avenue Middle
Tianhe District, Guangzhou 510655
People’s Republic of China
(Address of principal executive offices)
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 þ | 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
SIGNATURE
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: March 22, 2016
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EXHIBIT INDEX
| Exhibit No. | Description |
| Exhibit 99.1 | Press release |
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Exhibit 99.1
YY Reports Fourth Quarter and Full Year 2015 Unaudited Financial Results
Guangzhou, China, March 21, 2016 – 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.
1
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.
2
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.
1Non-GAAP operating income is a non-GAAP financial measure, which is defined as operating income excluding share-based compensation expenses.
2Non-GAAP operating margin is a non-GAAP financial measure, which is defined as non-GAAP operating income as a percentage of net revenues.
3Non-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.
4Non-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.
5ADS 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.
6Non-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.
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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.
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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.
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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 (20) 2916-2000
Email:IR@YY.com
ICR, Inc.
Charles Eveslage
Tel: +1 (646) 915-1611
Email:IR@YY.com
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YY INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except share, ADS and per ADS data)
December 31, 2014 | December 31, 2015 | December 31, 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 | |||||||||
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YY INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(All amounts in thousands, except share, ADS and per ADS data)
December 31, 2014 | December 31, 2015 | December 31, 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$0.00001 par value; 1,000,000,000 shares authorized, 427,352,696 shares issued and outstanding as of December 31, 2014 and 369,557,976 shares issued and outstanding as of December 31, 2015, respectively) | 30 | 27 | 4 | |||||||||
| Additional paid-in capital | 2,900,458 | 2,011,799 | 310,568 | |||||||||
| Statutory reserves | 56,469 | 56,507 | 8,723 | |||||||||
| Retained earnings | 173,963 | 1,207,168 | 186,355 | |||||||||
| Accumulated other comprehensive losses | (40,799 | ) | (36,385 | ) | (5,617 | ) | ||||||
| Noncontrolling interests | - | 7,660 | 1,183 | |||||||||
| Total shareholders’ equity | 3,090,164 | 3,246,819 | 501,223 | |||||||||
| Total liabilities, mezzanine equity and | ||||||||||||
| shareholders’ equity | 6,862,794 | 7,328,038 | 1,131,256 | |||||||||
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YY INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(All amounts in thousands, except share, ADS and per ADS data)
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
December 31, 2014 | September 30, 2015 | December 31, 2015 | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 2015 | ||||||||||||||||||||||
| RMB | RMB | RMB | US$ | 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 31, 2014 | September 30, 2015 | December 31, 2015 | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 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 | |||||||||||||||||||||
9
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 31, 2014 | September 30, 2015 | December 31, 2015 | December 31, 2015 | December 31, 2014 | December 31, 2015 | December 31, 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 | |||||||||||||||||||||
10
YY INC.
UNAUDITED SEGMENT REPORT
(All amounts in thousands, except share, ADS and per ADS data)
| Three Months Ended | ||||||||||||||||||||||||||||
| December 31, 2015 | ||||||||||||||||||||||||||||
| YY IVAS | Others | YY IVAS and others | Huya broadcasting | 100 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 and others | 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 | |||||||||||||||
11
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 and others | 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 | |||||||||||||
12
YY INC.
UNAUDITED SEGMENT REPORT
(All amounts in thousands, except share, ADS and per ADS data)
| Three Months Ended | ||||||||||||||||||||||||||||
| September 30, 2015 | ||||||||||||||||||||||||||||
| YY IVAS | Others | YY IVAS and others | Huya broadcasting | 100 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 | |||||||||||||||||||||
| (2) | Share-based compensation was allocated in cost of revenues and operating expenses as follows: |
| Three Months Ended | ||||||||||||||||||||
| September 30, 2015 | ||||||||||||||||||||
| YY IVAS and others | Huya broadcasting | 100 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 | |||||||||||||||
13
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 and others | Huya broadcasting | 100 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 | |||||||||||||
14