JOYY Q2 Earnings Call Highlights

Key Points

• JOYY delivered broad-based growth in Q2 2026: Revenue rose 16.3% year over year to $591 million, while non-GAAP operating income increased 28.2% to $49 million. The company raised its full-year non-GAAP operating-income growth outlook to approximately 20%.
• Advertising and commerce were key growth engines: BIGO Ads revenue surged 53.1% to $134 million, while Shopline revenue grew 28.6% to $34 million, driven partly by strong cross-border merchant growth and rapidly expanding traffic from AI channels.
• JOYY is increasing capital returns while investing for expansion: The company had $3.06 billion in net cash and returned $359 million to shareholders through Aug. 21. Its board authorized a new $1.5 billion shareholder-return program through the end of 2028.

JOYY NASDAQ: YY reported second-quarter 2026 revenue growth of 16.3% from a year earlier as its social entertainment, advertising technology and Shopline commerce businesses all expanded, while non-GAAP operating profit rose faster than revenue.

Total revenue reached $591 million, up 6.3% sequentially. Non-GAAP operating income increased 28.2% year over year to $49 million, while non-GAAP EBITDA rose 18.1% to $57 million. Operating cash flow was $65 million, and the company reported $3.06 billion in net cash as of June 30.

Chairperson and CEO Ting Li said the quarter reflected progress in JOYY's effort to develop a “multi-engine global technology company” spanning social entertainment, programmatic advertising and omnichannel commerce. She said non-live-streaming revenue exceeded 31.8% of total revenue during the quarter and that the company expects those segments to approach half of total revenue and operating profit by 2028.

Social Entertainment Returns to Growth

Social entertainment revenue totaled $423 million, rising 7.4% year over year and 5.6% from the prior quarter. Live-streaming revenue increased 7.3% from a year earlier and 5.9% sequentially, supported by growth in both paying users and average revenue per paying user.

Vice President of Finance Alex Liu said core live-streaming paying users increased 3.9% year over year, while ARPPU rose 2.4%. Revenue from developed markets increased 11.8% from a year earlier. Global average mobile monthly active users reached 277 million, up 5.5%, with the company’s instant-messaging product accounting for 82% of total MAUs.

Li attributed Bigo Live’s improved momentum to changes in streamer incentives, content ecosystem development, localized operating campaigns and AI-powered improvements in content distribution and payment experiences. Average daily active streamers rose 4.4% sequentially, while newly signed streamers increased 5.4%.

The company also said AI-generated content and interactive virtual gifts represented 34.3% of total virtual-gift consumption in May. Revenue from JOYY’s new voice-product portfolio rose more than 400% from a year earlier and 39% sequentially.

For the third quarter, JOYY expects social entertainment revenue to grow at a moderate single-digit year-over-year rate. Management said it expects the segment to produce full-year revenue growth in 2026.

Advertising Business Posts Strong Gains

BIGO Ads generated $134 million in second-quarter revenue, up 53.1% year over year and 7.1% sequentially. The third-party BIGO Audience Network business grew 74.1% from a year earlier and 9.3% from the preceding quarter.

Management said the growth reflected expanding traffic, a broader advertiser base, increased demand across multiple advertising verticals and improvements in algorithms. SDK traffic increased 37.7% year over year. Web-based advertising demand, primarily from lead generation and e-commerce, rose 91.7%, while management said in-app advertising spending increased 70.6%.

Li said the company is deepening partnerships with mediation platforms including MAX and LevelPlay, while investing in vertical-specific models, bidding and delivery tools, and compute scheduling. She said the third-party advertising business remains in a rapid expansion stage and will continue to require investment in research and development, sales and infrastructure, but has healthy unit economics and should remain profitable while margins improve over the medium term.

JOYY reiterated its three-year objective for BIGO Audience Network to reach $1 billion in revenue. For the full year, management expects BIGO Ads to grow at a mid-double-digit year-over-year rate.

Shopline Growth Accelerates as AI Traffic Expands

Shopline revenue was $34 million, increasing 28.6% year over year and 12.5% sequentially. Li said revenue from cross-border merchants rose 73.5% from a year earlier, helping accelerate the segment’s overall growth.

The company described Shopline as an AI-native, one-stop omnichannel commerce infrastructure provider. It said merchants’ page views from AI channels increased nearly 15-fold year over year in the first half, while order volumes from those channels rose more than 35-fold.

Shopline has expanded integrations with AI agents including ChatGPT, Claude and Cursor, according to Li. The company’s Shopline Copilot, which is designed to enable merchants to manage online stores using natural-language prompts, has entered internal testing.

Management said Shopline’s subscription services provide recurring revenue, while payments and marketing services enable the company to participate more directly in merchant transaction and GMV growth. The growing contribution of value-added services has pressured gross margin because those offerings carry lower gross margins than subscription revenue, but management expects them to generate operating leverage because they require less incremental sales and research-and-development spending to scale.

JOYY expects Shopline’s third-quarter revenue growth to remain in the mid-20% range year over year and expects full-year growth to exceed 20%. Management said operating expenses have largely stabilized and reiterated its expectation that Shopline will narrow losses in 2026 and reach operating breakeven by 2028.

Outlook and Capital Returns

For the third quarter, JOYY forecast total revenue of $602 million to $622 million, representing year-over-year growth of 11.4% to 15.2%. The company raised its outlook for full-year non-GAAP operating-income growth to about 20% year over year, from a previous expectation for growth in the teens.

Alex Liu said non-GAAP net income attributable to JOYY controlling interest was $63 million in the quarter, or a 10.7% margin. He said net income was affected by a $14 million foreign-exchange loss tied to a weaker U.S. dollar; excluding that impact, non-GAAP net income would have been $77 million.

JOYY returned $359 million to shareholders through Aug. 21, including $216 million in repurchased shares and $142 million in dividends. Of the repurchases, $128 million was completed under an up-to-$600 million program authorized in May. The company’s board also authorized a $1.5 billion shareholder-return program running through the end of 2028.

Management said it sees no inherent trade-off between investing for growth and returning capital, citing its cash position, operating cash flow and growth outlook across its three main businesses.

About JOYY (NASDAQ:YY)

JOYY Inc NASDAQ: YY is a global technology-driven social media company specializing in video-based content creation and real-time social entertainment. The company develops and operates platforms that enable users to broadcast live video, engage with audiences and participate in interactive social communities. Its flagship global products include Bigo Live, a live-streaming application, and Likee, a short-video creation and sharing platform, which collectively support real-time interaction through virtual gifting and in-app social features.

Originally founded in Guangzhou, China in 2005 by David Xueling Li under the name YY Inc, the company pioneered real-time group communication and live streaming services in its domestic market.

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