Q2 2026 JOYY Inc. Earnings Call Transcript
Key Points
- JOYY Inc (JOYY) delivered strong Q2 2026 results with total revenue of $591 million, up 16.3% year-over-year and 6.3% quarter-over-quarter, exceeding expectations.
- The company's third-party advertising business, Bigo Audience Network, showed exceptional growth, with revenue up 74.1% year-over-year and 9.3% sequentially, driven by strong demand and algorithm improvements.
- Shopline's revenue growth accelerated to 28.6% year-over-year, with cross-border merchant revenue surging 73.5%, positioning the segment for continued expansion and a path to profitability by 2028.
- JOYY Inc (JOYY) maintained a strong balance sheet with $3.06 billion in net cash and generated $65 million in operating cash flow, supporting ongoing shareholder returns.
- The company raised its full-year 2026 non-GAAP operating income growth guidance to around 20% year-over-year, up from previous teens-level expectations, reflecting improved operating leverage.
- Shareholder returns were robust, with $359 million returned year-to-date through dividends and buybacks, exceeding the total for the full year 2025, and management remains committed to further buybacks.
- JOYY Inc (JOYY) recorded a significant unrealized foreign exchange loss of $40 million in Q2 2026 due to the weakening US dollar, which negatively impacted non-GAAP net income.
- Gross margin for the overall company declined sequentially to 34.1%, driven by a revenue mix shift toward lower-margin third-party advertising and Shopline value-added services.
- The company's social entertainment business is expected to grow only at a moderate single-digit rate in Q3 2026, indicating slower momentum compared to other segments.
- Operating expenses increased year-over-year, with sales and marketing costs rising in line with revenue growth and G&A expenses up due to higher share-based compensation.
- The company faces ongoing uncertainty from foreign exchange fluctuations, which could continue to impact net income in future quarters, as noted in the Q3 outlook.
- Despite strong growth, the third-party advertising business is still in a rapid expansion phase, requiring continued investment in R&D, sales, and infrastructure, which may pressure near-term profitability.
Ladies and gentlemen, thank you for standing by and welcome to Joy Inc's second quarter 2026 earnings call.
At this time, all participants are in a listen-only mode.
After the management's prepared remarks, there will be a question-and-answer session.
I'd now like to hand the conference over to your host today, Sunyuan Liu, the company's Head of Investor Relations. Please go ahead, Sunyuan.
Thank you, operator. Hello, everyone. Welcome to Joy's second-quarter 2026 earnings conference call.
Joining us today are Ms. Ching Li, Chairperson and CEO of Joy, and Mr. Alex Liu, Vice President of Finance.
For today's call, management will provide a review of this quarter, followed by a Q&A session.
The financial results and webcast of this conference call are available on our website ir.joy.com.
Please note that today's call contains forward-looking statements made under the CPAP provisions of the US Private Securities Litigation Reform Act of 1,995.
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