DouYu International Holdings Limited (NASDAQ: DOYU), a leading Chinese game-centric live streaming platform, saw its stock plummet by 17.65% on September 12, 2024, after the company reported disappointing financial results for the second quarter of 2024.
The company's revenue declined by a staggering 25.9% year-over-year to $142.01 million, missing analyst estimates of $186.96 million. This disappointing performance was primarily driven by a 37.2% drop in livestreaming revenue, which accounts for a significant portion of DouYu's total revenue. The decline was attributed to the soft macroeconomic environment, which prompted product discounting and reduced promotional events.
Moreover, DouYu's user metrics painted a gloomy picture, with average mobile monthly active users (MAUs) falling to 44.1 million in Q2 2024, down from 50.3 million in the same period of 2023. Similarly, the number of quarterly average paying users declined to 3.4 million from 4.0 million a year ago, indicating a decrease in user engagement and monetization.
The company's gross margin also took a hit, declining from 13.6% to 8.2% year-over-year, primarily due to the impact of product discounting. Despite these challenges, DouYu maintained a strong cash position, with $902.9 million in cash and equivalents as of June 30, 2024.
Looking ahead, DouYu's ability to navigate the challenging macroeconomic environment and regain user growth will be critical for its future performance. The company may need to explore new revenue streams and innovative strategies to attract and retain users in the highly competitive live streaming market.
