EX-99.1

Exhibit 99.1

DouYu International Holdings Limited Reports Second Quarter 2020 Unaudited Financial Results

WUHAN, China, August 10, 2020 /PRNewswire/ — DouYu International Holdings Limited (“DouYu” or the “Company”) (Nasdaq: DOYU), a leading game-centric live streaming platform in China and a pioneer in the eSports value chain, today announced its unaudited financial results for the second quarter and six months ended June 30, 2020.

Second Quarter 2020 Financial and Operational Highlights

•

Total net revenues in the second quarter of 2020 increased by 33.9% to RMB2,508.2 million (US$354.4 million) from RMB1,872.7 million in the same period of 2019.

•

Gross profit in the second quarter of 2020 increased by 73.7% to RMB522.9 million (US$73.9 million) from RMB301.1 million in the same period of 2019, implying a gross margin of 20.8% in the second quarter of 2020, compared with 16.1% in the same period of 2019.

•

Net income in the second quarter of 2020 was RMB319.3 million (US$45.1 million), compared with RMB23.2 million in the same period of 2019, implying a net margin of 12.7%, compared with 1.2% in the same period of 2019.

•

Adjusted net income in the second quarter of 2020 was RMB322.9 million (US$45.6 million), compared with RMB52.6 million in the same period of 2019, implying an adjusted net margin of 12.9% in the second quarter of 2020, compared with 2.8% in the same period of 2019.

•

Average MAUs in the second quarter of 2020 were 165.3 million, compared with 162.8 million in the same period of 2019.

•

Average mobile MAUs in the second quarter of 2020 increased by 15.4% to 58.4 million from 50.6 million in the same period of 2019.

•

Quarterly average paying user count in the second quarter of 2020 increased by 13.4% to 7.6 million from 6.7 million in the same period of 2019.

Mr. Shaojie Chen, Chief Executive Officer of DouYu, commented, “We are pleased to announce that DouYu continued to deliver solid financial and operational results in the second quarter of 2020. In this quarter, we continued to demonstrate our ability to maintain our steady growth as our revenues once again outperformed the high-end range of our guidance, increasing by 33.9% year over year to RMB2.51 billion in the quarter. In addition, our adjusted net income in the quarter grew at a rapid pace, increasing by 513.7% year over year to RMB322.9 million. Going forward, by upgrading our high-quality content offerings on a continual basis, we remain confident in our ability to sustain our growth trajectory as well as further enhance our position as an industry-leading eSports-centric community with diversified live-streaming content.”

Mr. Hao Cao, Vice President of DouYu, commented, “We continued to deliver solid financial results in the second quarter of 2020 as we increased investment in those initiatives with growth potential and higher operating efficiency. This investment strategy enabled us to sustain the growth trajectory of our revenues, bolster our ROI, and steadily improve the profitability of our platform. Looking ahead, we plan to continue exploring our platform’s monetization capabilities while also enhancing our operating efficiency to generate sustainable shareholder value over the long term.”

Second Quarter 2020 Financial Results

Total net revenues in the second quarter of 2020 increased by 33.9% to RMB2,508.2 million (US$354.4 million) from RMB1,872.7 million in the same period of 2019, primarily driven by the increase in live streaming and advertising revenues.

Live streaming revenues in the second quarter of 2020 increased by 35.8% to RMB2,319.9 million (US$327.8 million) from RMB1,708.3 million in the same period of 2019. This increase was primarily due to the Company’s optimization of its platform’s interactive features and continuous refinement of its event models, both of which helped to further cultivate users’ paying habits.

Advertising and other revenues in the second quarter of 2020 increased by 14.5% to RMB188.3 million (US$26.6 million) from RMB164.4 million in the same period of 2019, primarily attributable to the Company’s improving brand awareness and the corresponding increase in demand for advertising products related to streamer promotion.

Cost of revenues in the second quarter of 2020 increased by 26.3% to RMB1,985.3 million (US$280.5 million) from RMB1,571.7 million in the same period of 2019, primarily due to the increase in revenue sharing fees and content costs.

Revenue sharing fees and content costs in the second quarter of 2020 increased by 32.3% to RMB1,754.9 million (US$248.0 million) from RMB1,326.6 million in the same period of 2019. This increase was primarily explained by: 1) increases in revenue sharing fees, which were largely in line with the increases in total net revenues, 2) increases in content costs attributable to the Company’s investments in eSports-related content and market expansion initiatives in Japan, and 3) increased investment in tournament-related videos and in-house content production.

Bandwidth costs in the second quarter of 2020 increased by 9.8% to RMB168.4 million (US$23.8 million) from RMB153.3 million in the same period of 2019. This increase was primarily due to increases in the growth of mobile users and total user engagement as well as the Company’s ongoing efforts to improve the viewing experience of users.

Gross profit in the second quarter of 2020 increased by 73.7% to RMB522.9 million (US$73.9 million) from RMB301.1 million in the same period of 2019. Gross margin in the second quarter of 2020 expanded to 20.8% from 16.1% in the same period of 2019.

Sales and marketing expenses in the second quarter of 2020 decreased by 15.3% to RMB142.1 million (US$20.1 million) from RMB167.8 million in the same period of 2019, primarily attributable to the postponement of large-scale offline events as a result of the COVID-19 pandemic and related safety concerns.

Research and development expenses in the second quarter of 2020 increased by 12.5% to RMB94.9 million (US$13.4 million) from RMB84.4 million in the same period of 2019, mainly due to the increased investment in technological innovations as well as higher share-based compensation to related employees.

General and administrative expenses in the second quarter of 2020 increased by 8.4% to RMB79.5 million (US$11.2 million) from RMB73.3 million in the same period of 2019, mainly due to higher professional service fees related to the compliance requirements of being a publicly-listed company on the NASDAQ.

Other operating income, net in the second quarter of 2020 was RMB32.5 million (US$4.6 million), compared with RMB14.5 million in the same period of 2019.

Income from operations in the second quarter of 2020 was RMB238.9 million (US$33.8 million), compared with an operating loss of RMB10.0 million in the same period of 2019.

Adjusted operating income¹ in the second quarter of 2020, which adds back share-based compensation expenses, was RMB272.7 million (US$38.5 million), compared with RMB17.4 million in the same period of 2019.

Income tax expenses in the second quarter of 2020 and 2019 were nil due to the Company’s cumulative net losses and the resulting tax loss carryforward.

Net income in the second quarter of 2020 was RMB319.3 million (US$45.1 million), compared with RMB23.2 million in the same period of 2019.

Adjusted net income in the second quarter of 2020, which excludes share-based compensation expenses, share of income in equity method investments, gain on disposal of investment or subsidiaries, and impairment loss of investments, was RMB322.9 million (US$45.6 million), compared with RMB52.6 million in the same period of 2019, implying an adjusted net margin of 12.9% for the second quarter of 2020.

Basic and diluted net income per ADS² in the second quarter of 2020 were RMB1.06 (US$0.15) and RMB1.02 (US$0.14) respectively. Adjusted basic and diluted net income per ADS in the second quarter of 2020 were RMB1.07 (US$0.15) and RMB1.07 (US$0.15) respectively.

Business Outlook

The Company expects its total net revenues to be in the range of RMB2,640 million to RMB2,680 million in the third quarter of 2020, representing year-over-year growth between 42.1% and 44.2%. This forecast reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change.

¹	“Adjusted operating income” is defined as operating income adding back share-based compensation expenses. For more information, refer to “Use of Non-GAAP Financial Measures” and “Reconciliations of Non-GAAP Results” at the end of this press release.

²	Every ten ADSs represent one ordinary share.

Conference Call Information

The Company will hold a conference call on Monday, August 10, 2020, at 8:00 am Eastern Time (or 8:00 pm Beijing Time on the same day) to discuss the financial results. Listeners may access the call by dialing the following numbers:


International:		1-412-317-6061

United States Toll Free:		1-888-317-6003

Mainland China Toll Free:		4001-206115

Hong Kong Toll Free:		800-963976

Singapore Toll Free:		800-120-5863

Conference ID:		5488573

The replay will be accessible through August 17, 2020, by dialing the following numbers:



International:		1-412-317-0088

United States Toll Free:		1-877-344-7529

Conference ID:		10146942

A live and archived webcast of the conference call will also be available at the Company’s investor relations website at http://ir.douyu.com/.

About DouYu International Holdings Limited

Headquartered in Wuhan, China, DouYu International Holdings Limited (Nasdaq: DOYU) is a leading game-centric live streaming platform in China and a pioneer in the eSports value chain. DouYu operates its platform on both PC and mobile apps, through which users can enjoy immersive and interactive games and entertainment live streaming. DouYu’s platform brings together a deep pool of top live streamers. By providing a sustainable streamer development system built on advanced technology infrastructure and capabilities, DouYu helps ensure a consistent supply of quality content. Through collaborations with a variety of participants across the eSports value chain, the Company has gained coveted access to a wide variety of premium eSports content, which further attracts viewers and enhances user experience. For more information, please see http://ir.douyu.com/.

Use of Non-GAAP Financial Measures

Adjusted operating income (loss) is calculated as operating income (loss) adjusted for share-based compensation expenses. Adjusted net income is calculated as net loss adjusted for share-based compensation expenses, share of income (loss) in equity method investments and impairment loss on investments. Adjusted net income attributable to DouYu is calculated as net income attributable to DouYu adjusted for share-based compensation expenses, share of income (loss) in equity method investments and impairment loss of investments. Adjusted basic and diluted net income per ordinary share is non-GAAP net income attributable to ordinary shareholders divided by weighted average number of ordinary shares used in the calculation of non-GAAP basic and diluted net income per ordinary share. The Company adjusted the non-cash impact of (i) share-based compensation expenses, (ii) share of income (loss) in equity method investments and (iii) impairment loss of investments to understand and evaluate the Company’s core operating performance. The non-GAAP financial measures are presented to enhance investors’ overall understanding of the Company’s financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. Investors are encouraged to review the reconciliation of the historical non-GAAP financial measures to its most directly comparable GAAP financial measures. As non-GAAP financial measures have material limitations as analytical metrics and may not be calculated in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measures as a substitute for, or superior to, such metrics in accordance with U.S. GAAP.

For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of Non-GAAP Results” near the end of this release.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB7.0768 to US$1.00, the noon buying rate in effect on June 26, 2020, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB amounts could have been, or could be, converted, realized or settled in U.S. dollars at that rate on June 26, 2020, or at any other rate.

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “target,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company’s filings with the Securities Exchange Commission. The announced results of the fourth quarter and full year 2019 are preliminary and subject to audit adjustments. All information provided in this press release is as of the date of this press release, and the Company does not undertake any duty to update such information, except as required under applicable law.

Investor Relations Contact

Mao Mao

DouYu International Holdings Limited

Email: ir@douyu.tv

Phone: +1 (646) 224-6934

Xinran Rao

ICR, Inc.

Email: DouYu.IR@icrinc.com

Phone: +1 (646) 224-6934

Media Relations Contact

Iris Ding

DouYu International Holdings Limited

Email: pr_douyu@douyu.tv

Phone: +1 (646) 308-1475

Edmond Lococo

ICR, Inc.

Email: DouYu.PR@icrinc.com

Phone: +1 (646) 308-1475

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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


	As of December 31		As of June 30
	2019		2020		2020
	RMB		RMB		US$⁽¹⁾
ASSETS
Current assets
Cash and cash equivalents		8,091,990		8,178,190		1,155,634
Restricted cash		42,903		10,703		1,512
Accounts receivable, net⁽²⁾		188,100		160,610		22,695
Prepayments⁽²⁾		50,304		98,524		13,922
Amounts due from related parties		24,044		40,533		5,728
Other current assets		204,310		178,744		25,258

Total current assets		8,601,651		8,667,304		1,224,749
Property and equipment, net		38,909		35,236		4,979
Intangible assets, net		198,057		188,538		26,642
Investments⁽²⁾		225,534		481,671		68,063
Goodwill		30,973		14,032		1,983
Right-of-use assets, net⁽³⁾		—		85,516		12,084
Other non-current assets		8,547		17,171		2,426

Total non-current assets		502,020		822,164		116,177

TOTAL ASSETS		9,103,671		9,489,468		1,340,926

LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY (DEFICIT)
LIABILITIES
Current liabilities
Accounts Payable		890,039		1,078,540		152,405
Advances from customers		17,135		13,275		1,876
Deferred revenue		195,983		182,658		25,811
Accrued expenses and other current liabilities		392,347		297,498		42,038
Amounts due to related parties		298,733		263,966		37,300
Lease liabilities due within one year⁽³⁾		—		44,485		6,286

Total current liabilities		1,794,237		1,880,422		265,716
Lease liabilities⁽³⁾		—		38,276		5,409
Deferred revenue		46,070		40,074		5,663

Total non-current liabilities		46,070		78,350		11,072

TOTAL LIABILITIES		1,840,307		1,958,772		276,788

⁽¹⁾

Translations of certain RMB amounts into U.S. dollars at a specified rate are solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB7.0942 to US$1.00, the noon buying rate in effect on Mar 27, 2020, in the H.10 statistical release of the Federal Reserve Board.

⁽²⁾

The Group adopted Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” on January 1, 2020 with modified retrospective method, which do not have a significant impact on the consolidated financial statements.

⁽³⁾

The Group adopted Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)” and its amendments on January 1, 2020 with modified retrospective method. The major impact of the standard is that assets and liabilities amounting to RMB97.7 million and RMB87.5 million, respectively, are recognized beginning January 1, 2020 for leased offices with terms of more than 12 months.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

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


	As of December 31			As of June 30
	2019			2020			2020
	RMB			RMB			US$⁽¹⁾
Shareholders’ equity
Ordinary shares		22			22			3
Treasury shares		(168,567	)		(695,098	)		(98,222	)
Additional paid-in capital		10,324,278			10,433,755			1,474,361
Accumulated deficit		(3,348,718	)		(2,752,222	)		(388,908	)
Accumulated other comprehensive income		434,894			491,674			69,476

Total DouYu Shareholders’ equity		7,241,909			7,478,131			1,056,710
Non-controlling interests		21,455			52,565			7,428

Total Shareholders’ Equity		7,263,364			7,530,696			1,064,138

TOTAL LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED SHARES AND SHAREHOLDERS’ EQUITY		9,103,671			9,489,468			1,340,926

⁽¹⁾

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

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


	Three Months Ended												Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,			June 30,			June 30,
	2019			2020			2020			2020			2019			2020			2020
	RMB			RMB			RMB			US$⁽¹⁾			RMB			RMB			US$⁽¹⁾
Net Revenues		1,872,729			2,278,035			2,508,152			354,419			3,361,853			4,786,187			676,321
Cost of revenues		(1,571,679	)		(1,792,181	)		(1,985,270	)		(280,532	)		(2,857,674	)		(3,777,451	)		(533,780	)

Gross profit		301,050			485,854			522,882			73,887			504,179			1,008,736			142,541
Operating expenses ⁽²⁾
Sales and marketing expenses		(167,759	)		(107,357	)		(142,058	)		(20,074	)		(291,328	)		(249,414	)		(35,244	)
General and administrative expenses		(73,344	)		(84,580	)		(79,470	)		(11,230	)		(136,802	)		(164,050	)		(23,181	)
Research and development expenses		(84,404	)		(92,888	)		(94,920	)		(13,413	)		(163,825	)		(187,808	)		(26,539	)
Other operating income, net		14,497			16,578			32,454			4,586			29,382			49,032			6,929

Total operating expenses		(311,010	)		(268,246	)		(283,994	)		(40,131	)		(562,573	)		(552,240	)		(78,035	)

Income (Loss) from operations		(9,960	)		217,608			238,888			33,756			(58,394	)		456,496			64,506
Other expenses, net		(3,766	)		(10,018	)		(8,382	)		(1,184	)		(3,879	)		(18,400	)		(2,600	)
Foreign exchange gains		—			—			—			—			32,045			—			—
Interest Income, net		35,166			45,044			50,106			7,080			69,118			95,150			13,445

Income before income taxes		21,440			252,634			280,612			39,652			38,890			533,246			75,351
Income tax expenses		—			—			—			—			—			—			—
Share of income (loss) in equity method investments		1,716			1,892			15,132			2,138			2,418			17,024			2,406
Gain (loss) on disposal of investment or subsidiaries		—			—			23,526			3,324			—			23,526			3,324

Net income		23,156			254,526			319,270			45,114			41,308			573,796			81,081
Less: Net loss attributable to non-controlling interest		(880	)		(5,924	)		(16,775	)		(2,370	)		(1,484	)		(22,699	)		(3,208	)

Net income attributable to DouYu		24,036			260,450			336,045			47,484			42,792			596,495			84,289

Net income per ordinary share
Basic		0.86			8.18			10.56			1.49			1.53			18.73			2.65
Diluted		0.82			7.90			10.23			1.44			1.46			18.12			2.56
Net income per ADS⁽³⁾
Basic		—			0.82			1.06			0.15			—			1.87			0.26
Diluted		—			0.79			1.02			0.14			—			1.81			0.26
Weighted average number of ordinary shares used in calculating net income per ordinary share
Basic		8,063,790			31,848,831			31,828,405			31,828,405			8,063,790			31,838,618			31,838,618
Diluted		29,351,365			32,976,034			32,864,145			32,864,145			29,343,741			32,920,090			32,920,090
Weighted average number of ADS used in calculating net income per ADS⁽²⁾
Basic		—			318,488,308			318,284,051			318,284,051			—			318,386,179			318,386,179
Diluted		—			329,760,341			328,641,453			328,641,453			—			329,200,897			329,200,897

⁽¹⁾

⁽²⁾	Share-based compensation expenses was allocated in cost of revenues and operating expenses as follows:


	Three Months Ended								Six Months Ended
	June 30,		March 31,		June 30,		June 30,		June 30,		June 30,		June 30,
	2019		2020		2020		2020		2019		2020		2020
	RMB		RMB		RMB		US$⁽¹⁾		RMB		RMB		US$⁽¹⁾
Research and development expenses		—		5,563		5,575		788		—		11,137		1,574
Sales and marketing expenses		—		1,174		1,148		162		—		2,322		328
General and administrative expenses		27,383		35,114		27,130		3,834		45,213		62,244		8,796

⁽³⁾	Every ten ADSs represent one ordinary share.

RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS

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


	Three Months Ended												Six Months Ended
	June 30,			March 31,			June 30,			June 30,			June 30,			June 30,			June 30,
	2019			2020			2020			2020			2019			2020			2020
	RMB			RMB			RMB			US$⁽¹⁾			RMB			RMB			US$⁽¹⁾
Income (Loss) from operations		(9,960	)		217,608			238,888			33,756			(58,394	)		456,496			64,506
Add:
Share-based compensation expenses		27,383			41,850			33,853			4,784			45,213			75,703			10,698

Adjusted Operating income (loss)		17,423			259,458			272,741			38,540			(13,181	)		532,199			75,204

Net income		23,156			254,526			319,270			45,114			41,308			573,796			81,081
Add:
Share-based compensation expenses		27,383			41,850			33,853			4,784			45,213			75,703			10,698
Share of income (loss) in equity method investments		(1,716	)		(1,892	)		(15,132	)		(2,138	)		(2,418	)		(17,024	)		(2,406	)
Gain (loss) on disposal of investment or subsidiaries		—			—			(23,526	)		(3,324	)		—			(23,526	)		(3,324	)
Impairment loss of investment		3,790			2,446			8,400			1,187			3,790			10,846			1,533

Adjusted net income		52,613			296,931			322,865			45,623			87,893			619,795			87,582

Net income attributable to DouYu		24,036			260,450			336,045			47,484			42,792			596,495			84,289
Add:
Share-based compensation expenses		27,383			41,850			33,853			4,784			45,213			75,703			10,698
Share of income (loss) in equity method investments		(1,716	)		(1,892	)		(15,132	)		(2,138	)		(2,418	)		(17,024	)		(2,406	)
Gain (loss) on disposal of investment or subsidiaries		—			—			(23,526	)		(3,324	)		—			(23,526	)		(3,324	)
Impairment loss of investment		3,790			2,446			8,400			1,187			3,790			10,846			1,533

Adjusted net income attributable to DouYu		53,493			302,855			339,640			47,993			89,377			642,494			90,790

Adjusted net income per ordinary share
Basic		4.51			9.51			10.67			1.51			7.31			20.18			2.85
Diluted		1.91			9.51			10.67			1.51			3.20			20.18			2.85
Adjusted net income per ADS⁽²⁾
Basic		—			0.95			1.07			0.15			—			2.02			0.29
Diluted		—			0.95			1.07			0.15			—			2.02			0.29
Weighted average number of ordinary shares used in calculating adjusted net income per ordinary share
Basic		8,063,790			31,848,831			31,828,405			31,828,405			8,063,790			31,838,618			31,838,618
Diluted		27,969,895			31,848,831			31,828,405			31,828,405			27,947,586			31,838,618			31,838,618
Weighted average number of ADS used in calculating net income per ADS⁽²⁾
Basic		—			318,488,308			318,284,051			318,284,051			—			318,386,179			318,386,179
Diluted		—			318,488,308			318,284,051			318,284,051			—			318,386,179			318,386,179

⁽¹⁾

⁽²⁾	Every ten ADSs represent one ordinary share.