Huya’s Profit Plunge Overshadows Record Revenue Performance

Chinese gaming-focused streaming platform Huya delivered a financial report marked by stark contrasts, with quarterly sales reaching their highest point in over two years while profitability suffered a severe contraction. The company's shares reflected investor concern, trading lower in pre-market activity following the announcement.

For Q3 2025, Huya posted net revenues of 1,688.3 million RMB (US$237.1 million), representing a 9.8% year-over-year increase and the company's strongest quarterly sales performance in nine quarters. However, this top-line achievement was substantially undermined by a dramatic collapse in bottom-line results.

Net income plummeted to just 9.6 million RMB (US$1.3 million), a sharp decline from the 23.6 million RMB recorded during the same period last year. Even when considering non-GAAP adjusted measures, profitability showed significant strain, with earnings nearly halving to 36.3 million RMB—a 53.5% decrease compared to the previous year.

• Total Revenue: 1,688.3 million RMB (+9.8% YoY)
• Adjusted Net Income: 36.3 million RMB (-53.5% YoY)
• Live Streaming Services: 1,156.7 million RMB (+2.6% YoY)
• Game-Related Services: 531.6 million RMB (+29.6% YoY)
• Pre-Market Stock Movement: -2.14%

Strategic Diversification Gains Momentum

A notable bright spot in Huya's earnings report came from its expanding portfolio of game-related services. This segment emerged as the primary growth driver, surging 29.6% year-over-year and far outpacing the modest 2.6% expansion in the core live streaming business.

Should investors sell immediately? Or is it worth buying Huya?

For the first time, revenue streams beyond live streaming contributed more than 30% to Huya's total sales. This shift highlights the initial success of the company's strategic initiatives to diversify its revenue base through expanded in-game item sales and deeper collaborations with game developers.

Investor Sentiment and Path Forward

Market reaction to the mixed results was decisively negative, with Huya's stock declining 2.14% in pre-market trading. This response indicates that investors are placing greater emphasis on the profit deterioration than on the revenue milestone.

Despite the profitability challenges, Huya maintains a robust financial position with 3.83 billion RMB (US$537.7 million) in cash and cash equivalents, providing substantial operational flexibility. Additionally, the company reported adjusted earnings per share of 0.16 RMB, exceeding analyst projections of 0.13 RMB.

The critical challenge facing Huya's management is whether the company can successfully translate its impressive revenue expansion and diversification efforts into sustained profit growth. The current quarterly figures present a concerning picture on this front, raising questions about the streaming platform's near-term earnings potential.