YY.com Q3 Beats, But Music Revenue Growth Slows
By KEVIN SHALVEY, INVESTOR'S BUSINESS DAILY
Posted 01:32 PM ET
Chinese Web company YY.com (YY) early Wednesday beat Q3 expectations as sales more than doubled, but revenue growth slowed for the its YY Music division, and YY stock fell.
YY reported sales of $79.6 million, topping analyst consensus views of $71.3 million, according to Thomson Reuters.
The company reported EPS minus items of 47 cents vs. views of 31 cents.
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YY said revenue from YY Music, its streaming music and karaoke site, jumped 161% as the number of users climbed 117% to 771,000.
But YY Music revenue soared 184% in Q2 and 246% in Q1.
Users logged onto YY Music watch live feeds of singers and pay to vote for the ones they like or to interact with the singers. Those features continue to drive growth at YY, company CEO David Xueling Li said in a statement.
"We understand mobile monetization began in earnest in Q3, primarily driven by YY's music business," Piper Jaffray analyst Gene Munster wrote in an October research note. "With 52 million cumulative mobile app installs and 14 million mobile monthly active users in Q2, YY's mobile platform is well-positioned to scale from here, in our view."
Sales from the music service accounted for about 47% of all sales, up from 38% in the year-earlier period.
YY's gaming sales in Q3 accounted for 32% of total revenue.
Revenue from YY's online games climbed 84% to $25.3 million. But that's down from 87% growth in Q2 and 92% in Q1.
YY stock was down nearly 10% in early afternoon trading in the stock market Wednesday. YY has a highest-possible IBD Relative Strength Rating of 99, as YY stock is up 240% for the year.
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