YY Reports Fourth Quarter And Full Year 2013 Unaudited Financial Results

4Q13 Net Revenues Up 129.5% YOY to RMB612.3 Million

4Q13 Net Income Up 477.9% YOY to RMB192.0 Million

4Q13 Non-GAAP Net Income Up 268.7% YOY to RMB216.9 Million

GUANGZHOU, China, March 4, 2014 (GLOBE NEWSWIRE) -- YY Inc. (Nasdaq:YY) ("YY" or the "Company"), a revolutionary real-time interactive social platform, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2013.

Fourth Quarter 2013 Highlights
  • Net revenues increased by 129.5% to RMB612.3 million (US$101.1 million) from RMB266.8 million in the corresponding period of 2012, primarily driven by a 144.1% increase in revenues from internet value-added services, or IVAS revenues.
  • Net income attributable to YY Inc. increased by 477.9% to RMB192.0 million (US$31.7 million) from RMB33.2 million in the corresponding period of 2012.
  • Non-GAAP net income attributable to YY Inc.1 increased by 268.7% to RMB216.9 million (US$35.8 million) from RMB58.8 million in the corresponding period of 2012.

Full Year 2013 Highlights
  • Net revenues increased by 122.4% to RMB1.8 billion (US$301.2 million) in 2013 from RMB820.0 million in 2012, primarily driven by a 136.4% increase in revenues from internet value-added services, or IVAS revenues.
  • Net income attributable to YY Inc. increased by 435.7% to RMB477.7 million (US$78.9 million) in 2013 from RMB89.2 million in 2012.
  • Non-GAAP net income attributable to YY Inc. increased by 213.8% to RMB594.8 million (US$98.3 million) in 2013 from RMB189.5 million in 2012.

Mr. David Xueling Li, Chief Executive Officer of YY, stated, "We're very pleased to end our first full fiscal year as a public company with a solid fourth quarter, building upon the strong momentum we saw throughout 2013. Online music and entertainment 2, in particular, again outperformed our expectations, with revenues growing by 217.1% year over year. Resulting from the powerful real-time interactive and social capabilities of our unique platform, we have seen increasingly diversified and interactive online activities among our expanding base of active users, with our average monthly active users reaching 92.3 million in the fourth quarter of 2013. Through a series of engaging and diversified group entertainment events and activities, such as our 2013 Annual Entertainment Awards Ceremony, we were able to not only stimulate user engagement and spending, but also enhance user attachment to our platform. Heading into 2014, we're excited to build upon the robust foundation we have established and continue to broaden our ability to engage our users and monetize our user traffic by further penetrating into online entertainment, live broadcasting, education and other verticals. We are proud of our evolution into a large, live and sticky online entertainment platform and aim to further enable services which cater to Chinese users' dynamic and ever-changing demands."

Mr. Eric He, Chief Financial Officer of YY, commented, "In the fourth quarter, not only we were able to exceed our expectations on both the top and bottom line growth, but we also further increased our profitability with non-GAAP net margin expanding to 35.4% from 22.0% a year ago. These results were driven by the greater operating leverage of our platform, which has increasingly been able to attract and engage massive audiences in a cost-effective manner through viral online marketing as well as self-promotions by performers and channel owners within our platform. We believe that YY has significant potential to become an even more powerful, pervasive and profitable platform through the ongoing diversification and expansion of our entertainment and education services."

Fourth Quarter 2013 Financial Results

NET REVENUES

Net revenues increased by 129.5% to RMB612.3 million (US$101.1 million) in the fourth quarter of 2013 from RMB266.8 million in the corresponding period of 2012, primarily driven by an increase in IVAS revenues and, to a lesser extent, an increase in the Company's online advertising revenues.

IVAS revenues, which consisted of revenues from online music and entertainment, online games, as well as other sources including the Company's membership program and live game broadcasting, increased by 144.1% to RMB568.9 million (US$94.0 million) in the fourth quarter of 2013 from RMB233.0 million in the corresponding period of 2012. The overall increase primarily reflected an increase in the number of paying users and an increase in average revenue per user ("ARPU").

Revenues from online music and entertainment, increased by 217.1% to RMB336.6 million (US$55.6 million) in the fourth quarter of 2013 from RMB106.1 million in the corresponding period of 2012. This increase primarily reflected a 165.3% increase in the number of paying users to 902,000 with a 19.6% increase in ARPU to RMB373 during the fourth quarter of 2013.

Revenues from online games increased by 66.1% to RMB162.8 million (US$26.9 million) in the fourth quarter of 2013 from RMB98.0 million in the corresponding period of 2012. This increase primarily reflected a year-over-year increase in ARPU of 41.4% to RMB376 and a 17.7% increase in the number of paying users to 433,000. The number of online games operated by the Company increased to 126 as of December 31, 2013 from 73 as of December 31, 2012.

Revenues from others, which primarily consist of the Company's membership program and live game broadcasting, increased by 140.9% to RMB69.5 million (US$11.5 million) in the fourth quarter of 2013 from RMB28.8 million in the corresponding period of 2012. Revenues from the membership program increased by 72.4% to RMB44.5 million (US$7.4 million) in the fourth quarter of 2013 from RMB25.8 million in the corresponding period of 2012. This increase primarily reflected a 64.8% increase in the number of members to 837,000 as of December 31, 2013 from 508,000 as of December 31, 2012. Revenues from live game broadcasting increased significantly to RMB20.6 million (US$3.4 million) in the fourth quarter of 2013 from RMB0.7 million in the corresponding period of 2012.

Online advertising revenues increased by 28.5% to RMB43.4 million (US$7.2 million) in the fourth quarter of 2013 from RMB33.8 million in the corresponding period of 2012. This increase reflected an increase in the total number of advertisers of 50.8% to 92 with an average revenue per advertiser ("ARPA") of approximately RMB472,000.

COST OF REVENUES AND GROSS PROFIT

Cost of revenues increased by 113.6% to RMB296.8 million (US$49.0 million) in the fourth quarter of 2013 from RMB138.9 million in the corresponding period of 2012. This increase was primarily attributable to an increase in revenue-sharing fees and content costs to RMB165.1 million (US$27.3 million) in the fourth quarter of 2013 from RMB47.1 million in the corresponding period of 2012. This increase in revenue-sharing fees and content costs paid to performers, channel owners and content providers was primarily due to higher levels of user engagement and spending. In addition, bandwidth costs increased to RMB59.7 million (US$9.9 million) in the fourth quarter of 2013 from RMB42.4 million in the corresponding period of 2012.

Gross profit increased by 146.7% to RMB315.5 million (US$52.1 million) in the fourth quarter of 2013 from RMB127.9 million in the corresponding period of 2012. Gross margin increased to 51.5% in the fourth quarter of 2013 from 47.9% in the corresponding period of 2012. The increase in gross margin was mainly attributable to the improved cost efficiency due to the scale effect of the Company's growth as well as the Company's ability to control bandwidth costs.

OPERATING INCOME

Operating expenses for the fourth quarter of 2013 increased by 37.0% to RMB128.5 million (US$21.2 million) from RMB93.8 million in the corresponding period of 2012. This increase was primarily attributable to higher research and development expenses and general and administrative expenses which were associated with the general growth of the Company's overall business.

Operating income in the fourth quarter of 2013 increased by 453.4% to RMB194.9 million (US$32.2 million) from RMB35.2 million in the corresponding period of 2012. Operating margin increased to 31.8% in the fourth quarter of 2013 from 13.2% in the corresponding period of 2012. The increase in operating margin was primarily due to increased operating leverage associated with the Company's expansion.

Non-GAAP operating income 3 increased by 261.4% to RMB219.8 million (US$36.3 million) in the fourth quarter of 2013 from RMB60.8 million in the corresponding period of 2012. Non-GAAP operating margin 4 increased to 35.9% in the fourth quarter of 2013 from 22.8% in the corresponding period of 2012.

NET INCOME

Net income attributable to YY Inc. increased by 477.9% to RMB192.0 million (US$31.7 million) in the fourth quarter of 2013, from RMB33.2 million in the corresponding period of 2012. Net margin in the fourth quarter of 2013 increased to 31.4% from 12.5% in the corresponding period of 2012. Non-GAAP net income attributable to YY Inc. 5 increased by 268.7% to RMB216.9 million (US$35.8 million) from RMB58.8 million in the corresponding period of 2012. Non-GAAP net margin 6 increased to 35.4% in the fourth quarter of 2013 from 22.0% in the corresponding period of 2012.

NET INCOME PER ADS

Diluted net income per ADS 7 in the fourth quarter of 2013 increased by 409.5% to RMB3.21 (US$0.53), from RMB0.63 in the corresponding period of 2012.

Non-GAAP diluted net income per ADS 8 in the fourth quarter of 2013 increased by 224.1% to RMB3.63 (US$0.60), from RMB1.12 in the corresponding period of 2012.

BALANCE SHEET AND CASH FLOWS

As of December 31, 2013, the Company had cash and cash equivalents of RMB729.6 million (US$120.5 million) and short-term deposits of RMB1.4 billion (US$236.7 million). For the fourth quarter of 2013, net cash from operating activities was RMB358.4 million (US$59.2 million).

SHARES OUTSTANDING

As of December 31, 2013, the Company had a total of 1.1 billion common shares outstanding, or the equivalent of 55.4 million ADSs outstanding.

Full Year 2013 Financial Results

For the full year of 2013, net revenues increased by 122.4% to RMB1.8 billion (US$301.2 million) from RMB820.0 million in 2012, primarily driven by a 136.4% increase in revenues from IVAS revenues.

Net income attributable to YY Inc. for the full year of 2013 increased by 435.7% to RMB477.7 million (US$78.9 million) from RMB89.2 million in 2012. Net margin for the full year of 2013 increased to 26.2% from 10.9% in 2012.

Non-GAAP net income attributable to YY Inc. for the full year of 2013 increased by 213.8% to RMB594.8 million (US$98.3 million) from RMB189.5 million in 2012. Non-GAAP net margin increased to 32.6% for the full year of 2013 from 23.1% in 2012.

Diluted net income per ADS for the full year 2013 increased to RMB8.09 (US$1.34) from RMB1.80 in the prior year. Non-GAAP diluted net income per ADS increased to RMB10.07 (US$1.66) from RMB3.82 in the prior year.

For the full year 2013, net cash from operating activities was RMB891.2 million (US$147.2 million).

Business Outlook

For the first quarter of 2014, the Company expects its net revenues to be between RMB625 million and RMB635 million, representing a year-over-year growth of approximately 98% to 102%. These forecasts reflect the Company's current and preliminary view on the market and operational conditions, which are subject to change.

Conference Call Information

The Company will hold a conference call on Tuesday, March 4, 2014 at 8:00 pm Eastern Time or Wednesday, March 5, 2014 at 9:00 am Beijing Time to discuss the financial results. Participants may access the call by dialing the following numbers:
United States: +1-845-675-0438
International Toll Free: +1-855-500-8701
China Domestic: 400-1200654
Hong Kong: +852-3051-2745
Conference ID: #59548573
 
The replay will be accessible through March 11, 2014 by dialing the following numbers:
United States Toll Free: +1-855-452-5696
International: +61-2-8199-0299
Conference ID: #59548573

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

Exchange Rate

This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars, in this press release, were made at a rate of RMB6.0537 to US$1.00, the noon buying rate in effect on December 31, 2013 in the City of New York for cable transfers in Renminbi per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York.

About YY Inc.

YY Inc. ("YY" or the "Company") is a revolutionary real-time interactive social platform that engages users in real-time online group activities through voice, text and video. Launched in July 2008, YY Client, the Company's core product, empowers users to create and organize groups of varying sizes to discover and participate in a wide range of online activities, including online games, karaoke, music concerts, education, live shows and conference calls.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as YY's strategic and operational plans, contain forward-looking statements. YY may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission ("SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about YY's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: YY's goals and strategies; YY's future business development, results of operations and financial condition; the expected growth of the online communication social platform market in China; the expectation regarding the rate at which to gain registered user accounts, active users, especially paying users; YY's ability to monetize the user base; YY's ability to continue attracting advertisers and offering popular online games; fluctuations in general economic and business conditions in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in YY's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and YY does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Use of Non-GAAP Financial Measures

The unaudited condensed consolidated financial information is prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"), except that the consolidated statement of changes in shareholders' equity (deficits), consolidated statements of cash flows, and the detailed notes have not been presented. YY uses non-GAAP operating income, non-GAAP operating margin, non-GAAP net income attributable to YY Inc ., non-GAAP net margin, non-GAAP net income (loss) attributable to common shareholders, and basic and diluted non-GAAP net income(loss) per ADS, which are non-GAAP financial measures. Non-GAAP operating income is operating income excluding share-based compensation expenses. Non-GAAP operating margin is non-GAAP operating income as a percentage of net revenues. Non-GAAP net income (loss) attributable to YY Inc. is net income (loss) attributable to YY Inc. excluding share-based compensation expenses. Non-GAAP net margin is non-GAAP net income attributable to YY Inc. as a percentage of net revenues. Non-GAAP net income (loss) attributable to common shareholders is net income (loss) attributable to common shareholders excluding share-based compensation expenses. Basic and diluted non-GAAP net income (loss) per ADS is non-GAAP net income (loss) attributable to common shareholders divided by weighted average number of basic and diluted ADS. The Company believes that separate analysis and exclusion of the non-cash impact of share-based compensation adds clarity to the constituent parts of its performance. The Company reviews these non-GAAP financial measures together with GAAP financial measures to obtain a better understanding of its operating performance. It uses the non-GAAP financial measure for planning, forecasting and measuring results against the forecast. The Company believes that non-GAAP financial measure is useful supplemental information for investors and analysts to assess its operating performance without the effect of non-cash share-based compensation expenses, which have been and will continue to be significant recurring expenses in its business. However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact the Company's net income (loss) for the period. In addition, because non-GAAP financial measures are not measured in the same manner by all companies, they may not be comparable to other similar titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measure in isolation from or as an alternative to the financial measure prepared in accordance with U.S. GAAP.

The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned "YY Inc. Reconciliations of GAAP and Non-GAAP Results" at the end of this release.

1 Non-GAAP net income attributable to YY Inc. is a non-GAAP financial measure, which is defined as net income attributable to YY Inc. excluding share-based compensation expenses. 

2 The Company renamed the YY Music segment 'online music and entertainment' in order to better reflect users' increasingly diverse online entertainment activities on the Company's platform.

3 Non-GAAP operating income is a non-GAAP financial measure, which is defined as operating income excluding share-based compensation expenses. 

4 Non-GAAP operating margin is a non-GAAP financial measure, which is defined as non-GAAP operating income as a percentage of net revenues. 

5 Non-GAAP net income attributable to YY Inc. is a non-GAAP financial measure, which is defined as net income attributable to YY Inc. excluding share-based compensation expenses.

6 Non-GAAP net margin is a non-GAAP financial measure, which is defined as non-GAAP net income attributable to YY Inc. as a percentage of net revenues.

7 ADS is American Depositary Share. Each ADS represents twenty Class A common shares of the Company. Diluted net income (loss) per ADS is net income (loss) attributable to common shareholders divided by weighted average number of diluted ADS.

8 Non-GAAP diluted net income (loss) per ADS is a non-GAAP financial measure, which is defined as non-GAAP net income (loss) attributable to common shareholders divided by weighted average number of diluted ADS.
YY INC.
 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in thousands, except share, ADS and per ADS data)
       
  December 31, December 31, December 31,
  2012 2013 2013
  RMB RMB US$
Assets      
Current assets      
Cash and cash equivalents 504,702 729,598 120,521
Short-term deposits 897,698 1,432,863 236,692
Accounts receivable, net 117,616 100,101 16,536
Amount due from a related party 1,073 73 12
Prepayments and other current assets 25,149 67,533 11,156
Deferred tax assets 31,549 66,921 11,055
       
Total current assets 1,577,787 2,397,089 395,972
       
Non-current assets      
Deferred tax assets 583 625 103
Investments 2,950 62,029 10,246
Property and equipment, net 90,299 102,636 16,954
Intangible assets, net 19,481 29,127 4,811
Goodwill 1,604 1,577 261
Other non-current assets 3,485 4,864 803
       
Total non-current assets 118,402 200,858 33,178
       
Total assets 1,696,189 2,597,947 429,150
       
Liabilities and shareholders' equity      
Current liabilities      
Accounts payable 28,149 56,391 9,315
Deferred revenue 159,859 293,866 48,543
Advances from customers 7,515 19,549 3,229
Income taxes payable 48,001 78,107 12,902
Accrued liabilities and other current liabilities 120,289 250,760 41,423
Amounts due to related parties 2,604 2,640 436
       
Total current liabilities 366,417 701,313 115,848
       
Non-current liabilities      
Deferred revenue 6,487 9,425 1,557
       
Total liabilities 372,904 710,738 117,405
       
       
YY INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(All amounts in thousands, except share, ADS and per ADS data)
       
  December 31, December 31, December 31,
  2012 2013 2013
  RMB RMB US$
Shareholders' equity      
Class A common shares (US$0.00001 par value; 10,000,000,000 shares authorized, 179,400,000 shares issued and outstanding as of December 31, 2012 and 622,658,738 shares issued and outstanding as of December 31, 2013) 11 38 6
Class B common shares (US$0.00001 par value; 1,000,000,000shares authorized, 907,833,224 shares issued and outstanding as of December 31, 2012 and 485,831,386 shares issued and outstanding as of December 31, 2013) 60 34 6
Additional paid-in capital 2,648,404 2,765,614 456,847
Statutory reserves 40,657 6,716
Accumulated deficits (1,311,767) (874,697) (144,490)
Accumulated other comprehensive losses (13,423) (44,437) (7,340)
       
Total shareholders' equity 1,323,285 1,887,209 311,745
       
Total liabilities and shareholders' equity 1,696,189 2,597,947 429,150
       
       
YY INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(All amounts in thousands, except share, ADS and per ADS data)
               
  Three Months Ended Twelve Months Ended
  December September December December  December  December December
  31, 30, 31, 31, 31, 31, 31,
   2012 2013 2013 2013 2012 2013 2013
  RMB RMB RMB US$ RMB RMB US$
               
Net revenues              
Internet value-added service              
—Online music and entertainment 106,145 228,906 336,590 55,601 286,446 852,885 140,887
—Online games 98,048 154,529 162,827 26,897 332,287 602,111 99,462
—Others 28,830 58,383 69,458 11,474 83,655 205,212 33,899
Online advertising 33,803 45,337 43,433 7,175 117,643 163,260 26,969
               
Total net revenue 266,826 487,155 612,308 101,147 820,031 1,823,468 301,217
               
Cost of revenues(1) (138,939) (248,553) (296,811) (49,030) (416,133) (881,999) (145,696)
               
Gross profit 127,887 238,602 315,497 52,117 403,898 941,469 155,521
               
               
Operating expenses(1)              
Research and development expenses (54,122) (67,148) (75,139) (12,412) (176,725) (267,005) (44,106)
Sales and marketing expenses (5,961) (7,502) (4,211) (696) (16,954) (24,955) (4,122)
General and administrative expenses (33,741) (46,663) (49,197) (8,127) (109,788) (200,554) (33,129)
               
Total operating expenses (93,824) (121,313) (128,547) (21,235) (303,467) (492,514) (81,357)
Other income 1,161 16,766 7,971 1,317 2,465 27,078 4,473
               
               
Operating income 35,224 134,055 194,921 32,199 102,896 476,033 78,637
               
Gain on disposal of an equity investment 651
Gain on disposal of a cost investment 2,351 2,351
Foreign currency exchange (losses) gains, net (1,164) 5,500 7,806 1,289 (4,153) 29,555 4,882
Interest income 5,789 16,542 19,540 3,228 16,316 60,221 9,948
               
Income before income tax expenses 42,200 156,097 222,267 36,716 118,061 565,809 93,467
               
Income tax expenses (9,107) (27,719) (30,830) (5,093) (29,041) (89,951) (14,859)
               
Income before share of income in equity method investments, net of income taxes 33,093 128,378 191,437 31,623 89,020 475,858 78,608
               
Share of income in equity method investments, net of income taxes 134 586 579 96 157 1,869 309
               
Net income attributable to YY Inc. 33,227 128,964 192,016 31,719 89,177 477,727 78,917
               
Decretion to convertible redeemable preferred shares redemption value 1,408,888 1,293,875
               
Allocation of net income to participating preferred shareholders (294,984) (478,754)
               
Net income attributable to common shareholders 1,147,131 128,964 192,016 31,719 904,298 477,727 78,917
               
Net income 33,227 128,964 192,016 31,719 89,177 477,727 78,917
               
Other comprehensive loss:              
Foreign currency translation adjustments, net of nil tax (4,374) (5,678) (8,197) (1,354) (1,204) (31,014) (5,123)
               
Comprehensive income attributable to YY Inc. 28,853 123,286 183,819 30,365 87,973 446,713 73,794
               
Net income per ADS              
—Basic 29.04 2.29 3.40 0.56 29.91 8.51 1.41
—Diluted 0.63 2.17 3.21 0.53 1.80 8.09 1.34
Weighted average number of ADS used in calculating net income per ADS              
—Basic 39,500,941 56,261,659 56,449,190 56,449,190 30,235,191 56,123,784 56,123,784
—Diluted 52,473,054 59,546,765 59,802,052 59,802,052 49,623,442 59,056,065 59,056,065
               
               
YY INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (CONTINUED)
(All amounts in thousands, except share, ADS and per ADS data)
               
(1) Share-based compensation was allocated in cost of revenues and operating expenses as follows: 
               
  Three Months Ended Twelve Months Ended
  December September December  December  December December  December
   31, 30, 31, 31,  31, 31, 31,
  2012 2013 2013 2013 2012 2013 2013
  RMB RMB RMB US$ RMB RMB US$
               
Cost of revenues 2,092 3,191 3,242 536 8,407 9,860 1,629
Research and development expenses 9,129 12,357 11,873 1,961 35,441 39,587 6,539
Sales and marketing expenses 216 432 445 74 884 1,318 218
General and administrative expenses 14,165 25,859 9,335 1,542 55,619 66,331 10,957
               
               
YY INC.
Reconciliations of GAAP and Non-GAAP Results
(All amounts in thousands, except share, ADS and per ADS data)
               
  Three Months Ended Twelve Months Ended
  December September December  December December December  December
  31, 30, 31, 31, 31, 31, 31,
   2012  2013 2013 2013 2012 2013 2013
  RMB RMB RMB  US$ RMB RMB US$
               
Operating income 35,224 134,055 194,921 32,199 102,896 476,033 78,637
Share-based compensation expenses 25,602 41,839 24,895 4,113 100,351 117,096 19,343
               
Non-GAAP operating income 60,826 175,894 219,816 36,312 203,247 593,129 97,980
               
               
Net income attributable to YY Inc. 33,227 128,964 192,016 31,719 89,177 477,727 78,917
Share-based compensation expenses 25,602 41,839 24,895 4,113 100,351 117,096 19,343
               
Non-GAAP net income attributable to YY Inc. 58,829 170,803 216,911 35,832 189,528 594,823 98,260
               
Decretion to convertible redeemable preferred shares redemption value 1,408,888 1,293,875
Allocation of Non-GAAP net income to particiating preferred shareholders (300,221) (513,492)
               
Non-GAAP net income attributable to common shareholders 1,167,496 170,803 216,911 35,832 969,911 594,823 98,260
               
               
Non-GAAP net income per ADS               
—Basic 29.56 3.04 3.84 0.63 32.08 10.60 1.75
—Diluted 1.12 2.87 3.63 0.60 3.82 10.07 1.66
               
Weighted average number of ADS used in calculating Non-GAAP net income per ADS              
—Basic 39,500,941 56,261,659 56,449,190 56,449,190 30,235,191 56,123,784 56,123,784
—Diluted 52,473,054 59,546,765 59,802,052 59,802,052 49,623,442 59,056,065 59,056,065
               
               
CONTACT: Investor Relations Contact                  YY Inc.         Anna Yu         Tel: (+86) 2029162000         Email:IR@YY.com                  ICR, Inc.         Jeremy Peruski         Tel: +1 (646) 915-1611         Email: IR@YY.com