Joyy revenue rises in Q4, but margins hit by advertising growth costs

Joyy reported its fourth-quarter 2025 results on March 10, with figures suggesting its long-awaited return to growth may be approaching, albeit on different terms than before. The company reported USD 581.9 million in revenue for the three months ended December 31, up 5.9% year-on-year (YoY) and 7.7% from the prior quarter. It was Joyy’s first quarterly revenue increase on a YoY basis since the second half of 2024. The rebound, however, was driven less by its legacy live streaming business than by a rapidly expanding advertising operation.

That shift matters because it changes both Joyy’s growth profile and its cost structure. Advertising revenue jumped 62.4% YoY to USD 145.4 million in the quarter. Live streaming revenue still declined from a year earlier, falling to USD 394.4 million from USD 422.4 million, though it rose 1.5% sequentially. Non-live streaming revenue reached USD 187.5 million, or 32.2% of group revenue, up from 23.1% a year earlier. The figures show that Joyy’s diversification is becoming more visible in the numbers.

The center of that shift is Bigo Ads. Joyy said the unit generated USD 128.1 million in fourth-quarter revenue, up 61.5% YoY and 23.3% from the previous quarter. Its Audience Network business expanded even faster. Management linked the growth to broader traffic coverage, deeper penetration across advertiser verticals, and algorithm improvements that increased delivery efficiency and advertiser spending. SDK ad requests rose 166% YoY, while demand from North America and Western Europe strengthened sequentially.

The tradeoff is already visible in profitability. Gross profit was broadly flat YoY at USD 205.6 million, pushing gross margin down to 35.3% from 37.1% a year earlier and 35.8% in the third quarter. Joyy attributed the pressure mainly to higher revenue-sharing fees and content costs tied to third-party traffic acquisition for its advertising business.

The pressure extended below the gross line. Non-GAAP EBITDA was unchanged from the previous quarter at USD 50.6 million but declined from USD 55.7 million a year earlier. Non-GAAP EBITDA margin narrowed to 8.7% from 10.1%, while non-GAAP operating income margin fell to 7% from 8.4%. Sales and marketing expenses rose to USD 81.4 million as Joyy resumed user acquisition spending after unusually low spending in the same quarter a year earlier, when a temporary app store interruption created one-off savings.

That leaves the quarter mixed beneath the headline beat. Operating income improved to USD 18.3 million from a USD 427.9 million loss a year earlier, while net income from continuing operations attributable to Joyy reached USD 54.3 million compared with a USD 304.1 million loss a year earlier. The comparison, however, is partly skewed by the absence of a USD 454.9 million goodwill impairment charge recorded in the fourth quarter of 2024. On a more comparable basis, profitability was steadier rather than sharply stronger. Non-GAAP net income from continuing operations slipped to USD 70.3 million from USD 72.4 million in the third quarter and USD 96.1 million a year earlier.

Live streaming, meanwhile, is recovering only gradually. Joyy highlighted a third consecutive quarter of sequential growth in the segment, supported by localized operations, a broader content mix, and artificial intelligence-driven improvements to recommendations and payment systems. Bigo paying users rose 1.5% sequentially to 1.54 million, while ARPPU reached USD 222.8. Even so, live streaming revenue remains below last year’s level, suggesting the core business has stabilized more than it has reaccelerated.

The full-year figures show the same pattern. Joyy’s 2025 revenue declined to USD 2.12 billion from USD 2.24 billion in 2024 as live streaming revenue fell to USD 1.53 billion from USD 1.79 billion. Advertising partly offset that drop, rising 37.1% to USD 442.7 million, while Bigo Ads revenue increased 38.5% to USD 398.5 million. Non-GAAP EBITDA rose 10.9% to USD 189.8 million, indicating that the company maintained earnings discipline even as its revenue mix shifted.

The balance sheet gives Joyy room to continue that transition. The company ended 2025 with USD 3.26 billion in net cash and generated USD 116 million in operating cash flow in the fourth quarter. It also returned USD 332 million to shareholders during 2025 through buybacks and dividends, and has since declared a cash dividend of USD 1.38 per ADS (American depository share) for the first quarter of 2026.

The next question is whether advertising can keep scaling without further eroding group margins. Joyy guided first-quarter 2026 revenue to USD 538–548 million, implying a sequential decline from the fourth quarter. The company also plans to refine its segment reporting beginning in the first quarter of 2026, which may provide a clearer view of how much growth is coming from advertising, commerce software, and its still-dominant social entertainment business.