JOYY Had A Sneaky Good Q2

Core Viewpoint - JOYY's stock remains stagnant in the mid $30s, with investor impatience growing due to lack of dividends and updates on the YY Live sale reversal by Baidu [1][2] - The company has a strong cash position, with $2.7 billion in assets exceeding liabilities, which is favorable compared to its $2 billion market cap [1] Financial Performance - JOYY reported a non-GAAP diluted EPS of $1.17, beating estimates by $0.25, although it was down from $1.29 in Q2 2023 [4] - The company generated $71.1 million in net cash from operating activities, an increase from $61.8 million year-over-year but a decrease from $75 million in Q1 [4] - Operating expenses rose to $198.7 million, primarily due to increased general and administrative costs [4] Share Buyback and Debt Management - JOYY increased its share buyback from $54.5 million to $71.4 million, representing 3.9% of ADS, which is significant for shareholder value [8] - The company bought back a $500 million convertible note for $405 million, reducing both cash and debt [3] Regional Performance - Developed markets showed a 32% year-over-year sales increase, now accounting for 54% of overall sales, indicating a shift in focus towards higher-quality earnings [6] - Sales in mainland China decreased by 23% year-over-year, highlighting the challenges in that market [6] New Business Developments - The BIGO Audience Network emerged as a significant growth area, with non-livestreaming BIGO sales increasing by 162% year-over-year [7] - Shopline, an e-commerce platform, is underperforming and lacks growth, leading to a reassessment of its valuation [7] Future Guidance - JOYY guided for Q3 sales between $555 million and $569 million, with expectations to meet the higher end of this range [11] - The company anticipates a slight decline in non-GAAP BIGO operating profits due to adjustments in its audio livestreaming product [11]