Huya shares drop on weak guidance despite narrower loss

Shares of Huya Inc. fell on Tuesday after the Chinese live-streaming platform reported a narrowed quarterly loss but provided weak guidance for the current quarter, reflecting broader concerns about the sector's growth trajectory.

Huya posted a loss of $22.4 million for the first quarter, an improvement from a $40.2 million loss in the same period last year. Revenue rose 11% year-over-year to $388.5 million, driven by higher live-streaming and advertising income. The company attributed the revenue growth to increased user engagement and monetization efforts.

Despite the positive financials, Huya’s management issued cautious guidance for the second quarter, projecting revenue between $370 million and $390 million. Analysts had expected revenue of $400 million, signaling potential headwinds ahead. The weak outlook overshadowed the narrower loss and revenue beat, pressuring the stock.

The decline in Huya’s shares mirrored broader trends in China’s tech sector, where companies have faced regulatory scrutiny and slowing growth. Competitors in the live-streaming space, including DouYu and Kuaishou, have also struggled with revenue pressures and user retention challenges.

Huya’s management cited macroeconomic uncertainties, including weaker consumer spending and regulatory risks, as factors influencing its cautious outlook. The company remains focused on expanding its user base and improving monetization, but near-term growth prospects appear constrained by external pressures.

The stock closed 5.2% lower at $2.85 on Tuesday, extending losses from the previous session. Year-to-date, Huya’s shares are down 18%, underperforming the broader Chinese tech index.