JOYY's Flywheel Turns: A Return to Growth with a $1.5B Capital Return

Social entertainment recovers, BIGO Ads accelerates, and Shopline gains traction as the company triples down on shareholder returns.

JOYY · Earnings Call · 2026-05-25

JOYY Inc. reported a pivotal first quarter of 2026, with total revenue reaching $555.7 million, up 12.4% year over year — the strongest growth in recent years. The company also announced a strategic reorganization into three distinct segments: Social Entertainment, BIGO Ads, and Shopline, reflecting the maturation of its diversification efforts. As the prepared remarks noted, "As we enter 2026, our social entertainment business has returned to year over year growth." “As we enter 2026, our social entertainment business has returned to year over year growth.” — Tingzhen Xie, Investor Relations (IR) team member · 2026-05-25

Recovery in Social Entertainment

Social entertainment revenue grew 3.2% year over year to $400 million, with live streaming revenue up 2.4%. More importantly, core live streaming paying users rose 5.9% year over year, while active streamers and average streaming hours improved sequentially despite the seasonally slow first quarter. The company attributes the recovery to structural enhancements in streamer incentives and AI-driven optimizations. "In Q1, as expected, our social entertainment revenue was up by 3.2% year over year, with live streaming revenue up 2.4% year over year, returning to a positive year over year growth trajectory," said CEO Ting Li. “In Q1, as expected, our social entertainment revenue was up by 3.2% year over year, with live streaming revenue up 2.4% year over year, returning to a positive year over year growth trajectory.” — Ting Li, Chairperson and CEO · 2026-05-25 This return to growth was anticipated in the prior quarter's call, where management guided that live streaming would resume positive growth in 2026. “In the fourth quarter, our live streaming business continued its sequential recovery with both paying users and ARPU up sequentially.” — Tingzhen Xie, Senior Manager of Investor Relations · 2026-03-11 The first quarter's results confirm that the recovery is not just sequential but also year-over-year.

The Flywheel Gains Momentum

The bigger story is the acceleration of JOYY's second and third growth engines. BIGO Ads revenue surged 55.6% year over year to $124.8 million, with the third-party advertising business (BIGO Audience Network) delivering an impressive 78.8% growth. "BIGO Ads continued to deliver exceptional growth," said CFO Alex Liu. “BIGO Ads continued to deliver exceptional growth.” — Fuyong Liu, Vice President of Finance · 2026-05-25 The company's BIGO Audience Network is now on track to reach its 2028 goal of $1 billion in revenue. The growth is driven by a algorithm flywheel that leverages the group's data asset to improve ad targeting and attract more advertisers. The flywheel concept was echoed in the prior call: "We are transforming our high-growth ad tech business by establishing BIGO Ads as a global platform for performance-driven multichannel advertising across different verticals." “We are transforming our high-growth ad tech business by establishing BIGO Ads as a global platform for performance-driven multichannel advertising across different verticals.” — Ting Li, Chairperson and CEO · 2025-11-19 Shopline, the e-commerce arm, is now a standalone segment with $30.5 million in revenue, up 16.1% year over year, and a gross margin of 51.5%. The company sees a clear path to breakeven by 2028. "we see a clear and achievable path for short line to reach breakeven by 2028," said Ting Li. “we see a clear and achievable path for short line to reach breakeven by 2028.” — Ting Li, Chairperson and CEO · 2026-05-25

Capital Returns and Confidence

Perhaps the most striking element is the increase in shareholder returns. The company announced a new three-year shareholder return program totaling $1.5 billion, comprising $600 million in buybacks and $900 million in dividends, a 67% increase from the previous $900 million program. CFO Alex Liu highlighted the confidence:

We have just announced an updated shareholder return program totaling $1.5 billion. under which we could repurchase up to $600 million worth of our shares and distribute up to $900 million in dividends.
Fuyong Liu, Vice President of Finance · 2026-05-25

With a net cash position of $3.18 billion — exceeding the entire market cap of $2.87 billion — the program is well-supported. The company repurchased $87.9 million in shares and paid $69 million in dividends year-to-date through May 22.

Outlook and Risks

The company guides second-quarter group revenue growth of 10.7% to 14.4% year over year, with all three segments expanding. However, there are risks, notably the FX impact: "our non-GAAP net income was lower due to higher FX loss of $13.6 million due to the weakening US dollar." “our non-GAAP net income was lower due to higher FX loss of $13.6 million due to the weakening US dollar.” — Fuyong Liu, Vice President of Finance · 2026-05-25 Management expects similar FX fluctuations in Q2 but characterizes them as non-operational mark-to-market movements that should reverse. JOYY's border merchant revenue is also growing strongly, with cross-border merchant revenue up 66% year over year, contributing to Shopline's acceleration. The company's strategic focus on AI and the flywheel effect positions it well for sustained growth, but investors should watch the competitive dynamics in livestreaming and the successful execution of the new segment reporting.