On August 25, JOYY Inc. (NASDAQ:JOYY) reported second-quarter results that show a livestreaming company turning into something else entirely. Net revenue climbed 16.3% year over year to $590.8 million, and non-GAAP operating income jumped 28.2% to $49.1 million, some of the fastest combined growth the company has posted in years. What stands out is that the growth is no longer riding on one segment. Social entertainment, advertising, and e-commerce all grew at once, and management now expects non-livestreaming businesses to approach half of group revenue by 2028.
Three Engines Firing At Once
BIGO Ads generated $133.7 million in revenue during the quarter, up 53.1% year over year, and the growth is accelerating rather than leveling off. The third-party BIGO Audience Network business grew 74.1% year over year, while web-based advertising demand, driven largely by lead generation and e-commerce clients, jumped 91.7%. In-app advertising spending rose 70.6%, and the developer network processing those ads expanded its request volume by 37.7%. Management is targeting $1 billion in revenue from the audience network over a three-year window, treating algorithm efficiency rather than headcount as the lever for getting there.
The core livestreaming business, long treated as the company’s legacy segment, is recovering too. Live streaming revenue rose 7.3% year over year, paying users grew 3.9%, and average revenue per paying user turned positive again, up 2.4%. Bigo Live’s average daily active streamers increased 4.4% quarter over quarter, and a newer voice product line grew revenue more than 400% year over year. Meanwhile, Shopline, the company’s e-commerce arm, posted revenue of $34.4 million, up 28.6% year over year, with cross-border merchant business growing 73.5%. Page views arriving through AI channels grew almost 15-fold in the first half of 2026, and order volume from those channels grew more than 35-fold.
None of this came at the expense of the balance sheet. As of June 30, 2026, JOYY held $3.06 billion in net cash, and through August 21, the company had returned $359 million to shareholders this year alone, split between $216 million in buybacks and $142 million in dividends. Management raised its full-year non-GAAP operating income growth target to roughly 20%, up from a prior expectation in the teens.
The Currency And Margin Squeeze
The quarter’s profitability came with a currency drag. Vice President of Finance Alex Liu said the weakening U.S. dollar produced a $14 million unrealized foreign exchange loss in the second quarter alone, on top of losses booked earlier in the year, and he expects a similar trend to continue into the third quarter. Strip that out, and non-GAAP net income would have been $77 million instead of the $63 million actually reported, a gap wide enough to matter.
Margins are also shifting in a way that is not entirely favorable. Group gross margin held flat at 34.1% for the quarter, but that stability masked declines underneath. BIGO Ads margin fell as third-party advertising revenue, which carries a lower margin than first-party ads, made up a larger share of the mix. Shopline’s margin pulled back too, as CEO Ting Li explained, because value-added services like payments and marketing carry lower gross margins than subscription revenue even as they grow faster.
There is also a question of pacing. After a strong first half, management’s own third-quarter guidance points to only moderate single-digit year-over-year growth for social entertainment, the segment that still makes up the majority of revenue. The ad tech and e-commerce businesses are growing fast off a smaller base, and it will take several more quarters before they are large enough to offset any slowdown in the core.
What The Market Is Pricing In
Hedge fund ownership of JOYY fell from 30 funds to 28 in the most recent quarter, a modest pullback rather than an exodus. Short interest sits at 6.33% of float, enough to signal a real bear camp without pointing to a crowded short. As of September 1, at 9.78 times forward earnings, the stock trades at a discount that assumes little of the ad tech or e-commerce growth continues, which is the tension: a cheap multiple sitting next to slipping institutional ownership and mid-single-digit skepticism from short sellers.
Where The Growth Story Goes
JOYY’s second quarter shows a company no longer dependent on one business to grow. The advertising and e-commerce segments are scaling quickly enough to reshape the revenue mix by 2028, while the core livestreaming business has stabilized rather than continuing to erode. For the growth story to hold, BIGO Ads and Shopline need to keep expanding while currency losses stop eating into the bottom line.
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