Douyu's Q2 revenue rises 19.4% sequentially as newer business lines gain share

226,000 visits at the Douyu Carnival

The return of the Douyu Carnival after a seven-year absence was the headline event of the quarter, held June 25–28 at the Wuhan International Expo Center. According to organizer data cited by the Wuhan municipal government, the four-day event drew more than 226,000 visits, with visitors from outside Wuhan accounting for 75% of attendance. A Wuhan Commerce Bureau report said the carnival covered more than 100,000 square meters and combined esports, music, and interactive experiences, with dozens of game and consumer brands participating. Douyu framed the event as a tool to "strengthen connections" with game studios, streamers, partners, and users. The carniva's role as a branding and engagement play — rather than a pure revenue driver — helps explain why sales and marketing expenses more than doubled sequentially to RMB 124.8 million (USD 18.5 million). Vice president Hao Cao acknowledged that concentrated spending on major brand and content initiatives pushed operating expenses higher during the quarter.

RMB 478.1 million from innovative business

The most strategically significant data point in the release is the size and trajectory of Douyu's non-core revenue lines. Innovative business, advertising, and other sources generated RMB 478.1 million (USD 71 million) in Q2, accounting for 48.7% of total revenue. Based on Douyu's quarterly disclosures, this segment has now represented more than 40% of revenue for six consecutive quarters. The segment grew 0.4% YoY and 32.2% sequentially. This diversification matters because Douyu's traditional live streaming business — still its largest single line at RMB 503 million — continues to shrink, falling 13% YoY even as it posted a 9.3% sequential recovery. CEO Simin Ren pointed to "continued growth in newer revenue streams and the Douyu Carnival" as evidence of Douyu's efforts to deepen relationships with streamers and game studios. The narrowing top-line decline combined with a higher non-core mix is the central narrative for investors trying to gauge whether Douyu's structural erosion is bottoming.

16.2% gross margin and the path to profitability

Despite reporting a GAAP net loss of RMB 72.4 million (USD 10.8 million) and an adjusted net loss of RMB 13.5 million (USD 2 million), Douyu's gross profit rose 12% YoY to RMB 159 million (USD 23.6 million), with gross margin expanding to 16.2% from 13.5% a year earlier. Cao attributed the margin improvement to a "more favorable revenue mix and improved cost efficiency," a claim consistent with the shift toward higher-margin advertising and innovative business lines. Average monthly active live streaming users rose 2.6% sequentially to 45.4 million, though management acknowledged "continued pressure on user retention and engagement." The voice-based social networking segment, a smaller business, generated RMB 272.3 million in revenue with 314,300 monthly active users and 66,200 monthly average paying users. Douyu said it was refining the service's user experience and resource allocation to balance profitability with a "healthy community ecosystem." The combination of expanding gross margin and disciplined investment language suggests management is positioning for eventual profitability, even as marketing-heavy quarters push operating expenses higher.