UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS(All amounts in thousands, except share, ADS and per ADS data) Three Months Ended Twelve Months Ended December 31, September 30, December 31, December 31, December 31, 2023 2024 2024 2023 2024 US$ US$ US$ US$ US$ Operating income (loss) 4,796 16,416 (427,853) 28,815 (405,625)Share-based compensation expenses 7,245 4,915 5,806 31,979 23,200 Amortization of intangible assets from business acquisitions 15,890 13,540 13,540 63,560 55,802 Impairment of goodwill and investments - - 454,935 - 464,321 Loss (gain) on deconsolidation and disposal of subsidiaries - - - 6,177 (1,643) Non-GAAP operating income 27,931 34,871 46,428 130,531 136,055 Net income (loss) 40,089 55,954 (386,537) 272,418 (242,638)Share-based compensation expenses 7,245 4,915 5,806 31,979 23,200 Amortization of intangible assets from business acquisitions 15,890 13,540 13,540 63,560 55,802 Impairment of goodwill and investments - - 454,935 - 464,321 Loss (gain) on deconsolidation and disposal of subsidiaries - - - 6,177 (1,643)Gain on disposal and deemed disposal of investments - - - (74,851) - (Gain) loss on fair value change of investments (6,263) (9,281) 3,011 (12,425) (6,636)Interest expenses related to the convertible bonds’ amortization to face value 239 - - 1,583 435 Income tax effects on non-GAAP adjustments (2,095) (1,574) (427) (11,604) (6,106)Reconciling items on the share of equity method investments 4,278 (6,167) 3,802 (9,091) (1,631) Non-GAAP net income 59,383 57,387 94,130 267,746 285,104 Net income (loss) attributable to common shareholders of JOYY Inc. 45,485 60,210 (304,492) 347,351 (147,624)Share-based compensation expenses 7,245 4,915 5,806 31,979 23,200 Amortization of intangible assets from business acquisitions 15,890 13,540 13,540 63,560 55,802 Impairment of goodwill and investments - - 454,935 - 464,321 Loss (gain) on deconsolidation and disposal of subsidiaries - - - 6,177 (1,643)Gain on disposal and deemed disposal of investments - - - (74,851) - (Gain) loss on fair value change of investments (6,263) (9,281) 3,011 (12,425) (6,636)Interest expenses related to the convertible bonds’ amortization to face value 239 - - 1,583 435 Accretion, cumulative dividend and deemed dividend to subsidiaries’ preferred shareholders 350 347 347 7,048 1,388 Gain on repurchase of redeemable convertible preferred shares of a subsidiary - - - (52,583) - Income tax effects on non-GAAP adjustments (2,095) (1,574) (427) (11,604) (6,106)Reconciling items on the share of equity method investments 4,278 (6,167) 3,802 (9,091) (1,631)Non-GAAP adjustments for net loss attributable to the non-controlling interest shareholders (929) (819) (80,434) (4,622) (83,008) Non-GAAP net income attributable to controlling interest and common shareholders of JOYY Inc. 64,200 61,171 96,088 292,522 298,498 Non-GAAP net income per ADS ——Basic 1.04 1.08 1.79 4.47 5.16 ——Diluted 0.97 1.07 1.77 4.10 4.96 Weighted average number of ADS used in calculating Non-GAAP net income per ADS ——Basic 61,876,261 56,573,411 53,737,863 65,434,782 57,892,728 ——Diluted 67,384,074 57,220,581 54,263,057 73,148,827 60,654,393 Operating income (loss) 4,796 16,416 (427,853) 28,815 (405,625)Impairment of goodwill - - 454,935 - 454,935 Operating income excluding goodwill impairment 4,796 16,416 27,082 28,815 49,310 Net income (loss) attributable to controlling interest of JOYY Inc. 45,835 60,557 (304,145) 301,816 (146,236)Impairment of goodwill - - 454,935 - 454,935 Adjustments attributable to the non-controlling interest shareholders - - (79,715) - (79,715) Net income excluding goodwill impairment attributable to controlling interest of JOYY Inc. 45,835 60,557 71,075 301,816 228,984 JOYY INC.
Unaudited Reconciliation of GAAP and Non-GAAP Results” near the end of this press release for details. 4 Non-GAAP net income (loss) attributable to controlling interest of JOYY is a non-GAAP financial measure, which is defined as net income (loss) attributable to controlling interest of JOYY excluding share-based compensation expenses, impairment of goodwill and investments, amortization of intangible assets from business acquisitions, gain (loss) on deconsolidation and disposal of subsidiaries and business, gain (loss) on disposal and deemed disposal of investments, gain (loss) on fair value change of investments, reconciling items on the share of equity method investments which refer to those similar non-GAAP reconciling items of the Company, gain (loss) on extinguishment of debt and derivative, interest expenses related to the convertible bonds amortization to face value, income tax effects of the above non-GAAP reconciling items and adjustments for non-GAAP reconciling items for net (loss) income attributable to non-controlling interest shareholders.
The Company believes that non-GAAP financial measure is useful supplemental information for investors and analysts to assess its operating performance without the non-cash effect of (i) share-based compensation expenses and amortization of intangible assets from business acquisitions, gain (loss) on extinguishment of debt and derivative, interest expenses related to the convertible bonds’ amortization to face value, which have been and will continue to be significant recurring expenses in its business, (ii) impairment of goodwill and investments, gain (loss) on deconsolidation and disposal of subsidiaries and business, gain (loss) on disposal and deemed disposal of investments, gain (loss) on fair value change of investments, reconciling items on the share of equity method investments, accretion, cumulative dividend and deemed dividend to subsidiaries’ preferred shareholders and gain on repurchase of redeemable convertible preferred shares of a subsidiary which may not be recurring in its business, and (iii) income tax expenses and non-GAAP adjustments for net income (loss) attributable to non-controlling interest shareholders, which are affected by the above non-GAAP reconciling items.
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