Live-streaming platform 17Live has announced its financial results after more than a year of being listed on the Singapore Exchange (SGX). The group was the first to successfully list via a special purpose acquisition company (spac). The spac, Vertex Technology Acquisition Corp (VTAC), was sponsored by Vertex Ventures, the venture capital arm of Temasek Holdings.
For its FY2024 ended Dec 31, 2024, 17Live announced a loss of about US$3.3 million ($4.4 million), narrowing from a loss of US$247.9 million a year ago, which included a revaluation loss. Its share price was down by around a third in the past year to close at 80 cents on March 12, valuing the company at $148.1 million.
In an interview with The Edge Singapore, Jiang Honghui, CEO of 17Live, says this is due to an accounting matter, where preferred shares are revalued after the listing. While this does not have any material financial impact, it affects the group’s bottomline on paper.
In FY2024, the revaluation loss is off the books, but there was yet another one-off expense, as the group had to incur a settlement expense with a music copyright organisation of about US$12 million. Jiang says that there were some “differences in interpreting the copyright agreement”. “That settlement has brought us from being profitable to being unprofitable [in our bottomline],” he adds.
Nevertheless, its operating income came in at US$9 million, which was lower than the preceding FY2023, in line with a decrease in full-year operating revenue of US$190.8 million, down 31.6% over FY2023’s US$278.9 million.
This was mainly due to the group’s efforts not to engage in a price war in acquiring talents under its Liver live-streaming segment. As a result, a number of these “Livers” defected to other competitors. On the other hand, its so-called V-Liver segment, which refers to streamers that perform via avatars, enjoyed significant growth, but it was not sufficient to offset the decline.
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“After Covid-19, many streaming platforms started to compete for live-streaming talents and were offering them attractive revenue sharing schemes to poach them,” explains Jiang. “We did not play the game and decided to maintain our margins because we were confident that we could grow our group of streamers, even if it meant losing some. We aim to keep our operating cost lean and become profitable.”
The rate of revenue decline is slowing down, as seen in the group’s 2HFY2024 results, and Jiang believes that Liver revenue will start to “normalise”. In the meantime, he is banking on continued growth from the V-Liver segment.
In the 2HFY2024 period, operating income came in at US$7.6 million, some 467.4% higher h-o-h and 927.9% higher y-o-y. The group managed to narrow its operating revenue decline by 9.5 percentage points (ppt) (1HFY2024 decline by 20.9%; 2HFY2024 decline by 11.4%), and recorded an operating revenue of US$89.7 million in 2HFY2024.
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Evolving landscape
Following the earnings release, PhillipCapital, in a paid report, kept its “buy” recommendation on 17Live but with a lower target price of $1.28 from $1.80 previously. In its March 4 note, PhillipCapital analysts Liu Miaomiao and Paul Chew are upbeat on the uptick in V-Liver revenue, which surged 121% y-o-y to US$11 million in FY2024, underpinned by strong demand in the Japanese market and growing intellectual property (IP) offerings by 17Live.
“The group has recently acquired around 140 V-livers through the M&A of N-craft, and we expect more acquisition activities in 2025, thus supporting our forecast of revenue to double in FY2025,” say Liu and Chew.
Margins in 2HFY2024 have also improved, rising 7.2ppt h-o-h to 8.5%, as cost-saving initiatives took effect and contributed positively to the bottomline. The group had shifted its marketing strategy towards the content market, focusing on profitability from offline events rather than pure publicity. As a result, FY2024 operating expenses saw a 27.3% y-o-y drop to US$73.6 million.
“While we don’t expect any further savings from cost optimisation, the group is expected to continue benefiting from improved efficiency. We anticipate that gross margin will remain stable at about 42.5%, and for operating margin to improve to 5.1% in FY2025,” say the analysts.
They remain cautious about the group’s core live-streaming business, which saw a decline in monthly active users (MAU), largely due to increased competition in Japan and Taiwan, where TikTok is aggressively expanding its market share.
To adapt to the evolving landscape, 17Live has abolished its exclusive contract requirement for streamers, allowing streamers to broadcast across multiple platforms, while maintaining the same revenue-sharing benefits as previous exclusive agreements.
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“While there is no data to quantify the impact, we believe this shift could attract streamers to some extent by offering greater flexibility, thereby boosting MAU, as their fans tend to follow them. We expect MAU to bottom out in FY2025, though growth will likely remain marginal given the intense competition in both key markets,” say the analysts.
On the outlook, they expect revenue, including the group’s recently diversified segments live-commerce and audio-streaming, to increase by 15% y-o-y in FY2025, driven by stronger-than-expected performance from Wave, the group’s audio-streaming app.
These two new segments have their revenues parked under “Others” in the financial statement. Jiang says: “These are two new businesses that we are still growing. We had to because we cannot just rely on one business — our core live-streaming.”
“However, these businesses are still small and have not reached a stage whereby it is reportable under revenue. So, they are still classified under ‘Others’,” explains Jiang, adding that for a business segment to be classified under “Revenue” it will need to report at least $5 million in revenue. At this point, both the live-commerce and audio-streaming segments combined have raked in revenue of about $8 million.
Forward strategy
In August 2024, 17Live unveiled its “17Live Forward Strategy”, centred on three key pillars designed to drive sustainable growth in the live-streaming industry while accelerating its new businesses both organically and through acquisitions. Since then, the group has reported progress in product innovation and strategic acquisitions.
Under its first pillar of strengthening platform and product enhancements to continue driving engagement, 17Live implemented new interactive features that enhance user and streamer experiences. One such feature is the AI Co-Host feature, which allows streamers to leverage artificial intelligence to engage with audiences in novel ways, improving both content creation and moderation.
Apart from using AI to help its live-streamers, Jiang shares that the group allows streamers to get onboard onto the platform — a service not typically provided by other platforms such as TikTok. This helps the streamers navigate the system and processes in 17Live for a better streaming experience.
The second pillar is to lower barriers to entry for streamer growth. Last December, 17Live launched its V-create tool, which is a cost-free virtual-character creation feature which enables aspiring content creators to develop avatars with minimal setup easily. This initiative democratises virtual live-streaming, allowing a broader range of creators to join the 17Live ecosystem with minimum start-up hurdles.
Finally, the third pillar is to diversify its revenue streams by building an IP-powered ecosystem to help generate overall revenue growth. While the V-Liver segment is considered a new segment, the group has introduced its new live-commerce and audio-streaming segments, which Jiang hopes to see more meaningful contribution in FY2025.
Under the V-Liver segment, Jiang says it is about more than just the talents, or “souls,” behind a virtual character. These virtual characters are IPs in their own right, and if they gain success and popularity, the group could unlock a high-margin revenue stream. Jiang is also optimistic that the V-Liver IP business will take off, seeing it as a potential driver for the group’s global expansion.
Jiang says: “Live-streaming revenue in the V-Liver industry represents just a portion of the overall potential, around a quarter. To tap into the majority of the revenue, the focus must expand to other areas such as events, merchandising and more. This is where popular IPs play a key role, as they are essential for monetising these additional streams and unlocking the full revenue potential.”
The company has already acquired two businesses to strengthen its V-liver segment: N Craft, which focuses solely on V-Liver live-streaming, and Mikai, a supplementary business centred on V-Tuber live-streaming on YouTube. Jiang anticipates making more acquisitions in FY2025, funding them through internal resources.
On the outlook, Jiang says: “We hope to see growth this year and finally turn profitable. We hope to see topline growth, as we are confident that our core live-streaming business has stabilised, while our new businesses are growing — both have different potentials.”
