JOYY Inc. (NASDAQ: YY) saw its stock price plummet 7% in after-hours trading on Wednesday following the release of its fourth quarter and full year 2024 financial results. The sharp decline came despite the company reporting adjusted earnings that beat analyst estimates, as investors focused on a massive goodwill impairment charge and declining user metrics.

For the fourth quarter of 2024, JOYY reported revenue of $549.4 million, slightly missing the consensus estimate of $549.5 million. However, the company's bottom line was severely impacted by a $454.9 million non-cash goodwill impairment charge, resulting in a net loss of $304.1 million for the quarter. Excluding this impairment and other one-time items, JOYY's adjusted net income was $96.1 million, surpassing the expected $73.4 million.

The significant goodwill writedown appears to be the primary driver of the stock's after-hours decline. Additionally, investors seem concerned about shrinking user engagement across JOYY's platforms. The company reported that its global average mobile monthly active users (MAUs) decreased to 263.1 million in Q4 2024, down from 274.9 million in the same period of 2023. This decline was evident across key products like Bigo Live, Likee, and Hago.

Despite the negative reaction, JOYY did report some positive metrics. The company's gross profit for Q4 was $203.8 million, with a gross margin of 37.1%. Management also highlighted growth in non-livestreaming revenues and improvements in operational efficiency. However, these positives were overshadowed by the large impairment charge and user metric declines, leading to the significant after-hours selloff.