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Momo Announces Unaudited Financial Results for the First Quarter of 2019

BEIJING, May 28, 2019 /PRNewswire/ -- Momo Inc. (NASDAQ: MOMO) ("Momo" or the "Company"), a leading mobile social networking platform in China, today announced its unaudited financial results for the first quarter of 2019.

First Quarter of 2019 Highlights

  • Net revenues increased 35% year over year to RMB3,722.9 million (US$554.7 million*) in the first quarter of 2019.
  • Net income attributable to Momo Inc. decreased to RMB289.3 million (US$43.1 million) in the first quarter of 2019 from RMB825.2 million in the same period of 2018, which was mainly due to the fact that we recognized a total share-based compensation expense of RMB593.1 million (US$88.4 million) in the first quarter of 2019 including a share-based compensation expense of RMB466.9 million (US$69.6 million) regarding to certain share options granted to Tantan's founders, while the total share-based compensation expense recognized in the same period of 2018 was only RMB78.7 million. In August 2018, Tantan Limited granted 3,578,205 share options to its founders. The share options included a performance condition in which the founders have the right to receive fully vested options immediately upon achieving certain performance condition. During the first quarter of 2019, we determined that it became probable that the performance condition will be met and accordingly, recognized a share-based compensation expense of RMB466.9 million (US$69.6 million) related to those options.
  • Non-GAAP net income attributable to Momo Inc. (note 1) increased slightly to RMB910.3 million (US$135.6 million) in the first quarter of 2019 from RMB903.8 million in the same period of 2018.
  • Diluted net income per American Depositary Share ("ADS") was RMB1.36 (US$0.20) in the first quarter of 2019, compared to RMB3.98 in the same period of 2018.
  • Non-GAAP diluted net income per ADS (note 1) was RMB4.15 (US$0.62) in the first quarter of 2019, compared to RMB4.36 in the same period of 2018.
  • Monthly Active Users ("MAU") on Momo application were 114.4 million in March 2019, compared to 103.3 million in March 2018.
  • Total paying users of our live video service and value-added service, without double counting the overlap, including 5.0 million paying users of Tantan Limited ("Tantan"), were 14.0 million for the first quarter of 2019, compared to 8.1 million for the first quarter of 2018.

"Q1 was a solid quarter and a good start to the year 2019," commented Yan Tang, Chairman and CEO of Momo. "We have started to implement the strategies that we laid out at the beginning of the year. Some of the initiatives we took on the product and operational fronts have already generated good results in driving business growth. We will continue to execute against the strategic priorities and create value for our shareholders."

* This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars, in this press release, were made at a rate of RMB6.7112 to US$1.00, the effective noon buying rate for March 29, 2019 as set forth in the H.10 statistical release of the Federal Reserve Board.

First Quarter of 2019 Financial Results

Net revenues

Total net revenues were RMB3,722.9 million (US$554.7 million) in the first quarter of 2019, an increase of 35% from RMB2,764.4 million in the first quarter of 2018.

Live video service revenues were RMB2,689.4 million (US$400.7 million) in the first quarter of 2019, an increase of 14% from RMB2,360.1 million during the same period of 2018. The growth in live video revenues was contributed by the increase in quarterly paying users, as well as the increase in average revenues per paying user per quarter.

Value-added service revenues mainly include membership subscription revenues and virtual gift revenues. The total value-added service revenues were RMB903.8 million (US$134.7 million) in the first quarter of 2019, an increase of 285% from RMB235.0 million during the same period of 2018. The year-over-year increase was primarily attributable to the continued growth of the virtual gift business on the Momo application driven by more paying scenarios introduced to enhance the social experience of Momo users, and to a lesser extent, the consolidation of Tantan's membership subscription revenues for the whole first quarter of 2019.

Mobile marketing revenues were RMB80.7 million (US$12.0 million) in the first quarter of 2019, a decrease of 32% from RMB118.9 million during the same period of 2018. The decrease in mobile marketing revenues was driven by the decreased demand from our advertising and marketing customers.

Mobile games revenues were RMB39.0 million (US$5.8 million) in the first quarter of 2019, a decrease of 8% from RMB42.2 million in the first quarter of 2018. The decrease in mobile game revenues was mainly due to the continued decrease in quarterly paying users.

Net revenues from Momo segment increased from RMB2,758.3 million in the first quarter of 2018 to RMB3,419.2 million (US$509.5 million) in the first quarter of 2019, primarily driven by the significant increase in net revenues from live video service and value-added service. Net revenues from Tantan segment was RMB295.3 million (US$44.0million) in the first quarter of 2019, which mainly included value -added service revenue.

Cost and expenses

Cost and expenses were RMB3,349.4 million (US$499.1 million) in the first quarter of 2019, an increase of 83% from RMB1,834.2 million in the first quarter of 2018. The increase was primarily attributable to: (a) an increase in personnel related costs including share-based compensation expenses, especially the share-based compensation expenses of RMB466.9 million (US$69.6 million) charged from the options granted to Tantan's founders and the Company's rapidly expanding talent pool; (b) an increase in revenue sharing with the broadcasters related to our live video service and virtual gift recipients; (c) an increase in marketing and promotional expenses to attract users and promote our live video services; (d) an increase in amortization expenses related to the intangible assets from business acquisitions; and (e) an increase in fees to payment channels resulting from a higher volume of cash collection through such channels.

Non-GAAP cost and expenses (note 1) were RMB2,719.2 million (US$405.2 million) in the first quarter of 2019, an increase of 55% from RMB1,755.5 million during the same period of 2018.

Income from operations

Income from operations was RMB384.4 million (US$57.3 million) in the first quarter of 2019, compared to RMB937.1 million during the same period of 2018. Income from operations of Momo segment was RMB998.6 million (US$148.8 million) in the first quarter of 2019 and increased from RMB940.6 million in the first quarter of 2018. Loss from operations of Tantan segment was RMB604.6 million (US$90.1 million) in the first quarter of 2019.

Non-GAAP income from operations (note 1) was RMB1,014.7 million (US$151.2 million) in the first quarter of 2019, compared to RMB1,015.7 million during the same period of 2018. Non-GAAP income from operations of Momo segment was RMB1,098.9 million (US$163.7 million) in the first quarter of 2019 and increased from RMB1,019.3 million in the first quarter of 2018. Non-GAAP loss from operations of Tantan segment was RMB77.1 million (US$11.5 million) in the first quarter of 2019.

Income tax expenses

Income tax expenses were RMB163.7 million (US$24.4 million) in the first quarter of 2019 and decreased from RMB170.9 million in the first quarter of 2018. The decrease was mainly because profit before income tax decreased in the first quarter of 2019.

Net income

Net income was RMB286.6 million (US$42.7 million) in the first quarter of 2019, compared to RMB822.2 million during the same period of 2018. Net income from Momo segment was RMB893.9 million (US$133.2 million) in the first quarter of 2019 and increased from RMB825.7 million in the first quarter of 2018. Net loss from Tantan segment was 597.7 million (US$89.1 million) in the first quarter of 2019 which was mainly due to the share-based compensation expenses of RMB466.9 million (US$69.6 million) charged from the options granted to Tantan's founders.

Non-GAAP net income (note 1) was RMB907.5 million (US$135.2 million) in the first quarter of 2019, compared to RMB900.8 million during the same period of 2018. Non-GAAP net income from Momo segment was RMB994.2 million (US$148.1 million) in the first quarter of 2019 and increased from RMB904.3 million in the first quarter of 2018. Non-GAAP net loss of Tantan segment was RMB79.6 million (US$11.9 million) in the first quarter of 2019.

Net income attributable to Momo Inc.

Net income attributable to Momo Inc. was RMB289.3 million (US$43.1 million) in the first quarter of 2019, compared to RMB825.2 million during the same period of 2018.

Non-GAAP net income (note 1) attributable to Momo Inc. was RMB910.3 million (US$135.6 million) in the first quarter of 2019, compared to RMB903.8 million during the same period of 2018.

Net income per ADS

Diluted net income per ADS was RMB1.36 (US$0.20) in the first quarter of 2019, compared to RMB 3.98 in the first quarter of 2018.

Non-GAAP diluted net income per ADS (note 1) was RMB4.15 (US$0.62) in the first quarter of 2019, compared to RMB4.36 in the first quarter of 2018.

Cash and cash flow

As of March 31, 2019, Momo's cash, cash equivalents, term deposits and short-term investment totaled RMB12,015.9 million (US$1,790.4 million), compared to RMB11,292.6 million as of December 31, 2018. Net cash provided by operating activities in the first quarter of 2019 was RMB1,175.9 million (US$175.2 million), compared to RMB825.5 million in the first quarter of 2018.

Recent Development

On March 12, 2019, Momo's board of directors declared a special cash dividend in the amount of US$0.62 per ADS, or US$0.31 per ordinary share. The cash dividend was paid on April 30, 2019 to shareholders of record at the close of business on April 5, 2019. The aggregate amount of cash dividends paid was US$128.6 million.

Business Outlook

For the second quarter of 2019, the Company expects total net revenues to be between RMB4.0 billion to RMB4.1 billion, representing an increase of 27% to 30% year over year. These estimates reflect the Company's current and preliminary view, which is subject to change.

Note 1: Non-GAAP measures

To supplement our consolidated financial statements presented in accordance with U.S. generally accepted accounting principles ("GAAP"), we use various non-GAAP financial measures that are adjusted from the most comparable GAAP results to exclude share-based compensation and amortization of intangible assets from business acquisitions, and tax impacts related to the amortization of intangible assets from business acquisitions.

Reconciliations of our non-GAAP financial measures to our U.S. GAAP financial measures are shown in tables at the end of this earnings release, which provide more details about the non-GAAP financial measures.

Our non-GAAP financial information is provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of the historical and current financial performance of our continuing operations and our prospects for the future. Our non-GAAP financial information should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to the GAAP results. In addition, our calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.

Our non-GAAP information (including non-GAAP cost and operating expenses, income from operations, net income,net income attributable to Momo Inc., and diluted net income per ADS) is adjusted from the most comparable GAAP results to exclude share-based compensation, amortization of intangible assets from business acquisitions, and tax impacts related to the amortization of intangible assets from business acquisitions. A limitation of using these non-GAAP financial measures is that share-based compensation, amortization of intangible assets from business acquisitions and tax impacts related to the amortization of intangible assets from business acquisitions have been and will continue to be for the foreseeable future a significant recurring expense in our results of operations. We compensate for these limitations by providing reconciliations of our non-GAAP measures to our U.S. GAAP measures. Please see the reconciliation tables at the end of this earnings release.

Conference Call

Momo's management will host an earnings conference call on Tuesday, May 28, 2019, at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing / Hong Kong Time on May 28, 2019).

Dial-in details for the earnings conference call are as follows:

International:

+65-6713-5090

U.S. Toll Free:

+1-866-519-4004

Hong Kong Toll Free: 

800-906601

Mainland China: 

4006-208038

Passcode:

Momo

Please dial in 15 minutes before the call is scheduled to begin.

A telephone replay of the call will be available after the conclusion of the conference call through 9:00 a.m. U.S. Eastern Time, June 5, 2019. The dial-in details for the replay are as follows:

International: 

+61-2-8199-0299

U.S. Toll Free:

+1-855-452-5696

Passcode: 

9359493

Additionally, a live and archived webcast of the conference call will be available on the Investor Relations section of Momo's website at http://ir.immomo.com.

About Momo

Momo is a leading mobile social networking platform in China. Momo connects people in a personal and lively way through a revolutionary mobile-based social networking platform. With powerful and precise location-based features, Momo enables users to connect with each other and expand relationships from online to offline. Momo's platform includes the Momo mobile application and a variety of related features, functionalities, tools and services that it provides to users, customers and platform partners. Leveraging its social interest graph engine and analysis of user behavior data, Momo is able to provide users a customized experience based on their social preferences and needs. Momo users can maintain and strengthen their relationships through private and group communication tools, content creation and sharing functions, as well as the offline social activities promoted on Momo's platform. Momo users are also able to enjoy live video on our platform. In addition, in May 2018, Momo completed its acquisition of Tantan, a leading social and dating app for the younger generation. Tantan, whose primary users consist of young Chinese singles, is designed to help its users find and establish romantic connections, as well as meet interesting people.

For investor and media inquiries, please contact:

Momo Inc.

Investor Relations
Phone: +86-10-5731-0538
Email: ir@immomo.com

Christensen

In China
Mr. Christian Arnell
Phone: +86-10-5900-1548
E-mail: carnell@christensenir.com

In US
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: lbergkamp@christensenir.com

Safe Harbor Statement

This news release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include but are not limited to our management quotes and our financial outlook for the second quarter of 2019. 

Our forward-looking statements are not historical facts but instead represent only our belief regarding expected results and events, many of which, by their nature, are inherently uncertain and outside of our control. Our actual results and other circumstances may differ, possibly materially, from the anticipated results and events indicated in these forward-looking statements. Announced results for the first quarter of 2019 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the second quarter of 2019 and may be unable to grow our business in the manner planned. We may also modify our strategy for growth.  In addition, there are other risks and uncertainties that could cause our actual results to differ from what we currently anticipate, including those relating to our ability to retain and grow our user base, our ability to attract and retain sufficiently trained professionals to support our operations, and our ability to anticipate and develop new services and enhance existing services to meet the demand of our users or customers.  For additional information on these and other important factors that could adversely affect our business, financial condition, results of operations, and prospects, please see our filings with the U.S. Securities and Exchange Commission.

All information provided in this press release and in the attachments is as of the date of the press release. We undertake no obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise, after the date of this release, except as required by law. Such information speaks only as of the date of this release.

Momo Inc.

Unaudited Condensed Consolidated Statement of Operations

(All amounts in thousands, except share and per share data)

 

Three months

 

ended March 31

 
 

2018

 

2019

 

2019

 
 

RMB

 

RMB

 

US$

 

Net revenues:

           

Live video service

2,360,114

 

2,689,413

 

400,735

 

Value-added service

235,004

 

903,849

 

134,678

 

Mobile marketing

118,858

 

80,729

 

12,029

 

Mobile games

42,228

 

39,008

 

5,812

 

Other services

8,172

 

9,920

 

1,478

 

Total net revenues

2,764,376

 

3,722,919

 

554,732

 

Cost and expenses:

           

Cost of revenues

(1,331,640)

 

(1,873,574)

 

(279,171)

 

Research and development

(111,386)

 

(249,431)

 

(37,166)

 

Sales and marketing

(281,708)

 

(623,848)

 

(92,956)

 

General and administrative

(109,469)

 

(602,596)

 

(89,790)

 

Total cost and expenses

(1,834,203)

 

(3,349,449)

 

(499,083)

 

Other operating income

6,904

 

10,954

 

1,632

 

Income from operations

937,077

 

384,424

 

57,281

 

Interest income

47,905

 

93,778

 

13,973

 

Interest expense

-

 

(18,989)

 

(2,829)

 

Impairment loss on long-term investments

-

 

(4,500)

 

(671)

 

Income before income tax and share of income on equity method
     investments

984,982

 

454,713

 

67,754

 

Income tax expenses

(170,929)

 

(163,651)

 

(24,385)

 

Income before share of income on equity method investments

814,053

 

291,062

 

43,369

 

Share of income (loss) on equity method investments

8,126

 

(4,504)

 

(671)

 

Net income

822,179

 

286,558

 

42,698

 

Less: net loss attributable to non-controlling interest

(2,976)

 

(2,759)

 

(411)

 

Net income attributable to Momo Inc.

825,155

 

289,317

 

43,109

 

Net income per share attributable to ordinary shareholders

           

Basic

2.07

 

0.70

 

0.10

 

Diluted

1.99

 

0.68

 

0.10

 

Weighted average shares used in calculating net income per ordinary share

           

Basic

399,002,678

 

413,967,371

 

413,967,371

 

Diluted

415,045,295

 

425,890,818

 

425,890,818

 

Momo Inc.

Unaudited Condensed Consolidated Statement of Comprehensive Income

(All amounts in thousands, except share and per share data)

 

Three months

   

ended March 31

   
 

2018

 

2019

 

2019

   
 

RMB

 

RMB

 

US$

   
               

Net income

822,179

 

286,558

 

42,698

   

Other comprehensive loss, net of tax:

             

Foreign currency translation adjustment

(88,293)

 

(72,981)

 

(10,875)

   

Comprehensive income

733,886

 

213,577

 

31,823

   

Less: comprehensive loss attributed to the non-controlling interest

(2,976)

 

(5,234)

 

(780)

   

Comprehensive income attributable to Momo Inc.

736,862

 

218,811

 

32,603

   

Momo Inc.

Unaudited Condensed Consolidated Balance Sheets

(All amounts in thousands, except share and per share data)

           
 

December 31

 

March 31

 

March 31

 

2018

 

2019

 

2019

RMB

RMB

 

US$

Assets

         

Current assets

         

Cash and cash equivalents

2,468,034

 

2,678,342

 

399,085

Term deposits

8,824,610

 

9,227,553

 

1,374,948

Short-term investment

-

 

110,000

 

16,391

Accounts receivable, net of allowance for doubtful
     accounts of RMB nil and RMB nil as of December 31,
     2018 and March 31, 2019, respectively

719,606

 

310,192

 

46,220

Prepaid expenses and other current assets

620,979

 

609,956

 

90,886

Total current assets

12,633,229

 

12,936,043

 

1,927,530

Property and equipment, net

387,532

 

362,062

 

53,949

Intangible assets

1,036,986

 

974,820

 

145,253

Rental deposits

24,192

 

25,508

 

3,801

Long-term investments

447,465

 

458,462

 

68,313

Deferred tax assets

57,786

 

32,249

 

4,805

Other non-current assets

71,519

 

43,988

 

6,554

Right-of-use assets, net[1]

-

 

175,911

 

26,211

Goodwill

4,306,829

 

4,204,440

 

626,481

Total assets

18,965,538

 

19,213,483

 

2,862,897

Liabilities and equity

         

Current liabilities

         

Accounts payable

718,362

 

720,924

 

107,419

Deferred revenue

441,892

 

460,734

 

68,652

Accrued expenses and other current liabilities

846,710

 

655,174

 

97,625

Amount due to related parties

82,948

 

56,034

 

8,349

Income tax payable

137,090

 

65,533

 

9,765

Lease liabilities due within one year1

-

 

74,499

 

11,101

Dividends payable

-

 

863,110

 

128,607

Deferred consideration in connection with business
     acquisitions

469,274

 

154,521

 

23,024

Total current liabilities

2,696,276

 

3,050,529

 

454,542

Deferred tax liabilities

259,247

 

243,705

 

36,313

Convertible senior notes

4,877,116

 

4,764,259

 

709,897

Share-based compensation liability

86,767

 

549,207

 

81,834

Lease liabilities1

-

 

79,731

 

11,880

Other non-current liabilities

23,273

 

30,751

 

4,582

Total liabilities

7,942,679

 

8,718,182

 

1,299,048

Shareholder's equity(i)

11,022,859

 

10,495,301

 

1,563,849

Total liabilities and shareholder's equity

18,965,538

 

19,213,483

 

2,862,897

 

[1] On January 1, 2019, the company adopted ASU 2016-02, the new lease standard, using the modified retrospective basis and did not restate comparative periods.

(i): As of March 31, 2019, the number of ordinary shares issued and outstanding was 414,698,540.

Momo Inc.

Unaudited Condensed Consolidated Statement of Cash Flows

(All amounts in thousands, except share and per share data)

 
 

Three months

   
 

ended March 31

   
 

2018

 

2019

 

2019

   
 

RMB

 

RMB

 

US$

   

Cash flows from operating activities:

             

Net income

822,179

 

286,558

 

42,698

   

Adjustments to reconcile net income to net cash provided by operating activities:

             

Depreciation of property and equipment

31,472

 

48,400

 

7,212

   

Amortization of intangible assets

1,433

 

38,595

 

5,751

   

Share-based compensation

78,664

 

593,074

 

88,372

   

Share of (income) loss on equity method investments

(8,126)

 

4,504

 

671

   

Impairment loss on long-term investments

-

 

4,500

 

671

   

Loss on disposal of property and equipment

2

 

4

 

1

   

Changes in operating assets and liabilities:

             

Accounts receivable

53,232

 

409,414

 

61,005

   

Prepaid expenses and other current assets

56,487

 

(18,189)

 

(2,710)

   

Amount due from related parties

(7,424)

 

-

 

-

   

Rental deposits

336

 

(1,317)

 

(196)

   

Deferred tax assets

7,965

 

25,537

 

3,805

   

Other non-current assets

(11,524)

 

31,439

 

4,684

   

Accounts payable

56,359

 

32,515

 

4,845

   

Income tax payable

(64,366)

 

(71,558)

 

(10,662)

   

Deferred revenue

(33,591)

 

18,842

 

2,808

   

Accrued expenses and other current liabilities

(169,103)

 

(185,495)

 

(27,640)

   

Amount due to related parties

(32)

 

(25,965)

 

(3,869)

   

Deferred tax liability

(358)

 

(15,542)

 

(2,316)

   

Other non-current liabilities

11,851

 

593

 

88

   

Net cash provided by operating activities

825,456

 

1,175,909

 

175,218

   

Cash flows from investing activities:

             

Purchase of property and equipment

(64,263)

 

(52,798)

 

(7,867)

   

Proceeds from disposal of property and equipment

9

 

5

 

1

   

Payment for long-term investments

(4,000)

 

(12,000)

 

(1,788)

   

Prepayment of long-term investments

(47,000)

 

-

 

-

   

Payment for business acquisition, net of cash acquired

(1,460,063)

 

(305,067)

 

(45,456)

   

Purchase of term deposits

(3,636,592)

 

(3,485,005)

 

(519,282)

   

Cash received on maturity of term deposits

2,382,960

 

3,005,005

 

447,760

   

Payment for short-term investments

-

 

(210,000)

 

(31,291)

   

Cash received from sales of short-term investment

10,500

 

100,000

 

14,900

   

Net cash used in investing activities

(2,818,449)

 

(959,860)

 

(143,023)

   

Cash flows from financing activities:

             

Proceeds from exercise of share options

2,437

 

83

 

12

   

Deferred payment of purchase of property and equipment

(7,327)

 

(94)

 

(14)

   

Net cash used in financing activities

(4,890)

 

(11)

 

(2)

   

Effect of exchange rate changes

(14,936)

 

(5,730)

 

(857)

   

Net (decrease) increase  in cash, cash equivalents, and restricted cash

(2,012,819)

 

210,308

 

31,336

   

Cash, cash equivalents, and restricted cash at beginning of period

4,462,194

 

2,468,034

 

367,749

   

Cash, cash equivalents, and restricted cash at end of period

2,449,375

 

2,678,342

 

399,085

   

Momo Inc.

Reconciliation of Non-GAAP financial measures to comparable GAAP measures

(All amounts in thousands, except per share data)

 

1. Reconciliation of Non-GAAP cost and operating expenses, income from operations, and net income to comparable GAAP measures.

                   
 

Three months

     

Three months

     

Three months

ended March 31, 2018

   

ended March 31, 2019

     

ended March 31, 2019

 

 

 

GAAP

RMB

 

Share-
based
compensation

RMB

 

Non-GAAP

RMB

 

GAAP

RMB

 

Amortization
of intangible
assets from
business
acquisitions
RMB

Share-

based
compensation

RMB

Tax
impacts(ii)
RMB

 

Non-GAAP

RMB

 

GAAP

US$

 

Amortization
of intangible
assets from
business
acquisitions

US$

Share-
based
compensation

US$

Tax
impacts(ii)
US$

 

Non-GAAP

US$

Cost of revenues

(1,331,640)

 

3,037

 

(1,328,603)

 

(1,873,574)

 

18,021

4,186

-

 

(1,851,367)

 

(279,171)

 

2,685

624

-

 

(275,862)

Research and
     development

(111,386)

 

16,359

 

(95,027)

 

(249,431)

 

2,289

39,730

-

 

(207,412)

 

(37,166)

 

341

5,920

-

 

(30,905)

Sales and
     marketing

(281,708)

 

20,908

 

(260,800)

 

(623,848)

 

16,853

39,452

-

 

(567,543)

 

(92,956)

 

2,511

5,879

-

 

(84,566)

General and
     administrative

(109,469)

 

38,360

 

(71,109)

 

(602,596)

 

-

509,706

-

 

(92,890)

 

(89,790)

 

-

75,949

-

 

(13,841)

Cost and
     operating
     expenses

(1,834,203)

 

78,664

 

(1,755,539)

 

(3,349,449)

 

37,163

593,074

-

 

(2,719,212)

 

(499,083)

 

5,537

88,372

-

 

(405,174)

Income from
     operations

937,077

 

78,664

 

1,015,741

 

384,424

 

37,163

593,074

-

 

1,014,661

 

57,281

 

5,537

88,372

-

 

151,190

Net income
     attributable to
     Momo Inc.

825,155

 

78,664

 

903,819

 

289,317

 

37,163

593,074

(9,291)

 

910,263

 

43,109

 

5,537

88,372

(1,384)

 

135,634

                                           

(ii) Includes tax impacts related to the amortization of intangible assets from business acquisition. There is no tax impact related to share-based compensation.

Momo Inc.

Reconciliation of Non-GAAP financial measures to comparable GAAP measures

(All amounts in thousands, except per share data)

 

2. Reconciliation of diluted EPS to Non-GAAP diluted EPS

 
 

Three months

 

Three months

 

Three months

 

ended March 31, 2018

ended March 31, 2019

 

ended March 31, 2019

 
 

 

GAAP

RMB

 

Adjustment

 

Non-GAAP

RMB

 

 

GAAP

RMB

 

Adjustment

 

 

Non-GAAP

RMB

 

 

GAAP

US$

 

Adjustment

 

 

Non-GAAP

US$

 

Weighted average ordinary shares outstanding
     used in computing
    
diluted EPS

415,045,295

 

-

 

415,045,295

 

425,890,818

 

22,442,346(iii)

 

448,333,164

 

425,890,818

 

22,442,346(iii)

 

448,333,164

 

Diluted earnings per share

1.99

     

2.18

 

0.68

     

2.07

 

0.10

     

0.31

 

Diluted earnings per ADS

3.98

     

4.36

 

1.36

     

4.15

 

0.20

     

0.62

 
 

(iii) The adjustment represents an incremental weighted average number of 22,442,346 ordinary shares resulting from the assumed conversion of convertible senior notes.

Momo Inc.

Unaudited Segment Report

(All amounts in thousands, except share and per share data)

 

Three months

Ended March 31, 2019

 

Momo

 

Tantan

 

QOOL

 

Total

 

Total

 

RMB

 

RMB

 

RMB

 

RMB

 

US$

Net revenues:

                 

Live video service

2,689,413

 

-

 

-

 

2,689,413

 

400,735

Value-added service

608,502

 

295,347

 

-

 

903,849

 

134,678

Mobile marketing

80,729

 

-

 

-

 

80,729

 

12,029

Mobile games

39,008

 

-

 

-

 

39,008

 

5,812

Other services

1,557

 

-

 

8,363

 

9,920

 

1,478

Total net revenues

3,419,209

 

295,347

 

8,363

 

3,722,919

 

554,732

Cost and expenses(iv):

                 

Cost of revenues

(1,770,038)

 

(98,856)

 

(4,680)

 

(1,873,574)

 

(279,171)

Research and development

(184,273)

 

(65,158)

 

-

 

(249,431)

 

(37,166)

Sales and marketing

(362,958)

 

(255,921)

 

(4,969)

 

(623,848)

 

(92,956)

General and administrative

(114,264)

 

(479,965)

 

(8,367)

 

(602,596)

 

(89,790)

Total cost and expenses

(2,431,533)

 

(899,900)

 

(18,016)

 

(3,349,449)

 

(499,083)

Other operating income

10,954

 

-

 

-

 

10,954

 

1,632

Income (loss) from
operations

998,630

 

(604,553)

 

(9,653)

 

384,424

 

57,281

Interest income

90,858

 

2,891

 

29

 

93,778

 

13,973

Interest expense

(18,989)

 

-

 

-

 

(18,989)

 

(2,829)

Impairment loss on long-term
     investments

(4,500)

 

-

 

-

 

(4,500)

 

(671)

Income (loss) before income
     tax and share of income

     on equity method
     investments

1,065,999

 

(601,662)

 

(9,624)

 

454,713

 

67,754

Income tax expenses

(167,603)

 

3,952

 

-

 

(163,651)

 

(24,385)

Income (loss) before share
     of income on equity
     method investments

898,396

 

(597,710)

 

(9,624)

 

291,062

 

43,369

Share of loss on equity
     method investments

(4,504)

 

-

 

-

 

(4,504)

 

(671)

Net income (loss)

893,892

 

(597,710)

 

(9,624)

 

286,558

 

42,698

 
 

(iv) Share-based compensation was allocated in cost of revenues and operating expenses as follows:

 
 

Three months

 

ended March 31, 2019

 

Momo

 

Tantan

 

QOOL

 

Total

 

Total

 

RMB

 

RMB

 

RMB

 

RMB

 

US$

Cost of revenues

3,606

 

580

 

-

 

4,186

 

624

Research and development

21,713

 

18,017

 

-

 

39,730

 

5,920

Sales and marketing

35,474

 

3,978

 

-

 

39,452

 

5,879

General and administrative

39,491

 

467,684

 

2,531

 

509,706

 

75,949

Total cost and expenses

100,284

 

490,259

 

2,531

 

593,074

 

88,372

Momo Inc.

Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report

(All amounts in thousands, except share and per share data)

 
 

Three months

 

ended March 31, 2019

 

Momo

 

Tantan

 

QOOL

 

Total

 

Total

 

RMB

 

RMB

 

RMB

 

RMB

 

US$

Operating income (loss)

998,630

 

(604,553)

 

(9,653)

 

384,424

 

57,281

Share-based compensation

100,284

 

490,259

 

2,531

 

593,074

 

88,372

Amortization of intangible assets from
     business acquisitions

-

 

37,163

 

-

 

37,163

 

5,537

Non-GAAP operating income (loss)

1,098,914

 

(77,131)

 

(7,122)

 

1,014,661

 

151,190

                   

Net income (loss)

893,892

 

(597,710)

 

(9,624)

 

286,558

 

42,698

Share-based compensation

100,284

 

490,259

 

2,531

 

593,074

 

88,372

Amortization of intangible assets from
     business acquisitions

-

 

37,163

 

-

 

37,163

 

5,537

Tax impacts

-

 

(9,291)

 

-

 

(9,291)

 

(1,384)

Non-GAAP net income (loss)

994,176

 

(79,579)

 

(7,093)

 

907,504

 

135,223

Momo Inc.

Unaudited Segment Report

(All amounts in thousands, except share and per share data)

 

Three months

ended March 31, 2018

 

Momo

     

QOOL

 

Total

 

Total

 

RMB

     

RMB

 

RMB

 

US$[2]

Net revenues:

                 

Live video service

2,360,114

     

-

 

2,360,114

 

376,258

Value-added service

235,004

     

-

 

235,004

 

37,465

Mobile marketing

118,858

     

-

 

118,858

 

18,949

Mobile games

42,228

     

-

 

42,228

 

6,732

Other services

2,053

     

6,119

 

8,172

 

1,303

Total net revenues

2,758,257

     

6,119

 

2,764,376

 

440,707

Cost and expenses(v):

                 

Cost of revenues

(1,327,371)

     

(4,269)

 

(1,331,640)

 

(212,295)

Research and development

(111,386)

     

-

 

(111,386)

 

(17,758)

Sales and marketing

(278,790)

     

(2,918)

 

(281,708)

 

(44,911)

General and administrative

(107,024)

     

(2,445)

 

(109,469)

 

(17,452)

Total cost and expenses

(1,824,571)

     

(9,632)

 

(1,834,203)

 

(292,416)

Other operating income

6,904

     

-

 

6,904

 

1,101

Income (loss) from operations

940,590

     

(3,513)

 

937,077

 

149,392

Interest income

47,895

     

10

 

47,905

 

7,637

Income (loss) before income tax and share of
     income on equity method investments

988,485

     

(3,503)

 

984,982

 

157,029

Income tax expenses

(170,929)

     

-

 

(170,929)

 

(27,250)

Income (loss) before share of income on equity
     method investments

817,556

     

(3,503)

 

814,053

 

129,779

Share of income on equity method investments

8,126

     

-

 

8,126

 

1,296

Net income (loss)

825,682

     

(3,503)

 

822,179

 

131,075

 

(v) Share-based compensation was allocated in cost of revenues and operating expenses as follows:

 
 

Three months

 

ended March 31, 2018

 

Momo

     

QOOL

 

Total

 

Total

 

RMB

     

RMB

 

RMB

 

US$[2]

Cost of revenues

3,037

     

-

 

3,037

 

484

Research and development

16,359

     

-

 

16,359

 

2,608

Sales and marketing

20,908

     

-

 

20,908

 

3,333

General and administrative

38,360

     

-

 

38,360

 

6,116

Total cost and expenses

78,664

     

-

 

78,664

 

12,541

Momo Inc.

Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report

(All amounts in thousands, except share and per share data)

 
 

Three months

 

ended March 31, 2018

 

Momo

     

QOOL

 

Total

 

Total

 

RMB

     

RMB

 

RMB

 

US$[2]

Operating income (loss)

940,590

     

(3,513)

 

937,077

 

149,392

Share-based compensation

78,664

     

-

 

78,664

 

12,541

Non-GAAP operating income (loss)

1,019,254

     

(3,513)

 

1,015,741

 

161,933

                   

Net income (loss)

825,682

     

(3,503)

 

822,179

 

131,075

Share-based compensation

78,664

     

-

 

78,664

 

12,541

Non-GAAP net income (loss)

904,346

     

(3,503)

 

900,843

 

143,616

[2] All translations from RMB to U.S. dollars are made at a rate of RMB 6.2726 to US$1.00, the effective noon buying rate for March 30, 2018 as set forth in the H.10 statistical release of the Federal Reserve Board.

SOURCE Momo Inc.

Related Links

http://ir.immomo.com/