Momo Announces Unaudited Financial Results for the Second Quarter of 2018
Second Quarter of 2018 Highlights
- Net revenues increased 58% year over year to
$494.3 million . - Net income attributable to
Momo Inc. increased to$117.8 million in the second quarter of 2018 from$60.8 million in the same period last year. - Non-GAAP net income attributable to
Momo Inc. (note 1) increased 90% to$140.2 million in the second quarter of 2018 from$73.8 million in the same period last year. - Diluted net income per American Depositary Share ("ADS") was
$0.56 , compared to$0.29 in the same period last year. - Non-GAAP diluted net income per ADS (note 1) was
$0.66 , compared to$0.35 in the same period last year. - Monthly Active Users ("MAU") on Momo application were 108.0 million in
June 2018 , compared to 91.3 million inJune 2017 . - Total paying users of our live video service and value-added service, without double counting the overlap, including 3.1 million paying users of Tantan in
June 2018 , were 11.6 million for the second quarter of 2018, compared to 7.1 million for the second quarter of 2017.
First Half of 2018 Highlights
- Net revenues increased 61% year over year to
$929.4 million for the first half of 2018. - Net income attributable to
Momo Inc. was$247.7 million for the first half of 2018, compared with$142.0 million during the same period of 2017. - Non-GAAP net income attributable to
Momo Inc. (note 1) was$282.4 million for the first half of 2018, compared with$164.5 million during the same period of 2017. - Diluted net income per ADS was
$1.18 for the first half of 2018, compared with$0.69 during the same period of 2017. - Non-GAAP diluted income per ADS (note 1) was
$1.35 for the first half of 2018, compared with$0.80 during the same period of 2017.
"I am glad that we delivered another solid quarter. Our community continued to grow with healthy engagement trends, thanks to our consistent endeavors to drive product innovation and content enrichment." Commented Yan Tang, Chairman and CEO of Momo. "Our live streaming business continued to grow robustly. In addition, value-added service revenues for the Momo app more than doubled from a year ago, demonstrating Momo's monetization potential as a social platform. Tantan officially joined our family in the second quarter of 2018 and started to contribute to our social ecosystem and topline growth. Together we will be pushing forward our strategic priorities and solidifying our leadership in
Second Quarter of 2018 Financial Results
Net revenues
Total net revenues were
Live video service revenues continued its growth momentum and the total live video service revenues were
Value-added service revenues mainly include membership subscription revenues and virtual gift revenues. The total value-added service revenues were
Mobile marketing revenues were
Mobile games revenues were
Cost and expenses
Cost and expenses were
Non-GAAP cost and expenses (note 1) were
Other operating income
Other operating income was
Income from operations
Income from operations was
Non-GAAP income from operations (note 1) was
Income tax expenses
Income tax expenses were
Net income attributable to
Net income attributable to
Non-GAAP net income (note 1) attributable to
Net income per ADS
Diluted net income per ADS was
Non-GAAP diluted net income per ADS (note 1) was
Cash and cash flow
As of
First Half of 2018 Financial Results
Net revenues for the first half of 2018 were
Net income attributable to
Non-GAAP net income attributable to
Diluted net income per ADS was
Non-GAAP diluted net income per ADS (note 1) was
Net cash provided by operating activities was
Completion of Offering of Convertible Senior Notes
By
The Notes will bear interest at a rate of 1.25% per year, payable semiannually in arrears on
Holders of the Notes have the right to require us to repurchase for cash all or part of their notes on
The Notes will be convertible into Momo's American depositary shares ("ADSs"), at the option of the holders, based on an initial conversion rate of 15.4776 of the Company's ADSs per
Repayment of Long-term Bank Loan
To facilitate the closing of our acquisition of 100% equity stake of
Business Outlook
For the third quarter of 2018, the Company expects total net revenues to be between
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 acquisitions, and provision for income tax related to the amortization of intangible assets.
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 attributable to
Conference Call
Momo's management will host an earnings conference call on
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 8:00 a.m. U.S. Eastern Time, August 29, 2018. The dial-in details for the replay are as follows:
International: |
+61-2-8199-0299 |
U.S. Toll Free: |
+1-855-452-5696 |
Passcode: |
9585639 |
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
For investor and media inquiries, please contact:
Investor Relations
Phone: +86-10-5731-0538
Email: ir@immomo.com
Christensen
In
Mr.
Phone: +86-10- 5900-1548
E-mail: carnell@christensenir.com
In US
Ms.
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 third quarter of 2018.
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 second quarter of 2018 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the third quarter of 2018 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
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 |
|||||||||||
(US dollars in thousands, except per share data) |
|||||||||||
Three months |
First half year |
||||||||||
ended June 30 |
ended June 30 |
||||||||||
2017 |
2018 |
2017 |
2018 |
||||||||
Net revenues: |
|||||||||||
Live video service |
259,417 |
410,977 |
471,994 |
782,473 |
|||||||
Value-added service |
24,636 |
55,221 |
47,503 |
92,212 |
|||||||
Mobile marketing |
19,018 |
22,264 |
36,907 |
40,973 |
|||||||
Mobile games |
9,143 |
5,454 |
20,704 |
12,101 |
|||||||
Other services |
10 |
354 |
354 |
1,640 |
|||||||
Total net revenues |
312,224 |
494,270 |
577,462 |
929,399 |
|||||||
Cost and expenses: |
|||||||||||
Cost of revenues |
(150,668) |
(269,736) |
(271,112) |
(479,344) |
|||||||
Research and development |
(10,317) |
(25,069) |
(18,876) |
(42,602) |
|||||||
Sales and marketing |
(69,084) |
(54,553) |
(103,081) |
(98,895) |
|||||||
General and administrative |
(15,978) |
(20,003) |
(28,078) |
(37,234) |
|||||||
Total cost and expenses |
(246,047) |
(369,361) |
(421,147) |
(658,075) |
|||||||
Other operating income |
7,569 |
15,692 |
8,474 |
16,779 |
|||||||
Income from operations |
73,746 |
140,601 |
164,789 |
288,103 |
|||||||
Interest income |
4,628 |
8,239 |
8,380 |
15,779 |
|||||||
Interest expense |
- |
(1,950) |
- |
(1,950) |
|||||||
Impairment loss on long-term investments |
(4,386) |
- |
(4,386) |
- |
|||||||
Income before income tax and share of |
73,988 |
146,890 |
168,783 |
301,932 |
|||||||
Income tax expenses |
(13,938) |
(31,143) |
(29,715) |
(58,048) |
|||||||
Income before share of income on equity |
60,050 |
115,747 |
139,068 |
243,884 |
|||||||
Share of income on equity method investments |
514 |
1,692 |
2,697 |
2,971 |
|||||||
Net income |
60,564 |
117,439 |
141,765 |
246,855 |
|||||||
Less: net loss attributable to non-controlling interest |
(198) |
(340) |
(205) |
(808) |
|||||||
Net income attributable to Momo Inc. |
60,762 |
117,779 |
141,970 |
247,663 |
|||||||
Net income per share attributable to ordinary |
|||||||||||
Basic |
0.15 |
0.29 |
0.36 |
0.62 |
|||||||
Diluted |
0.15 |
0.28 |
0.34 |
0.59 |
|||||||
Weighted average shares used in calculating net |
|||||||||||
Basic |
394,579,193 |
405,737,852 |
392,220,292 |
402,388,870 |
|||||||
Diluted |
416,635,812 |
423,089,714 |
413,773,272 |
419,086,110 |
|||||||
Momo Inc. |
|||||||
Unaudited Condensed Consolidated Statement of Comprehensive Income |
|||||||
(US dollars in thousands, except per share data) |
|||||||
Three months |
First half year |
||||||
ended June 30 |
ended June 30 |
||||||
2017 |
2018 |
2017 |
2018 |
||||
Net income |
60,564 |
117,439 |
141,765 |
246,855 |
|||
Other comprehensive income(loss), net of tax of nil |
|||||||
Foreign currency translation adjustment |
6,680 |
(50,756) |
8,943 |
(24,002) |
|||
Comprehensive income |
67,244 |
66,683 |
150,708 |
222,853 |
|||
Less: comprehensive loss attributed to the non- |
(200) |
(457) |
(207) |
(825) |
|||
Comprehensive income attributable to Momo Inc. |
67,444 |
67,140 |
150,915 |
223,678 |
Momo Inc. |
|||
Unaudited Condensed Consolidated Balance Sheets |
|||
( US dollars in thousands) |
|||
December 31 |
June 30 |
||
2017 |
2018 |
||
Assets |
|||
Current assets |
|||
Cash and cash equivalents |
685,827 |
306,255 |
|
Term deposits |
373,794 |
416,360 |
|
Restricted cash |
- |
357,139 |
|
Accounts receivable, net of allowance for doubtful |
39,597 |
32,434 |
|
Prepaid expenses and other current assets |
82,717 |
69,650 |
|
Amount due from related parties |
5,143 |
2,030 |
|
Short-term investment |
1,614 |
- |
|
Total current assets |
1,188,692 |
1,183,868 |
|
Property and equipment, net |
39,762 |
48,189 |
|
Intangible assets |
7,462 |
162,519 |
|
Rental deposits |
2,651 |
2,955 |
|
Long term investments |
44,337 |
62,357 |
|
Deferred tax assets, non-current |
7,197 |
2,759 |
|
Other non-current assets |
8,495 |
14,081 |
|
Goodwill |
3,401 |
626,528 |
|
Total assets |
1,301,997 |
2,103,256 |
|
Liabilities and equity |
|||
Current liabilities |
|||
Accounts payable |
74,535 |
86,535 |
|
Deferred revenue |
64,865 |
59,969 |
|
Accrued expenses and other current liabilities |
87,809 |
102,151 |
|
Amount due to related parties |
5,804 |
5,869 |
|
Income tax payable |
27,033 |
13,213 |
|
Deferred consideration in connection with business |
- |
74,131 |
|
Total current liabilities |
260,046 |
341,868 |
|
Deferred tax liabilities, non-current |
1,866 |
40,630 |
|
Bank loan |
- |
300,000 |
|
Other non-current liabilities |
2,305 |
3,989 |
|
Total liabilities |
264,217 |
686,487 |
|
Shareholder's equity (Note a) |
1,037,780 |
1,416,769 |
|
Total liabilities and shareholder's equity |
1,301,997 |
2,103,256 |
|
Note a: As of June 30, 2018, the number of ordinary shares issued and outstanding was 408,975,956. |
Momo Inc. |
||||||||
Unaudited Condensed Consolidated Statement of Cash Flows |
||||||||
( US dollars in thousands) |
||||||||
Three months |
First half year |
|||||||
ended June 30 |
ended June 30 |
|||||||
2017 |
2018 |
2017 |
2018 |
|||||
Cash flows from operating activities: |
||||||||
Net income |
60,564 |
117,439 |
141,765 |
246,855 |
||||
Adjustments to reconcile net income to net cash |
||||||||
Depreciation of property and equipment |
2,463 |
5,505 |
4,585 |
10,459 |
||||
Amortization of intangible assets |
183 |
2,061 |
183 |
2,287 |
||||
Share-based compensation |
12,998 |
21,011 |
22,507 |
33,393 |
||||
Share of income on equity method investments |
(514) |
(1,692) |
(2,697) |
(2,971) |
||||
Impairment loss on long-term investments |
4,386 |
- |
4,386 |
- |
||||
Income on disposal of property and equipment |
(2) |
- |
(2) |
- |
||||
Provision of allowance for doubtful accounts |
85 |
(92) |
85 |
(92) |
||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
(4,228) |
1,742 |
(318) |
10,121 |
||||
Prepaid expenses and other current assets |
(8,041) |
3,526 |
(12,616) |
12,522 |
||||
Amount due from related parties |
(176) |
4,305 |
(513) |
3,136 |
||||
Rental deposits |
(271) |
76 |
(1,440) |
129 |
||||
Deferred tax assets |
- |
3,231 |
73 |
4,485 |
||||
Other non-current assets |
(48) |
(4,182) |
(781) |
(5,996) |
||||
Accounts payable |
5,165 |
5,855 |
11,621 |
14,726 |
||||
Income tax payable |
(1,754) |
(4,403) |
8,043 |
(14,639) |
||||
Deferred revenue |
1,757 |
(4,035) |
1,333 |
(9,322) |
||||
Accrued expenses and other current liabilities |
34,208 |
5,998 |
25,276 |
(20,620) |
||||
Amount due to related parties |
1,463 |
71 |
1,208 |
66 |
||||
Deferred tax liability |
(46) |
(515) |
(46) |
(571) |
||||
Other non-current liabilities |
(109) |
(182) |
793 |
1,683 |
||||
Net cash provided by operating activities |
108,083 |
155,719 |
203,445 |
285,651 |
||||
Cash flows from investing activities: |
||||||||
Purchase of property and equipment |
(4,140) |
(4,067) |
(11,344) |
(14,182) |
||||
Proceeds from disposal of property and equipment |
3 |
- |
7 |
1 |
||||
Payment for long term investments |
(2,114) |
(7,860) |
(3,629) |
(8,490) |
||||
Prepayment of long term investments |
- |
- |
- |
(7,398) |
||||
Payment for acquired intangible assets |
(2,187) |
- |
(2,765) |
- |
||||
Prepaid consideration for business acquisition |
- |
- |
- |
(229,823) |
||||
Payment for business acquisition |
- |
(285,096) |
- |
(285,096) |
||||
Purchase of term deposits |
(130,181) |
(616,662) |
(391,968) |
(1,189,083) |
||||
Cash received on maturity of term deposits |
79,502 |
758,853 |
384,109 |
1,133,945 |
||||
Cash received from sales of short term investment |
- |
- |
- |
1,653 |
||||
Net cash used in investing activities |
(59,117) |
(154,832) |
(25,590) |
(598,473) |
||||
Cash flows from financing activities: |
||||||||
Proceeds from exercise of options |
111 |
9 |
410 |
393 |
||||
Deferred payment of purchase of property and |
(30) |
(169) |
(204) |
(1,322) |
||||
Proceeds from bank loan |
- |
300,000 |
- |
300,000 |
||||
Net cash provided by financing activities |
81 |
299,840 |
206 |
299,071 |
||||
Effect of exchange rate changes |
5,342 |
(27,821) |
7,463 |
(8,682) |
||||
Net increase(decrease) in cash, cash equivalent, and |
54,389 |
272,906 |
185,524 |
(22,433) |
||||
Cash, cash equivalent, and restricted cash at beginning of |
388,699 |
390,488 |
257,564 |
685,827 |
||||
Cash, cash equivalent, and restricted cash at end of period |
443,088 |
663,394 |
443,088 |
663,394 |
||||
Momo Inc. |
|||||||||||
Reconciliation of Non-GAAP financial measures to comparable GAAP measures |
|||||||||||
(US dollars in thousands, except per share data) |
|||||||||||
1. Reconciliation of Non-GAAP cost and operating expenses, income from operations, and net income to comparable GAAP |
|||||||||||
Three months |
Three months |
||||||||||
ended June 30, 2017 |
ended June 30, 2018 |
||||||||||
GAAP |
Adjustments |
Non- |
GAAP |
Adjustments |
Non- |
||||||
Cost and operating expenses |
(246,047) |
12,998 (a) |
(233,049) |
(369,361) |
22,848 (b) |
(346,513) |
|||||
Income from operations |
73,746 |
12,998 (a) |
86,744 |
140,601 |
22,848 (b) |
163,449 |
|||||
Net income attributable to |
60,762 |
12,998 (a) |
73,760 |
117,779 |
22,389 (b)(c) |
140,168 |
|||||
First half year |
First half year |
||||||||||
ended June 30, 2017 |
ended June 30, 2018 |
||||||||||
GAAP |
Adjustments |
Non- |
GAAP |
Adjustments |
Non- |
||||||
Cost and operating expenses |
(421,147) |
22,507 (d) |
(398,640) |
(658,075) |
35,230 (e) |
(622,845) |
|||||
Income from operations |
164,789 |
22,507 (d) |
187,296 |
288,103 |
35,230 (e) |
323,333 |
|||||
Net income attributable to |
141,970 |
22,507 (d) |
164,477 |
247,663 |
34,771 (e)(f) |
282,434 |
|||||
Notes: |
|||||||||||
(a) Adjustments to exclude share-based compensation of $12,998 from the unaudited condensed consolidated statements. |
|||||||||||
(b) Adjustments to exclude share-based compensation of $21,011 and amortization of intangible assets from acquisitions of |
|||||||||||
(c) Adjustments to exclude the provision for income tax related to amortization of intangible assets from acquisitions of |
|||||||||||
(d) Adjustments to exclude share-based compensation of $22,507 from the unaudited condensed consolidated statements. |
|||||||||||
(e) Adjustments to exclude share-based compensation of $33,393 and amortization of intangible assets from acquisitions of |
|||||||||||
(f) Adjustments to exclude the provision for income tax related to amortization of intangible assets from acquisitions of |
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