UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of May 2019
Commission File Number: 001-36765
Momo Inc.
20th Floor, Block B
Tower 2, Wangjing SOHO
No.1 Futongdong Street
Chaoyang District, Beijing 100102
People’s Republic of China
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Momo Inc. | ||||
| By | : | /s/ Jonathan Xiaosong Zhang | ||
| Name | : | Jonathan Xiaosong Zhang | ||
| Title | : | Chief Financial Officer | ||
Date: May 28, 2019
Exhibit Index
Exhibit 99.1—Press Release
Exhibit 99.1
Momo Announces Unaudited Financial Results for the First Quarter of 2019
BEIJING, CHINA, May 28, 2019 – 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. |
1
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.
2
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.
3
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.
4
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.
5
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.
6
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 | |||||||||
7
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 | |||||||||
|
|
|
|
|
|
|
|||||||
8
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, net1 |
— | 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 | |||||||||
|
|
|
|
|
|
|
|||||||
(i): As of March 31, 2019, the number of ordinary shares issued and outstanding was 414,698,540.
| 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. |
9
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 | |||||||||
|
|
|
|
|
|
|
|||||||
10
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. |
11
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. |
12
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 | |||||||||||||||
13
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 | |||||||||||||
14
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 | ||||||||||||
| 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. |
15
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. |
16