Form 6-K

 

 

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 June 2021

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: June 8, 2021


Exhibit Index

Exhibit 99.1—Press Release

EX-99.1

Exhibit 99.1

Momo Announces Unaudited Financial Results for the First Quarter of 2021

BEIJING, CHINA, June 8, 2021 – Momo Inc. (NASDAQ: MOMO) (“Momo” or the “Company”), a leading mobile social and entertainment platform in China, today announced its unaudited financial results for the first quarter of 2021.

First Quarter of 2021 Highlights

 

   

Net revenues decreased by 3.4% year over year to RMB3,470.6 million (US$529.7 million*) in the first quarter of 2021.

 

   

Net income attributable to Momo Inc. decreased to RMB461.7 million (US$70.5 million) in the first quarter of 2021 from RMB538.9 million in the same period of 2020.

 

   

Non-GAAP net income attributable to Momo Inc. (note 1) decreased to RMB633.7 million (US$96.7 million) in the first quarter of 2021, from RMB736.3 million in the same period of 2020.

 

   

Diluted net income per American Depositary Share (“ADS”) was RMB2.14 (US$0.33) in the first quarter of 2021, compared to RMB2.46 in the same period of 2020.

 

   

Non-GAAP diluted net income per ADS (note 1) was RMB2.91 (US$0.44) in the first quarter of 2021, compared to RMB3.34 in the same period of 2020.

 

   

Monthly Active Users (“MAU”) on Momo application were 115.3 million in March 2021, compared to 108.0 million in March 2020.

 

   

Total paying users of our live video service and value-added service, without double counting the overlap and including 3.5 million paying users of Tantan Limited (“Tantan”), were 12.6 million for the first quarter of 2021, compared to 12.8 million for the first quarter of 2020, which included 4.2 million paying users of Tantan.

“The first quarter of 2021 was a good quarter and a decent start to the year 2021”, commented Li Wang, CEO of Momo. “We have stepped up our efforts to drive towards the strategic priorities that I set for my team at the beginning of the year. The initiatives we took have started bearing fruits. Despite the negative seasonality MAU reaching a record high, Momo core is on a steady improving trend and will continue to be a very productive and evolving cash cow business. This leaves us ample room to invest in new endeavors beyond Momo and Tantan. I am excited about the growth opportunities that we are seeing in Tantan and have put together a solid plan to unleash their full potential going forward.”

First Quarter of 2021 Financial Results

Net revenues

Total net revenues were RMB3,470.6 million (US$529.7 million) in the first quarter of 2021, a decrease of 3.4% from RMB3,594.1 million in the first quarter of 2020.

 

 

*

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 RMB6.5518 to US$1.00, the effective noon buying rate for March 31, 2021 as set forth in the H.10 statistical release of the Federal Reserve Board.

 

1


Live video service revenues were RMB1,962.1 million (US$299.5 million) in the first quarter of 2021, a decrease of 15.9% from RMB2,332.0 million during the same period of 2020. The decrease was primarily due to our structural reform on Momo’s core live video business, which was used to revive the long tail content ecosystem. The decrease was partially offset by the growth from Tantan’s live video service, and live video service revenues from Tantan were RMB251.2 million (US$38.3 million) in the first quarter of 2021,compared to RMB6.1 million in the same period of 2020.

Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were RMB1,455.5 million (US$222.2 million) in the first quarter of 2021, an increase of 23.8% from RMB1,175.8 million during the same period of 2020. The year-over-year increase was primarily attributable to the continued growth of the virtual gift business on the Momo application driven by more innovative products and operational ideas launched, and more paying scenarios introduced to enhance the social entertainment experience of Momo users, and to a lesser extent, the increase in the virtual gift revenues of new applications. The increase was partially offset by the decrease in the membership subscription revenues of Tantan, due to the decrease of paying users of Tantan.

Mobile marketing revenues were RMB38.7 million (US$5.9 million) in the first quarter of 2021, a decrease of 32.3% from RMB57.2 million during the same period of 2020. The decrease in mobile marketing revenues was primarily caused by our strategy to underweight the line in terms of resource allocation.

Mobile games revenues were RMB11.2 million (US$1.7 million) in the first quarter of 2021, a decrease of 11.9% from RMB12.7 million in the first quarter of 2020. The decrease in mobile game revenues was mainly due to the continued decrease in quarterly paying users of mobile games.

Net revenues from the Momo segment decreased from RMB3,202.1 million in the first quarter of 2020 to RMB2,901.8 million (US$442.9 million) in the first quarter of 2021, primarily due to the decrease in net revenues from live video service, partially offset by the increase in net revenues from value-added service. Net revenues from the Tantan segment increased from RMB381.7 million in the first quarter of 2020 to RMB567.7 million (US$86.6 million) in the first quarter of 2021, which was mainly due to the increase in net revenues from live video service.

Cost and expenses

Cost and expenses were RMB3,016.3 million (US$460.4 million) in the first quarter of 2021, a decrease of 0.3% from RMB3,026.1 million in the first quarter of 2020. The decrease was primarily attributable to: (a) a decrease in revenue sharing with broadcasters related to Momo’s core live video service; (b) a decrease in marketing and promotional expenses to promote our core live video services and attract users on Tantan; (c) a decrease in commission fees paid to payment channels. These decreases were partially offset by an increase in revenue sharing with virtual gift recipients for our virtual gift service, and an increase in revenue sharing with broadcasters related to Tantan’s live video service.

Non-GAAP cost and expenses (note 1) were RMB2,835.3 million (US$432.8 million) in the first quarter of 2021, an increase of 0.6% from RMB2,819.2 million during the same period of 2020.

 

2


Income from operations

Income from operations was RMB480.2 million (US$73.3 million) in the first quarter of 2021, compared to RMB594.1 million during the same period of 2020. Income from operations of the Momo segment was RMB573.2 million (US$87.5 million) in the first quarter of 2021, which decreased from RMB770.3 million in the first quarter of 2020. Loss from operations of the Tantan segment was RMB89.3 million (US$13.6 million) in the first quarter of 2021, compared to loss from operations of RMB171.9 million in the first quarter of 2020.

Non-GAAP income from operations (note 1) was RMB661.2 million (US$100.9 million) in the first quarter of 2021, compared to RMB801.0 million during the same period of 2020. Non-GAAP income from operations of the Momo segment was RMB700.5 million (US$106.9 million) in the first quarter of 2021, which decreased from RMB903.1 million in the first quarter of 2020. Non-GAAP loss from operations of the Tantan segment was RMB35.6 million (US$5.4 million) in the first quarter of 2021, compared to non-GAAP loss from operations of RMB100.4 million in the first quarter of 2020.

Income tax expenses

Income tax expenses were RMB91.4 million (US$14.0 million) in the first quarter of 2021, decreasing from RMB162.9 million in the first quarter of 2020. The decrease in income tax expenses was mainly due to the lower profit and tax refund resulted from additional expense deduction related to previous year in the first quarter of 2021.

Net income

Net income was RMB460.9 million (US$70.3 million) in the first quarter of 2021, compared to RMB537.7 million during the same period of 2020. Net income from the Momo segment was RMB551.4 million (US$84.2 million) in the first quarter of 2021, which decreased from RMB707.1 million in the first quarter of 2020. Net loss from the Tantan segment was RMB86.8 million (US$13.3 million) in the first quarter of 2021, compared to net loss of RMB165.1 million in the first quarter of 2020.

Non-GAAP net income (note 1) was RMB633.0 million (US$96.6 million) in the first quarter of 2021, compared to RMB735.1 million during the same period of 2020. Non-GAAP net income from the Momo segment was RMB678.6 million (US$103.6 million) in the first quarter of 2021, which decreased from RMB839.9 million in the first quarter of 2020. Non-GAAP net loss of the Tantan segment was RMB42.0 million (US$6.4 million) in the first quarter of 2021, compared to non-GAAP net loss of RMB103.2 million in the first quarter of 2020.

Net income attributable to Momo Inc.

Net income attributable to Momo Inc. was RMB461.7 million (US$70.5 million) in the first quarter of 2021, compared to RMB538.9 million during the same period of 2020.

Non-GAAP net income (note 1) attributable to Momo Inc. was RMB633.7 million (US$96.7 million) in the first quarter of 2021, compared to RMB736.3 million during the same period of 2020.

Net income per ADS

Diluted net income per ADS was RMB2.14 (US$0.33) in the first quarter of 2021, compared to RMB2.46 in the first quarter of 2020.

Non-GAAP diluted net income per ADS (note 1) was RMB2.91 (US$0.44) in the first quarter of 2021, compared to RMB3.34 in the first quarter of 2020.

 

3


Cash and cash flow

As of March 31, 2021, Momo’s cash, cash equivalents, short-term deposits, long-term deposits and restricted cash totaled RMB16,956.0 million (US$2,588.0 million), compared to RMB16,482.3 million as of December 31, 2020. Net cash provided by operating activities in the first quarter of 2021 was RMB501.6 million (US$76.6 million), compared to RMB543.5 million in the first quarter of 2020.

Recent Developments

Resignation and appointment of board directors

On June 4, 2021, Mr. David Ying Zhang resigned from the Company’s board of directors for personal reasons, effective as of the same date.

On June 8, 2021, the board of directors of the Company appointed Mr. Ho Kee Harry Man as a new member of the board. Mr. Man joined Matrix Partners China as a founding member of the team with a focus on investments in the mobile internet sector in 2008. Prior to Matrix, Mr. Man was Partner at WI Harper Group and led investments in their China office in the TMT sector. Before WI Harper, Mr. Man led the corporate development teams of two US listed internet and mobile companies, and helped Linktone Ltd. (NASDAQ: LTON) and chinadotcom (Nasdaq: CHINA) in their investments in various sectors respectively. Mr. Man started his career as a management consultant with Arthur Andersen in 1998. Mr. Man has been investing in China since 2000, and always focuses on early stage internet and mobile sectors. During the past 15 years, Mr. Man led investments in Momo (Nasdaq: MOMO), XPENG (US: XPEV), 21Vianet (Nasdaq:VNET), iKang (Nasdaq: KANG), Sungy Mobile (Nasdaq: GOMO), Editgrid (sold to Apple), Career International (SZ: 300662), Didi Chuxing.

Payment of special cash dividends

In March 2021, Momo’s board of directors declared a special cash dividend in the amount of US$0.64 per ADS, or US$0.32 per ordinary share. The cash dividend was paid in April 2021 to shareholders of record at the close of business on April 13, 2021. The aggregate amount of cash dividends paid was US$132 million.

Execution of share repurchase program

On September 3, 2020, Momo’s board of directors authorized a share repurchase program under which the Company may repurchase up to US$300 million of its shares over the next 12 months. As of June 8, 2021, the Company has repurchased approximately 4.77 million ADSs for approximately US$65.5 million on the open market under this program, at an average purchase price of US$13.69 per ADS.

Business Outlook

For the second quarter of 2021, the Company expects total net revenues to be between RMB3.6 billion to RMB3.7 billion, representing a decrease of 6.9% to 4.3% year-over-year. This forecast reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change.

 

 

4


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 (loss) from operations, net income (loss), 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, June 8, 2021, at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing / Hong Kong Time on June 8, 2021).

All participants must preregister online prior to the call to receive the dial-in details. Once preregistration has been complete, participants will receive dial-in numbers, direct event passcode, and a unique registrant ID.

PRE-REGISTER LINK http://apac.directeventreg.com/registration/event/4099268

To join the conference, simply dial the number in the calendar invite you receive after preregistering, enter the passcode followed by your registrant ID, and you will join the conference instantly.

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 16, 2021. The dial-in details for the replay are as follows:

International: +61-2-8199-0299

U.S. Toll Free: +1-855-452-5696

Passcode: 4099268

 

5


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

We are a leading player in China’s online social and entertainment space. Through Momo, Tantan and other properties within our product portfolio, we enable users to discover new relationships, expand their social connections and build meaningful interactions. Momo is a mobile application that connects people and facilitates social interactions based on location, interests and a variety of online recreational activities. Tantan, which was added into our family of applications through acquisition in May 2018, is a leading social and dating application. It is designed to help its users find and establish romantic connections as well as meet interesting people. We also operate a number of other applications to serve different social and entertainment demands from our users.

For investor and media inquiries, please contact:

Momo Inc.

 

Investor Relations

Phone: +86-10-5731-0538

Email: ir@immomo.com

Christensen

In China

Mr. Eric Yuan

Phone: +86-10-5900-1548

E-mail: Eyuan@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, our financial outlook for the second quarter of 2021, as well as the amount of, timing, methods and funding sources for repurchases of our shares under the share repurchase program.

 

 

6


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 2021 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the second quarter of 2021 and may be unable to grow our business in the manner planned. We may also modify our strategy for growth. Moreover, 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, our ability to anticipate and develop new services and enhance existing services to meet the demand of our users or customers, the impact of the COVID-19 pandemic on Momo’s business operations and the economy in China, the market price of Momo’s stock prevailing from time to time, the nature of other investment opportunities presented to Momo from time to time, Momo’s cash flows from operations, general economic conditions, and other factors. 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.

 

7


Momo Inc.

Unaudited Condensed Consolidated Statement of Operations

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

 

     Three months  
   Ended March 31  
     2020     2021     2021  
     RMB     RMB     US$  

Net revenues:

      

Live video service

     2,332,004       1,962,095       299,474  

Value-added service

     1,175,754       1,455,513       222,155  

Mobile marketing

     57,155       38,717       5,909  

Mobile games

     12,691       11,184       1,707  

Other services

     16,480       3,087       471  
  

 

 

   

 

 

   

 

 

 

Total net revenues

     3,594,084       3,470,596       529,716  

Cost and expenses:

      

Cost of revenues

     (1,876,916     (1,938,245     (295,834

Research and development

     (262,159     (286,493     (43,727

Sales and marketing

     (709,808     (613,573     (93,650

General and administrative

     (177,249     (177,962     (27,162
  

 

 

   

 

 

   

 

 

 

Total cost and expenses

     (3,026,132     (3,016,273     (460,373

Other operating income

     26,119       25,900       3,953  
  

 

 

   

 

 

   

 

 

 

Income from operations

     594,071       480,223       73,296  

Interest income

     130,823       96,694       14,758  

Interest expense

     (19,819     (18,361     (2,802

Other gain or loss, net

     (6,000     (7,500     (1,145
  

 

 

   

 

 

   

 

 

 

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

     699,075       551,056       84,107  

Income tax expenses

     (162,891     (91,398     (13,950
  

 

 

   

 

 

   

 

 

 

Income before share of income on equity method investments

     536,184       459,658       70,157  

Share of income on equity method investments

     1,527       1,261       192  
  

 

 

   

 

 

   

 

 

 

Net income

     537,711       460,919       70,349  
  

 

 

   

 

 

   

 

 

 

Less: net loss attributable to non-controlling interest

     (1,195     (740     (113
  

 

 

   

 

 

   

 

 

 

Net income attributable to the shareholders of Momo Inc.

     538,906       461,659       70,462  
  

 

 

   

 

 

   

 

 

 

Net income per share attributable to ordinary shareholders

      

Basic

     1.29       1.12       0.17  

Diluted

     1.23       1.07       0.16  

Weighted average shares used in calculating net income per ordinary share

      

Basic

     417,294,242       411,968,817       411,968,817  

Diluted

     453,331,322       448,171,493       448,171,493  

 

8


Momo Inc.

Unaudited Condensed Consolidated Statement of Comprehensive Income

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

 

     Three months  
   ended March 31  
     2020     2021     2021  
     RMB     RMB     US$  

Net income

     537,711       460,919       70,349  

Other comprehensive loss, net of tax:

      

Foreign currency translation adjustment

     (867     (3,802     (580
  

 

 

   

 

 

   

 

 

 

Comprehensive income

     536,844       457,117       69,769  

Less: comprehensive (loss) income attributed to the non-controlling interest

     (5,569     379       58  
  

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to Momo Inc.

     542,413       456,738       69,711  
  

 

 

   

 

 

   

 

 

 

 

9


Momo Inc.

Unaudited Condensed Consolidated Balance Sheets

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

 

     December 31      March 31      March 31  
     2020      2021      2021  
   RMB      RMB      US$  

Assets

        

Current assets

        

Cash and cash equivalents

     3,363,942        3,490,405        532,740  

Short-term deposits

     7,566,250        7,913,468        1,207,831  

Restricted cash

     2,130        2,132        325  

Accounts receivable, net of allowance for doubtful accounts of RMB15,390 and RMB15,785 as of December 31, 2020 and March 31, 2021, respectively

     200,831        208,110        31,764  

Prepaid expenses and other current assets

     613,696        697,656        106,483  
  

 

 

    

 

 

    

 

 

 

Total current assets

     11,746,849        12,311,771        1,879,143  

Long-term deposits

     5,550,000        5,550,000        847,095  

Right-of-use assets, net

     278,175        261,561        39,922  

Property and equipment, net

     265,765        248,147        37,875  

Intangible assets, net

     687,211        652,553        99,599  

Rental deposits

     21,794        20,435        3,119  

Long-term investments

     454,996        443,147        67,637  

Other non-current assets

     94,868        99,152        15,134  

Deferred tax assets

     32,495        33,102        5,052  

Goodwill

     4,088,403        4,105,104        626,561  
  

 

 

    

 

 

    

 

 

 

Total assets

     23,220,556        23,724,972        3,621,137  
  

 

 

    

 

 

    

 

 

 

Liabilities and equity

        

Current liabilities

        

Accounts payable

     699,394        698,947        106,680  

Deferred revenue

     511,617        511,734        78,106  

Accrued expenses and other current liabilities

     854,835        726,767        110,926  

Amount due to related parties

     19,462        12,307        1,878  

Lease liabilities due within one year

     132,793        134,612        20,546  

Income tax payable

     236,490        259,380        39,589  

Dividends payable

     —          865,049        132,032  

Deferred consideration in connection with business acquisitions

     62,149        46,113        7,038  
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     2,516,740        3,254,909        496,795  

Deferred tax liabilities

     171,803        163,138        24,900  

Convertible senior notes

     4,658,966        4,681,825        714,586  

Share-based compensation liability

     875,616        879,213        134,194  

Lease liabilities

     136,436        124,985        19,076  

Other non-current liabilities

     25,666        41,760        6,374  
  

 

 

    

 

 

    

 

 

 

Total liabilities

     8,385,227        9,145,830        1,395,925  

Shareholder’s equity (i)

     14,835,329        14,579,142        2,225,212  
  

 

 

    

 

 

    

 

 

 

Total liabilities and shareholder’s equity

     23,220,556        23,724,972        3,621,137  
  

 

 

    

 

 

    

 

 

 

 

(i):

As of March 31, 2021, the number of ordinary shares outstanding was 412,260,535.

 

10


Momo Inc.

Unaudited Condensed Consolidated Statement of Cash Flows

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

 

     Three months  
     ended March 31  
     2020     2021     2021  
     RMB     RMB     US$  

Cash flows from operating activities:

      

Net income

     537,711       460,919       70,349  

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

      

Depreciation of property and equipment

     52,381       42,543       6,493  

Amortization of intangible assets

     39,882       36,953       5,640  

Share-based compensation

     168,527       145,257       22,170  

Share of income on equity method investments

     (1,527     (1,261     (192

Loss on long-term investments

     6,000       7,500       1,145  

Gain on subsidiary deconsolidation

     (6,676     —         —    

Loss on disposal of property and equipment

     —         22       3  

Provision of (income) losses on receivable and other assets

     (654     395       60  

Cash received on investment income distribution

     1,153       —         —    

Changes in operating assets and liabilities:

      

Accounts receivable

     (37,979     (7,580     (1,157

Prepaid expenses and other current assets

     1,162       (86,677     (13,229

Amount due from a related party

     2,123       —         —    

Rental deposits

     (173     1,359       207  

Deferred tax assets

     2,038       (607     (93

Other non-current assets

     14,840       12,330       1,882  

Accounts payable

     (80,073     (1,067     (163

Income tax payable

     20,344       22,891       3,494  

Deferred revenue

     (21,023     (379     (58

Accrued expenses and other current liabilities

     (154,243     (118,972     (18,159

Amount due to related parties

     4,984       (7,156     (1,092

Deferred tax liability

     (9,971     (9,238     (1,410

Other non-current liabilities

     4,670       4,360       665  
  

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     543,496       501,592       76,555  

Cash flows from investing activities:

      

Purchase of property and equipment

     (38,167     (25,183     (3,844

Payment for long-term investments

     (4,500     —         —    

Purchase of short-term deposits

     (3,300,000     (910,000     (138,893

Cash received on maturity of short-term deposits

     2,979,140       569,294       86,891  

Payment for short-term investments

     (10,000     —         —    

Cash received from sales of short-term investment

     10,000       —         —    

Cash received on investment income distribution

     —         5,610       856  

Other investing activities

     (791     3       —    
  

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (364,318     (360,276     (54,990

Cash flows from financing activities:

      

Deferred payment for business acquisition

     —         (12,907     (1,970

Repurchase of ordinary shares

     —         (3,079     (470

Repurchase of subsidiary’s share options

     —         (2,781     (424
  

 

 

   

 

 

   

 

 

 

Net cash used in financing activities

     —         (18,767     (2,864

Effect of exchange rate changes

     7,293       3,916       601  
  

 

 

   

 

 

   

 

 

 

Net increase in cash and cash equivalents

     186,471       126,465       19,302  

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

     2,612,743       3,366,072       513,763  
  

 

 

   

 

 

   

 

 

 

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

     2,799,214       3,492,537       533,065  
  

 

 

   

 

 

   

 

 

 

 

11


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, 2020     ended March 31, 2021     ended March 31, 2021  
    GAAP
RMB
    Amortization
of intangible
assets from
business
acquisitions
RMB
    Share-based
compensation
RMB
    Tax
impacts
(ii)
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

    (1,876,916     18,645       6,969       —         (1,851,302     (1,938,245     17,311       3,724       —         (1,917,210     (295,834     2,642       568       —         (292,624

Research and development

    (262,159     2,368       42,760       —         (217,031     (286,493     2,199       40,209       —         (244,085     (43,727     336       6,137       —         (37,254

Sales and marketing

    (709,808     17,436       47,074       —         (645,298     (613,573     16,189       17,556       —         (579,828     (93,650     2,471       2,680       —         (88,499

General and administrative

    (177,249     —         71,724       —         (105,525     (177,962     —         83,768       —         (94,194     (27,162     —         12,785       —         (14,377
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost and operating expenses

    (3,026,132     38,449       168,527       —         (2,819,156     (3,016,273     35,699       145,257       —         (2,835,317     (460,373     5,449       22,170       —         (432,754

Income from operations

    594,071       38,449       168,527       —         801,047       480,223       35,699       145,257       —         661,179       73,296       5,449       22,170       —         100,915  

Net income attributable to Momo Inc.

    538,906       38,449       168,527       (9,612     736,270       461,659       35,699       145,257       (8,925     633,690       70,462       5,449       22,170       (1,362     96,719  

 

(ii)

Includes tax impacts related to the amortization of intangible assets from business acquisition.

 

12


Momo Inc.

Unaudited Condensed Segment Report

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

 

     Three months  
   ended March 31, 2021  
     Momo     Tantan     QOOL     Total     Total  
     RMB     RMB     RMB     RMB     US$  

Net revenues:

          

Live video service

     1,710,889       251,206       —         1,962,095       299,474  

Value-added service

     1,139,015       316,498       —         1,455,513       222,155  

Mobile marketing

     38,717       —         —         38,717       5,909  

Mobile games

     11,184       —         —         11,184       1,707  

Other services

     1,968       —         1,119       3,087       471  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net revenues

     2,901,773       567,704       1,119       3,470,596       529,716  

Cost and expenses (iii):

          

Cost of revenues

     (1,656,895     (280,989     (361     (1,938,245     (295,834

Research and development

     (205,330     (81,163     —         (286,493     (43,727

Sales and marketing

     (326,829     (286,710     (34     (613,573     (93,650

General and administrative

     (159,451     (14,121     (4,390     (177,962     (27,162
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost and expenses

     (2,348,505     (662,983     (4,785     (3,016,273     (460,373

Other operating income

     19,961       5,938       1       25,900       3,953  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     573,229       (89,341     (3,665     480,223       73,296  

Interest income

     96,343       305       46       96,694       14,758  

Interest expense

     (18,361     —         —         (18,361     (2,802

Other gain or loss, net

     (7,500     —         —         (7,500     (1,145
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     643,711       (89,036     (3,619     551,056       84,107  

Income tax (expenses) benefits

     (93,602     2,204       —         (91,398     (13,950
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     550,109       (86,832     (3,619     459,658       70,157  

Share of loss on equity method investments

     1,261       —         —         1,261       192  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     551,370       (86,832     (3,619     460,919       70,349  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(iii)

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

 

     Three months  
     ended March 31, 2021  
     Momo      Tantan      QOOL      Total      Total  
     RMB      RMB      RMB      RMB      US$  

Cost of revenues

     2,325        1,399        —          3,724        568  

Research and development

     30,525        9,684        —          40,209        6,137  

Sales and marketing

     12,906        4,650        —          17,556        2,680  

General and administrative

     81,484        2,284        —          83,768        12,785  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total cost and expenses

     127,240        18,017        —          145,257        22,170  

 

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, 2021  
     Momo      Tantan     QOOL     Total     Total  
     RMB      RMB     RMB     RMB     US$  

Income (loss) from operations

     573,229        (89,341     (3,665     480,223       73,296  

Share-based compensation

     127,240        18,017       —         145,257       22,170  

Amortization of intangible assets from business acquisitions

     —          35,699       —         35,699       5,449  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP income (loss) from operations

     700,469        (35,625     (3,665     661,179       100,915  

Net income (loss)

     551,370        (86,832     (3,619     460,919       70,349  

Share-based compensation

     127,240        18,017       —         145,257       22,170  

Amortization of intangible assets from business acquisitions

     —          35,699       —         35,699       5,449  

Tax impacts

     —          (8,925     —         (8,925     (1,362
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss)

     678,610        (42,041     (3,619     632,950       96,606  

 

14


Momo Inc.

Unaudited Condensed Segment Report

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

 

     Three months  
   ended March 31, 2020  
     Momo     Tantan     QOOL     Total     Total  
     RMB     RMB     RMB     RMB     US$1  

Net revenues:

          

Live video service

     2,325,945       6,059       —         2,332,004       329,342  

Value-added service

     800,103       375,651       —         1,175,754       166,049  

Mobile marketing

     57,155       —         —         57,155       8,072  

Mobile games

     12,691       —         —         12,691       1,792  

Other services

     6,195       —         10,285       16,480       2,327  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net revenues

     3,202,089       381,710       10,285       3,594,084       507,582  

Cost and expenses (iv):

          

Cost of revenues

     (1,736,517     (132,278     (8,121     (1,876,916     (265,071

Research and development

     (183,900     (78,259     —         (262,159     (37,024

Sales and marketing

     (394,364     (315,421     (23     (709,808     (100,244

General and administrative

     (143,135     (27,680     (6,434     (177,249     (25,032
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost and expenses

     (2,457,916     (553,638     (14,578     (3,026,132     (427,371

Other operating income

     26,119       —         —         26,119       3,689  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     770,292       (171,928     (4,293     594,071       83,900  

Interest income

     129,278       1,472       73       130,823       18,476  

Interest expense

     (19,819     —         —         (19,819     (2,799

Other gain or loss, net

     (6,000     —         —         (6,000     (847
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     873,751       (170,456     (4,220     699,075       98,730  

Income tax (expenses) benefits

     (168,212     5,321       —         (162,891     (23,005
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     705,539       (165,135     (4,220     536,184       75,725  

Share of loss on equity method investments

     1,527       —         —         1,527       216  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     707,066       (165,135     (4,220     537,711       75,941  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(iv)

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

 

     Three months  
     ended March 31, 2020  
     Momo      Tantan      QOOL      Total      Total  
     RMB      RMB      RMB      RMB      US$  

Cost of revenues

     5,611        1,358        —          6,969        984  

Research and development

     26,802        15,958        —          42,760        6,039  

Sales and marketing

     45,441        1,633        —          47,074        6,648  

General and administrative

     54,984        14,121        2,619        71,724        10,129  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total cost and expenses

     132,838        33,070        2,619        168,527        23,800  

 

 

1 

All translations from RMB to U.S. dollars are made at a rate of RMB 7.0808 to US$1.00, the effective noon buying rate for March 31, 2020 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, 2020  
     Momo      Tantan     QOOL     Total     Total  
     RMB      RMB     RMB     RMB     US$  

Income (loss) from operations

     770,292        (171,928     (4,293     594,071       83,900  

Share-based compensation

     132,838        33,070       2,619       168,527       23,800  

Amortization of intangible assets from business acquisitions

     —          38,449       —         38,449       5,429  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP income (loss) from operations

     903,130        (100,409     (1,674     801,047       113,129  

Net income (loss)

     707,066        (165,135     (4,220     537,711       75,941  

Share-based compensation

     132,838        33,070       2,619       168,527       23,800  

Amortization of intangible assets from business acquisitions

     —          38,449       —         38,449       5,429  

Tax impacts

     —          (9,612     —         (9,612     (1,357
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss)

     839,904        (103,228     (1,601     735,075       103,813  

 

16