Press Releases

<< Back
Printer Friendly Version View printer-friendly version
Momo Announces Unaudited Financial Results for the Third Quarter of 2018

BEIJING, Dec. 5, 2018 /PRNewswire/ -- Momo Inc. (NASDAQ: MOMO) ("Momo" or the "Company"), a leading mobile social networking platform in China, today announced its unaudited financial results for the third quarter of 2018.

Third Quarter of 2018 Highlights

  • Net revenues increased 51% year over year to $536.0 million in the third quarter of 2018.
  • Net income attributable to Momo Inc. increased to $85.2 million in the third quarter of 2018 from $79.1 million in the same period last year.
  • Non-GAAP net income attributable to Momo Inc. (note 1) increased 22% to $114.3 million in the third quarter of 2018 from $93.8 million in the same period last year.
  • Diluted net income per American Depositary Share ("ADS") was $0.39, compared to $0.38 in the same period last year.
  • Non-GAAP diluted net income per ADS (note 1) was $0.53, compared to $0.45 in the same period last year.
  • Monthly Active Users ("MAU") on Momo application were 110.5 million in September 2018, compared to 94.4 million in September 2017.
  • Total paying users of our live video service and value-added service, without double counting the overlap, including 3.6 million paying users of Tantan Limited ("Tantan"), were 12.5 million for the third quarter of 2018, compared to 7.3 million for the third quarter of 2017.

First Nine Months of 2018 Highlights

  • Net revenues increased 57% year over year to $1,465.4 million for the first nine months of 2018.
  • Net income attributable to Momo Inc. was $332.8 million for the first nine months of 2018, compared with $221.1 million during the same period of 2017.
  • Non-GAAP net income attributable to Momo Inc. (note 1) was $396.7 million for the first nine months of 2018, compared with $258.2 million during the same period of 2017.
  • Diluted net income per ADS was $1.57 for the first nine months of 2018, compared with $1.07 during the same period of 2017.
  • Non-GAAP diluted income per ADS (note 1) was $1.87 for the first nine months of 2018, compared with $1.24 during the same period of 2017.

"I am pleased that we delivered solid operational and financial results for the quarter." Commented Yan Tang, Chairman and CEO of Momo. "At the same time we continued to push forward on product and operational fronts, in order to build up longer term growth drivers as we start to look beyond 2018 into next year."

Third Quarter of 2018 Financial Results

Net revenues

Total net revenues were $536.0 million in the third quarter of 2018, an increase of 51% from $354.5 million in the third quarter of 2017.

Live video service revenues were $406.9 million in the third quarter of 2018, an increase of 34% from $302.6 million during the same period of 2017. The growth in live video revenues was contributed by the increase in the quarterly paying users, as well as the increase in the 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 $84.2 million in the third quarter of 2018, an increase of 221% from $26.3 million during the same period of 2017. The year over year increase was primarily attributable to the continuous growth of the virtual gift business on the Momo application and to a lesser extent, the consolidation of Tantan's membership subscription revenues for the whole third quarter of 2018. The growth of the virtual gift business was driven by more paying use cases introduced to enhance the social experience for Momo users.

Mobile marketing revenues were $17.2 million in the third quarter of 2018, a decrease of 1% from $17.4 million during the same period of 2017.

Mobile games revenues were $4.1 million in the third quarter of 2018, a decrease of 49% from $8.0 million in the third quarter of 2017. The decrease in game revenues was mainly due to the decrease in quarterly paying users.

Revenues from other services in the third quarter of 2018 mainly consisted of revenues from Phanta City, a TV variety show co-produced by the Company.

Cost and expenses

Cost and expenses were $442.1 million in the third quarter of 2018, an increase of 66% from $266.3 million in the third quarter of 2017. The increase was primarily attributable to: (a) an increase in revenue sharing with the broadcasters related to our live video service and virtual gift recipients; (b) the produced contents in connection with Phanta City; (c) an increase in personnel related costs including share-based compensation expenses as a result of the Company's rapidly expanding talent pool; (d) an increase in marketing and promotional expenses to enhance our brand awareness and attract users; and (e) an increase in amortization expenses related to the intangible assets from acquisitions.

Non-GAAP cost and expenses (note 1) were $411.7 million in the third quarter of 2018, an increase of 64% from $251.7 million during the same period last year.

Income from operations

Income from operations was $94.6 million in the third quarter of 2018, compared to $89.0 million during the same period last year.

Non-GAAP income from operations (note 1) was $125.1 million in the third quarter of 2018, compared to $103.7 million during the same period last year.

Income tax expenses

Income tax expenses were $21.6 million in the third quarter of 2018, increased from $17.2 million in the third quarter of 2017. The increase was mainly because we generated higher profit in the third quarter of 2018.

Net income attributable to Momo Inc.

Net income attributable to Momo Inc. was $85.2 million in the third quarter of 2018, compared to $79.1 million during the same period last year.

Non-GAAP net income (note 1) attributable to Momo Inc. was $114.3 million in the third quarter of 2018, compared to $93.8 million during the same period last year.

Net income per ADS

Diluted net income per ADS was $0.39 in the third quarter of 2018, compared to $0.38 in the third quarter of 2017.

Non-GAAP diluted net income per ADS (note 1) was $0.53 in the third quarter of 2018, compared to $0.45 in the third quarter of 2017.

Cash and cash flow

As of September 30, 2018, Momo's cash, cash equivalents, term deposits, restricted cash and short-term investment totaled $1,493.6 million, compared to $1,061.2 million as of December 31, 2017. Net cash provided by operating activities in the third quarter of 2018 was $50.9 million, compared to $104.6 million for the same quarter of 2017. The decrease in the operating cash flow for the quarter was primarily because revenues from the TV show Phanta City still sit as accounts receivable on the balance sheet while related costs have largely been paid.

First Nine Months of 2018 Financial Results

Net revenues for the first nine months of 2018 were $1,465.4 million, an increase of 57% from $931.9 million in the same period of 2017, primarily driven by the significant increase in net revenues from live video service and value-added service.

Net income attributable to Momo Inc. was $332.8 million in the first nine months of 2018, compared to $221.1 million during the same period of 2017.

Non-GAAP net income attributable to Momo Inc. (note 1) was $396.7 million in the first nine months of 2018, compared to $258.2 million during the same period of 2017.

Diluted net income per ADS was $1.57 during the first nine months of 2018, compared to $1.07 in the same period of 2017.

Non-GAAP diluted net income per ADS (note 1) was $1.87 during the first nine months of 2018, compared to $1.24 in the same period of 2017.

Net cash provided by operating activities was $336.5 million during the first nine months of 2018, compared to $308.0 million in the same period of 2017.

Recent Development - changes to the Board of Directors

The Company also announced several changes to its board of directors (the "Board"). Mr. Yongming Wu, a director and founding partner of Vision Plus Capital and a co-founder of Alibaba Group, has been appointed to be a director of Momo's Board, effective on December 3, 2018. Mr. Wu founded Vision Plus Capital in 2015 and has led several key business segments of Alibaba Group. In addition, Mr. Neil Nanpeng Shen resigned from the Board on December 1, 2018, effective immediately. The resignation of Mr. Neil Nanpeng Shen was not due to any disagreement with the Company regarding its business, finance, accounting and/or any other affairs.  

Business Outlook

For the fourth quarter of 2018, the Company expects total net revenues to be between RMB3,655.0 million to RMB3,755.0 million, representing an increase of 43% to 47% year over year and an increase of 0% to 3% quarter over quarter, on a constant currency basis. Excluding the revenues from Phanta City, the Company expects the total revenues for the fourth quarter of 2018 to be between RMB3,624.0 million to RMB3,724.0 million, representing an increase of 42% to 46% year over year and an increase of 4% to 7% quarter over quarter, on a constant currency basis. The Company is not providing the business outlook in USD terms due to the recent volatility and uncertainty in foreign exchange rate. 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 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 Momo Inc., and diluted earnings per ADS) is adjusted from the most comparable GAAP results to exclude share-based compensation, amortization of intangible assets from acquisitions, and provision for income tax related to the amortization of intangible assets. A limitation of using these non-GAAP financial measures is that share-based compensation, amortization of intangible assets from acquisitions and provision for income tax related to the amortization of intangible assets charge has 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 Thursday, December 6, 2018 at 8:00 a.m. U.S. Eastern Time (9:00 p.m. Beijing / Hong Kong Time on December 6, 2018).

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, December 14, 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: 3986625

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

About Momo

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

For investor and media inquiries, please contact:

Momo Inc.

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

Christensen

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

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

Safe Harbor Statement

This news release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include but are not limited to our management quotes and our financial outlook for the fourth 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 third quarter of 2018 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the fourth 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 U.S. Securities and Exchange Commission.

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

 

Momo Inc.


Unaudited Condensed Consolidated Statement of Operations


(US dollars in thousands, except per share data)



Three months


First nine months


ended September 30


ended September 30



2017


2018


2017


2018


Net revenues:









       Live video service

302,603


406,905


774,597


1,189,378


       Value-added service

26,256


84,216


73,759


176,428


       Mobile marketing

17,441


17,241


54,348


58,214


       Mobile games

8,024


4,097


28,728


16,198


       Other services

129


23,511


483


25,151


Total net revenues

354,453


535,970


931,915


1,465,369


Cost and expenses:









       Cost of revenues

(177,967)


(298,527)


(449,079)


(777,871)


       Research and development

(13,855)


(36,097)


(32,731)


(78,699)


       Sales and marketing

(57,734)


(82,809)


(160,815)


(181,704)


       General and administrative

(16,792)


(24,713)


(44,870)


(61,947)


Total cost and expenses

(266,348)


(442,146)


(687,495)


(1,100,221)


Other operating income

897


779


9,371


17,558


Income from operations

89,002


94,603


253,791


382,706


Interest income

6,029


12,155


14,409


27,934


Interest expense

-


(3,588)


-


(5,538)


Impairment loss on long-term investments

-


-


(4,386)


-


Income before income tax and share of

   income on equity method investments

95,031


103,170


263,814


405,102


Income tax expenses

(17,218)


(21,567)


(46,933)


(79,615)


Income before share of income on equity

method investments

77,813


81,603


216,881


325,487


Share of income on equity method investments

1,166


2,428


3,863


5,399


Net income

78,979


84,031


220,744


330,886


Less: net loss attributable to non-controlling interest

(110)


(1,125)


(315)


(1,933)


Net income attributable to Momo Inc.

79,089


85,156


221,059


332,819


 

Net income per share attributable to ordinary shareholders









Basic

0.20


0.21


0.56


0.82


Diluted

0.19


0.20*


0.53


0.78*


Weighted average shares used in calculating net income per ordinary share









Basic

395,926,878


409,378,536


393,469,398


404,744,362


Diluted

417,066,439


445,871,236


414,884,571


428,148,904














* Net income attributable to Momo is adjusted for interest expense of Convertible Senior Notes for calculation of dilutive EPS.

 

Momo Inc.

Unaudited Condensed Consolidated Statement of Comprehensive Income

(US dollars in thousands, except per share data)








Three months


First nine months

ended September 30


ended September 30


2017


2018


2017


2018

Net income

78,979


84,031


220,744


330,886

Other comprehensive income (loss), net of tax of nil








       Foreign currency translation adjustment

9,021


(36,753)


17,964


(60,755)

Comprehensive income

88,000


47,278


238,708


270,131

Less: comprehensive loss attributed to the non-  controlling interest

(115)


(1,192)


(322)


(2,017)

Comprehensive income attributable to Momo Inc.  shareholders

88,115


48,470


239,030


272,148

 

Momo Inc.

Unaudited Condensed Consolidated Balance Sheets

( US dollars in thousands)






December 31


September 30

2017

2018

Assets




Current assets




       Cash and cash equivalents

685,827


285,195

       Term deposits

373,794


1,182,454

       Restricted cash

-


9,208

       Short-term investment

1,614


16,744

Accounts receivable, net of allowance for doubtful
   accounts of $90 and $nil as of December 31, 2017 and
   September 30,2018, respectively

39,597


92,404

       Prepaid expenses and other current assets

82,717


91,892

       Amount due from related parties

5,143


8

Total current assets

1,188,692


1,677,905

       Property and equipment, net

39,762


48,776

       Intangible assets

7,462


156,549

       Rental deposits

2,651


2,931

       Long term investments

44,337


67,326

       Deferred tax assets, non-current

7,197


2,608

       Other non-current assets

8,495


10,898

       Goodwill

3,401


626,406

Total assets

1,301,997


2,593,399

Liabilities and equity




Current liabilities




Accounts payable

74,535


104,836

Deferred revenue

64,865


62,525

Accrued expenses and other current liabilities

87,809


89,732

Amount due to related parties

5,804


8,380

Income tax payable

27,033


12,645

Deferred consideration in connection with business
   acquisitions

-


74,131

Total current liabilities

260,046


352,249

       Deferred tax liabilities, non-current

1,866


39,137

       Share-based compensation liability

-


4,323

       Convertible Senior Notes

-


708,771

       Other non-current liabilities

2,305


3,807

Total liabilities

264,217


1,108,287

Shareholder's equity(Note a)

1,037,780


1,485,112

Total liabilities and shareholder's equity

1,301,997


2,593,399


Note a: As of September 30, 2018, the number of ordinary shares issued and outstanding was 413,200,744.

 

Momo Inc.

Unaudited Condensed Consolidated Statement of Cash Flows

(US dollars in thousands)


Three months


First nine months


ended September 30


ended September 30


2017


2018


2017


2018

Cash flows from operating activities:








       Net income

78,979


84,031


220,744


330,886

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








             Depreciation of property and equipment

3,220


5,773


7,805


16,232

             Amortization of intangible assets

269


5,720


452


8,007

             Share-based compensation

14,664


24,974


37,171


58,367

             Share of income on equity method investment

(1,166)


(2,428)


(3,863)


(5,399)

             Impairment loss on long-term investments

-


-


4,386


-

             Income on disposal of property and equipment

-


(182)


(2)


(182)

             Provision of allowance for doubtful accounts

-


-


85


(92)

Changes in operating assets and liabilities:








             Accounts receivable

6,605


(61,716)


6,287


(51,595)

             Prepaid expenses and other current assets

(10,429)


(26,885)


(23,045)


(14,363)

             Amount due from related parties

(506)


1,966


(1,019)


5,102

             Rental deposits

(27)


(85)


(1,467)


44

             Deferred tax assets

-


50


73


4,535

             Other non-current assets

(1,046)


(980)


(1,827)


(6,976)

             Accounts payable

14,339


23,363


25,960


38,089

             Income tax payable

800


(726)


8,843


(15,365)

             Deferred revenue

1,966


4,790


3,299


(4,532)

             Accrued expenses and other current liabilities

(5,574)


(7,692)


19,702


(28,312)

             Amount due to related parties

2,638


2,536


3,846


2,602

             Deferred tax liability

(47)


(1,430)


(93)


(2,001)

             Other non-current liabilities

(109)


(182)


684


1,501

Net cash provided by operating activities

104,576


50,897


308,021


336,548

Cash flows from investing activities:








       Purchase of property and equipment

(7,937)


(10,491)


(19,281)


(24,673)

       Payment for acquired intangible assets

(228)


-


(2,993)


-

       Proceeds from disposal of property and equipment

1


323


8


324

       Payment for long term investments

(1,350)


(1,176)


(4,979)


(9,666)

       Prepayment of long term investments

-


-


-


(7,398)

       Payment for business acquisition

-


-


-


(514,919)

       Purchase of term deposits

(127,781)


(1,089,995)


(519,749)


(2,279,078)

       Cash received on maturity of term deposits

99,984


308,569


484,093


1,442,514

       Payment for short term investments

(855)


(52,045)


(855)


(52,045)

       Cash received from sales of short term investment

-


35,148


-


36,801

Net cash used in investing activities

(38,166)


(809,667)


(63,756)


(1,408,140)

Cash flows from financing activities:








       Proceeds from exercise of options

51


414


461


807

       Deferred payment of purchase of property and equipment

(13)


-


(217)


(1,322)

       Capital contribution from non-controlling interest shareholder

73


-


73


-

       Proceeds from bank loan

-


-


-


300,000

       Repayment of bank loan

-


(300,000)


-


(300,000)

Proceeds from issuance of Convertible Senior Notes, net of
   issuance cost of $16,703

-


708,297


-


708,297

Net cash provided by financing activities

111


408,711


317


707,782

Effect of exchange rate changes

7,110


(18,932)


14,573


(27,614)

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

73,631


(368,991)


259,155


(391,424)

Cash, cash equivalent and restricted cash at beginning of period

443,088


663,394


257,564


685,827

Cash, cash equivalent and restricted cash at end of period

516,719


294,403


516,719


294,403


 

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 measures.














Three months


Three months



ended September 30, 2017


ended September 30, 2018


GAAP


Share-based compensation


Non-GAAP


GAAP


Amortization of intangible assets from acquisitions


Share-based compensation


Non-GAAP


Cost of revenues

(177,967)


632


(177,335)


(298,527)


2,672


864


(294,991)


Research and development

(13,855)


2,751


(11,104)


(36,097)


339


6,747


(29,011)


Sales and marketing

(57,734)


3,492


(54,242)


(82,809)


2,499


6,430


(73,880)


General and administrative

(16,792)


7,789


(9,003)


(24,713)


-


10,933


(13,780)


Cost and operating
expenses

 

(266,348)


 

14,664


 

(251,684)


 

(442,146)


 

5,510


 

24,974


 

(411,662)

















Income from operations

89,002


14,664


103,666


94,603


5,510


24,974


125,087


Net income attributable to
   Momo Inc.

 

79,089


 

14,664


 

93,753


 

85,156


 

4,133(a)


 

24,974


 

114,263


















First nine months


First nine months



ended September 30, 2017


ended September 30, 2018



GAAP


Share-based compensation


Non-GAAP


GAAP


Amortization of intangible assets from acquisitions


Share-based compensation


Non-GAAP


Cost of revenues

(449,079)


1,385


(447,694)


(777,871)


3,563


2,478


(771,830)


Research and development

(32,731)


6,218


(26,513)


(78,699)


452


16,097


(62,150)


Sales and marketing

(160,815)


8,601


(152,214)


(181,704)


3,332


15,136


(163,236)


General and administrative

(44,870)


20,967


 

(23,903)


(61,947)


-


24,656


(37,291)


Cost and operating
expenses

(687,495)


37,171


(650,324)


(1,100,221)


7,347


58,367


 

(1,034,507)


Income from operations

253,791


37,171


290,962


382,706


7,347


58,367


448,420

















Net income attributable to
   Momo Inc.

221,059


37,171


258,230


332,819


5,511(b)


58,367


396,697

















Notes:

(a)  Adjustments to exclude the provision for income tax related to amortization of intangible assets from acquisitions of
$1,377 from the unaudited condensed consolidated statements.

(b)  Adjustments to exclude the provision for income tax related to amortization of intangible assets from acquisitions of
$1,836 from the unaudited condensed consolidated statements.

Cision View original content:http://www.prnewswire.com/news-releases/momo-announces-unaudited-financial-results-for-the-third-quarter-of-2018-300760594.html

SOURCE Momo Inc.