Momo Announces Unaudited Financial Results for the Second Quarter of 2020

Rhea-AI Summary

Momo Inc. (NASDAQ: MOMO) reported its second quarter 2020 financial results, showing a 6.8% decline in net revenues year-over-year, totaling RMB3,868.3 million (US$547.5 million).

Net income dropped to RMB456.4 million (US$64.6 million), down from RMB731.8 million in Q2 2019.

Monthly Active Users (MAU) fell to 111.5 million, while paying users increased to 12.8 million.

For Q3 2020, Momo anticipates total net revenues between RMB3.7 billion and RMB3.8 billion, reflecting a potential year-over-year decrease of 16.9% to 14.6%.

Positive

• Value-added service revenues increased 27% to RMB1,204.3 million, driven by virtual gift business growth.
• Total paying users rose from 11.8 million in Q2 2019 to 12.8 million, including 3.9 million from Tantan.

Negative

• Net revenues decreased by 6.8% YoY in Q2 2020.
• Diluted net income per ADS fell to RMB2.11 (US$0.30) from RMB3.33 in Q2 2019.
• Live video service revenues declined 16% YoY to RMB2,602.9 million.
• First half 2020 net income attributable to Momo Inc. decreased to RMB995.3 million from RMB1,021.1 million in 2019.
• Anticipated Q3 2020 net revenues suggest a further decline.

BEIJING, Sept. 3, 2020 /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 second quarter of 2020.

Second Quarter of 2020 Highlights

• Net revenues decreased by 6.8% year over year to RMB3,868.3 million (US$547.5 million*) in the second quarter of 2020.
• Net income attributable to Momo Inc. decreased to RMB456.4 million (US$64.6 million) in the second quarter of 2020 from RMB731.8 million in the same period of 2019.
• Non-GAAP net income attributable to Momo Inc. (note 1) decreased to RMB669.8 million (US$94.8 million) in the second quarter of 2020, from RMB1,242.5 million in the same period of 2019.
• Diluted net income per American Depositary Share ("ADS") was RMB2.11 (US$0.30) in the second quarter of 2020, compared to RMB3.33 in the same period of 2019.
• Non-GAAP diluted net income per ADS (note 1) was RMB3.05 (US$0.43) in the second quarter of 2020, compared to RMB5.60 in the same period of 2019.
• Monthly Active Users ("MAU") on Momo application were 111.5 million in June 2020, compared to 113.5 million in June 2019.
• Total paying users of our live video service and value-added service, without double counting the overlap and including 3.9 million paying users of Tantan Limited ("Tantan"), were 12.8 million for the second quarter of 2020, compared to 11.8 million for the second quarter of 2019, which included 3.2 million paying users of Tantan.

First Half of 2020 Highlights

• Net revenues decreased 5.2% year over year to RMB7,462.3 million (US$1,056.2 million) for the first half of 2020.
• Net income attributable to Momo Inc. was RMB995.3 million (US$140.9 million) for the first half of 2020, compared with RMB1,021.1 million during the same period of 2019.
• Non-GAAP net income attributable to Momo Inc. (note 1) was RMB1,406.0 million (US$199.0 million) for the first half of 2020, compared with RMB2,152.8 million during the same period of 2019.
• Diluted net income per ADS was RMB4.57 (US$0.65) for the first half of 2020, compared with RMB4.71 during the same period of 2019.
• Non-GAAP diluted net income per ADS (note 1) was RMB6.39 (US$0.90) for the first half of 2020, compared with RMB9.75 during the same period of 2019.

* 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 RMB7.0651 to US$1.00, the effective noon buying rate for June 30, 2020 as set forth in the H.10 statistical release of the Federal Reserve Board.

CEO statement

"The second quarter of 2020 was a busy quarter for us. With things gradually coming back to normal on the traffic side, starting from the second quarter of 2020, our teams have stepped up efforts to push toward our long term strategic goals." commented Yan Tang, Chairman and CEO of Momo. "I am glad to see that Tantan has reached a breakthrough with its testing of live video service. With the strength coming from Tantan and the value-added service on the core Momo, we can now focus more on driving structural changes to the core live broadcasting business so that it can grow healthily and steadily in the new macro environment."

Second Quarter of 2020 Financial Results

Net revenues

Total net revenues were RMB3,868.3 million (US$547.5 million) in the second quarter of 2020, a decrease of 6.8% from RMB4,152.6 million in the second quarter of 2019.

Live video service revenues were RMB2,602.9 million (US$368.4 million) in the second quarter of 2020, a decrease of 16% from RMB3,099.9 million during the same period of 2019. The decrease was primarily due to the impact of COVID-19 adversely affecting the sentiment of our paying users, especially among the top of the pyramid paying users. Meanwhile, Tantan has been accelerating the testing of its live video service since the middle of April, and live video service revenues from Tantan were 191.7 million (US$27.1 million) in the second quarter of 2020.

Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were RMB1,204.3 million (US$170.5 million) in the second quarter of 2020, an increase of 27% from RMB948.4 million during the same period of 2019. 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 features launched and more paying scenarios introduced to enhance the social entertainment experience of Momo users, and to a lesser extent, the increase in the membership subscription revenues of Tantan.

Mobile marketing revenues were RMB38.0 million (US$5.4 million) in the second quarter of 2020, a decrease of 50% from RMB76.2 million during the same period of 2019. The decrease in mobile marketing revenues was primarily caused by the decreased demand from our advertising and marketing customers as well as our strategy to underweight the line in terms of resource allocation.

Mobile games revenues were RMB11.6 million (US$1.6 million) in the second quarter of 2020, a decrease of 50% from RMB23.2 million in the second quarter of 2019. The decrease in mobile game revenues was mainly due to the continued decrease in quarterly paying users of mobile games.

Net revenues from Momo segment decreased from RMB3,865.4 million in the second quarter of 2019 to RMB3,340.7 million (US$472.8 million) in the second quarter of 2020, 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 Tantan segment increased from RMB284.8 million in the second quarter of 2019 to RMB517.2 million (US$73.2 million) in the second quarter of 2020, which was mainly due to the increase in net revenues from live video service.

Cost and expenses

Cost and expenses were RMB3,146.9 million (US$445.4 million) in the second quarter of 2020, a decrease of 7.1% from RMB3,386.8 million in the second quarter of 2019. The decrease was primarily attributable to: (a) a decrease in share-based compensation expenses due to the related expense from the options granted to Tantan's founders in the amount of RMB323.7 million charged in the second quarter of 2019 when the necessary performance conditions were satisfied; (b) a decrease in revenue sharing with broadcasters related to our live video service. The decrease was partially offset by an increase in marketing and promotional expenses to attract users on Tantan, and an increase in revenue sharing with virtual gift recipients for our virtual gift service.

Non-GAAP cost and expenses (note 1) were RMB2,923.7 million (US$413.8 million) in the second quarter of 2020, an increase of 2.0% from RMB2,866.7 million during the same period of 2019.

Other operating income

Other operating income was RMB91.3 million (US$12.9 million) in the second quarter of 2020, a decrease from RMB161.9 million during the second quarter of 2019. The decrease was mainly due to less government incentives received in the second quarter of 2020.

Income from operations

Income from operations was RMB812.7 million (US$115.0 million) in the second quarter of 2020, compared to RMB927.7 million during the same period of 2019. Income from operations of Momo segment was RMB945.3 million (US$133.8 million) in the second quarter of 2020, decreasing from RMB1,354.4 million in the second quarter of 2019. Loss from operations of Tantan segment was RMB125.6 million (US$17.8 million) in the second quarter of 2020, compared to loss from operations of RMB431.4 million in the second quarter of 2019.

Non-GAAP income from operations (note 1) was RMB1,035.8 million (US$146.6 million) in the second quarter of 2020, compared to RMB1,447.9 million during the same period of 2019. Non-GAAP income from operations of Momo segment was RMB1,102.6 million (US$156.1 million) in the second quarter of 2020, decreasing from RMB1,488.5 million in the second quarter of 2019. Non-GAAP loss from operations of Tantan segment was RMB62.4 million (US$8.8 million) in the second quarter of 2020, compared to non-GAAP loss from operations of RMB47.9 million in the second quarter of 2019.

Income tax expenses

Income tax expenses were RMB443.6 million (US$62.8 million) in the second quarter of 2020, increasing from RMB283.9 million in the second quarter of 2019. The increase in income tax expenses was mainly due to the payment of withholding income tax of 10% on dividends distributed by our wholly-foreign owned enterprise ("WFOE") in China to our offshore entity in the second quarter of 2020. The dividends of RMB2,200.0 million (US$311.4 million) and withholding income tax of RMB220.0 million (US$31.1 million) were paid in the second quarter of 2020.

Net income

Net income was RMB455.5 million (US$64.5 million) in the second quarter of 2020, compared to RMB731.1 million during the same period of 2019. Net income from Momo segment was RMB586.7 million (US$83.0 million) in the second quarter of 2020, decreasing from RMB1,149.5 million in the second quarter of 2019. Net loss from Tantan segment was RMB124.3 million (US$17.6 million) in the second quarter of 2020, compared to net loss of RMB423.2 million in the second quarter of 2019.

Non-GAAP net income (note 1) was RMB668.9 million (US$94.7 million) in the second quarter of 2020, compared to RMB1,241.8 million during the same period of 2019. Non-GAAP net income from Momo segment was RMB744.0 million (US$105.3 million) in the second quarter of 2020, decreasing from RMB1,283.6 million in the second quarter of 2019. Non-GAAP net loss of Tantan segment was RMB70.8 million (US$10.0 million) in the second quarter of 2020, compared to non-GAAP net loss of RMB49.1 million in the second quarter of 2019.

Net income attributable to Momo Inc.

Net income attributable to Momo Inc. was RMB456.4 million (US$64.6 million) in the second quarter of 2020, compared to RMB731.8 million during the same period of 2019.

Non-GAAP net income (note 1) attributable to Momo Inc. was RMB669.8 million (US$94.8 million) in the second quarter of 2020, compared to RMB1,242.5 million during the same period of 2019.

Net income per ADS

Diluted net income per ADS was RMB2.11 (US$0.30) in the second quarter of 2020, compared to RMB3.33 in the second quarter of 2019.

Non-GAAP diluted net income per ADS (note 1) was RMB3.05 (US$0.43) in the second quarter of 2020, compared to RMB5.60 in the second quarter of 2019.

Cash and cash flow

As of June 30, 2020, Momo's cash, cash equivalents, short-term deposits and long-term deposits totaled RMB15,376.5 million (US$2,176.4 million), compared to RMB15,225.3 million as of December 31, 2019. Net cash provided by operating activities in the second quarter of 2020 was RMB807.3 million (US$114.3 million), compared to RMB1,422.0 million in the second quarter of 2019.

First Half of 2020 Financial Results

Net revenues for the first half of 2020 were RMB7,462.3 million (US$1,056.2 million), a decrease of 5.2% from RMB7,875.5 million in the same period of 2019.

Net income attributable to Momo Inc. was RMB995.3 million (US$140.9 million) for the first half of 2020, compared to RMB1,021.1 million during the same period of 2019.

Non-GAAP net income attributable to Momo Inc. (note 1) was RMB1,406.0 million (US$199.0 million) for the first half of 2020, compared to RMB2,152.8 million during the same period of 2019.

Diluted net income per ADS was RMB4.57 (US$0.65) during the first half of 2020, compared to RMB4.71 in the same period of 2019.

Non-GAAP diluted net income per ADS (note 1) was RMB6.39 (US$0.90) during the first half of 2020, compared to RMB9.75 in the same period of 2019.

Net cash provided by operating activities was RMB1,350.7 million (US$191.2 million) during the first half of 2020, compared to RMB2,597.9 million in the same period of 2019.

Recent Development

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.

The Company's proposed repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. The Company's board of directors will review the share repurchase program periodically, and may authorize adjustment of its terms and size. The timing and conditions of the share repurchases will be subject to various factors, including the requirements under Rule 10b-18 and Rule 10b5-1 promulgated pursuant to the Securities Exchange Act of 1934, as amended. The Company plans to fund repurchases from its existing cash balance.

Business Outlook

For the third quarter of 2020, the Company expects total net revenues to be between RMB3.7 billion to RMB3.8 billion, representing a decrease of 16.9% to 14.6% year over year. This forecast considers the potential impact of the COVID-19 outbreak and reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change, particularly as to the potential impact of the COVID-19 on the economy in China.

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 Thursday, September 3, 2020, at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing / Hong Kong Time on September 3, 2020).

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/9767454

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, September 11, 2020. The dial-in details for the replay are as follows:

International:	+61-2-8199-0299
U.S. Toll Free:	+1-855-452-5696
Passcode:	9767454

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 interactions based on location, interests and a variety of recreational activities including live talent shows, short videos, social games as well as other video- and audio-based interactive experiences, such as live chats and mobile karaoke experience. Tantan, which was added into our family of applications through acquisition in May 2018, is a leading social and dating application for the younger generation. Tantan 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. 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 third quarter of 2020, as well as the amount of, timing, methods and funding sources for repurchases of our shares under the share repurchase program.

Our forward-looking statements are not historical facts but instead represent only our belief regarding expected results and events, many of which, by their nature, are inherently uncertain and outside of our control. Our actual results and other circumstances may differ, possibly materially, from the anticipated results and events indicated in these forward-looking statements. Announced results for the second quarter of 2020 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the third quarter of 2020 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 to 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.

 

 

 

Momo Inc.
Unaudited Condensed Consolidated Statement of Operations
(All amounts in thousands, except share and per share data)
	Three months							First half year
	ended June 30							ended June 30
	2019		2020		2020				2019		2020		2020
	RMB		RMB		US$				RMB		RMB		US$
Net revenues:
Live video service	3,099,887		2,602,876		368,413				5,789,300		4,934,880		698,487
Value-added service	948,394		1,204,320		170,460				1,852,243		2,380,074		336,878
Mobile marketing	76,208		37,964		5,373				156,937		95,119		13,463
Mobile games	23,240		11,564		1,637				62,248		24,255		3,433
Other services	4,901		11,528		1,633				14,821		28,008		3,964
Total net revenues	4,152,630		3,868,252		547,516				7,875,549		7,462,336		1,056,225
Cost and expenses:
Cost of revenues	(2,063,863)		(2,036,305)		(288,220)				(3,937,437)		(3,913,221)		(553,880)
Research and development	(251,658)		(279,002)		(39,490)				(501,089)		(541,161)		(76,596)
Sales and marketing	(570,609)		(651,500)		(92,214)				(1,194,457)		(1,361,308)		(192,681)
General and administrative	(500,660)		(180,061)		(25,486)				(1,103,256)		(357,310)		(50,574)
Total cost and expenses	(3,386,790)		(3,146,868)		(445,410)				(6,736,239)		(6,173,000)		(873,731)
Other operating income	161,901		91,329		12,927				172,855		117,448		16,624
Income from operations	927,741		812,713		115,033				1,312,165		1,406,784		199,118
Interest income	100,175		108,536		15,362				193,953		239,359		33,879
Interest expense	(19,315)		(20,121)		(2,848)				(38,304)		(39,940)		(5,653)
Impairment loss on long-term     investments	-		-		-				(4,500)		(6,000)		(849)
Income before income tax    and share of income on    equity method    investments	1,008,601		901,128		127,547				1,463,314		1,600,203		226,495
Income tax expenses	(283,868)		(443,633)		(62,792)				(447,519)		(606,524)		(85,848)
Income before share of    income on equity method    investments	724,733		457,495		64,755				1,015,795		993,679		140,647
Share of income (loss) on    equity method investments	6,375		(1,967)		(278)				1,871		(440)		(62)
Net income	731,108		455,528		64,477				1,017,666		993,239		140,585
Less: net loss attributable to    non-controlling interest	(669)		(872)		(123)				(3,428)		(2,067)		(293)
Net income attributable to    the shareholders of    Momo Inc.	731,777		456,400		64,600				1,021,094		995,306		140,878
Net income per share    attributable to ordinary    shareholders
Basic	1.76		1.09		0.15				2.46		2.38		0.34
Diluted	1.67		1.05		0.15				2.36		2.29		0.32
Weighted average shares    used in calculating net    income per ordinary share
Basic	414,769,943		417,559,984		417,559,984				414,370,874		417,427,113		417,427,113
Diluted	450,480,301		452,500,168		452,500,168				449,410,610		452,915,745		452,915,745

 

 

 

Momo Inc.
Unaudited Condensed Consolidated Statement of Comprehensive Income
(All amounts in thousands, except share and per share data)
	Three months									First half year
	ended June 30									ended June 30
	2019		2020			2020				2019		2020				2020
	RMB		RMB			US$				RMB		RMB				US$
Net income	731,108		455,528			64,477				1,017,666		993,239				140,585
Other comprehensive income    (loss), net of tax
Foreign currency translation    adjustment	40,899		8,818			1,248				(32,082)		7,951				1,125
Comprehensive income	772,007		464,346			65,725				985,584		1,001,190				141,710
Less: comprehensive (loss)    income attributed to the non-    controlling interest	2,271		(1,423)			(201)				(2,963)		(6,992)				(990)
Comprehensive income    attributable to Momo Inc.	769,736		465,769			65,926				988,547		1,008,182				142,700

 

 

 

Momo Inc.
Unaudited Condensed Consolidated Balance Sheets
(All amounts in thousands, except share and per share data)
	December 31		June 30		June 30
	2019		2020		2020
	RMB		RMB		US$
Assets
Current assets
Cash and cash equivalents	2,612,743		2,977,583		421,450
Short-term deposits	12,312,585		9,298,879		1,316,171
Accounts receivable, net of allowance for doubtful accounts of RMB 12,209 and RMB10,240 as of December 31, 2019 and June 30, 2020, respectively	265,155		254,710		36,052
Amount due from a related party	4,382		2,029		287
Prepaid expenses and other current assets	599,000		554,848		78,535
Total current assets	15,793,865		13,088,049		1,852,495
Long-term deposits	300,000		3,100,000		438,777
Right-of-use assets, net	190,552		144,313		20,426
Property and equipment, net	346,345		327,855		46,405
Intangible assets	890,303		821,860		116,327
Rental deposits	25,028		24,838		3,516
Long-term investments	495,905		492,578		69,720
Other non-current assets	44,009		71,998		10,191
Deferred tax assets	37,064		34,591		4,896
Goodwill	4,360,610		4,424,985		626,316
Total assets	22,483,681		22,531,067		3,189,069
Liabilities and equity
Current liabilities
Accounts payable	714,323		692,865		98,071
Deferred revenue	503,461		470,187		66,551
Accrued expenses and other current liabilities	985,873		785,415		111,169
Amount due to related parties	29,606		18,373		2,601
Lease liabilities due within one year	135,169		122,427		17,328
Income tax payable	153,976		219,032		31,002
Deferred consideration in connection with business acquisitions	84,346		67,293		9,525
Total current liabilities	2,606,754		2,375,592		336,247
Deferred tax liabilities	222,576		205,465		29,082
Convertible senior notes	4,954,352		5,035,982		712,797
Share-based compensation liability	902,047		931,401		131,831
Lease liabilities	56,498		21,226		3,004
Other non-current liabilities	22,672		38,662		5,472
Total liabilities	8,764,899		8,608,328		1,218,433
Shareholder's equity (i)	13,718,782		13,922,739		1,970,636
Total liabilities and shareholder's equity	22,483,681		22,531,067		3,189,069
(i): As of June 30, 2020, the number of ordinary shares issued and outstanding was 418,121,042.

 

 

 

Momo Inc.
Unaudited Condensed Consolidated Statement of Cash Flows
(All amounts in thousands, except share and per share data)
	Three months						First half year
	ended June 30						ended June 30
	2019		2020		2020		2019		2020		2020
	RMB		RMB		US$		RMB		RMB		US$
Cash flows from operating activities:
Net income	731,108		455,528		64,477		1,017,666		993,239		140,585
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment	48,236		52,210		7,390		96,636		104,591		14,804
Amortization of intangible assets	39,020		40,288		5,702		77,615		80,170		11,347
Share-based compensation	482,537		184,100		26,058		1,075,611		352,627		49,911
Share of (income) loss on equity method    investments	(6,375)		1,967		278		(1,871)		440		62
Impairment loss on long-term investments	-		-		-		4,500		6,000		849
Gain on subsidiary deconsolidation	-		-		-		-		(6,676)		(945)
Gain on disposal of property and equipment	(338)		(1)		-		(334)		(1)		-
Provision of allowance for doubtful accounts	9,309		1,060		150		9,309		406		57
Cash received on investment income distribution	-		-		-		-		1,153		163
Changes in operating assets and liabilities:
Accounts receivable	25,712		39,725		5,623		435,126		1,746		247
Prepaid expenses and other current assets	19,385		42,671		6,040		1,196		43,833		6,204
Amount due from a related party	(271)		230		33		(271)		2,353		333
Rental deposits	(1,078)		363		51		(2,395)		190		27
Deferred tax assets	570		435		62		26,107		2,473		350
Other non-current assets	(18,796)		3,411		483		12,643		18,251		2,583
Accounts payable	55,573		63,598		9,002		88,088		(16,475)		(2,332)
Income tax payable	64,570		44,712		6,329		(6,988)		65,056		9,208
Deferred revenue	(48,764)		(12,249)		(1,734)		(29,922)		(33,272)		(4,709)
Accrued expenses and other current liabilities	43,872		(59,987)		(8,491)		(141,623)		(214,230)		(30,322)
Amount due to related parties	(16,752)		(16,217)		(2,295)		(42,717)		(11,233)		(1,590)
Deferred tax liability	(9,755)		(10,072)		(1,426)		(25,297)		(20,043)		(2,837)
Other non-current liabilities	4,201		(24,522)		(3,471)		4,794		(19,852)		(2,810)
Net cash provided by operating activities	1,421,964		807,250		114,261		2,597,873		1,350,746		191,185
Cash flows from investing activities:
Purchase of property and equipment	(41,682)		(45,803)		(6,483)		(94,480)		(83,970)		(11,885)
Proceeds from disposal of property and equipment	505		15		2		510		17		2
Payment for long-term investments	(12,000)		-		-		(24,000)		(4,500)		(637)
Prepayment of long-term investments	(15,000)		-		-		(15,000)		-		-
Cash dividend received	-		-		-		-		233		33
Cash outflow due to subsidiary deconsolidation	-		-		-		-		(1,026)		(145)
Purchase of short-term deposits	(6,230,000)		(4,941,858)		(699,475)		(9,715,005)		(8,241,858)		(1,166,559)
Cash received on maturity of short-term deposits	4,860,025		8,306,434		1,175,699		7,865,030		11,285,574		1,597,369
Payment for short-term investments	(40,000)		-		-		(250,000)		(10,000)		(1,415)
Cash received from sales of short-term investment	60,000		-		-		160,000		10,000		1,415
Purchase of long-term deposits	-		(2,800,000)		(396,314)		-		(2,800,000)		(396,314)
Net cash (used in) provided by investing activities	(1,418,152)		518,788		73,429		(2,072,945)		154,470		21,864
Cash flows from financing activities:
Deferred payment for business acquisition	(73,681)		(18,355)		(2,598)		(378,748)		(18,355)		(2,598)
Proceeds from exercise of share options	32		1		-		115		1		-
Deferred payment of purchase of property and    equipment	-		-		-		(94)		-		-
Dividends payment	(877,346)		(1,123,983)		(159,089)		(877,346)		(1,123,983)		(159,089)
Net cash used in financing activities	(950,995)		(1,142,337)		(161,687)		(1,256,073)		(1,142,337)		(161,687)
Effect of exchange rate changes	4,584		(5,332)		(756)		(1,146)		1,961		278
Net (decrease) increase in cash and cash    equivalents	(942,599)		178,369		25,247		(732,291)		364,840		51,640
Cash and cash equivalents at the beginning of period	2,678,342		2,799,214		396,203		2,468,034		2,612,743		369,810
Cash and cash equivalents at the end of period	1,735,743		2,977,583		421,450		1,735,743		2,977,583		421,450

 

 

 

		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 June 30, 2019								ended June 30, 2020							ended June 30, 2020
			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			(2,063,863)		18,227	5,447	-	(2,040,189)			(2,036,305)	18,929	2,804	-	(2,014,572)			(288,220)	2,679			397			-	(285,144)
Research and    development			(251,658)		2,315	44,523	-	(204,820)			(279,002)	2,404	49,985	-	(226,613)			(39,490)	340			7,075			-	(32,075)
Sales and marketing			(570,609)		17,045	51,293	-	(502,271)			(651,500)	17,702	43,123	-	(590,675)			(92,214)	2,506			6,104			-	(83,604)
General and    administrative			(500,660)		-	381,274	-	(119,386)			(180,061)	-	88,188	-	(91,873)			(25,486)	-			12,482			-	(13,004)
Cost and operating    expenses			(3,386,790)		37,587	482,537	-	(2,866,666)			(3,146,868)	39,035	184,100	-	(2,923,733)			(445,410)	5,525			26,058			-	(413,827)
Income from operations			927,741		37,587	482,537	-	1,447,865			812,713	39,035	184,100	-	1,035,848			115,033	5,525			26,058			-	146,616
Net income attributable to    Momo Inc.			731,777		37,587	482,537	(9,397)	1,242,504			456,400	39,035	184,100	(9,759)	669,776			64,600	5,525			26,058			(1,381)	94,802

 

 

 

		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-continued.
			First half year								First half year							First half year
			ended June 30, 2019								ended June 30, 2020							ended June 30, 2020
			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			(3,937,437)		36,248	9,633	-	(3,891,556)			(3,913,221)	37,574	9,773	-	(3,865,874)			(553,880)	5,318			1,383			-	(547,179)
Research and    development			(501,089)		4,604	84,253	-	(412,232)			(541,161)	4,772	92,745	-	(443,644)			(76,596)	675			13,127			-	(62,794)
Sales and marketing			(1,194,457)		33,898	90,745	-	(1,069,814)			(1,361,308)	35,138	90,197	-	(1,235,973)			(192,681)	4,973			12,767			-	(174,941)
General and     administrative			(1,103,256)		-	890,980	-	(212,276)			(357,310)	-	159,912	-	(197,398)			(50,574)	-			22,634			-	(27,940)
Cost and operating    expenses			(6,736,239)		74,750	1,075,611	-	(5,585,878)			(6,173,000)	77,484	352,627	-	(5,742,889)			(873,731)	10,966			49,911			-	(812,854)
Income from    operations			1,312,165		74,750	1,075,611	-	2,462,526			1,406,784	77,484	352,627	-	1,836,895			199,118	10,966			49,911			-	259,995
Net income attributable     to Momo Inc.			1,021,094		74,750	1,075,611	(18,688)	2,152,767			995,306	77,484	352,627	(19,371)	1,406,046			140,878	10,966			49,911			(2,742)	199,013
(ii)            Includes tax impacts related to the amortization of intangible assets from business acquisition. There is no tax impact related to share-based compensation.

 

 

 

Momo Inc.
Unaudited Condensed Segment Report
(All amounts in thousands, except share and per share data)
	Three months
	ended June 30, 2020
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Net revenues:
Live video service	2,411,223		191,653		-		2,602,876		368,413
Value-added service	878,804		325,516		-		1,204,320		170,460
Mobile marketing	37,964		-		-		37,964		5,373
Mobile games	11,564		-		-		11,564		1,637
Other services	1,163		-		10,365		11,528		1,633
Total net revenues	3,340,718		517,169		10,365		3,868,252		547,516
Cost and expenses (iii):
Cost of revenues	(1,792,442)		(232,445)		(11,418)		(2,036,305)		(288,220)
Research and development	(202,774)		(76,228)		-		(279,002)		(39,490)
Sales and marketing	(337,196)		(314,293)		(11)		(651,500)		(92,214)
General and administrative	(154,161)		(19,828)		(6,072)		(180,061)		(25,486)
Total cost and expenses	(2,486,573)		(642,794)		(17,501)		(3,146,868)		(445,410)
Other operating income	91,190		-		139		91,329		12,927
Income (loss) from operations	945,335		(125,625)		(6,997)		812,713		115,033
Interest income	107,776		689		71		108,536		15,362
Interest expense	(20,121)		-		-		(20,121)		(2,848)
Income (loss) before income tax and     share of income on equity method     investments	1,032,990		(124,936)		(6,926)		901,128		127,547
Income tax (expenses) benefits	(444,278)		645		-		(443,633)		(62,792)
Income (loss) before share of income     on equity method investments	588,712		(124,291)		(6,926)		457,495		64,755
Share of loss on equity method     investments	(1,967)		-		-		(1,967)		(278)
Net income (loss)	586,745		(124,291)		(6,926)		455,528		64,477
(iii)           Share-based compensation was allocated in cost of revenues and operating expenses as follows:
	Three months
	ended June 30, 2020
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Cost of revenues	3,396		(592)		-		2,804		397
Research and development	36,670		13,315		-		49,985		7,075
Sales and marketing	38,905		4,218		-		43,123		6,104
General and administrative	78,250		7,280		2,658		88,188		12,482
Total cost and expenses	157,221		24,221		2,658		184,100		26,058

 

 

 

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 June 30, 2020
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Operating income (loss)	945,335		(125,625)		(6,997)		812,713		115,033
Share-based compensation	157,221		24,221		2,658		184,100		26,058
Amortization of intangible assets from    business acquisitions	-		39,035		-		39,035		5,525
Non-GAAP operating income (loss)	1,102,556		(62,369)		(4,339)		1,035,848		146,616
Net income (loss)	586,745		(124,291)		(6,926)		455,528		64,477
Share-based compensation	157,221		24,221		2,658		184,100		26,058
Amortization of intangible assets from    business acquisitions	-		39,035		-		39,035		5,525
Tax impacts	-		(9,759)		-		(9,759)		(1,381)
Non-GAAP net income (loss)	743,966		(70,794)		(4,268)		668,904		94,679

 

 

 

Momo Inc.
Unaudited Condensed Segment Report
(All amounts in thousands, except share and per share data)
	Three months
	ended June 30, 2019
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$(2)
Net revenues:
Live video service	3,099,887		-		-		3,099,887		451,549
Value-added service	663,601		284,793		-		948,394		138,149
Mobile marketing	76,208		-		-		76,208		11,101
Mobile games	23,240		-		-		23,240		3,385
Other services	2,452		-		2,449		4,901		715
Total net revenues	3,865,388		284,793		2,449		4,152,630		604,899
Cost and expenses (iv):
Cost of revenues	(1,970,672)		(89,362)		(3,829)		(2,063,863)		(300,636)
Research and development	(181,866)		(69,792)		-		(251,658)		(36,658)
Sales and marketing	(356,578)		(212,628)		(1,403)		(570,609)		(83,119)
General and administrative	(142,384)		(344,434)		(13,842)		(500,660)		(72,929)
Total cost and expenses	(2,651,500)		(716,216)		(19,074)		(3,386,790)		(493,342)
Other operating income	140,535		-		21,366		161,901		23,584
Income (loss) from operations	1,354,423		(431,423)		4,741		927,741		135,141
Interest income	97,118		3,024		33		100,175		14,592
Interest expense	(19,315)		-		-		(19,315)		(2,814)
Income (loss) before income tax and share    of income on equity method investments	1,432,226		(428,399)		4,774		1,008,601		146,919
Income tax (expenses) benefits	(289,101)		5,233		-		(283,868)		(41,350)
Income (loss) before share of income on    equity method investments	1,143,125		(423,166)		4,774		724,733		105,569
Share of income on equity method investments	6,375		-		-		6,375		929
Net income (loss)	1,149,500		(423,166)		4,774		731,108		106,498
(iv)           Share-based compensation was allocated in cost of revenues and operating expenses as follows:
	Three months
	ended June 30, 2019
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Cost of revenues	4,870		577		-		5,447		793
Research and development	27,587		16,936		-		44,523		6,486
Sales and marketing	47,381		3,912		-		51,293		7,472
General and administrative	54,235		324,479		2,560		381,274		55,539
Total cost and expenses	134,073		345,904		2,560		482,537		70,290
(2) All translations from RMB to U.S. dollars are made at a rate of RMB 6.865 to US$1.00, the effective noon buying rate for June 28, 2019 as set forth in the H.10 statistical release of the Federal Reserve Board.

 

 

 

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 June 30, 2019
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Operating income (loss)	1,354,423		(431,423)		4,741		927,741		135,141
Share-based compensation	134,073		345,904		2,560		482,537		70,290
Amortization of intangible assets from business acquisitions	-		37,587		-		37,587		5,476
Non-GAAP operating income (loss)	1,488,496		(47,932)		7,301		1,447,865		210,907
Net income (loss)	1,149,500		(423,166)		4,774		731,108		106,498
Share-based compensation	134,073		345,904		2,560		482,537		70,290
Amortization of intangible assets from business acquisitions	-		37,587		-		37,587		5,476
Tax impacts	-		(9,397)		-		(9,397)		(1,369)
Non-GAAP net income (loss)	1,283,573		(49,072)		7,334		1,241,835		180,895

 

 

 

Momo Inc.
Unaudited Condensed Segment Report
(All amounts in thousands, except share and per share data)
	First half year
	ended June 30, 2020
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Net revenues:
Live video service	4,737,168		197,712		-		4,934,880		698,487
Value-added service	1,678,907		701,167		-		2,380,074		336,878
Mobile marketing	95,119		-		-		95,119		13,463
Mobile games	24,255		-		-		24,255		3,433
Other services	7,358		-		20,650		28,008		3,964
Total net revenues	6,542,807		898,879		20,650		7,462,336		1,056,225
Cost and expenses (v):
Cost of revenues	(3,528,959)		(364,723)		(19,539)		(3,913,221)		(553,880)
Research and development	(386,674)		(154,487)		-		(541,161)		(76,596)
Sales and marketing	(731,560)		(629,714)		(34)		(1,361,308)		(192,681)
General and administrative	(297,296)		(47,508)		(12,506)		(357,310)		(50,574)
Total cost and expenses	(4,944,489)		(1,196,432)		(32,079)		(6,173,000)		(873,731)
Other operating income	117,309		-		139		117,448		16,624
Income (loss) from operations	1,715,627		(297,553)		(11,290)		1,406,784		199,118
Interest income	237,054		2,161		144		239,359		33,879
Interest expense	(39,940)		-		-		(39,940)		(5,653)
Impairment loss on long-term    investments	(6,000)		-		-		(6,000)		(849)
Income (loss) before income tax    and share of income on equity    method investments	1,906,741		(295,392)		(11,146)		1,600,203		226,495
Income tax (expenses) benefits	(612,490)		5,966		-		(606,524)		(85,848)
Income (loss) before share of    income on equity method    investments	1,294,251		(289,426)		(11,146)		993,679		140,647
Share of loss on equity method     investments	(440)		-		-		(440)		(62)
Net income (loss)	1,293,811		(289,426)		(11,146)		993,239		140,585
(v)            Share-based compensation was allocated in cost of revenues and operating expenses as follows:
	First half year
	ended June 30, 2020
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Cost of revenues	9,007		766		-		9,773		1,383
Research and development	63,472		29,273		-		92,745		13,127
Sales and marketing	84,346		5,851		-		90,197		12,767
General and administrative	133,234		21,401		5,277		159,912		22,634
Total cost and expenses	290,059		57,291		5,277		352,627		49,911

 

 

 

Momo Inc. Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report (All amounts in thousands, except share and per share data)
	First half year
	ended June 30, 2020
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Operating income (loss)	1,715,627		(297,553)		(11,290)		1,406,784		199,118
Share-based compensation	290,059		57,291		5,277		352,627		49,911
Amortization of intangible assets    from business acquisitions	-		77,484		-		77,484		10,966
Non-GAAP operating income    (loss)	2,005,686		(162,778)		(6,013)		1,836,895		259,995
Net income (loss)	1,293,811		(289,426)		(11,146)		993,239		140,585
Share-based compensation	290,059		57,291		5,277		352,627		49,911
Amortization of intangible assets    from business acquisitions	-		77,484		-		77,484		10,966
Tax impacts	-		(19,371)		-		(19,371)		(2,742)
Non-GAAP net income (loss)	1,583,870		(174,022)		(5,869)		1,403,979		198,720

 

 

 

Momo Inc.
Unaudited Condensed Segment Report
(All amounts in thousands, except share and per share data)
	First half year
	ended June 30, 2019
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Net revenues:
Live video service	5,789,300		-		-		5,789,300		843,307
Value-added service	1,272,103		580,140		-		1,852,243		269,810
Mobile marketing	156,937		-		-		156,937		22,860
Mobile games	62,248		-		-		62,248		9,067
Other services	4,009		-		10,812		14,821		2,159
Total net revenues	7,284,597		580,140		10,812		7,875,549		1,147,203
Cost and expenses (vi):
Cost of revenues	(3,740,710)		(188,218)		(8,509)		(3,937,437)		(573,552)
Research and development	(366,139)		(134,950)		-		(501,089)		(72,992)
Sales and marketing	(719,536)		(468,549)		(6,372)		(1,194,457)		(173,992)
General and administrative	(256,648)		(824,399)		(22,209)		(1,103,256)		(160,707)
Total cost and expenses	(5,083,033)		(1,616,116)		(37,090)		(6,736,239)		(981,243)
Other operating income	151,489		-		21,366		172,855		25,179
Income (loss) from operations	2,353,053		(1,035,976)		(4,912)		1,312,165		191,139
Interest income	187,976		5,915		62		193,953		28,252
Interest expense	(38,304)		-		-		(38,304)		(5,580)
Impairment loss on long-term    investments	(4,500)		-		-		(4,500)		(655)
Income (loss) before income tax    and share of income on equity    method investments	2,498,225		(1,030,061)		(4,850)		1,463,314		213,156
Income tax (expenses) benefits	(456,704)		9,185		-		(447,519)		(65,188)
Income (loss) before share of    income on equity method    investments	2,041,521		(1,020,876)		(4,850)		1,015,795		147,968
Share of income on equity method    investments	1,871		-		-		1,871		273
Net income (loss)	2,043,392		(1,020,876)		(4,850)		1,017,666		148,241
(vi)           Share-based compensation was allocated in cost of revenues and operating expenses as follows:
	First half year
	ended June 30, 2019
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Cost of revenues	8,476		1,157		-		9,633		1,403
Research and development	49,300		34,953		-		84,253		12,273
Sales and marketing	82,855		7,890		-		90,745		13,218
General and administrative	93,726		792,163		5,091		890,980		129,786
Total cost and expenses	234,357		836,163		5,091		1,075,611		156,680

 

 

 

Momo Inc. Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report (All amounts in thousands, except share and per share data)
	First half year
	ended June 30, 2019
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Operating income (loss)	2,353,053		(1,035,976)		(4,912)		1,312,165		191,139
Share-based compensation	234,357		836,163		5,091		1,075,611		156,680
Amortization of intangible assets    from business acquisitions	-		74,750		-		74,750		10,889
Non-GAAP operating income  (loss)	2,587,410		(125,063)		179		2,462,526		358,708
Net income (loss)	2,043,392		(1,020,876)		(4,850)		1,017,666		148,241
Share-based compensation	234,357		836,163		5,091		1,075,611		156,680
Amortization of intangible assets    from business acquisitions	-		74,750		-		74,750		10,889
Tax impacts	-		(18,688)		-		(18,688)		(2,723)
Non-GAAP net income (loss)	2,277,749		(128,651)		241		2,149,339		313,087

 

View original content:http://www.prnewswire.com/news-releases/momo-announces-unaudited-financial-results-for-the-second-quarter-of-2020-301123701.html

SOURCE Momo Inc.

FAQ

What were Momo's financial results for Q2 2020?

Momo reported net revenues of RMB3,868.3 million, a 6.8% decrease YoY, and net income of RMB456.4 million, down from RMB731.8 million in Q2 2019.

How many active users did Momo have in June 2020?

Momo had 111.5 million Monthly Active Users (MAU) in June 2020.

What guidance did Momo provide for Q3 2020?

Momo expects Q3 2020 net revenues to be between RMB3.7 billion to RMB3.8 billion, reflecting a year-over-year decrease of 16.9% to 14.6%.

How did Momo's value-added service revenues perform in Q2 2020?

Momo's value-added service revenues increased by 27% year-over-year to RMB1,204.3 million.

What was the diluted net income per ADS for Momo in Q2 2020?

The diluted net income per ADS was RMB2.11 (US$0.30) in Q2 2020.