Scienjoy Holding Corporation Reports Unaudited First Quarter 2024 Financial Results
Scienjoy Holding (NASDAQ: SJ), a leader in Chinese interactive entertainment, reported its unaudited financial results for Q1 2024. Revenues grew by 3.9% to RMB316.3 million (US$43.8 million), with gross profit up 32.4% to RMB53.1 million (US$7.4 million). The company's income from operations surged 109.6% to RMB10.3 million (US$1.4 million), and net income reached RMB2.8 million (US$0.4 million), reversing a net loss of RMB5.5 million from Q1 2023. Notably, net income attributable to shareholders was RMB6.6 million (US$0.9 million), compared to a net loss of RMB3.2 million in Q1 2023. Adjusted net income for shareholders rose 73.6% to RMB9.0 million (US$1.3 million). However, operating expenses increased by 21.6% to RMB42.8 million (US$5.9 million). The company holds RMB206.2 million (US$28.6 million) in cash and projects Q2 2024 revenues between RMB354 million and RMB374 million.
- Total revenues increased by 3.9% to RMB316.3 million (US$43.8 million).
- Gross profit rose by 32.4% to RMB53.1 million (US$7.4 million).
- Income from operations increased by 109.6% to RMB10.3 million (US$1.4 million).
- Net income was RMB2.8 million (US$0.4 million), reversing a net loss of RMB5.5 million.
- Net income attributable to shareholders was RMB6.6 million (US$0.9 million), compared to a net loss of RMB3.2 million.
- Adjusted net income for shareholders rose 73.6% to RMB9.0 million (US$1.3 million).
- Gross margin increased to 16.8% from 13.2%.
- Cash and cash equivalents increased to RMB206.2 million (US$28.6 million).
- User acquisition costs decreased by 50% due to a stable market share.
- ARPPU increased by 18% as the Chinese economy recovers.
- Total operating expenses increased by 21.6% to RMB42.8 million (US$5.9 million).
- Sales and marketing expenses increased by 851.2% to RMB2.0 million (US$0.3 million).
- General and administrative expenses increased by 15.1% to RMB19.9 million (US$2.8 million).
- Research and development expenses increased by 28.1% to RMB21.5 million (US$3.0 million).
- Change in fair value of investment in marketable security resulted in a loss of RMB3.2 million (US$0.4 million).
- Investment loss amounted to RMB2.2 million (US$0.3 million).
Insights
Scienjoy Holding Corporation has reported a substantial improvement in its financial performance for Q1 2024. Notably, total revenues increased by
Moreover, the income from operations grew by an astounding
While these figures reflect robust growth, the modest increase in total revenues of
In the short-term, investors might expect continued volatility due to market conditions and the company's significant investment in technology and global expansion. However, the long-term outlook seems promising given the company’s focus on metaverse innovation and AI integration, which could offer substantial growth opportunities.
The company's performance in the MENA region, specifically Dubai, is noteworthy. The sales and marketing expenses in this region increased significantly by
The focus on the dynamic MENA region aligns with the company's global expansion strategy. The increased marketing spend in new subsidiaries suggests that Scienjoy is investing heavily to establish a strong presence. While this could pressure short-term profitability, it is likely a strategic move to tap into new revenue streams and diversify beyond the Chinese market.
This approach to expansion indicates the company's broader vision and confidence in its product offerings and market potential. Investors should watch how quickly these new investments translate into tangible revenue growth, as this will be a critical factor in evaluating the success of the expansion strategy.
Scienjoy's emphasis on AI technologies and metaverse integration is a forward-looking strategy that could set it apart from competitors. The upcoming launch of AI Mate and AI Vision products showcases the company's commitment to innovation. AI-Generated Content (AIGC) is a rapidly evolving area with vast potential and Scienjoy's early adoption could provide a competitive edge.
The metaverse is still in its nascent stages, but companies that invest early could reap significant benefits. Integration of AI into metaverse experiences could enhance user engagement and create new revenue models.
For retail investors, understanding the technological edge and innovation capabilities of a company is crucial. While it's too early to quantify the direct impact of these new products on the company's bottom line, their launch aligns with global tech trends and indicates a proactive approach to future-proofing the business.
First Quarter 2024 Operating and Financial Highlights
- Total revenues increased by
3.9% toRMB316.3 million (US ) in the first quarter of 2024, from$43.8 million RMB304.3 million in the same period of 2023. - Gross profit increased by
32.4% toRMB53.1 million (US ) in the first quarter of 2024 from$7.4 million RMB40.1 million in the same period of 2023. Gross margin increased to16.8% in the first quarter of 2024 from13.2% in the same period of 2023. - Income from operations increased by
109.6% toRMB10.3 million (US ) in the first quarter of 2024, from$1.4 million RMB4.9 million in the same period of 2023. - Net income amounted to
RMB2.8 million (US ) in the first quarter of 2024, as compared with a net loss of$0.4 million RMB5.5 million in the same period of 2023. - Net income attributable to the Company's shareholders amounted
RMB6.6 million (US ) in the first quarter of 2024, as compared with a net loss attributable to the Company's shareholders of$0.9 million RMB3.2 million in the same period of 2023. - Adjusted net income attributable to the Company's shareholders increased by
73.6% toRMB9.0 million (US ) in the first quarter of 2024 from$1.3 million RMB5.2 million in the same period of 2023. - As of March 31, 2024, the Company had
RMB206.2 million (US ) in cash and cash equivalents, which represented an increase of$28.6 million RMB0.7 million fromRMB205.5 million as of December 31, 2023.
Mr. Victor He, Chairman and Chief Executive Officer of Scienjoy, commented, "In the first quarter of 2024, we've sustained remarkable momentum in executing our strategic agenda of global expansion and metaverse innovation. At the core of our expansion strategy lies our unwavering commitment to pioneering metaverse products and services with AI technologies and applications. As the rapid evolution of AI-Generated Content (AIGC) technology presents both challenges and opportunities within the metaverse landscape, we will continuously integrate the AIGC technology organically. And the upcoming launch of AI Mate and AI Vision epitomizes our mission to integrate AI into daily life. We hold firm confidence to bring our products to a wider audience and strengthen our position globally. Looking ahead, we strive to leverage our extensive online business experience and advanced technologies to actively shape the future contours of the metaverse ecosystem."
Mr. Denny Tang, Chief Financial Officer of Scienjoy, added, "We are pleased to report strong first-quarter results, driven by our continued focus on execution of the development plan. Our total revenues increased by
First Quarter 2024 Financial Results
Total revenues increased by
Cost of revenues decreased by
Gross profit increased by
Total operating expenses increased by
- Sales and marketing expenses increased by
851.2% toRMB2.0 million (US ) in the first quarter of 2024 from$0.3 million RMB0.2 million in the same period of 2023, primarily attributable to sales and marketing activities in our new subsidiaries inDubai . The Company is taking initiative inDubai market, aiming at global expansion starting from the dynamicMiddle East andNorth Africa (MENA) region. - General and administrative expenses increased by
15.1% toRMB19.9 million (US ) in the first quarter of 2024 from$2.8 million RMB17.3 million in the same period of 2023. The increase was primarily due to an increase ofRMB2.9 million in employee salary and welfare. - Research and development expenses increased by
28.1% toRMB21.5 million (US ) in the first quarter of 2024 from$3.0 million RMB16.8 million in the same period of 2023, due to an increase ofRMB4.1 million in technical services fees. - Recovery of credit losses amounted to
RMB0.6 million (US ) in the first quarter of 2024 as compared to a provision for credit losses of$0.09 million RMB0.9 million in the same period of 2023.
Income from operations increased by
Change in fair value of contingent consideration was nil in the first quarter of 2024, as compared to a loss of
Change in fair value of warrants liability was nil in the first quarter of 2024, as compared to a loss of
Change in fair value of investment in marketable security amounted to a loss of
Investment loss amounted to
Net income amounted to
Net income attributable to the Company's shareholders amounted to
Adjusted net income attributable to the Company's shareholders increased by
Basic and diluted net income attributable to the Company's shareholders per ordinary share were both
Adjusted basic and diluted net income attributable to the Company's shareholders per ordinary share were both
As of March 31, 2024, the Company had cash and cash equivalents of
Business Outlook
The Company expects its total revenues to be in the range of
About Scienjoy Holding Corporation
Scienjoy is a pioneering Nasdaq-listed interactive entertainment leader. Driven by the vision of shaping a metaverse lifestyle, Scienjoy leverages AI-powered technology to create immersive experiences that resonate with global audiences, fostering meaningful connections and redefining entertainment. For more information, please visit http://ir.scienjoy.com/.
Use of Non-GAAP Financial Measures
Adjusted net income is calculated as net income adjusted for change in fair value of contingent consideration, change in fair value of warrant liability and share based compensation. Adjusted basic and diluted net income per ordinary share is non-GAAP net income (loss) attributable to ordinary shareholders divided by weighted average number of ordinary shares used in the calculation of non-GAAP basic and diluted net income per ordinary share. The non-GAAP financial measures are presented to enhance investors' overall understanding of the Company's financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with
For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of Non-GAAP Results" near the end of this release.
Exchange Rate Information
This announcement contains translations of certain RMB amounts into
Safe Harbor Statement
Certain statements made in this release are "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, are: the ability to manage growth; ability to identify and integrate other future acquisitions; ability to obtain additional financing in the future to fund capital expenditures; fluctuations in general economic and business conditions; costs or other factors adversely affecting our profitability; litigation involving patents, intellectual property, and other matters; potential changes in the legislative and regulatory environment; a pandemic or epidemic. The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in the Company's filings with the Securities and Exchange Commission ("SEC") from time to time. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Such information speaks only as of the date of this release.
For investor and media inquiries, please contact:
Investor Relations Contacts
Denny Tang
Chief Financial Officer
Scienjoy Holding Corporation
+86-10-64428188
ir@scienjoy.com
Ascent Investor Relations LLC
Tina Xiao
+1-646-932-7242
investors@ascent-ir.com
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
(All amounts in thousands, except share and per share data or otherwise stated) | ||||||||||||
As of December | As of March 31, | |||||||||||
2023 | 2024 | 2024 | ||||||||||
RMB | RMB | US$ | ||||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | 205,465 | 206,175 | 28,555 | |||||||||
Accounts receivable, net | 260,979 | 210,329 | 29,130 | |||||||||
Prepaid expenses and other current assets | 78,653 | 58,458 | 8,096 | |||||||||
Amounts due from related parties | 355 | - | - | |||||||||
Investment in marketable security | 31,525 | 28,298 | 3,919 | |||||||||
Total current assets | 576,977 | 503,260 | 69,700 | |||||||||
Property and equipment, net | 2,193 | 2,035 | 282 | |||||||||
Intangible assets, net | 412,154 | 410,412 | 56,841 | |||||||||
Goodwill | 182,467 | 182,502 | 25,276 | |||||||||
Long term investment | 254,411 | 267,434 | 37,039 | |||||||||
Long term deposits and other assets | 726 | 731 | 101 | |||||||||
Right-of-use assets-operating lease | 12,157 | 10,359 | 1,435 | |||||||||
Deferred tax assets | 7,379 | 7,208 | 998 | |||||||||
Total non-current assets | 871,487 | 880,681 | 121,972 | |||||||||
TOTAL ASSETS | 1,448,464 | 1,383,941 | 191,672 | |||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
Current liabilities | ||||||||||||
Accounts payable | 73,183 | 35,296 | 4,886 | |||||||||
Accrued salary and employee benefits | 14,763 | 16,889 | 2,339 | |||||||||
Accrued expenses and other current liabilities | 27,610 | 9,864 | 1,366 | |||||||||
Income tax payable | 13,005 | 14,435 | 1,999 | |||||||||
Lease liabilities-operating lease -current | 7,974 | 7,085 | 981 | |||||||||
Deferred revenue | 97,586 | 83,636 | 11,583 | |||||||||
Total current liabilities | 234,121 | 167,205 | 23,154 | |||||||||
Non-current liabilities | ||||||||||||
Deferred tax liabilities | 59,818 | 59,463 | 8,236 | |||||||||
Lease liabilities-operating lease -non-current | 4,798 | 2,741 | 380 | |||||||||
Total non-current liabilities | 64,616 | 62,204 | 8,616 | |||||||||
TOTAL LIABILITIES | 298,737 | 229,409 | 31,770 | |||||||||
Commitments and contingencies | ||||||||||||
EQUITY | ||||||||||||
Ordinary share, no par value, unlimited Class A ordinary | ||||||||||||
Class A ordinary shares | 423,623 | 426,058 | 59,008 | |||||||||
Class B ordinary shares | 23,896 | 23,896 | 3,310 | |||||||||
Shares to be issued | 30,777 | 30,777 | 4,263 | |||||||||
Treasury stocks | (19,216) | (19,216) | (2,661) | |||||||||
Statutory reserves | 44,698 | 44,698 | 6,191 | |||||||||
Retained earnings | 628,821 | 635,401 | 88,002 | |||||||||
Accumulated other comprehensive income | 17,965 | 17,529 | 2,428 | |||||||||
Total shareholders' equity | 1,150,564 | 1,159,143 | 160,541 | |||||||||
Non-controlling interests | (837) | (4,611) | (639) | |||||||||
Total equity | 1,149,727 | 1,154,532 | 159,902 | |||||||||
TOTAL LIABILITIES AND EQUITY | 1,448,464 | 1,383,941 | 191,672 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND | ||||||||||||||
(All amounts in thousands, except share and per share data or otherwise stated) | ||||||||||||||
For three months ended | ||||||||||||||
March 31, | March 31, | March 31, | ||||||||||||
2023 | 2024 | 2024 | ||||||||||||
RMB | RMB | US$ | ||||||||||||
Live streaming - consumable virtual items revenue | 291,111 | 309,015 | 42,798 | |||||||||||
Live streaming - time based virtual items revenue | 5,511 | 5,974 | 827 | |||||||||||
Technical services | 7,669 | 1,310 | 182 | |||||||||||
Total revenues | 304,291 | 316,299 | 43,807 | |||||||||||
Cost of revenues | (264,195) | (263,212) | (36,454) | |||||||||||
Gross profit | 40,096 | 53,087 | 7,353 | |||||||||||
Operating expenses | ||||||||||||||
Sales and marketing expenses | (209) | (1,988) | (275) | |||||||||||
General and administrative expenses | (17,309) | (19,930) | (2,760) | |||||||||||
Recovery of (provision for) credit losses | (861) | 643 | 89 | |||||||||||
Research and development expenses | (16,810) | (21,527) | (2,981) | |||||||||||
Total operating expenses | (35,189) | (42,802) | (5,927) | |||||||||||
Income from operations | 4,907 | 10,285 | 1,426 | |||||||||||
Change in fair value of contingent consideration | (4,518) | - | - | |||||||||||
Change in fair value of warrants liability | (1,932) | - | - | |||||||||||
Change in fair value of investment in marketable security | 1,578 | (3,227) | (447) | |||||||||||
Investment loss | (218) | (2,240) | (310) | |||||||||||
Interest income | 437 | 1,979 | 274 | |||||||||||
Interest expense | (33) | - | - | |||||||||||
Other income, net | 171 | 113 | 16 | |||||||||||
Foreign exchange gain (loss), net | (33) | 534 | 74 | |||||||||||
Income before income taxes | 359 | 7,444 | 1,033 | |||||||||||
Income tax expenses | (5,894) | (4,638) | (642) | |||||||||||
Net income (loss) | (5,535) | 2,806 | 391 | |||||||||||
Less: net loss attributable to noncontrolling interest | (2,385) | (3,774) | (523) | |||||||||||
Net income (loss) attributable to the Company's | (3,150) | 6,580 | 914 | |||||||||||
Other comprehensive income (loss) | ||||||||||||||
Other comprehensive income (loss) - foreign currency | 13 | (436) | (60) | |||||||||||
Comprehensive income (loss) | (5,522) | 2,370 | 331 | |||||||||||
Less: comprehensive loss attributable to non- | (2,385) | (3,774) | (523) | |||||||||||
Comprehensive income (loss) attributable to the | (3,137) | 6,144 | 854 | |||||||||||
Weighted average number of shares | ||||||||||||||
Basic | 40,447,415 | 41,164,872 | 41,164,872 | |||||||||||
Diluted | 40,447,415 | 41,164,872 | 41,164,872 | |||||||||||
Earnings (loss) per share | ||||||||||||||
Basic | (0.08) | 0.16 | 0.02 | |||||||||||
Diluted | (0.08) | 0.16 | 0.02 | |||||||||||
Reconciliations of Non-GAAP Results | ||||||||||||
(All amounts in thousands, except share and per share data or otherwise stated) | ||||||||||||
For the three months ended | ||||||||||||
March | March | March | ||||||||||
2023 | 2024 | 2024 | ||||||||||
RMB | RMB | US$ | ||||||||||
Net income (loss) attributable to the Company's shareholders | (3,150) | 6,580 | 914 | |||||||||
Less: | ||||||||||||
Change in fair value of contingent consideration | (4,518) | - | - | |||||||||
Change in fair value of warrants liability | (1,932) | - | - | |||||||||
Share based compensation | (1,893) | (2,435) | (337) | |||||||||
Adjusted net income attributable to the Company's | 5,193 | 9,015 | 1,251 | |||||||||
Adjusted net income attributable to the Company's | ||||||||||||
Basic | 0.13 | 0.22 | 0.03 | |||||||||
Diluted | 0.13 | 0.22 | 0.03 | |||||||||
"Adjusted net income (loss) attributable to the Company's shareholders" is defined as net income (loss) |
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SOURCE Scienjoy Holding Corporation
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