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Momo Announces Unaudited Financial Results for the Second Quarter of 2019

BEIJING, Aug. 27, 2019 /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 2019.

Second Quarter of 2019 Highlights

  • Net revenues increased by 32% year over year to RMB4,152.6 million (US$604.9 million*) in the second quarter of 2019.
  • Net income attributable to Momo Inc. decreased to RMB731.8 million (US$106.6 million) in the second quarter of 2019 from RMB750.2 million in the same period of 2018. We recognized a total share-based compensation expense of RMB482.5 million (US$70.3 million) in the second quarter of 2019 including a share-based compensation expense of RMB323.7 million (US$47.1 million) regarding certain share options granted to the founders of Tantan Limited ("Tantan"), while the total share-based compensation expense recognized in the same period of 2018 was only RMB134.2 million. In August 2018, Tantan Limited granted 3,578,205 share options to its founders. The share options included a performance condition in which the founders have the right to receive fully vested options immediately upon achieving certain performance condition. During the second quarter of 2019, the performance condition was met and accordingly, we recognized a share-based compensation expense of RMB323.7 million (US$47.1 million) related to those options.
  • Non-GAAP net income attributable to Momo Inc. (note 1) increased to RMB1,242.5 million (US$181.0 million) in the second quarter of 2019, from RMB893.2 million in the same period of 2018.
  • Diluted net income per American Depositary Share ("ADS") was RMB3.33(US$0.49) in the second quarter of 2019, compared to RMB3.55 in the same period of 2018.
  • Non-GAAP diluted net income per ADS (note 1) was RMB5.60(US$0.82) in the second quarter of 2019, compared to RMB4.22 in the same period of 2018.
  • Monthly Active Users ("MAU") on Momo application were 113.5 million in June 2019, compared to 108.0 million in June 2018.
  • Total paying users of our live video service and value-added service, without double counting the overlap, including 3.2 million paying users of Tantan, were 11.8 million for the second quarter of 2019, compared to 11.6 million for the second quarter of 2018, which included 3.1 million paying users of Tantan in June 2018.

 

* This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars, in this press release, were made at a rate of RMB6.865 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.

 

Recent Development

Tantan's download and payment services were fully restored by July 15, 2019. As of August 25, 2019, the number of paying users of Tantan was 4.1 million.

First Half of 2019 Highlights

  • Net revenues increased 33% year over year to RMB7,875.5 million (US$1,147.2 million) for the first half of 2019.
  • Net income attributable to Momo Inc. was RMB1,021.1 million (US$148.7 million) for the first half of 2019, compared with RMB1,575.4 million during the same period of 2018.
  • Non-GAAP net income attributable to Momo Inc. (note 1) was RMB2,152.8 million (US$313.6 million) for the first half of 2019, compared with RMB1,797.0 million during the same period of 2018.
  • Diluted net income per ADS was RMB4.71(US$0.69) for the first half of 2019, compared with RMB7.52 during the same period of 2018.
  • Non-GAAP diluted net income per ADS (note 1) was RMB9.75 (US$1.42) for the first half of 2019, compared with RMB8.58 during the same period of 2018.

"The second quarter of 2019 was a good quarter. We continued to deliver strong financial results and make progress across all of our strategic priorities," commented Yan Tang, Chairman and CEO of Momo. "Since the full restoration of its download and payment service in mid-July, Tantan has been recovering with robust momentum across different user and revenue metrics. It demonstrated the strong demand for online dating service in China and Tantan's unique position in this sector. We expect Tantan to become an important driver of the company's growth in the coming few years."

Second Quarter of 2019 Financial Results

Net revenues

Total net revenues were RMB4,152.6 million (US$604.9 million) in the second quarter of 2019, an increase of 32% from RMB3,152.5 million in the second quarter of 2018.

Live video service revenues were RMB3,099.9 million (US$451.5 million) in the second quarter of 2019, an increase of 18% from RMB2,620.9 million during the same period of 2018. The growth in live video revenues was contributed by the increase in quarterly paying users, as well as the increase in average revenues per paying user per quarter.

Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. The total value-added service revenues were RMB948.4 million (US$138.1 million) in the second quarter of 2019, an increase of 169% from RMB352.6 million during the same period of 2018. The year-over-year increase was primarily attributable to the continued growth of the virtual gift business on the Momo application driven by more paying scenarios introduced to enhance the social experience of Momo users, and the consolidation of Tantan's membership subscription revenues for the whole second quarter of 2019, compared to the single month of June 2018 in the second quarter of 2018.

Mobile marketing revenues were RMB76.2 million (US$11.1 million) in the second quarter of 2019, a decrease of 46% from RMB142.0 million during the same period of 2018. The decrease in mobile marketing revenues was due to the decrease in advertisement properties on Momo's platform resulting from the suspension of certain user posting functions.

Mobile games revenues were RMB23.2 million (US$3.4 million) in the second quarter of 2019, a decrease of 33% from RMB34.8 million in the second quarter of 2018. 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 increased from RMB3,119.8 million in the second quarter of 2018 to RMB3,865.4 million (US$563.1 million) in the second quarter of 2019, primarily driven by the significant increase in net revenues from live video service and value-added service. Net revenues from Tantan segment increased from RMB31.0 million in the second quarter of 2018 to RMB284.8 million (US$41.5million) in the second quarter of 2019, which mainly included value-added service revenues. Tantan segment has been consolidated since June 2018.

Cost and expenses

Cost and expenses were RMB3,386.8 million (US$493.3 million) in the second quarter of 2019, an increase of 44% from RMB2,356.8 million in the second quarter of 2018. The increase was primarily attributable to: (a) an increase in personnel related costs including share-based compensation expenses, especially the share-based compensation expenses of RMB323.7 million (US$47.1 million) charged related to the options granted to Tantan's founders and the Company's rapidly expanding talent pool; (b) an increase in revenue sharing with broadcasters related to our live video service and virtual gift recipients; (c) an increase in marketing and promotional expenses to attract users and promote our live video services; (d) an increase in infrastructure-related spending, such as bandwidth costs and server depreciation costs, driven by more functions introduced on Momo's platform. The increase was partially offset by a decrease in production cost in connection with television program.

Non-GAAP cost and expenses (note 1) were RMB2,866.7 million (US$417.6 million) in the second quarter of 2019, an increase of 30% from RMB2,210.9 million during the same period of 2018.

Other operating income

Other operating income was RMB161.9 million (US$23.6 million) in the second quarter of 2019, a significant increase from RMB100.1 million during the second quarter of 2018. The increase was mainly due to more government incentives received in the second quarter of 2019.

Income from operations

Income from operations was RMB927.7 million (US$135.1 million) in the second quarter of 2019, compared to RMB895.8 million during the same period of 2018. Income from operations of Momo segment was RMB1,354.4 million (US$197.3 million) in the second quarter of 2019, increasing from RMB1,159.3 million in the second quarter of 2018. Loss from operations of Tantan segment was RMB431.4 million (US$62.8 million) in the second quarter of 2019, compared to loss from operations of RMB97.8 million in the second quarter of 2018. Tantan segment has been consolidated since June 2018.

Non-GAAP income from operations (note 1) was RMB1,447.9 million (US$210.9 million) in the second quarter of 2019, compared to RMB1,041.7 million during the same period of 2018. Non-GAAP income from operations of Momo segment was RMB1,488.5 million (US$216.8 million) in the second quarter of 2019, increasing from RMB1,258.9 million in the second quarter of 2018. Non-GAAP loss from operations of Tantan segment was RMB47.9 million (US$7.0 million) in the second quarter of 2019, compared to non-GAAP loss from operations of RMB51.5 million in the second quarter of 2018. Tantan segment has been consolidated since June 2018.

Income tax expenses

Income tax expenses were RMB283.9 million (US$41.4 million) in the second quarter of 2019, increasing from RMB198.6 million in the second quarter of 2018. The increase was mainly because we generated higher profit in the second quarter of 2019.

Net income

Net income was RMB731.1 million (US$106.5 million) in the second quarter of 2019, compared to RMB748.1 million during the same period of 2018. Net income from Momo segment was RMB1,149.5 million (US$167.4 million) in the second quarter of 2019, increasing from RMB1,008.6 million in the second quarter of 2018. Net loss from Tantan segment was RMB423.2 million (US$61.6 million) in the second quarter of 2019, compared to net loss of RMB94.8 million in the second quarter of 2018, which was mainly due to the share-based compensation expenses of RMB323.7 million (US$47.1 million) charged related to the options granted to Tantan's founders. Tantan segment has been consolidated since June 2018.

Non-GAAP net income (note 1) was RMB1,241.8 million (US$180.9 million) in the second quarter of 2019, compared to RMB891.0 million during the same period of 2018. Non-GAAP net income from Momo segment was RMB1,283.6 million (US$187.0 million) in the second quarter of 2019, increasing from RMB1,108.2 million in the second quarter of 2018. Non-GAAP net loss of Tantan segment was RMB49.1 million (US$7.1 million) in the second quarter of 2019, compared to non-GAAP net loss of RMB51.4 million in the second quarter of 2018. Tantan segment has been consolidated since June 2018.

Net income attributable to Momo Inc.

Net income attributable to Momo Inc. was RMB731.8 million (US$106.6 million) in the second quarter of 2019, compared to RMB750.2 million during the same period of 2018.

Non-GAAP net income (note 1) attributable to Momo Inc. was RMB1,242.5 million (US$181.0 million) in the second quarter of 2019, compared to RMB893.2 million during the same period of 2018.

Net income per ADS

Diluted net income per ADS was RMB3.33(US$0.49) in the second quarter of 2019, compared to RMB3.55 in the second quarter of 2018.

Non-GAAP diluted net income per ADS (note 1) was RMB5.60(US$0.82) in the second quarter of 2019, compared to RMB4.22 in the second quarter of 2018.

Cash and cash flow

As of June 30, 2019, Momo's cash, cash equivalents, term deposits and short-term investment totaled RMB12,489.8 million (US$1,819.4 million), compared to RMB11,292.6 million as of December 31, 2018. Net cash provided by operating activities in the second quarter of 2019 was RMB1,422.0 million (US$207.1 million), compared to RMB992.4 million in the second quarter of 2018.

First Half of 2019 Financial Results

Net revenues for the first half of 2019 were RMB7,875.5 million (US$1,147.2 million), an increase of 33% from RMB5,916.9 million in the same period of 2018, primarily driven by the significant increase in net revenues from live video service and value-added service.

Net income attributable to Momo Inc. was RMB1,021.1 million (US$148.7 million) for the first half of 2019, compared to RMB1,575.4 million during the same period of 2018.

Non-GAAP net income attributable to Momo Inc. (note 1) was RMB2,152.8 million (US$313.6 million) for the first half of 2019, compared to RMB1,797.0 million during the same period of 2018.

Diluted net income per ADS was RMB4.71(US$0.69) during the first half of 2019, compared to RMB7.52 in the same period of 2018.

Non-GAAP diluted net income per ADS (note 1) was RMB9.75(US$1.42) during the first half of 2019, compared to RMB8.58 in the same period of 2018.

Net cash provided by operating activities was RMB2,597.9 million (US$378.4 million) during the first half of 2019, compared to RMB1,817.9 million in the same period of 2018.

Business Outlook

For the third quarter of 2019, the Company expects total net revenues to be between RMB4.25 billion to RMB4.35 billion, representing an increase of 17% to 19% year over year. These estimates reflect the Company's current and preliminary view, which is subject to change.

Note 1: Non-GAAP measures

To supplement our consolidated financial statements presented in accordance with U.S. generally accepted accounting principles ("GAAP"), we use various non-GAAP financial measures that are adjusted from the most comparable GAAP results to exclude share-based compensation and amortization of intangible assets from business acquisitions, and tax impacts related to the amortization of intangible assets from business acquisitions.

Reconciliations of our non-GAAP financial measures to our U.S. GAAP financial measures are shown in tables at the end of this earnings release, which provide more details about the non-GAAP financial measures.

Our non-GAAP financial information is provided as additional information to help investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of the historical and current financial performance of our continuing operations and our prospects for the future. Our non-GAAP financial information should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to the GAAP results. In addition, our calculation of the non-GAAP financial measures may be different from the calculation used by other companies, and therefore comparability may be limited.

Our non-GAAP information (including non-GAAP cost and operating expenses, income (loss) from operations, net income (loss),net income attributable to Momo Inc., and diluted net income per ADS) is adjusted from the most comparable GAAP results to exclude share-based compensation, amortization of intangible assets from business acquisitions, and tax impacts related to the amortization of intangible assets from business acquisitions. A limitation of using these non-GAAP financial measures is that share-based compensation, amortization of intangible assets from business acquisitions and tax impacts related to the amortization of intangible assets from business acquisitions have been and will continue to be for the foreseeable future a significant recurring expense in our results of operations. We compensate for these limitations by providing reconciliations of our non-GAAP measures to our U.S. GAAP measures. Please see the reconciliation tables at the end of this earnings release.

Conference Call

Momo's management will host an earnings conference call on Tuesday, August 27, 2019, at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing / Hong Kong Time on August 27, 2019).

Dial-in details for the earnings conference call are as follows:

International:

+65-6713-5090

U.S. Toll Free:

+1-866-519-4004

Hong Kong Toll Free:

800-906601

Mainland China: 

4006-208038

Passcode:

Momo

Please dial in 15 minutes before the call is scheduled to begin.

A telephone replay of the call will be available after the conclusion of the conference call through 9:00 a.m. U.S. Eastern Time, September 4, 2019. The dial-in details for the replay are as follows:

International: 

+61-2-8199-0299

U.S. Toll Free:

+1-855-452-5696

Passcode:

8558826

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 third quarter of 2019.

Our forward-looking statements are not historical facts but instead represent only our belief regarding expected results and events, many of which, by their nature, are inherently uncertain and outside of our control. Our actual results and other circumstances may differ, possibly materially, from the anticipated results and events indicated in these forward-looking statements. Announced results for the second quarter of 2019 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the third quarter of 2019 and may be unable to grow our business in the manner planned. We may also modify our strategy for growth. In addition, there are other risks and uncertainties that could cause our actual results to differ from what we currently anticipate, including those relating to our ability to retain and grow our user base, our ability to attract and retain sufficiently trained professionals to support our operations, and our ability to anticipate and develop new services and enhance existing services to meet the demand of our users or customers. For additional information on these and other important factors that could adversely affect our business, financial condition, results of operations, and prospects, please see our filings with the U.S. Securities and Exchange Commission.

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


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


2018


2019


2019


2018


2019


2019



RMB


RMB


US$


RMB


RMB


US$


Net revenues:













Live video service

2,620,924


3,099,887


451,549


4,981,038


5,789,300


843,307


Value-added service

352,583


948,394


138,149


587,587


1,852,243


269,810


Mobile marketing

141,984


76,208


11,101


260,842


156,937


22,860


Mobile games

34,782


23,240


3,385


77,010


62,248


9,067


Other services

2,258


4,901


715


10,430


14,821


2,159


Total net revenues

3,152,531


4,152,630


604,899


5,916,907


7,875,549


1,147,203


Cost and expenses:













Cost of revenues

(1,720,340)


(2,063,863)


(300,636)


(3,051,980)


(3,937,437)


(573,552)


Research and development

(160,097)


(251,658)


(36,658)


(271,483)


(501,089)


(72,992)


Sales and marketing

(348,722)


(570,609)


(83,119)


(630,430)


(1,194,457)


(173,992)


General and administrative

(127,665)


(500,660)


(72,929)


(237,134)


(1,103,256)


(160,707)


Total cost and expenses

(2,356,824)


(3,386,790)


(493,342)


(4,191,027)


(6,736,239)


(981,243)


Other operating income

100,075


161,901


23,584


106,979


172,855


25,179


Income from operations

895,782


927,741


135,141


1,832,859


1,312,165


191,139


Interest income

52,547


100,175


14,592


100,452


193,953


28,252


Interest expense

(12,436)


(19,315)


(2,814)


(12,436)


(38,304)


(5,580)


Impairment loss on long-term
    investments

-


-


-


-


(4,500)


(655)


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

935,893


1,008,601


146,919


1,920,875


1,463,314


213,156


Income tax expenses

(198,605)


(283,868)


(41,350)


(369,534)


(447,519)


(65,188)


Income before share of
    income on equity method
    investments

737,288


724,733


105,569


1,551,341


1,015,795


147,968


Share of income on equity
    method investments

10,789


6,375


929


18,915


1,871


273


Net income

748,077


731,108


106,498


1,570,256


1,017,666


148,241


Less: net loss attributable to
    non-controlling interest

(2,167)


(669)


(97)


(5,143)


(3,428)


(499)


Net income attributable to
    Momo Inc.

750,244


731,777


106,595


1,575,399


1,021,094


148,740


 

Net income per share
    attributable to ordinary
    shareholders













Basic

1.85


1.76


0.26


3.92


2.46


0.36


Diluted

1.77


1.67


0.24


3.76


2.36


0.34


Weighted average shares
    used in calculating net
    income per ordinary share













Basic

405,737,852


414,769,943


414,769,943


402,388,870


414,370,874


414,370,874


Diluted

423,089,714


450,480,301


450,480,301


419,086,110


449,410,610


449,410,610


 

 

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


2018


2019


2019


2018


2019


2019


RMB


RMB


US$


RMB


RMB


US$

Net income

748,077


731,108


106,498


1,570,256


1,017,666


148,241

Other comprehensive income
    (loss), net of tax












Foreign currency translation
    adjustment

156,015


40,899


5,958


67,722


(32,082)


(4,673)

Comprehensive income

904,092


772,007


112,456


1,637,978


985,584


143,568

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

(1,061)


2,271


331


(4,037)


(2,963)


(432)

Comprehensive income
    attributable to Momo Inc.

905,153


769,736


112,125


1,642,015


988,547


144,000

 

 

Momo Inc.

Unaudited Condensed Consolidated Balance Sheets

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








December 31


June 30


June 30


2018


2019


2019

RMB

RMB


US$

Assets






Current assets






Cash and cash equivalents

2,468,034


1,735,743


252,839

Term deposits

8,824,610


10,664,100


1,553,401

Short-term investment

-


90,000


13,110

Accounts receivable, net of allowance for doubtful accounts of RMB
    nil and RMB9,309 as of December 31, 2018 and June 30, 2019,
    respectively

719,606


275,171


40,083

Amounts due from a related party

-


271


39

Prepaid expenses and other current assets

620,979


627,007


91,333

Total current assets

12,633,229


13,392,292


1,950,805

Property and equipment, net

387,532


368,503


53,679

Intangible assets

1,036,986


956,954


139,396

Rental deposits

24,192


26,586


3,873

Long-term investments

447,465


476,836


69,459

Deferred tax assets

57,786


31,679


4,615

Other non-current assets

71,519


18,768


2,734

Right-of-use assets, net[1]

-


194,126


28,278

Goodwill

4,306,829


4,300,285


626,407

Total assets

18,965,538


19,766,029


2,879,246

Liabilities and equity






Current liabilities






Accounts payable

718,362


778,682


113,427

Deferred revenue

441,892


411,970


60,011

Accrued expenses and other current liabilities

846,710


672,261


97,925

Amount due to related parties

82,948


39,921


5,815

Income tax payable

137,090


130,103


18,952

Lease liabilities due within one year[1]

-


103,648


15,098

Deferred consideration in connection with business acquisitions

469,274


83,916


12,224

Total current liabilities

2,696,276


2,220,501


323,452

Deferred tax liabilities

259,247


239,238


34,849

Convertible senior notes

4,877,116


4,877,214


710,446

Share-based compensation liability

86,767


887,511


129,281

Lease liabilities1

-


85,582


12,466

Other non-current liabilities

23,273


29,795


4,340

Total liabilities

7,942,679


8,339,841


1,214,834

Shareholder's equity (i)

11,022,859


11,426,188


1,664,412

Total liabilities and shareholder's equity

18,965,538


19,766,029


2,879,246







(i): As of June 30, 2019, the number of ordinary shares issued and outstanding was 415,264,580.







[1] On January 1, 2019, the Company adopted ASU 2016-02, the new lease standard, using the modified retrospective basis and did not restate comparative periods.


 

 

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


2018


2019


2019


2018


2019


2019


RMB


RMB


US$


RMB


RMB


US$

Cash flows from operating activities:












Net income

748,077


731,108


106,498


1,570,256


1,017,666


148,241

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












Depreciation of property and equipment

35,110


48,236


7,026


66,582


96,636


14,077

Amortization of intangible assets

13,145


39,020


5,684


14,578


77,615


11,306

Share-based compensation

134,177


482,537


70,290


212,841


1,075,611


156,680

Share of income on equity method investments

(10,789)


(6,375)


(929)


(18,915)


(1,871)


(273)

Impairment loss on long-term investments

-


-


-


-


4,500


655

Loss (income) on disposal of property and equipment

-


(338)


(49)


2


(334)


(49)

Provision of allowance for doubtful accounts

(585)


9,309


1,356


(585)


9,309


1,356

Changes in operating assets and liabilities:












Accounts receivable

11,112


25,712


3,745


64,344


435,126


63,383

Prepaid expenses and other current assets

33,204


19,385


2,824


89,691


1,196


174

Amount due from related parties

27,452


(271)


(39)


20,028


(271)


(39)

Rental deposits

486


(1,078)


(157)


822


(2,395)


(349)

Deferred tax assets

20,606


570


83


28,571


26,107


3,803

Other non-current assets

(26,670)


(18,796)


(2,738)


(38,194)


12,643


1,842

Accounts payable

37,339


55,573


8,095


93,698


88,088


12,831

Income tax payable

(38,795)


64,570


9,406


(103,161)


(6,988)


(1,018)

Deferred revenue

(25,729)


(48,764)


(7,103)


(59,320)


(29,922)


(4,359)

Accrued expenses and other current liabilities

38,250


43,872


6,391


(130,853)


(141,623)


(20,630)

Amount due to related parties

451


(16,752)


(2,440)


419


(42,717)


(6,222)

Deferred tax liability

(3,286)


(9,755)


(1,421)


(3,644)


(25,297)


(3,685)

Other non-current liabilities

(1,160)


4,201


612


10,691


4,794


698

Net cash provided by operating activities

992,395


1,421,964


207,134


1,817,851


2,597,873


378,422

Cash flows from investing activities:












Purchase of property and equipment

(25,938)


(41,682)


(6,072)


(90,201)


(94,480)


(13,763)

Proceeds from disposal of property and equipment

1


505


75


10


510


75

Payment for long-term investments

(50,125)


(12,000)


(1,748)


(54,125)


(24,000)


(3,496)

Prepayment of long-term investments

-


(15,000)


(2,185)


(47,000)


(15,000)


(2,185)

Payment for business acquisition, net of cash acquired

(1,818,146)


(73,681)


(10,733)


(3,278,209)


(378,748)


(55,171)

Purchase of term deposits

(3,932,638)


(6,230,000)


(907,502)


(7,569,230)


(9,715,005)


(1,415,150)

Cash received on maturity of term deposits

4,839,433


4,860,025


707,942


7,222,393


7,865,030


1,145,671

Payment for short-term investments

-


(40,000)


(5,827)


-


(250,000)


(36,417)

Cash received from sales of short-term investment

-


60,000


8,740


10,500


160,000


23,307

Net cash used in investing activities

(987,413)


(1,491,833)


(217,310)


(3,805,862)


(2,451,693)


(357,129)

Cash flows from financing activities:












Proceeds from exercise of options

55


32


5


2,492


115


17

Deferred payment of purchase of property and equipment

(1,078)


-


-


(8,405)


(94)


(14)

Dividends payment

-


(877,346)


(127,800)


-


(877,346)


(127,800)

Proceeds from bank loan

1,913,190


-


-


1,913,190


-


-

Net cash provided by (used in) financing activities

1,912,167


(877,314)


(127,795)


1,907,277


(877,325)


(127,797)

Effect of exchange rate changes

23,222


4,584


665


8,286


(1,146)


(167)

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

1,940,371


(942,599)


(137,306)


(72,448)


(732,291)


(106,671)

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

2,449,375


2,678,342


390,145


4,462,194


2,468,034


359,510

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

4,389,746


1,735,743


252,839


4,389,746


1,735,743


252,839

 

 

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, 2018

ended June 30, 2019


ended June 30, 2019



 

 

GAAP

RMB

Amortization
of intangible
assets from
business
acquisitions
RMB

Share-
based
compensation

RMB

Tax
impacts

(ii)
RMB

Non-GAAP

RMB


GAAP

RMB

Amortization
of intangible
assets from
business
acquisitions
RMB

Share-
based
compensation

RMB

Tax
impacts

(ii)

RMB

Non-GAAP

RMB


GAAP

US$

Amortization of
intangible assets
from
business
acquisitions

US$

Share-
based
compensation

US$

Tax
impacts

(ii)

US$

Non-GAAP

US$


Cost of revenues

(1,720,340)

5,682

7,246

-

(1,707,412)


(2,063,863)

18,227

5,447

-

(2,040,189)


(300,636)

2,656

793

-

(297,187)


Research and development

(160,097)

721

43,313

-

(116,063)


(251,658)

2,315

44,523

-

(204,820)


(36,658)

337

6,486

-

(29,835)


Sales and marketing

(348,722)

5,312

34,552

-

(308,858)


(570,609)

17,045

51,293

-

(502,271)


(83,119)

2,483

7,472

-

(73,164)


General and
    administrative

(127,665)

-

49,066

-

(78,599)


(500,660)

-

381,274

-

(119,386)


(72,929)

-

55,539

-

(17,390)


Cost and operating expenses

(2,356,824)

11,715

134,177

-

(2,210,932)


(3,386,790)

37,587

482,537

-

(2,866,666)


(493,342)

5,476

70,290

-

(417,576)


Income from operations

895,782

11,715

134,177

-

1,041,674


927,741

37,587

482,537

-

1,447,865


135,141

5,476

70,290

-

210,907


Net income attributable to
    Momo Inc.

750,244

11,715

134,177

(2,927)

893,209


731,777

37,587

482,537

(9,397)

1,242,504


106,595

5,476

70,290

(1,369)

180,992




















 

 

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, 2018

ended June 30, 2019


ended June 30, 2019



 

 

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 I
mpacts

(ii)

US$

Non-GAAP

US$


Cost of revenues

(3,051,980)

5,682

10,283

-

(3,036,015)


(3,937,437)

36,248

9,633

-

(3,891,556)


(573,552)

5,280

1,403

-

(566,869)


Research and
    development

(271,483)

721

59,672

-

(211,090)


(501,089)

4,604

84,253

-

(412,232)


(72,992)

671

12,273

-

(60,048)


Sales and marketing

(630,430)

5,312

55,460

-

(569,658)


(1,194,457)

33,898

90,745

-

(1,069,814)


(173,992)

4,938

13,218

-

(155,836)


General and
    administrative

(237,134)

-

87,426

-

(149,708)


(1,103,256)

-

890,980

-

(212,276)


(160,707)

-

129,786

-

(30,921)


Cost and operating
    expenses

(4,191,027)

11,715

212,841

-

(3,966,471)


(6,736,239)

74,750

1,075,611

-

(5,585,878)


(981,243)

10,889

156,680

-

(813,674)


Income from operations

1,832,859

11,715

212,841

-

2,057,415


1,312,165

74,750

1,075,611

-

2,462,526


191,139

10,889

156,680

-

358,708


Net income attributable to
    Momo Inc.

1,575,399

11,715

212,841

(2,927)

1,797,028


1,021,094

74,750

1,075,611

(18,688)

2,152,767


148,740

10,889

156,680

(2,723)

313,586





















(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 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$

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 (iii):










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












 

 

(iii) 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

 

 

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 Segment Report

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



Three months

ended June 30, 2018


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$[2]

Net revenues:










Live video service

2,620,924


-


-


2,620,924


396,083

Value-added service

321,614


30,969


-


352,583


53,284

Mobile marketing

141,984


-


-


141,984


21,457

Mobile games

34,782


-


-


34,782


5,256

Other services

453


-


1,805


2,258


341

Total net revenues

3,119,757


30,969


1,805


3,152,531


476,421

Cost and expenses (iv):










Cost of revenues

(1,541,843)


(18,731)


(159,766)


(1,720,340)


(259,984)

Research and development

(132,044)


(28,053)


-


(160,097)


(24,194)

Sales and marketing

(275,920)


(67,703)


(5,099)


(348,722)


(52,700)

General and administrative

(110,690)


(14,304)


(2,671)


(127,665)


(19,293)

Total cost and expenses

(2,060,497)


(128,791)


(167,536)


(2,356,824)


(356,171)

Other operating income

100,014


61


-


100,075


15,124

Income (loss) from operations

1,159,274


(97,761)


(165,731)


895,782


135,374

Interest income

52,466


64


17


52,547


7,941

Interest expense

(12,436)


-


-


(12,436)


(1,879)

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

1,199,304


(97,697)


(165,714)


935,893


141,436

Income tax (expenses) benefits

(201,533)


2,928


-


(198,605)


(30,014)

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

997,771


(94,769)


(165,714)


737,288


111,422

Share of income on equity method investments

10,789


-


-


10,789


1,631

Net income (loss)

1,008,560


(94,769)


(165,714)


748,077


113,053











[2] All translations from RMB to U.S. dollars are made at a rate of RMB 6.6171 to US$1.00, the effective noon buying rate for June 29, 2018
as set forth in the H.10 statistical release of the Federal Reserve Board.


 

 

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




Three months


ended June 30, 2018


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$

Cost of revenues

5,300


1,946


-


7,246


1,095

Research and development

24,559


18,754


-


43,313


6,546

Sales and marketing

30,783


3,769


-


34,552


5,222

General and administrative

38,997


10,069


-


49,066


7,415

Total cost and expenses

99,639


34,538


-


134,177


20,278

 

 

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, 2018


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$

Operating income (loss)

1,159,274


(97,761)


(165,731)


895,782


135,374

Share-based compensation

99,639


34,538


-


134,177


20,278

Amortization of intangible assets from
business acquisitions

-


11,715


-


11,715


1,770

Non-GAAP operating income (loss)

1,258,913


(51,508)


(165,731)


1,041,674


157,422











Net income (loss)

1,008,560


(94,769)


(165,714)


748,077


113,053

Share-based compensation

99,639


34,538


-


134,177


20,278

Amortization of intangible assets from
business acquisitions

-


11,715


-


11,715


1,770

Tax impacts

-


(2,927)


-


(2,927)


(442)

Non-GAAP net income (loss)

1,108,199


(51,443)


(165,714)


891,042


134,659

 

 

Momo Inc.

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$

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 (v):










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

 

 

(v) 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

 

 

Momo Inc.

Unaudited Segment Report

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



First half year

ended June 30, 2018


Momo


Tantan


QOOL


Total


Total


RMB


RMB


RMB


RMB


US$

Net revenues:










Live video service

4,981,038


-


-


4,981,038