UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of March 2019

Commission File Number: 001-36765

 

 

Momo Inc.

 

 

20th Floor, Block B

Tower 2, Wangjing SOHO

No.1 Futongdong Street

Chaoyang District, Beijing 100102

People’s Republic of China

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒            Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

 

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Momo Inc.
By:  

/s/ Jonathan Xiaosong Zhang

Name:   Jonathan Xiaosong Zhang
Title:   Chief Financial Officer

Date: March 12, 2019


Exhibit Index

Exhibit 99.1—Press Release

EX-99.1

Exhibit 99.1

Momo Announces Unaudited Financial Results for the Fourth Quarter and Fiscal Year 2018

BEIJING, CHINA, March 12, 2019 – Momo Inc. (NASDAQ: MOMO) (“Momo” or the “Company”), a leading mobile social networking platform in China, today announced its unaudited financial results for the fourth quarter and the full year ended December 31, 2018.

Starting from the fourth quarter of 2018, the Company changed its reporting currency from U.S.dollar (“US$”) to Renminbi (“RMB”), to reduce the impact of increased volatility of the RMB toUS$ exchange rate on the Company’s reported operating results. The aligning of the reportingcurrency with the underlying operations will better depict the Company’s results of operations foreach period. This release contains translations of certain RMB amounts into US$ for convenience*. Prior period numbers have been recast into the new reporting currency.

Fourth Quarter of 2018 Highlights

 

   

Net revenues increased 50% year over year to RMB3,843.9 million (US$559.1 million) in the fourth quarter of 2018.

 

   

Net income attributable to Momo Inc. increased to RMB660.8 million (US$96.1 million) in the fourth quarter of 2018 from RMB644.8 million in the same period of 2017.

 

   

Non-GAAP net income attributable to Momo Inc. (note 1) increased 22% to RMB887.4 million (US$129.1 million) in the fourth quarter of 2018 from RMB727.4 million in the same period of 2017.

 

   

Diluted net income per American Depositary Share (“ADS”) was RMB3.04 (US$0.44), compared to RMB3.10 in the same period of 2017.

 

   

Non-GAAP diluted net income per ADS (note 1) was RMB4.05 (US$0.59), compared to RMB3.49 in the same period of 2017.

 

   

Monthly Active Users (“MAU”) on Momo application were 113.3 million in December 2018, compared to 99.1 million in December 2017.

 

   

Total paying users of our live video service and value-added service, without double counting the overlap, including 3.9 million paying users of Tantan Limited (“Tantan”), were 13.0 million for the fourth quarter of 2018, compared to 7.8 million for the fourth quarter of 2017.

Full Year 2018 Highlights

 

   

Net revenues increased 51% year over year to RMB13,408.4 million (US$1,950.2 million) for the full year of 2018.

 

   

Net income attributable to Momo Inc. was RMB2,815.8 million (US$409.5 million) for the full year of 2018, compared with RMB2,148.1 million for 2017.

 

   

Non-GAAP net income attributable to Momo Inc. (note 1) was RMB3,462.1 million (US$503.5 million) for the full year of 2018, compared with RMB2,483.1 million for 2017.

 

   

Diluted net income per ADS was RMB13.18 (US$1.92) for the full year of 2018, compared with RMB10.35 for 2017.

 

   

Non-GAAP diluted net income per ADS (note 1) was RMB16.17 (US$2.35) for the full year of 2018, compared with RMB11.96 for 2017.

 

*

Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB 6.8755 to US$1.00, the effective noon buying rate for December 31, 2018 as set forth in the H.10 statistical release of the Federal Reserve Board.

 

1


“Q4 was a solid quarter, closing out a fruitful year of 2018.” Commented Yan Tang, Chairman and CEO of Momo. “I am pleased with the progress we made in 2018 in product innovation, monetization, financial performance and the strengthening of the Company’s position as a leading player in China’s open social space. We look forward to delivering more results to our shareholders in 2019.”

Fourth Quarter of 2018 Financial Results

Net revenues

Total net revenues were RMB3,843.9 million (US$559.1 million) in the fourth quarter of 2018, an increase of 50% from RMB2,554.9 million in the fourth quarter of 2017.

Live video service revenues were RMB2,959.2 million (US$430.4 million) in the fourth quarter of 2018, an increase of 36% from RMB2,169.0 million during the same period of 2017. 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 membership subscription revenues and virtual gift revenues. The total value-added service revenues were RMB722.4 million (US$105.1 million) in the fourth quarter of 2018, an increase of 272% from RMB194.3 million during the same period of 2017. 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 use cases introduced to enhance the social experience of Momo users, and to a lesser extent, the consolidation of Tantan’s membership subscription revenues for the whole fourth quarter of 2018.

Mobile marketing revenues were RMB 122.1 million (US$17.8 million) in the fourth quarter of 2018, a decrease of 15% from RMB144.4 million during the same period of 2017. The decrease in mobile marketing revenues was driven by the decreased demand from our advertising and marketing customers.

Mobile games revenues were RMB25.5 million (US$3.7 million) in the fourth quarter of 2018, a decrease of 44% from RMB45.6 million in the fourth quarter of 2017. The decrease in game revenues was mainly due to the continued decrease in quarterly paying users.

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

Cost and expenses

Cost and expenses were RMB3,195.7 million (US$464.8 million) in the fourth quarter of 2018, an increase of 65% from RMB1,939.5 million in the fourth quarter of 2017. The increase was primarily attributable to: (a) an increase in revenue sharing with the broadcasters related to our live video service and virtual gift recipients; (b) an increase in marketing and promotional expenses to enhance our brand awareness and attract users; (c) an increase in personnel related costs including share-based compensation expenses as a result of the Company’s rapidly expanding talent pool; (d) an increase in fees to payment channels resulting from a higher volume of cash collection through such channels; and (e) an increase in amortization expenses related to the intangible assets from business acquisitions.

 

2


Non-GAAP cost and expenses (note 1) were RMB2,959.6 million (US$430.5 million) in the fourth quarter of 2018, an increase of 59% from RMB1,856.9 million during the same period of 2017.

Other operating income

Other operating income was RMB141.4 million (US$20.6 million) in the fourth quarter of 2018, a significant increase from RMB92.6 million during the fourth quarter of 2017. The increase was mainly due to more government incentives received in the fourth quarter of 2018.

Income from operations

Income from operations was RMB789.6 million (US$114.8 million) in the fourth quarter of 2018, compared to RMB708.1 million during the same period of 2017.

Non-GAAP income from operations (note 1) was RMB1,025.7 million (US$149.2 million) in the fourth quarter of 2018, compared to RMB790.6 million during the same period of 2017.

Income tax expenses

Income tax expenses were RMB183.3 million (US$26.7 million) in the fourth quarter of 2018 and increased from RMB126.0 million in the fourth quarter of 2017. The increase was mainly because we generated higher profit in the fourth quarter of 2018.

Net income attributable to Momo Inc.

Net income attributable to Momo Inc. was RMB660.8 million (US$96.1 million) in the fourth quarter of 2018, compared to RMB644.8 million during the same period of 2017.

Non-GAAP net income (note 1) attributable to Momo Inc. was RMB887.4 million (US$129.1 million) in the fourth quarter of 2018, compared to RMB727.4 million during the same period of 2017.

Net income per ADS

Diluted net income per ADS was RMB3.04 (US$0.44) in the fourth quarter of 2018, compared to RMB 3.10 in the fourth quarter of 2017.

Non-GAAP diluted net income per ADS (note 1) was RMB4.05 (US$0.59) in the fourth quarter of 2018, compared to RMB3.49 in the fourth quarter of 2017.

Cash and cash flow

As of December 31, 2018, Momo’s cash, cash equivalents, term deposits and short-term investment totaled RMB11,292.6 million (US$1,642.4 million), compared to RMB6,904.7 million as of December 31, 2017. Net cash provided by operating activities in the fourth quarter of 2018 was RMB1,163.4 million (US$169.2 million), compared to RMB790.8 million in the fourth quarter of 2017.

Full Year 2018 Financial Results

Net revenues for the full year of 2018 were RMB13,408.4 million (US$1,950.2 million), an increase of 51% from RMB8,886.4 million in the same period of 2017, primarily driven by the significant increase in net revenues from live video service and value-added service.

 

3


Net income attributable to Momo Inc. was RMB2,815.8 million (US$409.5 million) in the full year of 2018, compared to RMB2,148.1 million during the same period of 2017.

Non-GAAP net income attributable to Momo Inc. (note 1) was RMB3,462.1 million (US$503.5 million) in the full year of 2018, compared to RMB2,483.1 million during the same period of 2017.

Diluted net income per ADS was RMB13.18 (US$1.92) during the full year of 2018, compared to RMB10.35 in the same period of 2017.

Non-GAAP diluted net income per ADS (note 1) was RMB16.17 (US$2.35) during the full year of 2018, compared to RMB11.96 in the same period of 2017.

Net cash provided by operating activities was RMB3,327.7 million (US$484.0 million) during the full year of 2018, compared to RMB2,886.1 million in the same period of 2017.

Recent Development - Declaration of Special Cash Dividend

Momo’s board of directors has declared a special cash dividend in the amount of US$0.62 per ADS, or US$0.31 per ordinary share. The cash dividend will be paid on April 30, 2019 to shareholders of record at the close of business on April 5, 2019. The ex-dividend date will be April 4, 2019. The aggregate amount of cash dividends to be paid is approximately US$128 million, which will be funded by surplus cash on the Company’s balance sheet.

Business Outlook

For the first quarter of 2019, the Company expects total net revenues to be between RMB3.55 billion to RMB3.65 billion, representing an increase of 28% to 32% year over year, on a constant currency basis. The Company is not providing the business outlook in USD terms due to the recent volatility and uncertainty in foreign exchange rate. These estimates reflect the Company’s current and preliminary view, which is subject to change.

Note 1: Non-GAAP measures

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

 

4


Our non-GAAP information (including non-GAAP cost and operating expenses, income from operations, 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, March 12, 2019, at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing / Hong Kong Time on March 12, 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 8:00 a.m. U.S. Eastern Time, March 20, 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: 3573546

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.

 

5


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 first 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 fourth quarter and full year of 2018 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the first 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.

 

6


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

 

7


Momo Inc.

Unaudited Condensed Consolidated Statement of Operations

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

 

     Three months     Year  
     ended December 31     ended December 31  
     2017     2018     2018     2017     2018     2018  
     RMB     RMB     US$     RMB     RMB     US$  

Net revenues:

            

Live video service

     2,168,998       2,959,222       430,401       7,429,906       10,709,491       1,557,631  

Value-added service

     194,287       722,414       105,071       695,798       1,883,150       273,893  

Mobile marketing

     144,360       122,143       17,765       514,279       500,321       72,769  

Mobile games

     45,569       25,502       3,709       241,388       130,392       18,965  

Other services

     1,722       14,635       2,128       5,019       185,067       26,916  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net revenues

     2,554,936       3,843,916       559,074       8,886,390       13,408,421       1,950,174  

Cost and expenses:

            

Cost of revenues

     (1,323,876     (2,099,265     (305,325     (4,373,377     (7,182,897     (1,044,709

Research and development

     (124,056     (243,499     (35,415     (346,144     (760,644     (110,631

Sales and marketing

     (374,436     (618,268     (89,923     (1,467,376     (1,812,262     (263,583

General and administrative

     (117,124     (234,700     (34,136     (422,005     (640,023     (93,087
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost and expenses

     (1,939,492     (3,195,732     (464,799     (6,608,902     (10,395,826     (1,512,010

Other operating income

     92,634       141,420       20,569       156,764       253,697       36,899  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     708,078       789,604       114,844       2,434,252       3,266,292       475,063  

Interest income

     47,785       89,766       13,056       145,568       272,946       39,698  

Interest expense

     —         (19,646     (2,857     —         (56,503     (8,218

Impairment loss on long-term investments

     —         (43,200     (6,283     (30,085     (43,200     (6,283
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     755,863       816,524       118,760       2,549,735       3,439,535       500,260  

Income tax expenses

     (125,956     (183,338     (26,665     (445,001     (699,648     (101,760
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before share of income on equity method investments

     629,907       633,186       92,095       2,104,734       2,739,887       398,500  

Share of income on equity method investments

     13,398       13,221       1,923       39,729       48,660       7,077  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     643,305       646,407       94,018       2,144,463       2,788,547       405,577  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Less: net loss attributable to non-controlling interest

     (1,498     (14,430     (2,100     (3,635     (27,228     (3,960
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to Momo Inc.

     644,803       660,837       96,118       2,148,098       2,815,775       409,537  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income per share attributable to ordinary shareholders

            

Basic

     1.62       1.60       0.23       5.44       6.92       1.01  

Diluted

     1.55       1.52       0.22       5.17       6.59       0.96  

Weighted average shares used in calculating net income per ordinary share

            

Basic

     397,753,884       413,732,538       413,732,538       394,549,323       407,009,875       407,009,875  

Diluted

     416,371,383       447,773,521       447,773,521       415,265,078       433,083,643       433,083,643  

 

8


Momo Inc.

Unaudited Condensed Consolidated Statement of Comprehensive Income

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

 

     Three months     Year  
   ended December 31     ended December 31  
     2017     2018     2018     2017     2018     2018  
     RMB     RMB     US$     RMB     RMB     US$  

Net income

     643,305       646,407       94,018       2,144,463       2,788,547       405,577  

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

            

Foreign currency translation adjustment

     (53,534     5,171       752       (155,368     198,654       28,893  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income

     589,771       651,578       94,770       1,989,095       2,987,201       434,470  

Less: comprehensive loss attributed to the non-controlling interest

     (1,498     (14,535     (2,114     (3,635     (24,613     (3,580
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to Momo Inc. shareholders

     591,269       666,113       96,884       1,992,730       3,011,814       438,050  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

9


Momo Inc.

Unaudited Condensed Consolidated Balance Sheets

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

 

     December 31
2017
RMB
     December 31
2018
RMB
     December 31
2018
US$
 

Assets

        

Current assets

        

Cash and cash equivalents

     4,462,194        2,468,034        358,961  

Term deposits

     2,432,016        8,824,610        1,283,486  

Short-term investment

     10,500        —          —    

Accounts receivable, net of allowance for doubtful accounts of RMB585 and RMB nil as of December 31, 2017 and 2018, respectively

     257,633        719,606        104,662  

Prepaid expenses and other current assets

     538,182        620,979        90,318  

Amount due from related parties

     33,460        —          —    
  

 

 

    

 

 

    

 

 

 

Total current assets

     7,733,985        12,633,229        1,837,427  

Property and equipment, net

     258,704        387,532        56,364  

Intangible assets

     48,553        1,036,986        150,823  

Rental deposits

     17,249        24,192        3,519  

Long term investments

     288,471        447,465        65,081  

Deferred tax assets

     46,825        57,786        8,405  

Other non-current assets

     55,271        71,519        10,402  

Goodwill

     22,130        4,306,829        626,402  
  

 

 

    

 

 

    

 

 

 

Total assets

     8,471,188        18,965,538        2,758,423  
  

 

 

    

 

 

    

 

 

 

Liabilities and equity

        

Current liabilities

        

Accounts payable

     484,945        718,362        104,481  

Deferred revenue

     422,028        441,892        64,271  

Accrued expenses and other current liabilities

     571,333        846,710        123,148  

Amount due to related parties

     37,760        82,948        12,064  

Income tax payable

     175,887        137,090        19,939  

Deferred consideration in connection with business acquisitions

     —          469,274        68,253  
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     1,691,953        2,696,276        392,156  

Deferred tax liabilities

     12,138        259,247        37,706  

Convertible Senior Notes

     —          4,877,116        709,347  

Share-based compensation liability

     —          86,767        12,620  

Other non-current liabilities

     14,997        23,273        3,385  
  

 

 

    

 

 

    

 

 

 

Total liabilities

     1,719,088        7,942,679        1,155,214  

Shareholder’s equity (Note a)

     6,752,100        11,022,859        1,603,209  
  

 

 

    

 

 

    

 

 

 

Total liabilities and shareholder’s equity

     8,471,188        18,965,538        2,758,423  
  

 

 

    

 

 

    

 

 

 

Note a: As of December 31, 2018, the number of ordinary shares issued and outstanding was 413,876,480.

 

10


Momo Inc.

Unaudited Condensed Consolidated Statement of Cash Flows

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

 

     Three months
ended December 31
    Year
ended December 31
 
     2017
RMB
    2018
RMB
    2018
US$
    2017
RMB
    2018
RMB
    2018
US$
 

Cash flows from operating activities:

            

Net income

     643,305       646,407       94,018       2,144,463       2,788,547       405,577  

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

            

Depreciation of property and equipment

     25,906       42,244       6,144       78,885       148,238       21,560  

Amortization of intangible assets

     1,735       39,522       5,748       4,784       93,030       13,531  

Share-based compensation

     82,563       198,013       28,800       334,973       580,813       84,476  

Share of income on equity method investments

     (13,398     (13,221     (1,923     (39,729     (48,660     (7,077

Impairment loss on long-term investments

     —         43,200       6,283       30,085       43,200       6,283  

Impairment loss on intangible assets

     1,266       —         —         1,266       —         —    

Loss(income) on disposal of property and equipment

     128       (44     (6     112       (1,283     (187

Provision of allowance for doubtful accounts

     —         —         —         585       (585     (85

Changes in operating assets and liabilities:

            

Accounts receivable

     (49,685     (84,973     (12,359     (7,725     (440,644     (64,089

Prepaid expenses and other current assets

     (150,633     14,190       2,064       (306,838     (67,304     (9,789

Amount due from related parties

     (25,948     56       8       (32,846     33,463       4,867  

Rental deposits

     (810     (4,062     (591     (10,902     (3,817     (555

Deferred tax assets

     (45,383     (39,874     (5,799     (44,883     (10,961     (1,594

Other non-current assets

     7,119       (670     (97     (5,234     (45,534     (6,623

Accounts payable

     (1,206     (18,987     (2,762     174,290       233,713       33,992  

Income tax payable

     91,525       81,097       11,795       152,277       (38,791     (5,642

Deferred revenue

     113,197       12,470       1,814       135,443       (14,249     (2,072

Accrued expenses and other current liabilities

     156,071       235,104       34,194       292,054       51,903       7,549  

Amount due to related parties

     (41,941     25,349       3,687       (16,070     43,024       6,258  

Deferred tax liability

     (343     (9,547     (1,389     (969     (22,923     (3,334

Other non-current liabilities

     (2,653     (2,915     (424     2,086       6,538       951  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     790,815       1,163,359       169,205       2,886,107       3,327,718       483,997  

 

11


Momo Inc.

Unaudited Condensed Consolidated Statement of Cash Flows

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

 

     Three months     Year  
     ended December 31     ended December 31  
     2017     2018     2018     2017     2018     2018  
     RMB     RMB     US$     RMB     RMB     US$  

Cash flows from investing activities:

            

Purchase of property and equipment

     (86,183     (81,243     (11,816     (218,627     (242,843     (35,320

Proceeds from disposal of property and equipment

     1       4       1       59       2,214       322  

Payment for long term investments

     (20,000     (3,000     (436     (53,928     (65,125     (9,472

Prepayment of long term investments

     (50,000     (8,000     (1,164     (50,000     (55,000     (7,999

Payment for acquired intangible assets

     —         —         —         (18,979     —         —    

Payment for business acquisition

     —         (40,632     (5,910     —         (3,318,841     (482,705

Purchase of term deposits

     (480,645     (5,300,000     (770,853     (4,028,058     (20,287,302     (2,950,666

Cash received on maturity of term deposits

     882,645       4,600,000       669,042       4,191,859       13,922,393       2,024,928  

Payment for short term investments

     (10,000     (103,000     (14,981     (15,700     (457,200     (66,497

Cash received from sales of short term investment

     5,200       218,000       31,707       5,200       467,700       68,024  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) investing activities

     241,018       (717,871     (104,410     (188,174     (10,034,004     (1,459,385

Cash flows from financing activities:

            

Proceeds from exercise of options

     680       1       —         3,839       5,313       773  

Deferred payment of purchase of property and equipment

     —         (157     (23     (1,496     (8,562     (1,245

Capital contribution from non-controlling interest shareholder

     —         12       2       490       12       2  

Proceeds from bank loan

     —         —         —         —         1,913,190       278,262  

Repayment of bank loan

     —         —         —         —         (2,041,680     (296,950

Proceeds from issuance of convertible notes, net of issuance cost of RMB113,673

     —         —         —         —         4,820,387       701,096  

Payment of issuance cost of convertible notes

     —         (709     (103     —         (709     (103
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     680       (853     (124     2,833       4,687,951       681,835  

Effect of exchange rate changes

     (8,207     1,439       208       (26,840     24,175       3,515  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     1,024,306       446,074       64,879       2,673,926       (1,994,160     (290,038

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

     3,437,888       2,021,960       294,082       1,788,268       4,462,194       648,999  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     4,462,194       2,468,034       358,961       4,462,194       2,468,034       358,961  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

12


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 December 31, 2017     ended December 31, 2018     ended December 31, 2018  
    GAAP
RMB
    Share-
based
compensation
RMB
    Non-GAAP
RMB
    GAAP
RMB
    Amortization
of intangible
assets from
business
acquisitions
RMB
    Share-
based
compensation
RMB
    Tax
impacts(a)
RMB
    Non-GAAP
RMB
    GAAP
US$
    Amortization
of intangible
assets from
business
acquisitions
US$
    Share-
based
compensation
US$
    Tax
impacts(a)
US$
    Non-
GAAP
US$
 

Cost of revenues

    (1,323,876     4,160       (1,319,716     (2,099,265     18,471       5,498       —         (2,075,296     (305,325     2,686       800       —         (301,839

Research and development

    (124,056     17,028       (107,028     (243,499     2,345       47,215       —         (193,939     (35,415     341       6,867       —         (28,207

Sales and marketing

    (374,436     20,645       (353,791     (618,268     17,273       43,707       —         (557,288     (89,923     2,512       6,357       —         (81,054

General and administrative

    (117,124     40,730       (76,394     (234,700     —         101,593       —         (133,107     (34,136     —         14,776       —         (19,360
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost and operating expenses

    (1,939,492     82,563       (1,856,929     (3,195,732     38,089       198,013       —         (2,959,630     (464,799     5,539       28,800       —         (430,460

Income from operations

    708,078       82,563       790,641       789,604       38,089       198,013       —         1,025,706       114,844       5,539       28,800       —         149,183  

Net income attributable to Momo Inc.

    644,803       82,563       727,366       660,837       38,089       198,013       (9,522     887,417       96,118       5,539       28,800       (1,385     129,072  

 

13


Momo Inc.

Reconciliation of Non-GAAP financial measures to comparable GAAP measures

(All amounts in thousands, except per share data)

 

    Year     Year     Year  
    ended December 31, 2017     ended December 31, 2018     ended December 31, 2018  
    GAAP
RMB
    Share-
based
compen
sation
RMB
    Non-
GAAP
RMB
    GAAP
RMB
    Amortization
of intangible
assets from
business
acquisitions
RMB
    Share-
based
compensation
RMB
    Tax
impacts(a)
RMB
    Non-
GAAP
RMB
    GAAP
US$
    Amortization
of intangible
assets from
business
acquisitions
US$
    Share-
based
compensation
US$
    Tax
impacts(a)
US$
    Non-
GAAP
US$
 

Cost of revenues

    (4,373,377     13,547       (4,359,830     (7,182,897     42,336       21,661       —         (7,118,900     (1,044,709     6,158       3,150       —         (1,035,401

Research and development

    (346,144     59,190       (286,954     (760,644     5,375       152,806       —         (602,463     (110,631     782       22,225       —         (87,624

Sales and marketing

    (1,467,376     79,032       (1,388,344     (1,812,262     39,589       142,927       —         (1,629,746     (263,583     5,758       20,788       —         (237,037

General and administrative

    (422,005     183,204       (238,801     (640,023     —         263,419       —         (376,604     (93,087     —         38,313       —         (54,774
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost and operating expenses

    (6,608,902     334,973       (6,273,929     (10,395,826     87,300       580,813       —         (9,727,713     (1,512,010     12,698       84,476       —         (1,414,836

Income from operations

    2,434,252       334,973       2,769,225       3,266,292       87,300       580,813       —         3,934,405       475,063       12,698       84,476       —         572,237  

Net income attributable to Momo Inc.

    2,148,098       334,973       2,483,071       2,815,775       87,300       580,813       (21,823     3,462,065       409,537       12,698       84,476       (3,174     503,537  

 

(a)

Includes tax impacts related to the amortization of intangible assets from business acquisition. There is no tax impact related to share-based compensation.

 

14