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 May 2020

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: May 29, 2020


Exhibit Index

Exhibit 99.1—Press Release

EX-99.1

Exhibit 99.1

Momo Announces Unaudited Financial Results for the First Quarter of 2020

BEIJING, CHINA, May 29, 2020 – Momo Inc. (NASDAQ: MOMO) (“Momo” or the “Company”), a leading mobile social networking platform in China, today announced its unaudited financial results for the first quarter of 2020.

First Quarter of 2020 Highlights

 

   

Net revenues decreased by 3.5% year over year to RMB3,594.1 million (US$507.6 million*) in the first quarter of 2020.

 

   

Net income attributable to Momo Inc. increased to RMB538.9 million (US$76.1 million) in the first quarter of 2020 from RMB289.3 million in the same period of 2019.

 

   

Non-GAAP net income attributable to Momo Inc. (note 1) decreased to RMB736.3 million (US$104.0 million) in the first quarter of 2020, from RMB910.3 million in the same period of 2019.

 

   

Diluted net income per American Depositary Share (“ADS”) was RMB2.46 (US$0.35) in the first quarter of 2020, compared to RMB1.36 in the same period of 2019.

 

   

Non-GAAP diluted net income per ADS (note 1) was RMB3.34 (US$0.47) in the first quarter of 2020, compared to RMB4.15 in the same period of 2019.

 

   

Monthly Active Users (“MAU”) on Momo application were 108.0 million in March 2020, compared to 114.4 million in March 2019.

 

   

Total paying users of our live video service and value-added service, without double counting the overlap and including 4.2 million paying users of Tantan Limited (“Tantan”), were 12.8 million for the first quarter of 2020, compared to 14.0 million for the first quarter of 2019, which included 5.0 million paying users of Tantan.

“Q1 2020 was a challenging and yet very fruitful quarter for Momo.” commented Yan Tang, Chairman and CEO of Momo. “I am proud that the team has been able to adapt well to the changing environment and navigate through the challenges with solid execution against our strategic goals. Despite the macro headwind, we are seeing plenty of growth opportunities ahead of us. We will continue to pursue these opportunities and drive value for our shareholders.”

First Quarter of 2020 Financial Results

Net revenues

Total net revenues were RMB3,594.1 million (US$507.6 million) in the first quarter of 2020, a decrease of 3.5% from RMB3,722.9 million in the first quarter of 2019.

Live video service revenues were RMB2,332.0 million (US$329.3 million) in the first quarter of 2020, a decrease of 13% from RMB2,689.4 million during the same period of 2019, as a result of the impact of COVID-19 adversely affecting the sentiment of our paying users, especially among the top of the pyramid paying users.

 

* 

This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars, in this press release, were made at a rate of RMB7.0808 to US$1.0000, the effective noon buying rate for March 31, 2020 as set forth in the H.10 statistical release of the Federal Reserve Board.

 

1


Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were RMB1,175.8 million (US$166.0 million) in the first quarter of 2020, an increase of 30% from RMB903.8 million during the same period of 2019. The year-over-year increase was primarily attributable to the continued growth of the virtual gift business on the Momo application driven by more functions launched and more paying scenarios introduced to enhance the social experience of Momo users, and to a lesser extent, the increase in the membership subscription revenues of Tantan.

Mobile marketing revenues were RMB57.2 million (US$8.1 million) in the first quarter of 2020, a decrease of 29% from RMB80.7 million during the same period of 2019. The decrease in mobile marketing revenues was primarily caused by the decreased demand from our advertising and marketing customers as well as our strategy to underweight the line in terms of resource allocation.

Mobile games revenues were RMB12.7 million (US$1.8 million) in the first quarter of 2020, a decrease of 67% from RMB39.0 million in the first quarter of 2019. The decrease in mobile game revenues was mainly due to the continued decrease in quarterly paying users of mobile games.

Net revenues from Momo segment decreased from RMB3,419.2 million in the first quarter of 2019 to RMB3,202.1 million (US$452.2 million) in the first quarter of 2020, primarily driven by the decrease in net revenues from live video service, partially offset by the increase in net revenues from value-added service. Net revenues from Tantan segment increased from RMB295.3 million in the first quarter of 2019 to RMB381.7 million (US$53.9 million) in the first quarter of 2020, which was mainly due to the increase in the average revenues per paying user resulting from more features launched.

Cost and expenses

Cost and expenses were RMB3,026.1 million (US$427.4 million) in the first quarter of 2020, a decrease of 10% from RMB3,349.4 million in the first quarter of 2019. The decrease was primarily attributable to: (a) a decrease in share-based compensation expenses due to the related expense from the options granted to Tantan’s founders amount of RMB466.9 million as the related share options vested in the first quarter of 2019 when the necessary performance conditions were satisfied; (b) a decrease in revenue sharing with broadcasters related to our live video service. The decrease was partially offset by an increase in marketing and promotional expenses to attract users on Momo and Tantan.

Non-GAAP cost and expenses (note 1) were RMB2,819.2 million (US$398.1 million) in the first quarter of 2020, an increase of 4% from RMB2,719.2 million during the same period of 2019.

Income from operations

Income from operations was RMB594.1 million (US$83.9 million) in the first quarter of 2020, compared to RMB384.4 million during the same period of 2019. Income from operations of Momo segment was RMB770.3 million (US$108.8 million) in the first quarter of 2020, decreasing from RMB998.6 million in the first quarter of 2019. Loss from operations of Tantan segment was RMB171.9 million (US$24.3 million) in the first quarter of 2020, compared to loss from operations of RMB604.6 million in the first quarter of 2019.

 

2


Non-GAAP income from operations (note 1) was RMB801.0 million (US$113.1 million) in the first quarter of 2020, compared to RMB1,014.7 million during the same period of 2019. Non-GAAP income from operations of Momo segment was RMB903.1 million (US$127.5 million) in the first quarter of 2020, decreasing from RMB1,098.9 million in the first quarter of 2019. Non-GAAP loss from operations of Tantan segment was RMB100.4 million (US$14.2 million) in the first quarter of 2020, compared to non-GAAP loss from operations of RMB77.1 million in the first quarter of 2019.

Income tax expenses

Income tax expenses were RMB162.9 million (US$23.0 million) in the first quarter of 2020, decreasing from RMB163.7 million in the first quarter of 2019.

Net income

Net income was RMB537.7 million (US$75.9 million) in the first quarter of 2020, compared to RMB286.6 million during the same period of 2019. Net income from Momo segment was RMB707.1 million (US$99.9 million) in the first quarter of 2020, decreasing from RMB893.9 million in the first quarter of 2019. Net loss from Tantan segment was RMB165.1 million (US$23.3 million) in the first quarter of 2020, compared to net loss of RMB597.7 million in the first quarter of 2019.

Non-GAAP net income (note 1) was RMB735.1 million (US$103.8 million) in the first quarter of 2020, compared to RMB907.5 million during the same period of 2019. Non-GAAP net income from Momo segment was RMB839.9 million (US$118.6 million) in the first quarter of 2020, decreasing from RMB994.2 million in the first quarter of 2019. Non-GAAP net loss of Tantan segment was RMB103.2 million (US$14.6 million) in the first quarter of 2020, compared to non-GAAP net loss of RMB79.6 million in the first quarter of 2019.

Net income attributable to Momo Inc.

Net income attributable to Momo Inc. was RMB538.9 million (US$76.1 million) in the first quarter of 2020, compared to RMB289.3 million during the same period of 2019.

Non-GAAP net income (note 1) attributable to Momo Inc. was RMB736.3 million (US$104.0 million) in the first quarter of 2020, compared to RMB910.3 million during the same period of 2019.

Net income per ADS

Diluted net income per ADS was RMB2.46 (US$0.35) in the first quarter of 2020, compared to RMB1.36 in the first quarter of 2019.

Non-GAAP diluted net income per ADS (note 1) was RMB3.34 (US$0.47) in the first quarter of 2020, compared to RMB4.15 in the first quarter of 2019.

Cash and cash flow

As of March 31, 2020, Momo’s cash, cash equivalents and short-term deposits totaled RMB15,467.2 million (US$2,184.4 million), compared to RMB14,925.3 million as of December 31, 2019. Net cash provided by operating activities in the first quarter of 2020 was RMB543.5 million (US$76.8 million), compared to RMB1,175.9 million in the first quarter of 2019.

 

3


Recent Development

On March 19, 2020, Momo’s board of directors declared a special cash dividend in the amount of US$0.76 per ADS, or US$0.38 per ordinary share. The cash dividend was paid in April 2020 to shareholders of record at the close of business on April 8, 2020. The aggregate amount of cash dividends paid was US$158.6 million.

Business Outlook

For the second quarter of 2020, the Company expects total net revenues to be between RMB3.8 billion to RMB3.9 billion, representing a decrease of 8.5% to 6.1% year over year. This forecast considers the potential impact of the COVID-19 outbreak and reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change, particularly as to the potential impact of the COVID-19 on the economy in China.

Note 1: Non-GAAP measures

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

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

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

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

 

4


Conference Call

Momo’s management will host an earnings conference call on Thursday, May 28, 2020, at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing / Hong Kong Time on May 28, 2020).

All participants must preregister online prior to the call to receive the dial-in details. Once preregistration has been complete, participants will receive dial-in numbers, direct event passcode, and a unique registrant ID.

PRE-REGISTER LINK http://apac.directeventreg.com/registration/event/4085667

To join the conference, simply dial the number in the calendar invite you receive after preregistering, enter the passcode followed by your registrant ID, and you will join the conference instantly.

A telephone replay of the call will be available after the conclusion of the conference call through 9:00 a.m. U.S. Eastern Time, June 5, 2020. The dial-in details for the replay are as follows:

International:     +61-2-8199-0299

U.S. Toll Free:     +1-855-452-5696

Passcode: 4085667

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

About Momo

We are a leading player in China’s online social and entertainment space. Through Momo, Tantan and other properties within our product portfolio, we enable users to discover new relationships, expand their social connections and build meaningful interactions. Momo is a mobile application that connects people and facilitates interactions based on location, interests and a variety of recreational activities including live talent shows, short videos, social games as well as other video- and audio-based interactive experiences, such as live chats and mobile karaoke experience. Tantan, which was added into our family of applications through acquisition in May 2018, is a leading social and dating application for the younger generation. Tantan is designed to help its users find and establish romantic connections as well as meet interesting people. For investor and media inquiries, please contact:

Momo Inc.

Investor Relations

Phone: +86-10-5731-0538

Email: ir@immomo.com

Christensen

In China

Mr. 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

 

5


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 second quarter of 2020.

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 first quarter of 2020 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the second quarter of 2020 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, our ability to anticipate and develop new services and enhance existing services to meet the demand of our users or customers, and the impact of the COVID-19 to Momo’s business operations and the economy in China. 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.

 

6


Momo Inc.

Unaudited Condensed Consolidated Statement of Operations

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

 

     Three months  
   ended March 31  
     2019     2020     2020  
     RMB     RMB     US$  

Net revenues:

      

Live video service

     2,689,413       2,332,004       329,342  

Value-added service

     903,849       1,175,754       166,049  

Mobile marketing

     80,729       57,155       8,072  

Mobile games

     39,008       12,691       1,792  

Other services

     9,920       16,480       2,327  
  

 

 

   

 

 

   

 

 

 

Total net revenues

     3,722,919       3,594,084       507,582  

Cost and expenses:

      

Cost of revenues

     (1,873,574     (1,876,916     (265,071

Research and development

     (249,431     (262,159     (37,024

Sales and marketing

     (623,848     (709,808     (100,244

General and administrative

     (602,596     (177,249     (25,032
  

 

 

   

 

 

   

 

 

 

Total cost and expenses

     (3,349,449     (3,026,132     (427,371

Other operating income

     10,954       26,119       3,689  
  

 

 

   

 

 

   

 

 

 

Income from operations

     384,424       594,071       83,900  

Interest income

     93,778       130,823       18,476  

Interest expense

     (18,989     (19,819     (2,799

Impairment loss on long-term investments

     (4,500     (6,000     (847
  

 

 

   

 

 

   

 

 

 

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

     454,713       699,075       98,730  

Income tax expenses

     (163,651     (162,891     (23,005
  

 

 

   

 

 

   

 

 

 

Income before share of income on equity method investments

     291,062       536,184       75,725  

Share of (loss) income on equity method investments

     (4,504     1,527       216  
  

 

 

   

 

 

   

 

 

 

Net income

     286,558       537,711       75,941  
  

 

 

   

 

 

   

 

 

 

Less: net loss attributable to non-controlling interest

     (2,759     (1,195     (169
  

 

 

   

 

 

   

 

 

 

Net income attributable to the shareholders of Momo Inc.

     289,317       538,906       76,110  
  

 

 

   

 

 

   

 

 

 

Net income per share attributable to ordinary shareholders

      

Basic

     0.70       1.29       0.18  

Diluted

     0.68       1.23       0.17  

Weighted average shares used in calculating net income per ordinary share

      

Basic

     413,967,371       417,294,242       417,294,242  

Diluted

     425,890,818       453,331,322       453,331,322  

 

7


Momo Inc.

Unaudited Condensed Consolidated Statement of Comprehensive Income

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

 

     Three months  
   ended March 31  
     2019     2020     2020  
     RMB     RMB     US$  

Net income

     286,558       537,711       75,941  

Other comprehensive loss, net of tax

      

Foreign currency translation adjustment

     (72,981     (867     (122
  

 

 

   

 

 

   

 

 

 

Comprehensive income

     213,577       536,844       75,819  

Less: comprehensive loss attributed to the non-controlling interest

     (5,234     (5,569     (786
  

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to Momo Inc.

     218,811       542,413       76,605  
  

 

 

   

 

 

   

 

 

 

 

8


Momo Inc.

Unaudited Condensed Consolidated Balance Sheets

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

 

     December 31      March 31      March 31  
     2019      2020      2020  
     RMB      RMB      US$  

Assets

        

Current assets

        

Cash and cash equivalents

     2,612,743        2,799,214        395,325  

Short-term deposits

     12,312,585        12,668,028        1,789,067  

Accounts receivable, net of allowance for doubtful accounts of RMB 12,209 and RMB11,555 as of December 31, 2019 and March 31, 2020, respectively

     265,155        295,513        41,734  

Amount due from a related party

     4,382        2,258        319  

Prepaid expenses and other current assets

     599,000        598,495        84,523  
  

 

 

    

 

 

    

 

 

 

Total current assets

     15,793,865        16,363,508        2,310,968  

Long-term deposits

     300,000        300,000        42,368  

Right-of-use assets, net

     190,552        163,926        23,151  

Property and equipment, net

     346,345        339,560        47,955  

Intangible assets

     890,303        863,878        122,003  

Rental deposits

     25,028        25,201        3,559  

Long-term investments

     495,905        494,545        69,843  

Other non-current assets

     44,009        55,796        7,880  

Deferred tax assets

     37,064        35,026        4,947  

Goodwill

     4,360,610        4,434,769        626,309  
  

 

 

    

 

 

    

 

 

 

Total assets

     22,483,681        23,076,209        3,258,983  
  

 

 

    

 

 

    

 

 

 

Liabilities and equity

        

Current liabilities

        

Accounts payable

     714,323        635,546        89,755  

Deferred revenue

     503,461        482,455        68,135  

Accrued expenses and other current liabilities

     985,873        838,913        118,477  

Amount due to related parties

     29,606        34,590        4,885  

Lease liabilities due within one year

     135,169        123,451        17,435  

Income tax payable

     153,976        174,320        24,619  

Dividends payable

     —          1,123,364        158,649  

Deferred consideration in connection with business acquisitions

     84,346        85,788        12,116  
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     2,606,754        3,498,427        494,071  

Deferred tax liabilities

     222,576        215,970        30,501  

Convertible senior notes

     4,954,352        5,043,106        712,223  

Share-based compensation liability

     902,047        930,603        131,426  

Lease liabilities

     56,498        42,972        6,069  

Other non-current liabilities

     22,672        41,522        5,864  
  

 

 

    

 

 

    

 

 

 

Total liabilities

     8,764,899        9,772,600        1,380,154  

Shareholder’s equity (i)

     13,718,782        13,303,609        1,878,829  
  

 

 

    

 

 

    

 

 

 

Total liabilities and shareholder’s equity

     22,483,681        23,076,209        3,258,983  
  

 

 

    

 

 

    

 

 

 

 

(i):

As of March 31, 2020, the number of ordinary shares issued and outstanding was 417,412,368.

 

9


Momo Inc.

Unaudited Condensed Consolidated Statement of Cash Flows

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

 

     Three months  
     ended March 31  
     2019     2020     2020  
     RMB     RMB     US$  

Cash flows from operating activities:

      

Net income

     286,558       537,711       75,941  

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

      

Depreciation of property and equipment

     48,400       52,381       7,398  

Amortization of intangible assets

     38,595       39,882       5,632  

Share-based compensation

     593,074       168,527       23,800  

Share of loss (income) on equity method investments

     4,504       (1,527     (216

Impairment loss on long-term investments

     4,500       6,000       847  

Gain on subsidiary deconsolidation

     —         (6,676     (943

Loss on disposal of property and equipment

     4       —         —    

Provision of allowance for doubtful accounts

     —         (654     (92

Cash received on investment income distribution

     —         1,153       163  

Changes in operating assets and liabilities:

      

Accounts receivable

     409,414       (37,979     (5,364

Prepaid expenses and other current assets

     (18,189     1,162       164  

Amount due from related parties

     —         2,123       300  

Rental deposits

     (1,317     (173     (24

Deferred tax assets

     25,537       2,038       288  

Other non-current assets

     31,439       14,840       2,096  

Accounts payable

     32,515       (80,073     (11,308

Income tax payable

     (71,558     20,344       2,873  

Deferred revenue

     18,842       (21,023     (2,969

Accrued expenses and other current liabilities

     (185,495     (154,243     (21,783

Amount due to related parties

     (25,965     4,984       704  

Deferred tax liability

     (15,542     (9,971     (1,408

Other non-current liabilities

     593       4,670       660  
  

 

 

   

 

 

   

 

 

 

Net cash provided by operating activities

     1,175,909       543,496       76,759  

Cash flows from investing activities:

      

Purchase of property and equipment

     (52,798     (38,167     (5,390

Proceeds from disposal of property and equipment

     5       2       —    

Payment for long-term investments

     (12,000     (4,500     (636

Cash dividend received

     —         233       33  

Cash outflow due to subsidiary deconsolidation

     —         (1,026     (145

Purchase of short-term deposits

     (3,485,005     (3,300,000     (466,049

Cash received on maturity of short-term deposits

     3,005,005       2,979,140       420,735  

Payment for short-term investments

     (210,000     (10,000     (1,412

Cash received from sales of short-term investment

     100,000       10,000       1,412  
  

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (654,793     (364,318     (51,452

Cash flows from financing activities:

      

Deferred payment for business acquisition

     (305,067     —         —    

Proceeds from exercise of share options

     83       —         —    

Deferred payment of purchase of property and equipment

     (94     —         —    
  

 

 

   

 

 

   

 

 

 

Net cash used in financing activities

     (305,078     —         —    

Effect of exchange rate changes

     (5,730     7,293       1,028  
  

 

 

   

 

 

   

 

 

 

Net increase in cash and cash equivalents

     210,308       186,471       26,335  

Cash and cash equivalents at the beginning of period

     2,468,034       2,612,743       368,990  
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at the end of period

     2,678,342       2,799,214       395,325  
  

 

 

   

 

 

   

 

 

 

 

10


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 March
31, 2019
    ended March
31, 2020
    ended March
31, 2020
 
    GAAP
RMB
    Amortization
of intangible
assets from
business
acquisitions
RMB
    Share-based
compensation
RMB
    Tax
impacts
(ii)
RMB
    Non-GAAP
RMB
    GAAP
RMB
    Amortization
of intangible
assets from
business
acquisitions
RMB
    Share-based
compensation
RMB
    Tax
impacts
(ii)
RMB
    Non-GAAP
RMB
    GAAP
US$
    Amortization
of intangible
assets from
business
acquisitions
US$
    Share-based
compensation
US$
    Tax
impacts
(ii)
US$
    Non-GAAP
US$
 

Cost of revenues

    (1,873,574     18,021       4,186       —         (1,851,367     (1,876,916     18,645       6,969       —         (1,851,302     (265,071     2,633       984       —         (261,454

Research and development

    (249,431     2,289       39,730       —         (207,412     (262,159     2,368       42,760       —         (217,031     (37,024     334       6,039       —         (30,651

Sales and marketing

    (623,848     16,853       39,452       —         (567,543     (709,808     17,436       47,074       —         (645,298     (100,244     2,462       6,648       —         (91,134

General and administrative

    (602,596     —         509,706       —         (92,890     (177,249     —         71,724       —         (105,525     (25,032     —         10,129       —         (14,903
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cost and operating expenses

    (3,349,449     37,163       593,074       —         (2,719,212     (3,026,132     38,449       168,527       —         (2,819,156     (427,371     5,429       23,800       —         (398,142

Income from operations

    384,424       37,163       593,074       —         1,014,661       594,071       38,449       168,527       —         801,047       83,900       5,429       23,800       —         113,129  

Net income attributable to Momo Inc.

    289,317       37,163       593,074       (9,291     910,263       538,906       38,449       168,527       (9,612     736,270       76,110       5,429       23,800       (1,357     103,982  

 

(ii)

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

 

11


Momo Inc.

Unaudited Condensed Segment Report

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

 

     Three months  
   ended March 31, 2020  
     Momo     Tantan     QOOL     Total     Total  
     RMB     RMB     RMB     RMB     US$  

Net revenues:

          

Live video service

     2,325,945       6,059       —         2,332,004       329,342  

Value-added service

     800,103       375,651       —         1,175,754       166,049  

Mobile marketing

     57,155       —         —         57,155       8,072  

Mobile games

     12,691       —         —         12,691       1,792  

Other services

     6,195       —         10,285       16,480       2,327  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net revenues

     3,202,089       381,710       10,285       3,594,084       507,582  

Cost and expenses (iii):

          

Cost of revenues

     (1,736,517     (132,278     (8,121     (1,876,916     (265,071

Research and development

     (183,900     (78,259     —         (262,159     (37,024

Sales and marketing

     (394,364     (315,421     (23     (709,808     (100,244

General and administrative

     (143,135     (27,680     (6,434     (177,249     (25,032
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost and expenses

     (2,457,916     (553,638     (14,578     (3,026,132     (427,371

Other operating income

     26,119       —         —         26,119       3,689  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     770,292       (171,928     (4,293     594,071       83,900  

Interest income

     129,278       1,472       73       130,823       18,476  

Interest expense

     (19,819     —         —         (19,819     (2,799

Impairment loss on long-term investments

     (6,000     —         —         (6,000     (847
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     873,751       (170,456     (4,220     699,075       98,730  

Income tax (expenses) benefits

     (168,212     5,321       —         (162,891     (23,005
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     705,539       (165,135     (4,220     536,184       75,725  

Share of loss on equity method investments

     1,527       —         —         1,527       216  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     707,066       (165,135     (4,220     537,711       75,941  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(iii)

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

 

     Three months  
     ended March 31, 2020  
     Momo      Tantan      QOOL      Total      Total  
     RMB      RMB      RMB      RMB      US$  

Cost of revenues

     5,611        1,358        —          6,969        984  

Research and development

     26,802        15,958        —          42,760        6,039  

Sales and marketing

     45,441        1,633        —          47,074        6,648  

General and administrative

     54,984        14,121        2,619        71,724        10,129  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total cost and expenses

     132,838        33,070        2,619        168,527        23,800  

 

12


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 March 31, 2020  
     Momo      Tantan     QOOL     Total     Total  
     RMB      RMB     RMB     RMB     US$  

Operating income (loss)

     770,292        (171,928     (4,293     594,071       83,900  

Share-based compensation

     132,838        33,070       2,619       168,527       23,800  

Amortization of intangible assets from business acquisitions

     —          38,449       —         38,449       5,429  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating income (loss)

     903,130        (100,409     (1,674     801,047       113,129  

Net income (loss)

     707,066        (165,135     (4,220     537,711       75,941  

Share-based compensation

     132,838        33,070       2,619       168,527       23,800  

Amortization of intangible assets from business acquisitions

     —          38,449       —         38,449       5,429  

Tax impacts

     —          (9,612     —         (9,612     (1,357
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss)

     839,904        (103,228     (1,601     735,075       103,813  

 

13


Momo Inc.

Unaudited Condensed Segment Report

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

 

     Three months  
   ended March 31, 2019  
     Momo     Tantan     QOOL     Total     Total  
     RMB     RMB     RMB     RMB     US$2  

Net revenues:

          

Live video service

     2,689,413       —         —         2,689,413       400,735  

Value-added service

     608,502       295,347       —         903,849       134,678  

Mobile marketing

     80,729       —         —         80,729       12,029  

Mobile games

     39,008       —         —         39,008       5,812  

Other services

     1,557       —         8,363       9,920       1,478  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total net revenues

     3,419,209       295,347       8,363       3,722,919       554,732  

Cost and expenses (iv):

          

Cost of revenues

     (1,770,038     (98,856     (4,680     (1,873,574     (279,171

Research and development

     (184,273     (65,158     —         (249,431     (37,166

Sales and marketing

     (362,958     (255,921     (4,969     (623,848     (92,956

General and administrative

     (114,264     (479,965     (8,367     (602,596     (89,790
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cost and expenses

     (2,431,533     (899,900     (18,016     (3,349,449     (499,083

Other operating income

     10,954       —         —         10,954       1,632  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     998,630       (604,553     (9,653     384,424       57,281  

Interest income

     90,858       2,891       29       93,778       13,973  

Interest expense

     (18,989     —         —         (18,989     (2,829

Impairment loss on long-term investments

     (4,500     —         —         (4,500     (671
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     1,065,999       (601,662     (9,624     454,713       67,754  

Income tax (expenses) benefits

     (167,603     3,952       —         (163,651     (24,385
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

     898,396       (597,710     (9,624     291,062       43,369  

Share of income on equity method investments

     (4,504     —         —         (4,504     (671
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     893,892       (597,710     (9,624     286,558       42,698  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(iv)

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

 

     Three months  
     ended March 31, 2019  
     Momo      Tantan      QOOL      Total      Total  
     RMB      RMB      RMB      RMB      US$  

Cost of revenues

     3,606        580        —          4,186        624  

Research and development

     21,713        18,017        —          39,730        5,920  

Sales and marketing

     35,474        3,978        —          39,452        5,879  

General and administrative

     39,491        467,684        2,531        509,706        75,949  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total cost and expenses

     100,284        490,259        2,531        593,074        88,372  

 

 

2 

All translations from RMB to U.S. dollars are made at a rate of RMB 6.7112 to US$1.00, the effective noon buying rate for March 29, 2019 as set forth in the H.10 statistical release of the Federal Reserve Board.

 

14


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 March 31, 2019  
     Momo      Tantan     QOOL     Total     Total  
     RMB      RMB     RMB     RMB     US$  

Operating income (loss)

     998,630        (604,553     (9,653     384,424       57,281  

Share-based compensation

     100,284        490,259       2,531       593,074       88,372  

Amortization of intangible assets from business acquisitions

     —          37,163       —         37,163       5,537  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP operating income (loss)

     1,098,914        (77,131     (7,122     1,014,661       151,190  

Net income (loss)

     893,892        (597,710     (9,624     286,558       42,698  

Share-based compensation

     100,284        490,259       2,531       593,074       88,372  

Amortization of intangible assets from business acquisitions

     —          37,163       —         37,163       5,537  

Tax impacts

     —          (9,291     —         (9,291     (1,384
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income (loss)

     994,176        (79,579     (7,093     907,504       135,223  

 

15