Momo Announces Unaudited Financial Results for the First Quarter of 2020

BEIJING, May 28, 2020 /PRNewswire/ -- Momo Inc. (NASDAQ: MOMO) ("Momo" or the "Company"), a leading mobile social networking platform in China, today announced its unaudited financial results for the 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."


             * 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$1.00, the effective noon
              buying rate for March 31, 2020 as set
              forth in the H.10 statistical release of
              the Federal Reserve Board.

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.

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.

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.

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.

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

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.


                                                                                    
              
                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                                                             454,713               699,075           98,730
      investments



           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


                                                                        
              
                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

                                                                                                                                                                              ===


                                                                
              
                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                                        265,155                                           295,513                 41,734
      RMB11,555 as of December 31, 2019
       and March 31, 2020, respectively


               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.


                                                                                        
              
                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

                                                                                                                                                                                              ===


                                              
              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                
              Amortization                
              Share-                
              Tax          
       Non-GAAP               
              GAAP            
             Amortization          
              Share-             
              Tax         
       Non-GAAP             
     GAAP             
             Amortization            
              Share-            
              Tax     
        Non-GAAP
                                                                                                         of intangible                           based                          impacts                                                                       of intangible                     based                       impacts                                                            of intangible                       based                      impacts
                                                                                                          assets from                         compensation                                                                                                     assets from                   compensation                                                                                       assets from                     compensation
                                                                                                           business                                                         
              (ii)                                                                     business                                                
              (ii)                                                          business                                                 
              (ii)
                                                                                                                                                                                                                                                              acquisitions                                                                                                                     acquisitions
                                                                                                    
              acquisitions


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



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




           
                Cost and operating                                        (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)
      expenses



           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                                                 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
      Momo Inc.





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


                                                                                                                              
              
                Momo Inc.


                                                                                                                 
              
                Unaudited Condensed Segment Report


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




                                                                                                                      
              Three months


                                                                                                                
                ended   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                                                           873,751                                 (170,456)               (4,220)           699,075            98,730
      share of income on equity method
      investments



           Income tax (expenses) benefits                                                                           (168,212)                                    5,321                                (162,891)         (23,005)




           
                Income (loss) before share of income                                                          705,539                                 (165,135)               (4,220)           536,184            75,725
      on equity method investments



           Share of loss on equity method                                                                               1,527                                                                             1,527               216
      investments




           
                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


                                                                            
              
                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                       -                                   38,449                                           38,449            5,429
      business acquisitions



           
                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                       -                                   38,449                                           38,449            5,429
      business acquisitions



           Tax impacts                                                  -                                  (9,612)                                         (9,612)         (1,357)



           
                Non-GAAP net income (loss)                839,904                                 (103,228)                          (1,601)        735,075          103,813


                                                                                                                                              
              
                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                                                                    1,065,999                                    (601,662)          (9,624)            454,713             67,754
         of income on equity method
         investments



              Income tax (expenses) benefits                                                                                            (167,603)                                       3,952                            (163,651)          (24,385)




              
                Income (loss) before share of income on                                                                        898,396                                    (597,710)          (9,624)            291,062             43,369
         equity method investments



              Share of income on equity method                                                                                            (4,504)                                                                         (4,504)             (671)
         investments




              
                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.


                                                                                 
              
                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                          -                                   37,163                                            37,163            5,537
    business acquisitions




              
                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                          -                                   37,163                                            37,163            5,537
    business acquisitions



              Tax impacts                                                     -                                  (9,291)                                          (9,291)         (1,384)




              
                Non-GAAP net income (loss)                   994,176                                  (79,579)                         (7,093)          907,504          135,223

View original content:http://www.prnewswire.com/news-releases/momo-announces-unaudited-financial-results-for-the-first-quarter-of-2020-301066759.html

SOURCE Momo Inc.