Momo Trades 11% Higher After Beating Q1 Earnings Expectations

Momo Inc.
(Nasdaq) IT08-momo-082317-nasdaq Momo

Momo Inc. (NASDAQ: MOMO) announced its financial results for the first quarter of 2019 on Tuesday, May 28, before the opening bell.

The mobile-based social networking and entertainment company topped Wall Street expectations, and also provided a rosy revenue guidance for its fiscal second quarter.

Investors responded positively to the earnings report by sending shares of the Chinese-based company up more than 5% in the premarket hours. As of 10:54 a.m. ET, the shares were trading 11.15% higher to $28.92.

MOMO Earnings & Outlook

Net income in the first quarter of 2019 was $43.1 million, down 65% on a year-over-basis. Earnings per American Depositary Share (ADS) were 20 cents, down 66% from a year ago. Excluding one-time items, earnings per ADS came 62 cents, a decline of 5% from the first quarter of the previous year.

Net revenue, the company said, rose 35% to $554.7 million. Analysts were expecting Momo to report adjusted earnings of 54 cents per share on net revenue of $526.67 million.

Revenues from its live video service grew 14%, thanks in part to an increase in paying users during the quarter. Revenues from its value-added service surged 285%, boosted by Tantan’s subscription revenues as well as continued growth of the Momo’s virtual gift business.

Mobile marketing revenue fell 32% on a year-over-year basis, due to lower demand from marketers, while revenue from its mobile games business dropped 8%. For the second quarter, Momo said it is expecting net revenue growth of between 27% to 30% on a year-over-year basis.

Momo CEO Comments

“Q1 was a solid quarter and a good start to the year 2019,” commented Yan Tang, Chairman and CEO of Momo. “We have started to implement the strategies that we laid out at the beginning of the year. Some of the initiatives we took on the product and operational fronts have already generated good results in driving business growth. We will continue to execute against the strategic priorities and create value for our shareholders.”

Momo Company Profile

Momo Inc provides mobile-based social networking services. The firm enables its users to establish and expand social relationships based on location and interests.

Its platform includes Momo mobile application and a variety of related features, functionalities, tools, and services that it provides to users, customers and platform partners. It also operates a stand-alone video application called Hani, which features the live video content on its core Momo mobile application.

The company principally derives its revenue from live video service, value-added services, mobile marketing services, mobile games and other services.

It operates in three segments: Momo’ service lines, Tantan’s service lines, and QOOL’s service line out of which Momo’ service lines segment derives majority revenue.