Momo's Stock Ends Higher on Revenue Beat, User Growth
The stock in Momo Inc. (Nasdaq: MOMO) closed 46 cents higher Tuesday, at $33.19 per share, after the company reported better-than-expected revenue and a return to full operations.
The Beijing-based company said its revenue in the three months through June reached $604.9 million, up 32 percent year-over-year. Net income was $106.6 million, or 49 cents per American depositary share, compared with $117.8 million, or 56 cents per ADS, a year ago.
In response to the news, Momo's shares soared as high as 8 percent on Tuesday morning, to $35.38 per share, then leveled off in the afternoon, closing just 1 percent up on the day.
Momo operates mobile social media platforms that allow users to express via communication tools such as social feeds, message boards, voice recordings and emoticons. The apps are available on iPhone and Android. The company also offers live music and entertainment broadcasts through its Momo application.
In a statement today, Momo said the number of its monthly active users reached 113.5 million in the second quarter, compared with 108 million a year ago. The number of paying users of its live video service and value-added service reached 11.8 million, of which 3.2 million were paying users of Tantan, according to the report.
Momo acquired the popular dating app Tantan, similar to Tinder, for more than $700 million in Feb. 2018.
In April, Tantan was suspended from multiple app stores in China due to an ongoing government effort to clean up content cyberspace, according to the South China Morning Post. That was followed by a one-month ban on posting on both Tantan and Momo, as requested by government authorities, aimed to clean up illegal content, according to a May report by the South China Morning Post. Tantan was made available again in July.
Yan Tang, the chairman and CEO of Momo, noted that the apps were in full operation.
"Since the full restoration of its download and payment service in mid-July, Tantan has been recovering with robust momentum across different user and revenue metrics. It demonstrated the strong demand for online dating service in China and Tantan's unique position in this sector," he said.
Despite the company's revenue growth, Tang admitted that the suspensions had an impact on the number of paying users on Tantan in a conference call on Tuesday. Tang also followed up on the rebound in growth the company had made since Tantan's restoration in July.
"Since then we started to see a strong rebound in all the core metrics including the number of active users, paying subscribers," Tang said on Tuesday in a conference call.
He added, "By August 25th the paying users already went back to 4.1 million. Our goal is to build Tantan into an important driver of the company."
Recently Momo, ranked in the top position among the Fortune 100 fastest growing companies in 2019, as its annual growth rate on a three year basis reached 141 percent in revenue, 193 percent in net income and 53 percent in stock price.
Going forward, the company said it anticipates to generate revenue in the range of between $607 million and $621 million in the third quarter, representing an increase of between 17 and 19 percent year-over-year.
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