EX-99.1

EX-99.1 2 d828376dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

Momo Announces Unaudited Financial Results for the Third Quarter of 2019

BEIJING, CHINA, November 26, 2019 – Momo Inc. (NASDAQ: MOMO) (“Momo” or the “Company”), a leading mobile social networking platform in China, today announced its unaudited financial results for the third quarter of 2019.

Third Quarter of 2019 Highlights

•

Net revenues increased by 22% year over year to RMB4,451.6 million (US$622.8 million^*) in the third quarter of 2019.

•

Net income attributable to Momo Inc. increased to RMB893.9 million (US$125.1 million) in the third quarter of 2019 from RMB579.5 million in the same period of 2018.

•

Non-GAAP net income attributable to Momo Inc. (note 1) increased to RMB1,088.1 million (US$152.2 million) in the third quarter of 2019, from RMB777.6 million in the same period of 2018.

•

Diluted net income per American Depositary Share (“ADS”) was RMB4.04 (US$0.57) in the third quarter of 2019, compared to RMB2.69 in the same period of 2018.

•

Non-GAAP diluted net income per ADS (note 1) was RMB4.90 (US$0.69) in the third quarter of 2019, compared to RMB3.57 in the same period of 2018.

•

Monthly Active Users (“MAU”) on Momo application were 114.1 million in September 2019, compared to 110.5 million in September 2018.

•

Total paying users of our live video service and value-added service, without double counting the overlap and including 4.5 million paying users of Tantan, were 13.4 million for the third quarter of 2019, compared to 12.5 million for the third quarter of 2018, which included 3.6 million paying users of Tantan.

First Nine Months of 2019 Highlights

•

Net revenues increased 29% year over year to RMB12,327.2 million (US$1,724.6 million) for the first nine months of 2019.

•

Net income attributable to Momo Inc. was RMB1,915.0 million (US$267.9 million) for the first nine months of 2019, compared with RMB2,154.9 million during the same period of 2018.

•

Non-GAAP net income attributable to Momo Inc. (note 1) was RMB3,240.8 million (US$453.4 million) for the first nine months of 2019, compared with RMB2,574.6 million during the same period of 2018.

•

Diluted net income per ADS was RMB8.76 (US$1.23) for the first nine months of 2019, compared with RMB10.16 during the same period of 2018.

•

Non-GAAP diluted net income per ADS (note 1) was RMB14.65 (US$2.05) for the first nine months of 2019, compared with RMB12.12 during the same period of 2018.

“The third quarter of 2019 was another robust quarter,” commented Yan Tang, Chairman and CEO of Momo. “We continued to deliver strong financial results both in terms of revenues and profitability.

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 RMB7.1477 to US$1.00, the effective noon buying rate for September 30, 2019 as set forth in the H.10 statistical release of the Federal Reserve Board.

Moreover, we are also making solid progress with our product initiatives and sowing the seeds for future growth.”

Third Quarter of 2019 Financial Results

Net revenues

Total net revenues were RMB4,451.6 million (US$622.8 million) in the third quarter of 2019, an increase of 22% from RMB3,647.6 million in the third quarter of 2018.

Live video service revenues were RMB3,275.4 million (US$458.2 million) in the third quarter of 2019, an increase of 18% from RMB2,769.2 million during the same period of 2018, as a result of the successful strategy to apply different products and operational efforts to drive spending from different cohorts of users.

Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were RMB1,064.6 million (US$148.9 million) in the third quarter of 2019, an increase of 86% from RMB573.1 million during the same period of 2018. 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 RMB81.9 million (US$11.5 million) in the third quarter of 2019, a decrease of 30% from RMB117.3 million during the same period of 2018. The decrease in mobile marketing revenues was primarily caused by the decreased demand from our advertising and marketing customers and the decrease in advertisement properties on Momo’s platform.

Mobile games revenues were RMB15.8 million (US$2.2 million) in the third quarter of 2019, a decrease of 43% from RMB27.9 million in the third quarter of 2018. The decrease in mobile game revenues was mainly due to the continued decrease in quarterly paying users of mobile games.

Revenues from other services in the third quarter of 2018 mainly consisted of revenues from Phanta City, a TV variety show co-produced by the Company, which did not generate revenues in the third quarter of 2019.

Net revenues from Momo segment increased from RMB3,325.1 million in the third quarter of 2018 to RMB4,138.9 million (US$579.1 million) in the third quarter of 2019, primarily driven by the significant increase in net revenues from live video service and value-added service. Net revenues from Tantan segment increased from RMB164.1 million in the third quarter of 2018 to RMB310.0 million (US$43.4million) in the third quarter of 2019, which was mainly due to the increase in the number of paying users of Tantan.

Cost and expenses

Cost and expenses were RMB3,487.9 million (US$488.0 million) in the third quarter of 2019, an increase of 16% from RMB3,009.1 million in the third quarter of 2018. The increase was primarily attributable to: (a) an increase in revenue sharing with broadcasters related to our live video service and virtual gift recipients; (b) an increase in marketing and promotional expenses to attract users on both Momo and Tantan platforms and promote our live video services; (c) an increase in personnel related costs as a result of the Company’s rapidly expanding talent pool; (d) an increase in infrastructure-related spending, such as bandwidth costs and server depreciation costs, driven by more functions introduced on Momo’s platform. The increase was partially offset by a decrease in production cost in connection with a television program.

Non-GAAP cost and expenses (note 1) were RMB3,284.0 million (US$459.5 million) in the third quarter of 2019, an increase of 17% from RMB2,801.6 million during the same period of 2018.

Income from operations

Income from operations was RMB993.1 million (US$138.9 million) in the third quarter of 2019, compared to RMB643.8 million during the same period of 2018. Income from operations of Momo segment was RMB1,227.2 million (US$171.7 million) in the third quarter of 2019, increasing from RMB943.9 million in the third quarter of 2018. Loss from operations of Tantan segment was RMB228.7 million (US$32.0 million) in the third quarter of 2019, compared to loss from operations of RMB227.6 million in the third quarter of 2018.

Non-GAAP income from operations (note 1) was RMB1,196.9 million (US$167.5 million) in the third quarter of 2019, compared to RMB851.3 million during the same period of 2018. Non-GAAP income from operations of Momo segment was RMB1,364.1 million (US$190.9 million) in the third quarter of 2019, increasing from RMB1,055.9 million in the third quarter of 2018. Non-GAAP loss from operations of Tantan segment was RMB164.4 million (US$23.0 million) in the third quarter of 2019, compared to non-GAAP loss from operations of RMB132.2 million in the third quarter of 2018.

Income tax expenses

Income tax expenses were RMB182.6 million (US$25.5 million) in the third quarter of 2019, increasing from RMB146.8 million in the third quarter of 2018. The increase was mainly because we generated higher profit in the third quarter of 2019.

Net income

Net income was RMB890.8 million (US$124.6 million) in the third quarter of 2019, compared to RMB571.9 million during the same period of 2018. Net income from Momo segment was RMB1,110.2 million (US$155.3 million) in the third quarter of 2019, increasing from RMB862.4 million in the third quarter of 2018. Net loss from Tantan segment was RMB214.1 million (US$29.9 million) in the third quarter of 2019, compared to net loss of RMB218.1 million in the third quarter of 2018.

Non-GAAP net income (note 1) was RMB1,084.9 million (US$151.8 million) in the third quarter of 2019, compared to RMB770.0 million during the same period of 2018. Non-GAAP net income from Momo segment was RMB1,247.2 million (US$174.5 million) in the third quarter of 2019, increasing from RMB974.4 million in the third quarter of 2018. Non-GAAP net loss of Tantan segment was RMB159.5 million (US$22.3 million) in the third quarter of 2019, compared to non-GAAP net loss of RMB132.0 million in the third quarter of 2018.

Net income attributable to Momo Inc.

Net income attributable to Momo Inc. was RMB893.9 million (US$125.1 million) in the third quarter of 2019, compared to RMB579.5 million during the same period of 2018.

Non-GAAP net income (note 1) attributable to Momo Inc. was RMB1,088.1 million (US$152.2 million) in the third quarter of 2019, compared to RMB777.6 million during the same period of 2018.

Net income per ADS

Diluted net income per ADS was RMB4.04 (US$0.57) in the third quarter of 2019, compared to RMB2.69 in the third quarter of 2018.

Non-GAAP diluted net income per ADS (note 1) was RMB4.90 (US$0.69) in the third quarter of 2019, compared to RMB3.57 in the third quarter of 2018.

Cash and cash flow

As of September 30, 2019, Momo’s cash, cash equivalents, term deposits and short-term investment totaled RMB13,669.9 million (US$1,912.5 million), compared to RMB11,292.6 million as of December 31, 2018. Net cash provided by operating activities in the third quarter of 2019 was RMB1,175.9 million (US$164.5 million), compared to RMB346.5 million in the third quarter of 2018.

First Nine Months of 2019 Financial Results

Net revenues for the first nine months of 2019 were RMB12,327.2 million (US$1,724.6 million), an increase of 29% from RMB9,564.5 million in the same period of 2018, primarily driven by the significant increase in net revenues from live video service and value-added service.

Net income attributable to Momo Inc. was RMB1,915.0 million (US$267.9 million) for the first nine months of 2019, compared to RMB2,154.9 million during the same period of 2018.

Non-GAAP net income attributable to Momo Inc. (note 1) was RMB3,240.8 million (US$453.4 million) for the first nine months of 2019, compared to RMB2,574.6 million during the same period of 2018.

Diluted net income per ADS was RMB8.76 (US$1.23) during the first nine months of 2019, compared to RMB10.16 in the same period of 2018.

Non-GAAP diluted net income per ADS (note 1) was RMB14.65 (US$2.05) during the first nine months of 2019, compared to RMB12.12 in the same period of 2018.

Net cash provided by operating activities was RMB3,773.8 million (US$528.0 million) during the first nine months of 2019, compared to RMB2,164.4 million in the same period of 2018.

Business Outlook

For the fourth quarter of 2019, the Company expects total net revenues to be between RMB4.52 billion to RMB4.62 billion, representing an increase of 18% to 20% year over year. These estimates reflect the Company’s current and preliminary view, which is subject to change.

Note 1: Non-GAAP measures

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

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

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

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 Tuesday, November 26, 2019, at 8:00 a.m. U.S. Eastern Time (9:00 p.m. Beijing / Hong Kong Time on November 26, 2019).

Dial-in details for the earnings conference call are as follows:

International: +65-6713-5090

U.S. Toll Free: +1-866-519-4004

Hong Kong Toll Free: 800-906601

Mainland China: 4006-208038

Passcode: Momo

Please dial in 15 minutes before the call is scheduled to begin.

A telephone replay of the call will be available after the conclusion of the conference call through 8:00 a.m. U.S. Eastern Time, December 4, 2019. The dial-in details for the replay are as follows:

International: +61-2-8199-0299

U.S. Toll Free: +1-855-452-5696

Passcode: 9698746

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

Momo is a leading mobile social networking platform in China. Momo connects people in a personal and lively way through a revolutionary mobile-based social networking platform. With powerful and precise location-based features, Momo enables users to connect with each other and expand relationships from online to offline. Momo’s platform includes the Momo mobile application and a variety of related features, functionalities, tools and services that it provides to users, customers and platform partners. Leveraging its social interest graph engine and analysis of user behavior data, Momo is able to provide users a customized experience based on their social preferences and needs. Momo users can maintain and strengthen their relationships through private and group communication tools, content creation and sharing functions, as well as the offline social activities promoted on Momo’s platform. Momo users are also able to enjoy live video on our platform. In addition, in May 2018, Momo completed its acquisition of Tantan, a leading social and dating app for the younger generation. Tantan, whose primary users consist of young Chinese singles, is designed to help its users find and establish romantic connections, as well as meet interesting people.

For investor and media inquiries, please contact:

Momo Inc.

Investor Relations

Phone: +86-10-5731-0538

Email: ir@immomo.com

Christensen

In China

Mr. Christian Arnell

Phone: +86-10-5900-1548

E-mail: carnell@christensenir.com

In US

Ms. Linda Bergkamp

Phone: +1-480-614-3004

Email: lbergkamp@christensenir.com

Safe Harbor Statement

This news release contains “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements include but are not limited to our management quotes and our financial outlook for the fourth quarter of 2019.

Our forward-looking statements are not historical facts but instead represent only our belief regarding expected results and events, many of which, by their nature, are inherently uncertain and outside of our control. Our actual results and other circumstances may differ, possibly materially, from the anticipated results and events indicated in these forward-looking statements. Announced results for the third quarter of 2019 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the fourth quarter of 2019 and may be unable to grow our business in the manner planned. We may also modify our strategy for growth. In addition, there are other risks and uncertainties that could cause our actual results to differ from what we currently anticipate, including those relating to our ability to retain and grow our user base, our ability to attract and retain sufficiently trained professionals to support our operations, and our ability to anticipate and develop new services and enhance existing services to meet the demand of our users or customers. For additional information on these and other important factors that could adversely affect our business, financial condition, results of operations, and prospects, please see our filings with the U.S. Securities and Exchange Commission.

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									First nine months
	ended September 30									ended September 30
	2018			2019			2019			2018			2019			2019
	RMB			RMB			US$			RMB			RMB			US$
Net revenues:
Live video service		2,769,231			3,275,354			458,239			7,750,269			9,064,654			1,268,192
Value-added service		573,148			1,064,606			148,944			1,160,735			2,916,849			408,082
Mobile marketing		117,336			81,894			11,457			378,178			238,831			33,414
Mobile games		27,880			15,785			2,208			104,890			78,033			10,917
Other services		160,002			14,003			1,960			170,432			28,824			4,032

Total net revenues		3,647,597			4,451,642			622,808			9,564,504			12,327,191			1,724,637
Cost and expenses:
Cost of revenues		(2,031,652	)		(2,203,350	)		(308,260	)		(5,083,632	)		(6,140,787	)		(859,128	)
Research and development		(245,661	)		(301,754	)		(42,217	)		(517,144	)		(802,843	)		(112,322	)
Sales and marketing		(563,564	)		(771,338	)		(107,914	)		(1,193,994	)		(1,965,795	)		(275,025	)
General and administrative		(168,189	)		(211,423	)		(29,579	)		(405,323	)		(1,314,679	)		(183,930	)

Total cost and expenses		(3,009,066	)		(3,487,865	)		(487,970	)		(7,200,093	)		(10,224,104	)		(1,430,405	)
Other operating income		5,298			29,342			4,105			112,277			202,197			28,288

Income from operations		643,829			993,119			138,943			2,476,688			2,305,284			322,520
Interest income		82,728			105,384			14,744			183,180			299,337			41,879
Interest expense		(24,421	)		(20,117	)		(2,814	)		(36,857	)		(58,421	)		(8,173	)
Impairment loss on long-term investments		—			(11,211	)		(1,568	)		—			(15,711	)		(2,198	)

Income before income tax and share of income on equity method investments		702,136			1,067,175			149,305			2,623,011			2,530,489			354,028
Income tax expenses		(146,776	)		(182,578	)		(25,544	)		(516,310	)		(630,097	)		(88,154	)

Income before share of income on equity method investments		555,360			884,597			123,761			2,106,701			1,900,392			265,874
Share of income on equity method investments		16,524			6,185			865			35,439			8,056			1,127

Net income		571,884			890,782			124,626			2,142,140			1,908,448			267,001

Less: net loss attributable to non-controlling interest		(7,655	)		(3,115	)		(436	)		(12,798	)		(6,543	)		(915	)

Net income attributable to Momo Inc.		579,539			893,897			125,062			2,154,938			1,914,991			267,916

Net income per share attributable to ordinary shareholders
Basic		1.42			2.15			0.30			5.32			4.62			0.65
Diluted		1.34			2.02			0.28			5.08			4.38			0.61
Weighted average shares used in calculating net income per ordinary share
Basic		409,378,536			415,615,139			415,615,139			404,744,362			414,790,186			414,790,186
Diluted		445,871,236			452,571,862			452,571,862			428,148,904			450,470,088			450,470,088

Momo Inc.

Unaudited Condensed Consolidated Statement of Comprehensive Income

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

Three months

First nine months

ended September 30

2018

2019

2018

2019

RMB

US$

RMB

US$

Net income

571,884

890,782

124,626

2,142,140

1,908,448

267,001

Other comprehensive income, net of tax

Foreign currency translation adjustment

125,760

62,771

8,782

193,482

30,689

4,294

Comprehensive income

697,644

953,553

133,408

2,335,622

1,939,137

271,295

Less: comprehensive (loss) income attributed to the non-controlling interest

(6,041

)

3,519

492

(10,078

)

556

Comprehensive income attributable to Momo Inc.

703,685

950,034

132,916

2,345,700

1,938,581

271,217

Momo Inc.

Unaudited Condensed Consolidated Balance Sheets

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


	December 31 2018 RMB		September 30 2019 RMB		September 30 2019 US$
Assets
Current assets
Cash and cash equivalents		2,468,034		2,870,923		401,657
Term deposits		8,824,610		10,759,003		1,505,240
Short-term investment		—		40,000		5,596
Accounts receivable, net of allowance for doubtful accounts of RMB nil and RMB12,209 as of December 31, 2018 and September 30, 2019, respectively		719,606		375,575		52,545
Amounts due from a related party		—		1,606		225
Prepaid expenses and other current assets		620,979		649,563		90,877

Total current assets		12,633,229		14,696,670		2,056,140
Property and equipment, net		387,532		367,285		51,385
Intangible assets		1,036,986		953,901		133,456
Rental deposits		24,192		24,553		3,435
Long-term investments		447,465		505,810		70,765
Deferred tax assets		57,786		34,482		4,824
Other non-current assets		71,519		15,072		2,109
Right-of-use assets, net¹		—		216,078		30,230
Goodwill		4,306,829		4,476,460		626,280

Total assets		18,965,538		21,290,311		2,978,624

Liabilities and equity
Current liabilities
Accounts payable		718,362		618,109		86,475
Deferred revenue		441,892		496,691		69,490
Accrued expenses and other current liabilities		846,710		911,963		127,588
Amount due to related parties		82,948		29,371		4,109
Income tax payable		137,090		114,039		15,955
Lease liabilities due within one year¹		—		135,304		18,930
Deferred consideration in connection with business acquisitions		469,274		86,599		12,116

Total current liabilities		2,696,276		2,392,076		334,663
Deferred tax liabilities		259,247		238,475		33,364
Convertible senior notes		4,877,116		5,082,352		711,047
Share-based compensation liability		86,767		925,068		129,422
Lease liabilities¹		—		79,723		11,154
Other non-current liabilities		23,273		29,294		4,098

Total liabilities		7,942,679		8,746,988		1,223,748
Shareholder’s equity (i)		11,022,859		12,543,323		1,754,876

Total liabilities and shareholder’s equity		18,965,538		21,290,311		2,978,624

(i): As of September 30, 2019, the number of ordinary shares issued and outstanding was 416,748,172.

¹	On January 1, 2019, the Company adopted ASU 2016-02, the new lease standard, using the modified retrospective basis and did not restate comparative periods.

Momo Inc.

Unaudited Condensed Consolidated Statement of Cash Flows

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


	Three months									First nine months
	ended September 30									ended September 30
	2018			2019			2019			2018			2019			2019
	RMB			RMB			US$			RMB			RMB			US$
Cash flows from operating activities:
Net income		571,884			890,782			124,626			2,142,140			1,908,448			267,001
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		39,412			50,216			7,025			105,994			146,852			20,545
Amortization of intangible assets		38,930			40,100			5,610			53,508			117,715			16,469
Share-based compensation		169,959			165,163			23,107			382,800			1,240,774			173,590
Share of income on equity method investments		(16,524	)		(6,185	)		(865	)		(35,439	)		(8,056	)		(1,127	)
Impairment loss on long-term investments		—			11,211			1,568			—			15,711			2,198
Loss on disposal of property and equipment		(1,241	)		(64	)		(9	)		(1,239	)		(398	)		(56	)
Provision of allowance for doubtful accounts		—			2,900			406			(585	)		12,209			1,708
Changes in operating assets and liabilities:
Accounts receivable		(420,015	)		(103,290	)		(14,451	)		(355,671	)		331,836			46,426
Prepaid expenses and other current assets		(171,185	)		(24,378	)		(3,411	)		(81,494	)		(23,182	)		(3,243	)
Amount due from related parties		13,379			(1,335	)		(187	)		33,407			(1,606	)		(225	)
Rental deposits		(577	)		2,033			284			245			(362	)		(51	)
Deferred tax assets		342			(2,803	)		(392	)		28,913			23,304			3,260
Other non-current assets		(6,670	)		(33,254	)		(4,652	)		(44,864	)		(20,611	)		(2,884	)
Accounts payable		159,002			(133,863	)		(18,728	)		252,700			(45,775	)		(6,404	)
Income tax payable		(16,727	)		(16,064	)		(2,247	)		(119,888	)		(23,052	)		(3,225	)
Deferred revenue		32,601			84,711			11,852			(26,719	)		54,789			7,665
Accrued expenses and other current liabilities		(52,348	)		278,181			38,919			(183,201	)		136,558			19,105
Amount due to related parties		17,256			(10,550	)		(1,476	)		17,675			(53,267	)		(7,452	)
Deferred tax liability		(9,732	)		(10,025	)		(1,403	)		(13,376	)		(35,322	)		(4,942	)
Other non-current liabilities		(1,238	)		(7,556	)		(1,057	)		9,453			(2,762	)		(386	)

Net cash provided by operating activities		346,508			1,175,930			164,519			2,164,359			3,773,803			527,972
Cash flows from investing activities:
Purchase of property and equipment		(71,399	)		(59,933	)		(8,385	)		(161,600	)		(154,413	)		(21,603	)
Proceeds from disposal of property and equipment		2,200			294			41			2,210			804			112
Payment for long-term investments		(8,000	)		(19,000	)		(2,658	)		(62,125	)		(43,000	)		(6,016	)
Prepayment of long-term investments		—			—			—			(47,000	)		(15,000	)		(2,099	)
Payment for business acquisition, net of cash acquired		—			(759	)		(106	)		(3,278,209	)		(379,507	)		(53,095	)
Purchase of term deposits		(7,418,072	)		(4,786,130	)		(669,604	)		(14,987,302	)		(14,501,135	)		(2,028,783	)
Cash received on maturity of term deposits		2,100,000			4,785,400			669,502			9,322,393			12,650,430			1,769,860
Payment for short-term investments		(354,200	)		(30,000	)		(4,197	)		(354,200	)		(280,000	)		(39,173	)
Cash received from sales of short-term investment		239,200			80,000			11,192			249,700			240,000			33,577

Net cash used in investing activities		(5,510,271	)		(30,128	)		(4,215	)		(9,316,133	)		(2,481,821	)		(347,220	)
Cash flows from financing activities:
Proceeds from exercise of options		2,820			71			10			5,312			186			26
Deferred payment of purchase of property and equipment		—			(16,893	)		(2,363	)		(8,405	)		(16,987	)		(2,377	)
Dividends payment		—			—			—			—			(877,346	)		(122,745	)
Proceeds from bank loan		—			—			—			1,913,190			—			—
Repayment of bank loan		(2,041,680	)		—			—			(2,041,680	)		—			—
Proceeds from issuance of Convertible Senior Notes, net of issuance cost of RMB113,673		4,820,387			—			—			4,820,387			—			—

Net cash provided by (used in) financing activities		2,781,527			(16,822	)		(2,353	)		4,688,804			(894,147	)		(125,096	)
Effect of exchange rate changes		14,450			6,200			867			22,736			5,054			710

Net (decrease) increase in cash, cash equivalents, and restricted cash		(2,367,786	)		1,135,180			158,818			(2,440,234	)		402,889			56,366
Cash, cash equivalents, and restricted cash at beginning of period		4,389,746			1,735,743			242,839			4,462,194			2,468,034			345,291

Cash, cash equivalents, and restricted cash at end of period		2,021,960			2,870,923			401,657			2,021,960			2,870,923			401,657

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 September 30, 2018													ended September 30, 2019													ended September 30, 2019
	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		(2,031,652	)		18,183		5,880		—			(2,007,589	)		(2,203,350	)		18,751		6,738		—			(2,177,861	)		(308,260	)		2,623		943		—			(304,694	)
Research and development		(245,661	)		2,309		45,919		—			(197,433	)		(301,754	)		2,381		45,345		—			(254,028	)		(42,217	)		333		6,344		—			(35,540	)
Sales and marketing		(563,564	)		17,004		43,760		—			(502,800	)		(771,338	)		17,535		52,100		—			(701,703	)		(107,914	)		2,453		7,289		—			(98,172	)
General and administrative		(168,189	)		—		74,400		—			(93,789	)		(211,423	)		—		60,980		—			(150,443	)		(29,579	)		—		8,531		—			(21,048	)

Cost and operating expenses		(3,009,066	)		37,496		169,959		—			(2,801,611	)		(3,487,865	)		38,667		165,163		—			(3,284,035	)		(487,970	)		5,409		23,107		—			(459,454	)
Income from operations		643,829			37,496		169,959		—			851,284			993,119			38,667		165,163		—			1,196,949			138,943			5,409		23,107		—			167,459
Net income attributable to Momo Inc.		579,539			37,496		169,959		(9,374	)		777,620			893,897			38,667		165,163		(9,667	)		1,088,060			125,062			5,409		23,107		(1,352	)		152,226

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-continued.


	First nine months													First nine months													First nine months
	ended September 30, 2018													ended September 30, 2019													ended September 30, 2019
	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		(5,083,632	)		23,865		16,163		—			(5,043,604	)		(6,140,787	)		54,999		16,371		—			(6,069,417	)		(859,128	)		7,695		2,290		—			(849,143	)
Research and development		(517,144	)		3,030		105,591		—			(408,523	)		(802,843	)		6,985		129,598		—			(666,260	)		(112,322	)		978		18,131		—			(93,213	)
Sales and marketing		(1,193,994	)		22,316		99,220		—			(1,072,458	)		(1,965,795	)		51,433		142,845		—			(1,771,517	)		(275,025	)		7,196		19,985		—			(247,844	)
General and administrative		(405,323	)		—		161,826		—			(243,497	)		(1,314,679	)		—		951,960		—			(362,719	)		(183,930	)		—		133,184		—			(50,746	)

Cost and operating expenses		(7,200,093	)		49,211		382,800		—			(6,768,082	)		(10,224,104	)		113,417		1,240,774		—			(8,869,913	)		(1,430,405	)		15,869		173,590		—			(1,240,946	)
Income from operations		2,476,688			49,211		382,800		—			2,908,699			2,305,284			113,417		1,240,774		—			3,659,475			322,520			15,869		173,590		—			511,979
Net income attributable to Momo Inc.		2,154,938			49,211		382,800		(12,301	)		2,574,648			1,914,991			113,417		1,240,774		(28,355	)		3,240,827			267,916			15,869		173,590		(3,967	)		453,408

(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 Segment Report

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


	Three months
	ended September 30, 2019
	Momo			Tantan			QOOL			Total			Total
	RMB			RMB			RMB			RMB			US$
Net revenues:
Live video service		3,275,354			—			—			3,275,354			458,239
Value-added service		754,629			309,977			—			1,064,606			148,944
Mobile marketing		81,894			—			—			81,894			11,457
Mobile games		15,785			—			—			15,785			2,208
Other services		11,234			—			2,769			14,003			1,960

Total net revenues		4,138,896			309,977			2,769			4,451,642			622,808
Cost and expenses (iii):
Cost of revenues		(2,101,678	)		(99,722	)		(1,950	)		(2,203,350	)		(308,260	)
Research and development		(225,539	)		(76,215	)		—			(301,754	)		(42,217	)
Sales and marketing		(422,034	)		(349,274	)		(30	)		(771,338	)		(107,914	)
General and administrative		(191,832	)		(13,425	)		(6,166	)		(211,423	)		(29,579	)

Total cost and expenses		(2,941,083	)		(538,636	)		(8,146	)		(3,487,865	)		(487,970	)
Other operating income		29,342			—			—			29,342			4,105

Income (loss) from operations		1,227,155			(228,659	)		(5,377	)		993,119			138,943
Interest income		102,749			2,594			41			105,384			14,744
Interest expense		(20,117	)		—			—			(20,117	)		(2,814	)
Impairment loss on long-term investments		(11,211	)		—			—			(11,211	)		(1,568	)

Income (loss) before income tax and share of income on equity method investments		1,298,576			(226,065	)		(5,336	)		1,067,175			149,305
Income tax (expenses) benefits		(194,580	)		12,002			—			(182,578	)		(25,544	)

Income (loss) before share of income on equity method investments		1,103,996			(214,063	)		(5,336	)		884,597			123,761
Share of income on equity method investments		6,185			—			—			6,185			865

Net income (loss)		1,110,181			(214,063	)		(5,336	)		890,782			124,626

(iii)

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


	Three months
	ended September 30, 2019
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Cost of revenues		5,917		821		—		6,738		943
Research and development		27,375		17,970		—		45,345		6,344
Sales and marketing		46,831		5,269		—		52,100		7,289
General and administrative		56,860		1,486		2,634		60,980		8,531

Total cost and expenses		136,983		25,546		2,634		165,163		23,107

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 September 30, 2019
	Momo		Tantan			QOOL			Total			Total
	RMB		RMB			RMB			RMB			US$
Operating income (loss)		1,227,155		(228,659	)		(5,377	)		993,119			138,943
Share-based compensation		136,983		25,546			2,634			165,163			23,107
Amortization of intangible assets from business acquisitions		—		38,667			—			38,667			5,409

Non-GAAP operating income (loss)		1,364,138		(164,446	)		(2,743	)		1,196,949			167,459

Net income (loss)		1,110,181		(214,063	)		(5,336	)		890,782			124,626
Share-based compensation		136,983		25,546			2,634			165,163			23,107
Amortization of intangible assets from business acquisitions		—		38,667			—			38,667			5,409
Tax impacts		—		(9,667	)		—			(9,667	)		(1,352	)

Non-GAAP net income (loss)		1,247,164		(159,517	)		(2,702	)		1,084,945			151,790

Momo Inc.

Unaudited Segment Report

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


	Three months
	ended September 30, 2018
	Momo			Tantan			QOOL			Total			Total
	RMB			RMB			RMB			RMB			US$²
Net revenues:
Live video service		2,769,231			—			—			2,769,231			403,208
Value-added service		409,087			164,061			—			573,148			83,452
Mobile marketing		117,336			—			—			117,336			17,084
Mobile games		27,880			—			—			27,880			4,059
Other services		1,589			—			158,413			160,002			23,297

Total net revenues		3,325,123			164,061			158,413			3,647,597			531,100
Cost and expenses (iv):
Cost of revenues		(1,743,108	)		(73,369	)		(215,175	)		(2,031,652	)		(295,814	)
Research and development		(168,147	)		(77,514	)		—			(245,661	)		(35,769	)
Sales and marketing		(350,985	)		(201,172	)		(11,407	)		(563,564	)		(82,056	)
General and administrative		(124,281	)		(39,648	)		(4,260	)		(168,189	)		(24,489	)

Total cost and expenses		(2,386,521	)		(391,703	)		(230,842	)		(3,009,066	)		(438,128	)
Other operating income		5,271			27			—			5,298			771

Income (loss) from operations		943,873			(227,615	)		(72,429	)		643,829			93,743
Interest income		82,528			172			28			82,728			12,045
Interest expense		(24,421	)		—			—			(24,421	)		(3,556	)

Income (loss) before income tax and share of income on equity method investments		1,001,980			(227,443	)		(72,401	)		702,136			102,232
Income tax (expenses) benefits		(156,150	)		9,374			—			(146,776	)		(21,371	)

Income (loss) before share of income on equity method investments		845,830			(218,069	)		(72,401	)		555,360			80,861
Share of income on equity method investments		16,524			—			—			16,524			2,406

Net income (loss)		862,354			(218,069	)		(72,401	)		571,884			83,267

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


	Three months
	ended September 30, 2018
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Cost of revenues		3,777		2,103		—		5,880		856
Research and development		24,826		21,093		—		45,919		6,686
Sales and marketing		39,595		4,165		—		43,760		6,372
General and administrative		43,812		30,588		—		74,400		10,833

Total cost and expenses		112,010		57,949		—		169,959		24,747

²	All translations from RMB to U.S. dollars are made at a rate of RMB 6.868 to US$1.00, the effective noon buying rate for September 28, 2018 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 September 30, 2018
	Momo		Tantan			QOOL			Total			Total
	RMB		RMB			RMB			RMB			US$
Operating income (loss)		943,873		(227,615	)		(72,429	)		643,829			93,743
Share-based compensation		112,010		57,949			—			169,959			24,747
Amortization of intangible assets from business acquisitions		—		37,496			—			37,496			5,460

Non-GAAP operating income (loss)		1,055,883		(132,170	)		(72,429	)		851,284			123,950

Net income (loss)		862,354		(218,069	)		(72,401	)		571,884			83,267

Share-based compensation		112,010		57,949			—			169,959			24,747
Amortization of intangible assets from business acquisitions		—		37,496			—			37,496			5,460
Tax impacts		—		(9,374	)		—			(9,374	)		(1,365	)

Non-GAAP net income (loss)		974,364		(131,998	)		(72,401	)		769,965			112,109

Momo Inc.

Unaudited Segment Report

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


	First nine months
	ended September 30, 2019
	Momo			Tantan			QOOL			Total			Total
	RMB			RMB			RMB			RMB			US$
Net revenues:
Live video service		9,064,654			—			—			9,064,654			1,268,192
Value-added service		2,026,732			890,117			—			2,916,849			408,082
Mobile marketing		238,831			—			—			238,831			33,414
Mobile games		78,033			—			—			78,033			10,917
Other services		15,243			—			13,581			28,824			4,032

Total net revenues		11,423,493			890,117			13,581			12,327,191			1,724,637
Cost and expenses (v):
Cost of revenues		(5,842,388	)		(287,940	)		(10,459	)		(6,140,787	)		(859,128	)
Research and development		(591,678	)		(211,165	)		—			(802,843	)		(112,322	)
Sales and marketing		(1,141,571	)		(817,823	)		(6,401	)		(1,965,795	)		(275,025	)
General and administrative		(448,480	)		(837,824	)		(28,375	)		(1,314,679	)		(183,930	)

Total cost and expenses		(8,024,117	)		(2,154,752	)		(45,235	)		(10,224,104	)		(1,430,405	)
Other operating income		180,831			—			21,366			202,197			28,288

Income (loss) from operations		3,580,207			(1,264,635	)		(10,288	)		2,305,284			322,520
Interest income		290,725			8,509			103			299,337			41,879
Interest expense		(58,421	)		—			—			(58,421	)		(8,173	)
Impairment loss on long-term investments		(15,711	)		—			—			(15,711	)		(2,198	)

Income (loss) before income tax and share of income on equity method investments		3,796,800			(1,256,126	)		(10,185	)		2,530,489			354,028
Income tax (expenses) benefits		(651,284	)		21,187			—			(630,097	)		(88,154	)

Income (loss) before share of income on equity method investments		3,145,516			(1,234,939	)		(10,185	)		1,900,392			265,874
Share of income on equity method investments		8,056			—			—			8,056			1,127

Net income (loss)		3,153,572			(1,234,939	)		(10,185	)		1,908,448			267,001

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


	First nine months
	ended September 30, 2019
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Cost of revenues		14,393		1,978		—		16,371		2,290
Research and development		76,675		52,923		—		129,598		18,131
Sales and marketing		129,686		13,159		—		142,845		19,985
General and administrative		150,586		793,649		7,725		951,960		133,184

Total cost and expenses		371,340		861,709		7,725		1,240,774		173,590

Momo Inc.

Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report

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


	First nine months
	ended September 30, 2019
	Momo		Tantan			QOOL			Total			Total
	RMB		RMB			RMB			RMB			US$
Operating income (loss)		3,580,207		(1,264,635	)		(10,288	)		2,305,284			322,520
Share-based compensation		371,340		861,709			7,725			1,240,774			173,590
Amortization of intangible assets from business acquisitions		—		113,417			—			113,417			15,869

Non-GAAP operating income (loss)		3,951,547		(289,509	)		(2,563	)		3,659,475			511,979
Net income (loss)		3,153,572		(1,234,939	)		(10,185	)		1,908,448			267,001
Share-based compensation		371,340		861,709			7,725			1,240,774			173,590
Amortization of intangible assets from business acquisitions		—		113,417			—			113,417			15,869
Tax impacts		—		(28,355	)		—			(28,355	)		(3,967	)

Non-GAAP net income (loss)		3,524,912		(288,168	)		(2,460	)		3,234,284			452,493

Momo Inc.

Unaudited Segment Report

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


	First nine months
	ended September 30, 2018
	Momo			Tantan			QOOL			Total			Total
	RMB			RMB			RMB			RMB			US$
Net revenues:
Live video service		7,750,269			—			—			7,750,269			1,128,461
Value-added service		965,705			195,030			—			1,160,735			169,006
Mobile marketing		378,178			—			—			378,178			55,064
Mobile games		104,890			—			—			104,890			15,272
Other services		4,095			—			166,337			170,432			24,815

Total net revenues		9,203,137			195,030			166,337			9,564,504			1,392,618
Cost and expenses (vi):
Cost of revenues		(4,612,322	)		(92,100	)		(379,210	)		(5,083,632	)		(740,191	)
Research and development		(411,577	)		(105,567	)		—			(517,144	)		(75,298	)
Sales and marketing		(905,695	)		(268,875	)		(19,424	)		(1,193,994	)		(173,849	)
General and administrative		(341,995	)		(53,952	)		(9,376	)		(405,323	)		(59,016	)

Total cost and expenses		(6,271,589	)		(520,494	)		(408,010	)		(7,200,093	)		(1,048,354	)
Other operating income		112,189			88			—			112,277			16,348

Income (loss) from operations		3,043,737			(325,376	)		(241,673	)		2,476,688			360,612
Interest income		182,889			236			55			183,180			26,671
Interest expense		(36,857	)		—			—			(36,857	)		(5,366	)

Income (loss) before income tax and share of income on equity method investments		3,189,769			(325,140	)		(241,618	)		2,623,011			381,917
Income tax (expenses) benefits		(528,612	)		12,302			—			(516,310	)		(75,176	)

Income (loss) before share of income on equity method investments		2,661,157			(312,838	)		(241,618	)		2,106,701			306,741
Share of income on equity method investments		35,439			—			—			35,439			5,160

Net income (loss)		2,696,596			(312,838	)		(241,618	)		2,142,140			311,901

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


	First nine months
	ended September 30, 2018
	Momo		Tantan		QOOL		Total		Total
	RMB		RMB		RMB		RMB		US$
Cost of revenues		12,114		4,049		—		16,163		2,353
Research and development		65,744		39,847		—		105,591		15,374
Sales and marketing		91,286		7,934		—		99,220		14,447
General and administrative		121,169		40,657		—		161,826		23,562

Total cost and expenses		290,313		92,487		—		382,800		55,736

Momo Inc.

Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report

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


	First nine months
	ended September 30, 2018
	Momo		Tantan			QOOL			Total			Total
	RMB		RMB			RMB			RMB			US$
Operating income (loss)		3,043,737		(325,376	)		(241,673	)		2,476,688			360,612
Share-based compensation		290,313		92,487			—			382,800			55,736
Amortization of intangible assets from business acquisitions		—		49,211			—			49,211			7,165

Non-GAAP operating income (loss)		3,334,050		(183,678	)		(241,673	)		2,908,699			423,513

Net income (loss)		2,696,596		(312,838	)		(241,618	)		2,142,140			311,901
Share-based compensation		290,313		92,487			—			382,800			55,736
Amortization of intangible assets from business acquisitions		—		49,211			—			49,211			7,165
Tax impacts		—		(12,301	)		—			(12,301	)		(1,791	)

Non-GAAP net income (loss)		2,986,909		(183,441	)		(241,618	)		2,561,850			373,011