EX-99.1

EX-99.1 2 d99095dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

Momo Announces Unaudited Financial Results for the Second Quarter of 2020

BEIJING, CHINA, September 3, 2020 – Momo Inc. (NASDAQ: MOMO) (“Momo” or the “Company”), a leading mobile social networking platform in China, today announced its unaudited financial results for the second quarter of 2020.

Second Quarter of 2020 Highlights

•

Net revenues decreased by 6.8% year over year to RMB3,868.3 million (US$547.5 million^*) in the second quarter of 2020.

•

Net income attributable to Momo Inc. decreased to RMB456.4 million (US$64.6 million) in the second quarter of 2020 from RMB731.8 million in the same period of 2019.

•

Non-GAAP net income attributable to Momo Inc. (note 1) decreased to RMB669.8 million (US$94.8 million) in the second quarter of 2020, from RMB1,242.5 million in the same period of 2019.

•

Diluted net income per American Depositary Share (“ADS”) was RMB2.11 (US$0.30) in the second quarter of 2020, compared to RMB3.33 in the same period of 2019.

•

Non-GAAP diluted net income per ADS (note 1) was RMB3.05 (US$0.43) in the second quarter of 2020, compared to RMB5.60 in the same period of 2019.

•

Monthly Active Users (“MAU”) on Momo application were 111.5 million in June 2020, compared to 113.5 million in June 2019.

•

Total paying users of our live video service and value-added service, without double counting the overlap and including 3.9 million paying users of Tantan Limited (“Tantan”), were 12.8 million for the second quarter of 2020, compared to 11.8 million for the second quarter of 2019, which included 3.2 million paying users of Tantan.

First Half of 2020 Highlights

•

Net revenues decreased 5.2% year over year to RMB7,462.3 million (US$1,056.2 million) for the first half of 2020.

•

Net income attributable to Momo Inc. was RMB995.3 million (US$140.9 million) for the first half of 2020, compared with RMB1,021.1 million during the same period of 2019.

•

Non-GAAP net income attributable to Momo Inc. (note 1) was RMB1,406.0 million (US$199.0 million) for the first half of 2020, compared with RMB2,152.8 million during the same period of 2019.

•

Diluted net income per ADS was RMB4.57 (US$0.65) for the first half of 2020, compared with RMB4.71 during the same period of 2019.

•

Non-GAAP diluted net income per ADS (note 1) was RMB6.39 (US$0.90) for the first half of 2020, compared with RMB9.75 during the same period of 2019.

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 RMB7.0651 to US$1.00, the effective noon buying rate for June 30, 2020 as set forth in the H.10 statistical release of the Federal Reserve Board.

CEO statement

“The second quarter of 2020 was a busy quarter for us. With things gradually coming back to normal on the traffic side, starting from the second quarter of 2020, our teams have stepped up efforts to push toward our long term strategic goals.” commented Yan Tang, Chairman and CEO of Momo. “I am glad to see that Tantan has reached a breakthrough with its testing of live video service. With the strength coming from Tantan and the value-added service on the core Momo, we can now focus more on driving structural changes to the core live broadcasting business so that it can grow healthily and steadily in the new macro environment.”

Second Quarter of 2020 Financial Results

Net revenues

Total net revenues were RMB3,868.3 million (US$547.5 million) in the second quarter of 2020, a decrease of 6.8% from RMB4,152.6 million in the second quarter of 2019.

Live video service revenues were RMB2,602.9 million (US$368.4 million) in the second quarter of 2020, a decrease of 16% from RMB3,099.9 million during the same period of 2019. The decrease was primarily due to the impact of COVID-19 adversely affecting the sentiment of our paying users, especially among the top of the pyramid paying users. Meanwhile, Tantan has been accelerating the testing of its live video service since the middle of April, and live video service revenues from Tantan were 191.7 million (US$27.1 million) in the second quarter of 2020.

Value-added service revenues mainly include virtual gift revenues and membership subscription revenues. Total value-added service revenues were RMB1,204.3 million (US$170.5 million) in the second quarter of 2020, an increase of 27% from RMB948.4 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 innovative features launched and more paying scenarios introduced to enhance the social entertainment experience of Momo users, and to a lesser extent, the increase in the membership subscription revenues of Tantan.

Mobile marketing revenues were RMB38.0 million (US$5.4 million) in the second quarter of 2020, a decrease of 50% from RMB76.2 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 RMB11.6 million (US$1.6 million) in the second quarter of 2020, a decrease of 50% from RMB23.2 million in the second 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 RMB3,865.4 million in the second quarter of 2019 to RMB3,340.7 million (US$472.8 million) in the second quarter of 2020, primarily due to 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 RMB284.8 million in the second quarter of 2019 to RMB517.2 million (US$73.2 million) in the second quarter of 2020, which was mainly due to the increase in net revenues from live video service.

Cost and expenses

Cost and expenses were RMB3,146.9 million (US$445.4 million) in the second quarter of 2020, a decrease of 7.1% from RMB3,386.8 million in the second 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 in the amount of RMB323.7 million charged in the second 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 Tantan, and an increase in revenue sharing with virtual gift recipients for our virtual gift service.

Non-GAAP cost and expenses (note 1) were RMB2,923.7 million (US$413.8 million) in the second quarter of 2020, an increase of 2.0% from RMB2,866.7 million during the same period of 2019.

Other operating income

Other operating income was RMB91.3 million (US$12.9 million) in the second quarter of 2020, a decrease from RMB161.9 million during the second quarter of 2019. The decrease was mainly due to less government incentives received in the second quarter of 2020.

Income from operations

Income from operations was RMB812.7 million (US$115.0 million) in the second quarter of 2020, compared to RMB927.7 million during the same period of 2019. Income from operations of Momo segment was RMB945.3 million (US$133.8 million) in the second quarter of 2020, decreasing from RMB1,354.4 million in the second quarter of 2019. Loss from operations of Tantan segment was RMB125.6 million (US$17.8 million) in the second quarter of 2020, compared to loss from operations of RMB431.4 million in the second quarter of 2019.

Non-GAAP income from operations (note 1) was RMB1,035.8 million (US$146.6 million) in the second quarter of 2020, compared to RMB1,447.9 million during the same period of 2019. Non-GAAP income from operations of Momo segment was RMB1,102.6 million (US$156.1 million) in the second quarter of 2020, decreasing from RMB1,488.5 million in the second quarter of 2019. Non-GAAP loss from operations of Tantan segment was RMB62.4 million (US$8.8 million) in the second quarter of 2020, compared to non-GAAP loss from operations of RMB47.9 million in the second quarter of 2019.

Income tax expenses

Income tax expenses were RMB443.6 million (US$62.8 million) in the second quarter of 2020, increasing from RMB283.9 million in the second quarter of 2019. The increase in income tax expenses was mainly due to the payment of withholding income tax of 10% on dividends distributed by our wholly-foreign owned enterprise (“WFOE”) in China to our offshore entity in the second quarter of 2020. The dividends of RMB2,200.0 million (US$311.4 million) and withholding income tax of RMB220.0 million (US$31.1 million) were paid in the second quarter of 2020.

Net income

Net income was RMB455.5 million (US$64.5 million) in the second quarter of 2020, compared to RMB731.1 million during the same period of 2019. Net income from Momo segment was RMB586.7 million (US$83.0 million) in the second quarter of 2020, decreasing from RMB1,149.5 million in the second quarter of 2019. Net loss from Tantan segment was RMB124.3 million (US$17.6 million) in the second quarter of 2020, compared to net loss of RMB423.2 million in the second quarter of 2019.

Non-GAAP net income (note 1) was RMB668.9 million (US$94.7 million) in the second quarter of 2020, compared to RMB1,241.8 million during the same period of 2019. Non-GAAP net income from Momo segment was RMB744.0 million (US$105.3 million) in the second quarter of 2020, decreasing from RMB1,283.6 million in the second quarter of 2019. Non-GAAP net loss of Tantan segment was RMB70.8 million (US$10.0 million) in the second quarter of 2020, compared to non-GAAP net loss of RMB49.1 million in the second quarter of 2019.

Net income attributable to Momo Inc.

Net income attributable to Momo Inc. was RMB456.4 million (US$64.6 million) in the second quarter of 2020, compared to RMB731.8 million during the same period of 2019.

Non-GAAP net income (note 1) attributable to Momo Inc. was RMB669.8 million (US$94.8 million) in the second quarter of 2020, compared to RMB1,242.5 million during the same period of 2019.

Net income per ADS

Diluted net income per ADS was RMB2.11 (US$0.30) in the second quarter of 2020, compared to RMB3.33 in the second quarter of 2019.

Non-GAAP diluted net income per ADS (note 1) was RMB3.05 (US$0.43) in the second quarter of 2020, compared to RMB5.60 in the second quarter of 2019.

Cash and cash flow

As of June 30, 2020, Momo’s cash, cash equivalents, short-term deposits and long-term deposits totaled RMB15,376.5 million (US$2,176.4 million), compared to RMB15,225.3 million as of December 31, 2019. Net cash provided by operating activities in the second quarter of 2020 was RMB807.3 million (US$114.3 million), compared to RMB1,422.0 million in the second quarter of 2019.

First Half of 2020 Financial Results

Net revenues for the first half of 2020 were RMB7,462.3 million (US$1,056.2 million), a decrease of 5.2% from RMB7,875.5 million in the same period of 2019.

Net income attributable to Momo Inc. was RMB995.3 million (US$140.9 million) for the first half of 2020, compared to RMB1,021.1 million during the same period of 2019.

Non-GAAP net income attributable to Momo Inc. (note 1) was RMB1,406.0 million (US$199.0 million) for the first half of 2020, compared to RMB2,152.8 million during the same period of 2019.

Diluted net income per ADS was RMB4.57 (US$0.65) during the first half of 2020, compared to RMB4.71 in the same period of 2019.

Non-GAAP diluted net income per ADS (note 1) was RMB6.39 (US$0.90) during the first half of 2020, compared to RMB9.75 in the same period of 2019.

Net cash provided by operating activities was RMB1,350.7 million (US$191.2 million) during the first half of 2020, compared to RMB2,597.9 million in the same period of 2019.

Recent Development

On September 3, 2020, Momo’s board of directors authorized a share repurchase program under which the Company may repurchase up to US$300 million of its shares over the next 12 months.

The Company’s proposed repurchases may be made from time to time on the open market at prevailing market prices, in privately negotiated transactions, in block trades and/or through other legally permissible means, depending on market conditions and in accordance with applicable rules and regulations. The Company’s board of directors will review the share repurchase program periodically, and may authorize adjustment of its terms and size. The timing and conditions of the share repurchases will be subject to various factors, including the requirements under Rule 10b-18 and Rule 10b5-1 promulgated pursuant to the Securities Exchange Act of 1934, as amended. The Company plans to fund repurchases from its existing cash balance.

Business Outlook

For the third quarter of 2020, the Company expects total net revenues to be between RMB3.7 billion to RMB3.8 billion, representing a decrease of 16.9% to 14.6% 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, September 3, 2020, at 8:00 a.m. U.S. Eastern Time (8:00 p.m. Beijing / Hong Kong Time on September 3, 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/9767454

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, September 11, 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: 9767454

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. Eric Yuan

Phone: +86-10-5900-1548

E-mail: Eyuan@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, our financial outlook for the third quarter of 2020, as well as the amount of, timing, methods and funding sources for repurchases of our shares under the share repurchase program.

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 second quarter of 2020 are preliminary, unaudited and subject to audit adjustment. In addition, we may not meet our financial outlook for the third quarter of 2020 and may be unable to grow our business in the manner planned. We may also modify our strategy for growth. Moreover, 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, the impact of the COVID-19 to Momo’s business operations and the economy in China, the market price of Momo’s stock prevailing from time to time, the nature of other investment opportunities presented to Momo from time to time, Momo’s cash flows from operations, general economic conditions, and other factors. 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 half year
	ended June 30									ended June 30
	2019			2020			2020			2019			2020			2020
	RMB			RMB			US$			RMB			RMB			US$
Net revenues:
Live video service		3,099,887			2,602,876			368,413			5,789,300			4,934,880			698,487
Value-added service		948,394			1,204,320			170,460			1,852,243			2,380,074			336,878
Mobile marketing		76,208			37,964			5,373			156,937			95,119			13,463
Mobile games		23,240			11,564			1,637			62,248			24,255			3,433
Other services		4,901			11,528			1,633			14,821			28,008			3,964

Total net revenues		4,152,630			3,868,252			547,516			7,875,549			7,462,336			1,056,225
Cost and expenses:
Cost of revenues		(2,063,863	)		(2,036,305	)		(288,220	)		(3,937,437	)		(3,913,221	)		(553,880	)
Research and development		(251,658	)		(279,002	)		(39,490	)		(501,089	)		(541,161	)		(76,596	)
Sales and marketing		(570,609	)		(651,500	)		(92,214	)		(1,194,457	)		(1,361,308	)		(192,681	)
General and administrative		(500,660	)		(180,061	)		(25,486	)		(1,103,256	)		(357,310	)		(50,574	)

Total cost and expenses		(3,386,790	)		(3,146,868	)		(445,410	)		(6,736,239	)		(6,173,000	)		(873,731	)
Other operating income		161,901			91,329			12,927			172,855			117,448			16,624

Income from operations		927,741			812,713			115,033			1,312,165			1,406,784			199,118
Interest income		100,175			108,536			15,362			193,953			239,359			33,879
Interest expense		(19,315	)		(20,121	)		(2,848	)		(38,304	)		(39,940	)		(5,653	)
Impairment loss on long-term investments		—			—			—			(4,500	)		(6,000	)		(849	)

Income before income tax and share of income on equity method investments		1,008,601			901,128			127,547			1,463,314			1,600,203			226,495
Income tax expenses		(283,868	)		(443,633	)		(62,792	)		(447,519	)		(606,524	)		(85,848	)

Income before share of income on equity method investments		724,733			457,495			64,755			1,015,795			993,679			140,647
Share of income (loss) on equity method investments		6,375			(1,967	)		(278	)		1,871			(440	)		(62	)

Net income		731,108			455,528			64,477			1,017,666			993,239			140,585

Less: net loss attributable to non-controlling interest		(669	)		(872	)		(123	)		(3,428	)		(2,067	)		(293	)

Net income attributable to the shareholders of Momo Inc.		731,777			456,400			64,600			1,021,094			995,306			140,878

Net income per share attributable to ordinary shareholders
Basic		1.76			1.09			0.15			2.46			2.38			0.34
Diluted		1.67			1.05			0.15			2.36			2.29			0.32
Weighted average shares used in calculating net income per ordinary share
Basic		414,769,943			417,559,984			417,559,984			414,370,874			417,427,113			417,427,113
Diluted		450,480,301			452,500,168			452,500,168			449,410,610			452,915,745			452,915,745

Momo Inc.

Unaudited Condensed Consolidated Statement of Comprehensive Income

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


	Three months								First half year
	ended June 30								ended June 30
	2019		2020			2020			2019			2020			2020
	RMB		RMB			US$			RMB			RMB			US$
Net income		731,108		455,528			64,477			1,017,666			993,239			140,585
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment		40,899		8,818			1,248			(32,082	)		7,951			1,125

Comprehensive income		772,007		464,346			65,725			985,584			1,001,190			141,710
Less: comprehensive (loss) income attributed to the non-controlling interest		2,271		(1,423	)		(201	)		(2,963	)		(6,992	)		(990	)

Comprehensive income attributable to Momo Inc.		769,736		465,769			65,926			988,547			1,008,182			142,700

Momo Inc.

Unaudited Condensed Consolidated Balance Sheets

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


	December 31		June 30		June 30
	2019		2020		2020
	RMB		RMB		US$
Assets
Current assets
Cash and cash equivalents		2,612,743		2,977,583		421,450
Short-term deposits		12,312,585		9,298,879		1,316,171
Accounts receivable, net of allowance for doubtful accounts of RMB 12,209 and RMB10,240 as of December 31, 2019 and June 30, 2020, respectively		265,155		254,710		36,052
Amount due from a related party		4,382		2,029		287
Prepaid expenses and other current assets		599,000		554,848		78,535

Total current assets		15,793,865		13,088,049		1,852,495
Long-term deposits		300,000		3,100,000		438,777
Right-of-use assets, net		190,552		144,313		20,426
Property and equipment, net		346,345		327,855		46,405
Intangible assets		890,303		821,860		116,327
Rental deposits		25,028		24,838		3,516
Long-term investments		495,905		492,578		69,720
Other non-current assets		44,009		71,998		10,191
Deferred tax assets		37,064		34,591		4,896
Goodwill		4,360,610		4,424,985		626,316

Total assets		22,483,681		22,531,067		3,189,069

Liabilities and equity
Current liabilities
Accounts payable		714,323		692,865		98,071
Deferred revenue		503,461		470,187		66,551
Accrued expenses and other current liabilities		985,873		785,415		111,169
Amount due to related parties		29,606		18,373		2,601
Lease liabilities due within one year		135,169		122,427		17,328
Income tax payable		153,976		219,032		31,002
Deferred consideration in connection with business acquisitions		84,346		67,293		9,525

Total current liabilities		2,606,754		2,375,592		336,247
Deferred tax liabilities		222,576		205,465		29,082
Convertible senior notes		4,954,352		5,035,982		712,797
Share-based compensation liability		902,047		931,401		131,831
Lease liabilities		56,498		21,226		3,004
Other non-current liabilities		22,672		38,662		5,472

Total liabilities		8,764,899		8,608,328		1,218,433
Shareholder’s equity (i)		13,718,782		13,922,739		1,970,636

Total liabilities and shareholder’s equity		22,483,681		22,531,067		3,189,069

(i):	As of June 30, 2020, the number of ordinary shares issued and outstanding was 418,121,042.

Momo Inc.

Unaudited Condensed Consolidated Statement of Cash Flows

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


	Three months									First half year
	ended June 30									ended June 30
	2019			2020			2020			2019			2020			2020
	RMB			RMB			US$			RMB			RMB			US$
Cash flows from operating activities:
Net income		731,108			455,528			64,477			1,017,666			993,239			140,585
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property and equipment		48,236			52,210			7,390			96,636			104,591			14,804
Amortization of intangible assets		39,020			40,288			5,702			77,615			80,170			11,347
Share-based compensation		482,537			184,100			26,058			1,075,611			352,627			49,911
Share of (income) loss on equity method investments		(6,375	)		1,967			278			(1,871	)		440			62
Impairment loss on long-term investments		—			—			—			4,500			6,000			849
Gain on subsidiary deconsolidation		—			—			—			—			(6,676	)		(945	)
Gain on disposal of property and equipment		(338	)		(1	)		—			(334	)		(1	)		—
Provision of allowance for doubtful accounts		9,309			1,060			150			9,309			406			57
Cash received on investment income distribution		—			—			—			—			1,153			163
Changes in operating assets and liabilities:
Accounts receivable		25,712			39,725			5,623			435,126			1,746			247
Prepaid expenses and other current assets		19,385			42,671			6,040			1,196			43,833			6,204
Amount due from a related party		(271	)		230			33			(271	)		2,353			333
Rental deposits		(1,078	)		363			51			(2,395	)		190			27
Deferred tax assets		570			435			62			26,107			2,473			350
Other non-current assets		(18,796	)		3,411			483			12,643			18,251			2,583
Accounts payable		55,573			63,598			9,002			88,088			(16,475	)		(2,332	)
Income tax payable		64,570			44,712			6,329			(6,988	)		65,056			9,208
Deferred revenue		(48,764	)		(12,249	)		(1,734	)		(29,922	)		(33,272	)		(4,709	)
Accrued expenses and other current liabilities		43,872			(59,987	)		(8,491	)		(141,623	)		(214,230	)		(30,322	)
Amount due to related parties		(16,752	)		(16,217	)		(2,295	)		(42,717	)		(11,233	)		(1,590	)
Deferred tax liability		(9,755	)		(10,072	)		(1,426	)		(25,297	)		(20,043	)		(2,837	)
Other non-current liabilities		4,201			(24,522	)		(3,471	)		4,794			(19,852	)		(2,810	)

Net cash provided by operating activities		1,421,964			807,250			114,261			2,597,873			1,350,746			191,185
Cash flows from investing activities:
Purchase of property and equipment		(41,682	)		(45,803	)		(6,483	)		(94,480	)		(83,970	)		(11,885	)
Proceeds from disposal of property and equipment		505			15			2			510			17			2
Payment for long-term investments		(12,000	)		—			—			(24,000	)		(4,500	)		(637	)
Prepayment of long-term investments		(15,000	)		—			—			(15,000	)		—			—
Cash dividend received		—			—			—			—			233			33
Cash outflow due to subsidiary deconsolidation		—			—			—			—			(1,026	)		(145	)
Purchase of short-term deposits		(6,230,000	)		(4,941,858	)		(699,475	)		(9,715,005	)		(8,241,858	)		(1,166,559	)
Cash received on maturity of short-term deposits		4,860,025			8,306,434			1,175,699			7,865,030			11,285,574			1,597,369
Payment for short-term investments		(40,000	)		—			—			(250,000	)		(10,000	)		(1,415	)
Cash received from sales of short-term investment		60,000			—			—			160,000			10,000			1,415
Purchase of long-term deposits		—			(2,800,000	)		(396,314	)		—			(2,800,000	)		(396,314	)

Net cash (used in) provided by investing activities		(1,418,152	)		518,788			73,429			(2,072,945	)		154,470			21,864
Cash flows from financing activities:
Deferred payment for business acquisition		(73,681	)		(18,355	)		(2,598	)		(378,748	)		(18,355	)		(2,598	)
Proceeds from exercise of share options		32			1			—			115			1			—
Deferred payment of purchase of property and equipment		—			—			—			(94	)		—			—
Dividends payment		(877,346	)		(1,123,983	)		(159,089	)		(877,346	)		(1,123,983	)		(159,089	)

Net cash used in financing activities		(950,995	)		(1,142,337	)		(161,687	)		(1,256,073	)		(1,142,337	)		(161,687	)
Effect of exchange rate changes		4,584			(5,332	)		(756	)		(1,146	)		1,961			278

Net (decrease) increase in cash and cash equivalents		(942,599	)		178,369			25,247			(732,291	)		364,840			51,640
Cash and cash equivalents at the beginning of period		2,678,342			2,799,214			396,203			2,468,034			2,612,743			369,810

Cash and cash equivalents at the end of period		1,735,743			2,977,583			421,450			1,735,743			2,977,583			421,450

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 June 30, 2019													ended June 30, 2020													ended June 30, 2020
	GAAP RMB			Amortization of intangible assets from business acquisitions RMB		Share-based compensation RMB		Tax impacts (ii) RMB			Non-GAAP RMB			GAAP RMB			Amortization of intangible assets from business acquisitions RMB		Share-based compensation RMB		Tax impacts (ii) RMB			Non-GAAP RMB			GAAP US$			Amortization of intangible assets from business acquisitions US$		Share-based compensation US$		Tax impacts (ii) US$			Non-GAAP US$
Cost of revenues		(2,063,863	)		18,227		5,447		—			(2,040,189	)		(2,036,305	)		18,929		2,804		—			(2,014,572	)		(288,220	)		2,679		397		—			(285,144	)
Research and development		(251,658	)		2,315		44,523		—			(204,820	)		(279,002	)		2,404		49,985		—			(226,613	)		(39,490	)		340		7,075		—			(32,075	)
Sales and marketing		(570,609	)		17,045		51,293		—			(502,271	)		(651,500	)		17,702		43,123		—			(590,675	)		(92,214	)		2,506		6,104		—			(83,604	)
General and administrative		(500,660	)		—		381,274		—			(119,386	)		(180,061	)		—		88,188		—			(91,873	)		(25,486	)		—		12,482		—			(13,004	)

Cost and operating expenses		(3,386,790	)		37,587		482,537		—			(2,866,666	)		(3,146,868	)		39,035		184,100		—			(2,923,733	)		(445,410	)		5,525		26,058		—			(413,827	)
Income from operations		927,741			37,587		482,537		—			1,447,865			812,713			39,035		184,100		—			1,035,848			115,033			5,525		26,058		—			146,616
Net income attributable to Momo Inc.		731,777			37,587		482,537		(9,397	)		1,242,504			456,400			39,035		184,100		(9,759	)		669,776			64,600			5,525		26,058		(1,381	)		94,802

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 half year													First half year													First half year
	ended June 30, 2019													ended June 30, 2020													ended June 30, 2020
	GAAP RMB			Amortization of intangible assets from business acquisitions RMB		Share-based compensation RMB		Tax impacts (ii) RMB			Non-GAAP RMB			GAAP RMB			Amortization of intangible assets from business acquisitions RMB		Share-based compensation RMB		Tax impacts (ii) RMB			Non-GAAP RMB			GAAP US$			Amortization of intangible assets from business acquisitions US$		Share-based compensation US$		Tax impacts (ii) US$			Non-GAAP US$
Cost of revenues		(3,937,437	)		36,248		9,633		—			(3,891,556	)		(3,913,221	)		37,574		9,773		—			(3,865,874	)		(553,880	)		5,318		1,383		—			(547,179	)
Research and development		(501,089	)		4,604		84,253		—			(412,232	)		(541,161	)		4,772		92,745		—			(443,644	)		(76,596	)		675		13,127		—			(62,794	)
Sales and marketing		(1,194,457	)		33,898		90,745		—			(1,069,814	)		(1,361,308	)		35,138		90,197		—			(1,235,973	)		(192,681	)		4,973		12,767		—			(174,941	)
General and administrative		(1,103,256	)		—		890,980		—			(212,276	)		(357,310	)		—		159,912		—			(197,398	)		(50,574	)		—		22,634		—			(27,940	)

Cost and operating expenses		(6,736,239	)		74,750		1,075,611		—			(5,585,878	)		(6,173,000	)		77,484		352,627		—			(5,742,889	)		(873,731	)		10,966		49,911		—			(812,854	)
Income from operations		1,312,165			74,750		1,075,611		—			2,462,526			1,406,784			77,484		352,627		—			1,836,895			199,118			10,966		49,911		—			259,995
Net income attributable to Momo Inc.		1,021,094			74,750		1,075,611		(18,688	)		2,152,767			995,306			77,484		352,627		(19,371	)		1,406,046			140,878			10,966		49,911		(2,742	)		199,013

(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 June 30, 2020
	Momo			Tantan			QOOL			Total			Total
	RMB			RMB			RMB			RMB			US$
Net revenues:
Live video service		2,411,223			191,653			—			2,602,876			368,413
Value-added service		878,804			325,516			—			1,204,320			170,460
Mobile marketing		37,964			—			—			37,964			5,373
Mobile games		11,564			—			—			11,564			1,637
Other services		1,163			—			10,365			11,528			1,633

Total net revenues		3,340,718			517,169			10,365			3,868,252			547,516
Cost and expenses (iii):
Cost of revenues		(1,792,442	)		(232,445	)		(11,418	)		(2,036,305	)		(288,220	)
Research and development		(202,774	)		(76,228	)		—			(279,002	)		(39,490	)
Sales and marketing		(337,196	)		(314,293	)		(11	)		(651,500	)		(92,214	)
General and administrative		(154,161	)		(19,828	)		(6,072	)		(180,061	)		(25,486	)

Total cost and expenses		(2,486,573	)		(642,794	)		(17,501	)		(3,146,868	)		(445,410	)
Other operating income		91,190			—			139			91,329			12,927

Income (loss) from operations		945,335			(125,625	)		(6,997	)		812,713			115,033
Interest income		107,776			689			71			108,536			15,362
Interest expense		(20,121	)		—			—			(20,121	)		(2,848	)

Income (loss) before income tax and share of income on equity method investments		1,032,990			(124,936	)		(6,926	)		901,128			127,547
Income tax (expenses) benefits		(444,278	)		645			—			(443,633	)		(62,792	)

Income (loss) before share of income on equity method investments		588,712			(124,291	)		(6,926	)		457,495			64,755
Share of loss on equity method investments		(1,967	)		—			—			(1,967	)		(278	)

Net income (loss)		586,745			(124,291	)		(6,926	)		455,528			64,477

(iii) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
	Three months
	ended June 30, 2020
	Momo			Tantan			QOOL			Total			Total
	RMB			RMB			RMB			RMB			US$
Cost of revenues		3,396			(592	)		—			2,804			397
Research and development		36,670			13,315			—			49,985			7,075
Sales and marketing		38,905			4,218			—			43,123			6,104
General and administrative		78,250			7,280			2,658			88,188			12,482

Total cost and expenses		157,221			24,221			2,658			184,100			26,058

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 June 30, 2020
	Momo		Tantan			QOOL			Total			Total
	RMB		RMB			RMB			RMB			US$
Operating income (loss)		945,335		(125,625	)		(6,997	)		812,713			115,033
Share-based compensation		157,221		24,221			2,658			184,100			26,058
Amortization of intangible assets from business acquisitions		—		39,035			—			39,035			5,525

Non-GAAP operating income (loss)		1,102,556		(62,369	)		(4,339	)		1,035,848			146,616
Net income (loss)		586,745		(124,291	)		(6,926	)		455,528			64,477
Share-based compensation		157,221		24,221			2,658			184,100			26,058
Amortization of intangible assets from business acquisitions		—		39,035			—			39,035			5,525
Tax impacts		—		(9,759	)		—			(9,759	)		(1,381	)

Non-GAAP net income (loss)		743,966		(70,794	)		(4,268	)		668,904			94,679

Momo Inc.

Unaudited Condensed Segment Report

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


	Three months
	ended June 30, 2019
	Momo			Tantan			QOOL			Total			Total
	RMB			RMB			RMB			RMB			US$²
Net revenues:
Live video service		3,099,887			—			—			3,099,887			451,549
Value-added service		663,601			284,793			—			948,394			138,149
Mobile marketing		76,208			—			—			76,208			11,101
Mobile games		23,240			—			—			23,240			3,385
Other services		2,452			—			2,449			4,901			715

Total net revenues		3,865,388			284,793			2,449			4,152,630			604,899
Cost and expenses (iv):
Cost of revenues		(1,970,672	)		(89,362	)		(3,829	)		(2,063,863	)		(300,636	)
Research and development		(181,866	)		(69,792	)		—			(251,658	)		(36,658	)
Sales and marketing		(356,578	)		(212,628	)		(1,403	)		(570,609	)		(83,119	)
General and administrative		(142,384	)		(344,434	)		(13,842	)		(500,660	)		(72,929	)

Total cost and expenses		(2,651,500	)		(716,216	)		(19,074	)		(3,386,790	)		(493,342	)
Other operating income		140,535			—			21,366			161,901			23,584

Income (loss) from operations		1,354,423			(431,423	)		4,741			927,741			135,141
Interest income		97,118			3,024			33			100,175			14,592
Interest expense		(19,315	)		—			—			(19,315	)		(2,814	)

Income (loss) before income tax and share of income on equity method investments		1,432,226			(428,399	)		4,774			1,008,601			146,919
Income tax (expenses) benefits		(289,101	)		5,233			—			(283,868	)		(41,350	)

Income (loss) before share of income on equity method investments		1,143,125			(423,166	)		4,774			724,733			105,569
Share of income on equity method investments		6,375			—			—			6,375			929

Net income (loss)		1,149,500			(423,166	)		4,774			731,108			106,498

(iv) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
	Three months
	ended June 30, 2019
	Momo			Tantan			QOOL			Total			Total
	RMB			RMB			RMB			RMB			US$
Cost of revenues		4,870			577			—			5,447			793
Research and development		27,587			16,936			—			44,523			6,486
Sales and marketing		47,381			3,912			—			51,293			7,472
General and administrative		54,235			324,479			2,560			381,274			55,539

Total cost and expenses		134,073			345,904			2,560			482,537			70,290

²	All translations from RMB to U.S. dollars are made at a rate of RMB 6.865 to US$1.00, the effective noon buying rate for June 28, 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 June 30, 2019
	Momo		Tantan			QOOL		Total			Total
	RMB		RMB			RMB		RMB			US$
Operating income (loss)		1,354,423		(431,423	)		4,741		927,741			135,141
Share-based compensation		134,073		345,904			2,560		482,537			70,290
Amortization of intangible assets from business acquisitions		—		37,587			—		37,587			5,476

Non-GAAP operating income (loss)		1,488,496		(47,932	)		7,301		1,447,865			210,907
Net income (loss)		1,149,500		(423,166	)		4,774		731,108			106,498
Share-based compensation		134,073		345,904			2,560		482,537			70,290
Amortization of intangible assets from business acquisitions		—		37,587			—		37,587			5,476
Tax impacts		—		(9,397	)		—		(9,397	)		(1,369	)

Non-GAAP net income (loss)		1,283,573		(49,072	)		7,334		1,241,835			180,895

Momo Inc.

Unaudited Condensed Segment Report

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


	First half year
	ended June 30, 2020
	Momo			Tantan			QOOL			Total			Total
	RMB			RMB			RMB			RMB			US$
Net revenues:
Live video service		4,737,168			197,712			—			4,934,880			698,487
Value-added service		1,678,907			701,167			—			2,380,074			336,878
Mobile marketing		95,119			—			—			95,119			13,463
Mobile games		24,255			—			—			24,255			3,433
Other services		7,358			—			20,650			28,008			3,964

Total net revenues		6,542,807			898,879			20,650			7,462,336			1,056,225
Cost and expenses (v):
Cost of revenues		(3,528,959	)		(364,723	)		(19,539	)		(3,913,221	)		(553,880	)
Research and development		(386,674	)		(154,487	)		—			(541,161	)		(76,596	)
Sales and marketing		(731,560	)		(629,714	)		(34	)		(1,361,308	)		(192,681	)
General and administrative		(297,296	)		(47,508	)		(12,506	)		(357,310	)		(50,574	)

Total cost and expenses		(4,944,489	)		(1,196,432	)		(32,079	)		(6,173,000	)		(873,731	)
Other operating income		117,309			—			139			117,448			16,624

Income (loss) from operations		1,715,627			(297,553	)		(11,290	)		1,406,784			199,118
Interest income		237,054			2,161			144			239,359			33,879
Interest expense		(39,940	)		—			—			(39,940	)		(5,653	)
Impairment loss on long-term investments		(6,000	)		—			—			(6,000	)		(849	)

Income (loss) before income tax and share of income on equity method investments		1,906,741			(295,392	)		(11,146	)		1,600,203			226,495
Income tax (expenses) benefits		(612,490	)		5,966			—			(606,524	)		(85,848	)

Income (loss) before share of income on equity method investments		1,294,251			(289,426	)		(11,146	)		993,679			140,647
Share of loss on equity method investments		(440	)		—			—			(440	)		(62	)

Net income (loss)		1,293,811			(289,426	)		(11,146	)		993,239			140,585

(v) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
	First half year
	ended June 30, 2020
	Momo			Tantan			QOOL			Total			Total
	RMB			RMB			RMB			RMB			US$
Cost of revenues		9,007			766			—			9,773			1,383
Research and development		63,472			29,273			—			92,745			13,127
Sales and marketing		84,346			5,851			—			90,197			12,767
General and administrative		133,234			21,401			5,277			159,912			22,634

Total cost and expenses		290,059			57,291			5,277			352,627			49,911

Momo Inc.

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

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


	First half year
	ended June 30, 2020
	Momo		Tantan			QOOL			Total			Total
	RMB		RMB			RMB			RMB			US$
Operating income (loss)		1,715,627		(297,553	)		(11,290	)		1,406,784			199,118
Share-based compensation		290,059		57,291			5,277			352,627			49,911
Amortization of intangible assets from business acquisitions		—		77,484			—			77,484			10,966

Non-GAAP operating income (loss)		2,005,686		(162,778	)		(6,013	)		1,836,895			259,995
Net income (loss)		1,293,811		(289,426	)		(11,146	)		993,239			140,585
Share-based compensation		290,059		57,291			5,277			352,627			49,911
Amortization of intangible assets from business acquisitions		—		77,484			—			77,484			10,966
Tax impacts		—		(19,371	)		—			(19,371	)		(2,742	)

Non-GAAP net income (loss)		1,583,870		(174,022	)		(5,869	)		1,403,979			198,720

Momo Inc.

Unaudited Condensed Segment Report

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


	First half year
	ended June 30, 2019
	Momo			Tantan			QOOL			Total			Total
	RMB			RMB			RMB			RMB			US$
Net revenues:
Live video service		5,789,300			—			—			5,789,300			843,307
Value-added service		1,272,103			580,140			—			1,852,243			269,810
Mobile marketing		156,937			—			—			156,937			22,860
Mobile games		62,248			—			—			62,248			9,067
Other services		4,009			—			10,812			14,821			2,159

Total net revenues		7,284,597			580,140			10,812			7,875,549			1,147,203
Cost and expenses (vi):
Cost of revenues		(3,740,710	)		(188,218	)		(8,509	)		(3,937,437	)		(573,552	)
Research and development		(366,139	)		(134,950	)		—			(501,089	)		(72,992	)
Sales and marketing		(719,536	)		(468,549	)		(6,372	)		(1,194,457	)		(173,992	)
General and administrative		(256,648	)		(824,399	)		(22,209	)		(1,103,256	)		(160,707	)

Total cost and expenses		(5,083,033	)		(1,616,116	)		(37,090	)		(6,736,239	)		(981,243	)
Other operating income		151,489			—			21,366			172,855			25,179

Income (loss) from operations		2,353,053			(1,035,976	)		(4,912	)		1,312,165			191,139
Interest income		187,976			5,915			62			193,953			28,252
Interest expense		(38,304	)		—			—			(38,304	)		(5,580	)
Impairment loss on long-term investments		(4,500	)		—			—			(4,500	)		(655	)

Income (loss) before income tax and share of income on equity method investments		2,498,225			(1,030,061	)		(4,850	)		1,463,314			213,156
Income tax (expenses) benefits		(456,704	)		9,185			—			(447,519	)		(65,188	)

Income (loss) before share of income on equity method investments		2,041,521			(1,020,876	)		(4,850	)		1,015,795			147,968
Share of income on equity method investments		1,871			—			—			1,871			273

Net income (loss)		2,043,392			(1,020,876	)		(4,850	)		1,017,666			148,241

(vi) Share-based compensation was allocated in cost of revenues and operating expenses as follows:
	First half year
	ended June 30, 2019
	Momo			Tantan			QOOL			Total			Total
	RMB			RMB			RMB			RMB			US$
Cost of revenues		8,476			1,157			—			9,633			1,403
Research and development		49,300			34,953			—			84,253			12,273
Sales and marketing		82,855			7,890			—			90,745			13,218
General and administrative		93,726			792,163			5,091			890,980			129,786

Total cost and expenses		234,357			836,163			5,091			1,075,611			156,680

Momo Inc.

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

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


	First half year
	ended June 30, 2019
	Momo		Tantan			QOOL			Total			Total
	RMB		RMB			RMB			RMB			US$
Operating income (loss)		2,353,053		(1,035,976	)		(4,912	)		1,312,165			191,139
Share-based compensation		234,357		836,163			5,091			1,075,611			156,680
Amortization of intangible assets from business acquisitions		—		74,750			—			74,750			10,889

Non-GAAP operating income (loss)		2,587,410		(125,063	)		179			2,462,526			358,708
Net income (loss)		2,043,392		(1,020,876	)		(4,850	)		1,017,666			148,241
Share-based compensation		234,357		836,163			5,091			1,075,611			156,680
Amortization of intangible assets from business acquisitions		—		74,750			—			74,750			10,889
Tax impacts		—		(18,688	)		—			(18,688	)		(2,723	)

Non-GAAP net income (loss)		2,277,749		(128,651	)		241			2,149,339			313,087