MOGU Inc. (NYSE: MOGU) (“MOGU” or the “Company”), a KOL-driven
online fashion and lifestyle destination in China, today announced
its unaudited financial results for the six months ended September
30, 2022.
Mr. Chen Qi, Chairman and Chief Executive Officer of MOGU,
commented, “In 2022, the Live eCommerce industry faced many
challenges, including ongoing macro environment uncertainty, the
impact of the COVID-19 resurgence in China on consumption demand
and an intensifying competition amongst the major live platforms.
In particular, COVID-19 travel restrictions affected the
fulfillment of orders nationwide resulting in both sales volume and
revenue coming in below expectations. The Gross Merchandise Value
(“GMV2”) and revenue of MOGU decreased by 48.1% and 32.2% to
RMB2,828 million (US$397.6 million1) and RMB114.8 million (US$16.1
million) period-over-period, respectively. Despite these
challenges, we proactively explored new opportunities.”
“During the first half of fiscal year of 2023, our total
revenues decreased by 32.2% to RMB114.8 million. We continued to
take a holistic approach to improve our operating efficiency and
optimize costs throughout the Company to reduce loss from
operations. The adjusted EBITDA and loss from operations were
negative RMB17.1 million and RMB48.1 million, compared with
negative RMB72.7 million and RMB430.1 million, respectively, for
the same period of fiscal year 2022. We are continuing to explore
new business opportunities to diversify our revenue structure.”
added Ms. Qi Feng, Financial Controller.
Highlights for the Six Months ended September 30,
2022
- Total revenues for the six months ended September 30,
2022 decreased by 32.2% to RMB114.8 million (US$16.1 million) from
RMB169.5 million during the same period of the fiscal year
2022.
- Live Video Broadcast (LVB) associated GMV for the six
months ended September 30, 2022 decreased by 45.6%
period-over-period to RMB2,703 million (US$379.9 million1). LVB
associated GMV for the six months ended September 30, 2022
accounted for 95.6% of our total GMV.
- Gross Merchandise Value (GMV2) for the six months ended
September 30, 2022 was RMB2,828 million (US$397.6 million), a
decrease of 48.1% period-over-period.
Financial Results for the Six Months ended September 30,
2022
Total revenues for the six months ended September 30,
2022 decreased by 32.2% to RMB114.8 million (US$16.1 million) from
RMB169.5 million during the same period of the fiscal year
2022.
- Commission revenues for the six months ended September
30, 2022 decreased by 38.6% to RMB71.7 million (US$10.1 million)
from RMB116.8 million in the same period of the fiscal year 2022,
primarily attributable to the lower GMV due to the heightened
competitive environment and the COVID-19 pandemic resurgence.
- Marketing services revenues for the six months ended
September 30, 2022 decreased by 77.1% to RMB3.0 million (US$0.4
million) from RMB13.0 million in the same period of the fiscal year
2022, primarily due to the challenging competitive
environment.
- Financing solutions revenues for the six months ended
September 30, 2022 decreased by 67.7% to RMB6.9 million (US$1.0
million) from RMB21.5 million in the same period of the fiscal year
2022. The decrease was primarily due to the decrease in the service
fee of loans to users in line with the lower GMV.
- Technology service revenues for the six months ended
September 30, 2022 increased by 170.8% to RMB28.1 million(US$3.9
million) from RMB10.4 million in the same period of fiscal year
2022, primarily attributable to the combination of Hangzhou Ruisha
Technology Co. Ltd. (“Ruisha”) in July 2021, which is committed to
providing brands merchants with one-stop and customized services
for full-domain operations, including a wide variety of operational
services, data platforms, and other software services, as well as
value-added services such as traffic placement.
- Other revenues for the six months ended September 30,
2022 decreased by 34.0% to RMB5.2 million (US$0.7 million) from
RMB7.8 million in the same period of the fiscal year 2022.
Cost of revenues for the six months ended September 30, 2022
decreased by 29.9% to RMB59.6 million (US$8.4 million) from RMB85.1
million in the same period of the fiscal year 2022, which was
primarily due to the decrease in payroll, IT-related expenses and
payment handling and outsourcing costs, correlating with overall
reduction in revenue.
Sales and marketing expenses for the six months ended September
30, 2022 decreased by 64.8% to RMB32.6 million (US$4.6 million)
from RMB92.8 million in the same period of the fiscal year 2022,
primarily due to optimized spending on branding and user
acquisition activities, in line with reduction in revenue.
Research and development expenses for the six months ended
September 30, 2022 decreased by 53.7% to RMB20.9 million (US$2.9
million) from RMB45.2 million in the same period of the fiscal year
2022, primarily due to a decrease in payroll costs.
General and administrative expenses for the six months ended
September 30, 2022 decreased by 22.2% to RMB32.7 million (US$4.6
million) from RMB42.1 million in the same period of the fiscal year
2022, primarily due to a decrease in professional service fees and
payroll costs.
Amortization of intangible assets for the six months ended
September 30, 2022 decreased by 87.5% to RMB20.0 million (US$2.8
million) from RMB160.2 million in the same period of the fiscal
year 2022, primarily because the majority of the intangible assets
recorded as a result of the business cooperation agreement MOGU
entered into with Tencent in July 2018 have been fully amortized as
of March 31, 2022.
Loss from operations for the six months ended September
30, 2022 was RMB48.1 million (US$6.8 million), compared to a loss
from operations of RMB430.1 million in the same period of the
fiscal year 2022, primarily attributable to the goodwill impairment
of RMB186.5 million and more amortization of intangible assets
incurred in the first half of the fiscal year 2022.
Net loss attributable to MOGU Inc. for the six months
ended September 30, 2022 was RMB57.4 million (US$8.1 million),
compared to a net loss attributable to MOGU Inc. of RMB411.9
million in the same period of the fiscal year 2022.
Adjusted EBITDA3 for the six months ended September 30,
2022 was negative RMB17.1 million (US$2.4 million), compared to
negative RMB72.7 million in the same period of the fiscal year
2022.
Adjusted net loss4 for the six months ended September 30,
2022 was RMB11.8 million (US$1.7 million), compared to an adjusted
net loss of RMB69.9 million in the same period of the fiscal year
2022.
Basic and diluted loss per ADS for the six months ended
September 30, 2022 were RMB6.79 (US$0.95) and RMB6.79 (US$0.95),
respectively, compared with RMB49.07 and RMB49.07, respectively, in
the same period of the fiscal year 2022. Each ADS represents 300
Class A ordinary shares.
Cash and cash equivalents, Restricted cash and Short-term
investments were RMB604.8 million (US$85.0 million) as of
September 30, 2022, compared with RMB636.3 million as of March 31,
2022.
Use of Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses
non-GAAP measures, such as Adjusted EBITDA and Adjusted net loss as
supplemental measures to review and assess operating performance.
The presentation of these non-GAAP financial measures is not
intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with
accounting principles generally accepted in the United States of
America (“U.S. GAAP”). The Company defines Adjusted EBITDA as net
loss before interest income, interest expense, (gain)/loss from
investments, net, income tax benefits, share of results of equity
investees, goodwill impairment, share-based compensation expenses,
amortization of intangible assets, and depreciation of property and
equipment. The Company defines Adjusted net loss as net loss
excluding (gain)/loss from investments, net, goodwill impairment,
share-based compensation expenses, amortization of intangible
assets, and adjustments for tax effects. See “Unaudited
Reconciliations of GAAP and Non-GAAP Results” at the end of this
press release.
The Company presents these non-GAAP financial measures because
they are used by management to evaluate operating performance and
formulate business plans. The Company believes that the non-GAAP
financial measures help identify underlying trends in its business
by excluding certain expenses, gain/loss and other items that are
not expected to result in future cash payments or that are
non-recurring in nature or may not be indicative of the Company’s
core operating results and business outlook. The Company also
believes that the non-GAAP financial measures could provide further
information about the Company’s results of operations, enhance the
overall understanding of the Company’s past performance and future
prospects.
The non-GAAP financial measures are not defined under U.S. GAAP
and are not presented in accordance with U.S. GAAP. The non-GAAP
financial measures have limitations as analytical tools. The
Company’s non-GAAP financial measures do not reflect all items of
income and expense that affect the Company’s operations and do not
represent the residual cash flow available for discretionary
expenditures. Further, these non-GAAP measures may differ from the
non-GAAP information used by other companies, including peer
companies, and therefore their comparability may be limited. The
Company compensates for these limitations by reconciling the
non-GAAP financial measures to the nearest U.S. GAAP performance
measure, all of which should be considered when evaluating
performance. The Company encourages you to review the Company’s
financial information in its entirety and not rely on a single
financial measure.
For more information on the non-GAAP financial measures, please
see the table captioned “Unaudited Reconciliations of GAAP and
Non-GAAP Results” set forth at the end of this press release.
Safe Harbor Statement
This announcement contains forward-looking statements. These
statements are made under the “safe harbor” provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as
“will,” “expects,” “anticipates,” “aims,” “future,” “intends,”
“plans,” “believes,” “estimates,” “confident,” “potential,”
“continue” or other similar expressions. Among other things, the
business outlook and quotations from management in this
announcement, as well as MOGU’s strategic and operational plans,
contain forward-looking statements. MOGU may also make written or
oral forward-looking statements in its periodic reports to the U.S.
Securities and Exchange Commission (the “SEC”), in its annual
report to shareholders, in press releases and other written
materials and in oral statements made by its officers, directors or
employees to third parties. Statements that are not historical
facts, including but not limited to statements about MOGU’s beliefs
and expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties. A number of
factors could cause actual results to differ materially from those
contained in any forward-looking statement, including but not
limited to the following: MOGU’s growth strategies; the risk that
COVID-19 or other health risks in China or globally could adversely
affect its operations or financial results; its future business
development, results of operations and financial condition; its
ability to understand buyer needs and provide products and services
to attract and retain buyers; its ability to maintain and enhance
the recognition and reputation of its brand; its ability to rely on
merchants and third-party logistics service providers to provide
delivery services to buyers; its ability to maintain and improve
quality control policies and measures; its ability to establish and
maintain relationships with merchants; trends and competition in
China’s ecommerce market; changes in its revenues and certain cost
or expense items; the expected growth of China’s ecommerce market;
PRC governmental policies and regulations relating to MOGU’s
industry, and general economic and business conditions globally and
in China and assumptions underlying or related to any of the
foregoing. Further information regarding these and other risks is
included in MOGU’s filings with the SEC. All information provided
in this press release and in the attachments is as of the date of
this press release, and MOGU undertakes no obligation to update any
forward-looking statement, except as required under applicable
law.
About MOGU Inc.
MOGU Inc. (NYSE: MOGU) is a KOL-driven online fashion and
lifestyle destination in China. MOGU provides people with a more
accessible and enjoyable shopping experience for everyday fashion,
particularly as they increasingly live their lives online. By
connecting merchants, KOLs and users together, MOGU’s platform
serves as a valuable marketing channel for merchants, a powerful
incubator for KOLs, and a vibrant and dynamic community for people
to discover and share the latest fashion trends with others, where
users can enjoy a truly comprehensive online shopping
experience.
MOGU INC.
Unaudited Interim Condensed
Consolidated Balance Sheets
(All amounts in thousands,
except for share and per share data)
As of March 31,
As of September 30,
2022
2022
RMB
RMB
US$
ASSETS
Current assets:
Cash and cash equivalents
438,608
392,970
55,243
Restricted cash
809
809
114
Short-term investments
196,853
211,049
29,669
Inventories, net
79
84
12
Loan receivables, net
26,788
9,739
1,369
Prepayments and other current assets
55,135
54,073
7,600
Amounts due from related parties
640
779
110
Total current assets
718,912
669,503
94,117
Non-current assets:
Property, equipment and software, net
7,702
5,881
827
Intangible assets, net
89,822
74,414
10,461
Right-of-use assets*
-
12,394
1,742
Goodwill
63,460
63,460
8,921
Investments
72,120
61,392
8,630
Other non-current assets
214,964
236,363
33,227
Total non-current assets
448,068
453,904
63,808
Total assets
1,166,980
1,123,407
157,925
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current liabilities:
Short-term borrowings
10,064
11,635
1,636
Accounts payable
17,950
15,564
2,188
Salaries and welfare payable
12,311
9,455
1,329
Advances from customers
901
326
46
Taxes payable
3,265
2,171
305
Amounts due to related parties
4,694
2,990
420
Current portion of lease liabilities*
-
6,675
938
Accruals and other current liabilities
272,638
262,085
36,845
Total current liabilities
321,823
310,901
43,707
Non-current liabilities:
Non-current lease liabilities*
-
3,175
446
Deferred tax liabilities
12,112
10,877
1,529
Other non-current liabilities
890
332
47
Total non-current liabilities
13,002
14,384
2,022
Total liabilities
334,825
325,285
45,729
SHAREHOLDERS’ EQUITY
Ordinary shares
181
181
25
Treasury stock
(136,113
)
(137,446
)
(19,322
)
Statutory reserves
3,331
3,331
468
Additional paid-in capital
9,471,101
9,479,937
1,332,668
Accumulated other comprehensive income
69,016
86,325
12,135
Accumulated deficit
(8,617,780
)
(8,675,218
)
(1,219,543
)
Total MOGU Inc. shareholders’ equity
789,736
757,110
106,431
Non-controlling interests
42,419
41,012
5,765
Total shareholders’ equity
832,155
798,122
112,196
Total liabilities and shareholders’
equity
1,166,980
1,123,407
157,925
*On April 1, 2022, the Company adopted ASC 842, Leases and used the
additional transition method to initially apply this new lease
standard at the adoption date. Right-of-use assets and lease
liabilities were recognized on the Company's consolidated financial
statements.
MOGU INC.
Unaudited Interim Condensed
Consolidated Statements of Operations and Comprehensive
Loss
(All amounts in thousands,
except for share and per share data)
For the six months
ended
September 30,
2021
2022
RMB
RMB
US$
Net revenues
Commission revenues
116,807
71,700
10,079
Marketing services revenues
13,006
2,982
419
Financing solutions revenues
21,485
6,930
974
Technology service revenues
10,368
28,077
3,947
Other revenues
7,808
5,157
725
Total revenues
169,474
114,846
16,144
Cost of revenues (exclusive of
amortization of intangible assets shown separately below)
(85,133
)
(59,641
)
(8,384
)
Sales and marketing expenses
(92,772
)
(32,646
)
(4,589
)
Research and development expenses
(45,227
)
(20,922
)
(2,941
)
General and administrative expenses
(42,095
)
(32,741
)
(4,603
)
Amortization of intangible assets
(160,190
)
(20,022
)
(2,815
)
Goodwill impairment
(186,504
)
-
-
Other income, net
12,310
3,066
431
Loss from operations
(430,137
)
(48,060
)
(6,757
)
Interest income
7,001
9,013
1,267
Interest expense
-
(328
)
(46
)
Gain/(loss) from investments, net
7,822
(19,431
)
(2,732
)
Loss before income tax and share of
results of equity investees
(415,314
)
(58,806
)
(8,268
)
Income tax benefits
1,715
1,086
153
Share of results of equity investee
(418
)
(1,125
)
(158
)
Net loss
(414,017
)
(58,845
)
(8,273
)
Net loss attributable to non-controlling
interests
(2,091
)
(1,407
)
(198
)
Net loss attributable to MOGU
Inc.
(411,926
)
(57,438
)
(8,075
)
Net loss
(414,017
)
(58,845
)
(8,273
)
Other comprehensive
income/(loss):
Foreign currency translation adjustments,
net of nil tax
(10,656
)
18,495
2,600
Unrealized securities holding losses, net
of tax
(10,213
)
(1,186
)
(167
)
Total comprehensive loss
(434,886
)
(41,536
)
(5,840
)
Total comprehensive loss attributable to
non-controlling interests
(2,091
)
(1,407
)
(198
)
Total comprehensive loss attributable
to MOGU Inc.
(432,795
)
(40,129
)
(5,642
)
Net loss per share attributable to
ordinary shareholders
Basic
(0.16
)
(0.02
)
(0.00
)
Diluted
(0.16
)
(0.02
)
(0.00
)
Net loss per ADS
Basic
(49.07
)
(6.79
)
(0.95
)
Diluted
(49.07
)
(6.79
)
(0.95
)
Weighted average number of shares used
in computing net loss per share
Basic
2,518,428,173
2,537,852,017
2,537,852,017
Diluted
2,518,428,173
2,537,852,017
2,537,852,017
Share-based compensation expenses
included in:
Cost of revenues
1,241
808
114
General and administrative expenses
3,668
5,069
713
Sales and marketing expenses
2,762
2,448
344
Research and development expenses
244
511
71
MOGU INC.
Unaudited Interim Condensed
Consolidated Statements of Cash Flows
(All amounts in thousands,
except for share and per share data)
For the six months
ended
September 30,
2021
2022
RMB
RMB
US$
Net cash used in operating
activities
(73,528
)
(16,020
)
(2,252
)
Net cash provided by/(used in)
investing activities
49,458
(28,155
)
(3,957
)
Net cash used in financing
activities
(8,365
)
(2,972
)
(418
)
Effect of foreign exchange rate changes on
cash and cash equivalents and restricted cash
(2,594
)
1,509
212
Net decrease in cash and cash equivalents
and restricted cash
(35,029
)
(45,638
)
(6,415
)
Cash and cash equivalents and restricted
cash at beginning of period
542,884
439,417
61,772
Cash and cash equivalents and restricted
cash at end of period
507,855
393,779
55,357
MOGU INC.
Reconciliations of GAAP and
Non-GAAP Results
(All amounts in thousands,
except for share and per share data)
For the six months
ended
September 30,
2021
2022
RMB
RMB
US$
Net loss
(414,017
)
(58,845
)
(8,273
)
Add:
Interest expense
-
328
46
Less:
Income tax benefits
(1,715
)
(1,086
)
(153
)
Less:
Interest income
(7,001
)
(9,013
)
(1,267
)
Add:
Amortization of intangible assets
160,190
20,022
2,815
Add:
Depreciation of property and equipment
2,797
2,067
291
EBITDA
(259,746
)
(46,527
)
(6,541
)
Add:
Goodwill impairment
186,504
-
-
Add:
Share-based compensation expenses
7,915
8,836
1,242
Add:
Share of result of equity investees
418
1,125
158
Less:
(Gain)/loss from investments, net
(7,822
)
19,431
2,732
Adjusted EBITDA
(72,731
)
(17,135
)
(2,409
)
Net loss
(414,017
)
(58,845
)
(8,273
)
Less:
(Gain)/loss from investments, net
(7,822
)
19,431
2,732
Add:
Share-based compensation expenses
7,915
8,836
1,242
Add:
Goodwill impairment
186,504
-
-
Add:
Amortization of intangible assets
160,190
20,022
2,815
Less:
Adjusted for tax effects
(2,672
)
(1,235
)
(174
)
Adjusted net loss
(69,902
)
(11,791
)
(1,658
)
1 The U.S. dollar (US$) amounts disclosed in this press release,
except for those transaction amounts that were actually settled in
U.S. dollars, are presented solely for the convenience of the
readers. The conversion of Renminbi (RMB) into US$ in this press
release is based on the exchange rate set forth in the H.10
statistical release of the Board of Governors of the Federal
Reserve System as of September 30, 2022, which was RMB7.1135 to
US$1.00. The percentages stated in this press release are
calculated based on the RMB amounts.
2 GMV refers to the total value of orders placed on the MOGU
platform regardless of whether the products are sold, delivered or
returned, calculated based on the listed prices of the ordered
products without taking into consideration any discounts on the
listed prices. Buyers on the MOGU platform are not charged for
separate shipping fees over the listed price of a product. If
merchants include certain shipping fees in the listed price of a
product, such shipping fees will be included in GMV. As a prudent
matter aiming at eliminating any influence on MOGU’s GMV of
irregular transactions, the Company excludes from its calculation
of GMV transactions over a certain amount (RMB100,000) and
transactions by users over a certain amount (RMB1,000,000) per
day.
3 Adjusted EBITDA represents net loss before (i) interest
income, interest expense, (gain)/Loss from investments, net, income
tax benefits and share of results of equity investee, goodwill
impairment and (ii) certain non-cash expenses, consisting of
share-based compensation expenses, amortization of intangible
assets, and depreciation of property and equipment. See “Unaudited
Reconciliations of GAAP and NonGAAP Results” at the end of this
press release.
4 Adjusted net loss represents net loss excluding (i)
(gain)/Loss from investments, net, (ii) share-based compensation
expenses, (iii) goodwill impairment, (iv)amortization of intangible
assets, (v) adjustments for tax effects. See “Unaudited
Reconciliations of GAAP and NonGAAP Results” at the end of this
press release.
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version on businesswire.com: https://www.businesswire.com/news/home/20230303005111/en/
For investor and media inquiries:
MOGU Inc.
Ms. Qi Feng Phone: +86-571-8530-8201 E-mail: ir@mogu.com
Christensen Advisory
In China Mr. Eric Yuan Phone: +86-10-5900-1548 E-mail:
eric.yuan@christensencomms.com
In the United States Ms. Linda Bergkamp Phone: +1-480-614-3004
Email: linda.bergkamp@christensencomms.com
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