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, 2023.
Mr. Fan Yiming, Chief Executive Officer of MOGU, commented,
“Throughout 2023, China's online retail industry experienced
heightened competition, with the focus shifting from customer scale
to customer value on the various platforms. Against the backdrop of
a saturated online traffic environment and escalating customer
acquisition costs, our new customer acquisition fell short of
expectations. In the first half of fiscal year 2024, our gross
merchandise value (GMV1) decreased by 22.3% year-on-year to
RMB2,196 million.
In order to cope with this new competition, we have proactively
adjusted our commodity categories and supply chain. In the past
months, we have restructured our platform from a traditional
e-commerce platform to a professional service platform in beauty
and personal care, health, baby, foods and other categories. We
also provide the merchants on our platform with a series of
differentiated services in sourcing supply chain, product
selection, brand extension and other support. These measures drove
our users' growth in some commodity categories. In the future, we
will further strengthen our e-commerce live streaming service
capabilities and channels to generate new business growth
points.”
“During the first half of fiscal year of 2024, our total
revenues decreased by 27.5% to RMB83.3 million. The loss from
operations was RMB 52.1 million, compared to RMB48.1 million for
the same period of fiscal year 2023. Over the past six months, we
have diligently optimized our cost structure and improved
operational efficiency, yielding positive outcomes. However,
despite these efforts, the increasing cost of acquiring new
customers and a decline in revenue prevented us from achieving our
targeted operational results. Looking ahead, we will continue to
focus on cost reduction and efficiency enhancements and continue
looking for new revenue growth opportunities. We are confident that
these measures will contribute to our overall financial resilience
and sustainable growth. ” added Ms. Qi Feng, Financial
Controller.
Highlights For the Six Months Ended September 30,
2023
- Total revenues for the six months ended September 30,
2023 decreased by 27.5% to RMB83.3 million (US$11.4 million) from
RMB114.8 million during the same period of the fiscal year
2023.
- Live video broadcast (“LVB”) associated GMV for
the six months ended September 30, 2023 decreased by 20.9%
period-over-period to RMB2,137 million (US$292.9 million2).
- GMV for the six months ended September 30, 2023 was
RMB2,196 million (US$301.0 million), a decrease of 22.3%
period-over-period.
Financial Results For the Six Months Ended September 30,
2023
Total revenues for the six months ended September 30,
2023 decreased by 27.5% to RMB83.3 million (US$11.4 million) from
RMB114.8 million during the same period of the fiscal year
2023.
- Commission revenues for the six months ended September
30, 2023 decreased by 22.4% to RMB55.6 million (US$7.6 million)
from RMB71.7 million in the same period of the fiscal year 2023,
primarily attributable to the lower GMV due to the heightened
competitive environment.
- Marketing services revenues for the six months ended
September 30, 2023 decreased by 75.0% to RMB0.7 million (US$0.1
million) from RMB3.0 million in the same period of the fiscal year
2023, primarily attributable to the lower GMV due to the heightened
competitive environment.
- Financing solutions revenues for the six months ended
September 30, 2023 decreased by 22.0% to RMB5.4 million (US$0.7
million) from RMB6.9 million in the same period of the fiscal year
2023. 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, 2023 decreased by 34.5% to RMB18.4 million (US$2.5
million) from RMB28.1 million in the same period of fiscal year
2023, primarily attributable to the decrease of software service
revenue as a result of weaker-than-expected operating results of
Ruisha Technology.
- Other revenues for the six months ended September 30,
2023 decreased by 39.0% to RMB3.1 million (US$0.4 million) from
RMB5.2 million in the same period of the fiscal year 2023,
primarily due to the decrease of promotion services revenue
provided to financial institutions.
Cost of revenues for the six months ended September 30, 2023
decreased by 16.8% to RMB49.6 million (US$6.8 million) from RMB59.6
million in the same period of the fiscal year 2023, which was
primarily due to the decrease in payroll of RMB 4.4 million,
IT-related expenses of RMB 4.0 million and payment handling costs
of RMB1.1 million, correlating with an overall reduction in
revenue.
Sales and marketing expenses for the six months ended September
30, 2023 increased by 14.2% to RMB37.3 million (US$5.1 million)
from RMB32.6 million in the same period of the fiscal year 2023,
primarily due to increased spending on user acquisition activities
of RMB8.4 million, which was partly offset by the a decrease in
payroll costs of RMB 4.7 million.
Research and development expenses for the six months ended
September 30, 2023 decreased by 33.7% to RMB13.9 million (US$1.9
million) from RMB20.9 million in the same period of the fiscal year
2023, primarily due to a decrease in payroll costs.
General and administrative expenses for the six months ended
September 30, 2023 decreased by 14.7% to RMB27.9 million (US$3.8
million) from RMB32.7 million in the same period of the fiscal year
2023, primarily due to a decrease in payroll costs and professional
service fees.
Amortization of intangible assets for the six months ended
September 30, 2023 decreased by 90.9% to RMB1.8 million (US$0.3
million) from RMB20.0 million in the same period of the fiscal year
2023, primarily because 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 December 31,
2022.
Impairment of intangible assets for the six months ended
September 30, 2023 increased to RMB9.9 million (US$1.4 million)
from nil in the same period of fiscal year 2023, primarily due to
the Company’s recognition of a full impairment charge of RMB9.9
million against its intangible assets arising from the acquisition
of Hangzhou Ruisha Technology Co., Ltd. (“Ruisha Technology”). The
recorded impairments resulted from weaker-than-expected operating
results which reflect an increasingly competitive business
environment and the related limited future economic benefits
expected to be generated from these intangible assets.
Loss from operations for the six months ended September
30, 2023 was RMB52.1 million (US$7.1 million), compared to a loss
from operations of RMB48.1 million in the same period of the fiscal
year 2023.
Net loss attributable to MOGU Inc. for the six months
ended September 30, 2023 was RMB35.4 million (US$4.9 million),
compared to a net loss attributable to MOGU Inc. of RMB57.4 million
in the same period of the fiscal year 2023.
Adjusted EBITDA3 for the six months ended September 30,
2023 was negative RMB34.0 million (US$4.7 million), compared to
negative RMB17.1 million in the same period of the fiscal year
2023.
Adjusted net loss4 for the six months ended September 30,
2023 was RMB32.8 million (US$4.5 million), compared to an adjusted
net loss of RMB31.8 million in the same period of the fiscal year
2023.
Basic and diluted loss per ADS for the six months ended
September 30, 2023 were RMB4.11 (US$0.56) and RMB4.11 (US$0.56),
respectively, compared with RMB6.79 and RMB6.79, respectively, in
the same period of the fiscal year 2023. Each ADS represents 300
Class A ordinary shares.
Cash and cash equivalents, Restricted cash and Short-term
investments were RMB470.3 million (US$64.5 million) as of
September 30, 2023, compared with RMB562.8 million as of March 31,
2023.
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
income/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, loss/(gain) from
investments, net, income tax benefits, share of results of equity
investees, impairment of intangible assets, share-based
compensation expenses, amortization of intangible assets, and
depreciation of property and equipment. The Company defines
Adjusted net loss as net loss excluding loss/(gain) from
investments, net, impairment of intangible assets, share-based
compensation expenses, and adjustments for tax effects. The Company
excluded “amortization of intangible assets” as a non-recurring
item in the presentation of adjusted net loss in its Unaudited
Reconciliations of GAAP and Non-GAAP Results for the six months
ended March 31, 2023 and fiscal year 2023. As a result, the Company
made the corresponding change to the prior period comparative
metrics to conform with the new definition. 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
nonrecurring 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 Condensed
Consolidated Balance Sheets (All amounts in thousands,
except for share and per share data)
As of March 31,
As of September 30,
2023
2023
RMB
RMB
US$
ASSETS
Current assets:
Cash and cash equivalents
416,201
366,151
50,185
Restricted cash
810
510
70
Short-term investments
145,836
103,679
14,210
Inventories, net
144
113
15
Loan receivables, net*
7,229
3,278
449
Prepayments, receivables and other current
assets*
69,126
99,135
13,588
Amounts due from related parties
1,260
1,311
180
Total current assets
640,606
574,177
78,697
Non-current assets:
Property and equipment, net
194,589
222,228
30,459
Intangible assets, net
12,554
1,026
141
Right-of-use assets
5,441
2,155
295
Investments
69,318
82,231
11,271
Other non-current assets*
63,640
46,430
6,364
Total non-current assets
345,542
354,070
48,530
Total assets
986,148
928,247
127,227
LIABILITIES AND SHAREHOLDERS’
EQUITY
Current liabilities:
Accounts payable
8,179
6,480
888
Salaries and welfare payable
13,550
8,293
1,137
Advances from customers
245
55
8
Taxes payable
11,126
3,809
522
Amounts due to related parties
4,196
4,692
643
Current portion of lease liabilities
2,654
1,485
204
Accruals and other current liabilities
270,717
265,218
36,351
Total current liabilities
310,667
290,032
39,753
Non-current liabilities:
Non-current lease liabilities
753
—
—
Deferred tax liabilities
3,369
1,614
221
Total non-current liabilities
4,122
1,614
221
Total liabilities
314,789
291,646
39,974
Shareholders’ equity
Ordinary shares
181
181
25
Treasury stock
(137,446
)
(137,446
)
(18,839
)
Statutory reserves
3,331
3,331
457
Additional paid-in capital
9,484,664
9,487,453
1,300,364
Accumulated other comprehensive income
82,396
89,068
12,207
Accumulated deficit*
(8,795,764
)
(8,832,878
)
(1,210,647
)
Total MOGU Inc. shareholders’ equity
637,362
609,709
83,567
Non-controlling interests
33,997
26,892
3,686
Total shareholders’ equity
671,359
636,601
87,253
Total liabilities and shareholders’
equity
986,148
928,247
127,227
*On April 1, 2023, the Company adopted ASU 2016-13, Financial
Instruments - Credit Losses (Topic 326), using the modified
retrospective method and the adoption did not have material impact
on the consolidated financial statements.
MOGU INC. Unaudited 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,
2022
2023
RMB
RMB
US$
Net revenues
Commission revenues
71,700
55,619
7,623
Marketing services revenues
2,982
746
102
Financing service revenues
6,930
5,403
741
Technology service revenues
28,077
18,388
2,520
Other revenues
5,157
3,146
431
Total revenues
114,846
83,302
11,417
Cost of revenues (exclusive of
amortization of intangible assets shown separately below)
(59,641
)
(49,602
)
(6,799
)
Sales and marketing expenses
(32,646
)
(37,274
)
(5,109
)
Research and development expenses
(20,922
)
(13,879
)
(1,902
)
General and administrative expenses
(32,741
)
(27,914
)
(3,826
)
Amortization of intangible assets
(20,022
)
(1,826
)
(250
)
Impairment of intangible assets
—
(9,945
)
(1,363
)
Other income, net
3,066
5,059
693
Loss from operations
(48,060
)
(52,079
)
(7,139
)
Interest income
9,013
7,142
979
Interest expense
(328
)
—
—
(Loss)/gain from investments, net
(19,431
)
1,267
174
Loss before income tax and share of
results of equity investees
(58,806
)
(43,670
)
(5,986
)
Income tax benefits
1,086
1,662
228
Share of results of equity investee
(1,125
)
(504
)
(69
)
Net loss
(58,845
)
(42,512
)
(5,827
)
Net loss attributable to non-controlling
interests
(1,407
)
(7,105
)
(974
)
Net loss attributable to MOGU
Inc.
(57,438
)
(35,407
)
(4,853
)
Net loss
(58,845
)
(42,512
)
(5,827
)
Other comprehensive
income/(loss):
Foreign currency translation adjustments,
net of nil tax
18,495
4,970
681
Unrealized securities holding
(losses)/gains, net of tax
(1,186
)
1,702
233
Total comprehensive loss
(41,536
)
(35,840
)
(4,913
)
Total comprehensive loss attributable to
non-controlling interests
(1,407
)
(7,105
)
(974
)
Total comprehensive loss attributable
to MOGU Inc.
(40,129
)
(28,735
)
(3,939
)
Net loss per share attributable to
ordinary shareholders
Basic
(0.02
)
(0.01
)
(0.00
)
Diluted
(0.02
)
(0.01
)
(0.00
)
Net loss per ADS
Basic
(6.79
)
(4.11
)
(0.56
)
Diluted
(6.79
)
(4.11
)
(0.56
)
Weighted average number of shares used
in computing net loss per share
Basic
2,537,852,017
2,581,758,960
2,581,758,960
Diluted
2,537,852,017
2,581,758,960
2,581,758,960
Share-based compensation expenses
included in:
Cost of revenues
808
415
57
General and administrative expenses
5,069
1,763
242
Sales and marketing expenses
2,448
419
57
Research and development expenses
511
192
26
MOGU INC. Unaudited Condensed
Consolidated Statements of Cash Flows (All amounts in
thousands, except for share and per share data)
For the six months
ended
September 30,
2022
2023
RMB
RMB
US$
Net cash used in operating
activities
(16,020
)
(32,907
)
(4,510
)
Net cash used in investing
activities
(28,155
)
(20,779
)
(2,848
)
Net cash used in financing
activities
(2,972
)
—
—
Effect of foreign exchange rate changes on
cash and cash equivalents and restricted cash
1,509
3,336
457
Net decrease in cash and cash equivalents
and restricted cash
(45,638
)
(50,350
)
(6,901
)
Cash and cash equivalents and restricted
cash at beginning of period
439,417
417,011
57,156
Cash and cash equivalents and restricted
cash at end of period
393,779
366,661
50,255
MOGU INC. Unaudited 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,
2022
2023
RMB
RMB
US$
Net loss
(58,845
)
(42,512
)
(5,827
)
Add:
Interest expense
328
—
—
Less:
Income tax benefits
(1,086
)
(1,662
)
(228
)
Less:
Interest income
(9,013
)
(7,142
)
(979
)
Add:
Amortization of intangible assets
20,022
1,826
250
Add:
Depreciation of property and equipment
2,067
3,529
484
EBITDA
(46,527
)
(45,961
)
(6,300
)
Add:
Impairment of intangible assets
—
9,945
1,363
Add:
Share-based compensation expenses
8,836
2,789
382
Add:
Share of result of equity investees
1,125
504
69
Less:
Loss/(gain) from investments, net
19,431
(1,267
)
(174
)
Adjusted EBITDA
(17,135
)
(33,990
)
(4,660
)
Net loss
(58,845
)
(42,512
)
(5,827
)
Add:
Loss/(gain) from investments, net
19,431
(1,267
)
(174
)
Add:
Share-based compensation expenses
8,836
2,789
382
Add:
Impairment of intangible assets
—
9,945
1,363
Less:
Adjusted for tax effects
(1,235
)
(1,755
)
(241
)
Adjusted net loss
(31,813
)
(32,800
)
(4,497
)
1 GMV are to gross merchandise volume, 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.
2 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, 2023, which was RMB7.2960 to
US$1.00. The percentages stated in this press release are
calculated based on the RMB amounts.
3 Adjusted EBITDA represents net loss before (i) interest
income, interest expense, loss/(gain) from investments, net, income
tax benefits and share of results of equity investee, impairment of
intangible assets 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 Non-GAAP Results” at the end of this
press release.
4 Adjusted net loss represents net loss excluding (i)
loss/(gain) from investments, net, (ii) share-based compensation
expenses, (iii) impairment of intangible assets, (iv) adjustments
for tax effects. The Company excluded “amortization of intangible
assets” as a non-recurring item in the presentation of adjusted net
loss in its Unaudited Reconciliations of GAAP and Non-GAAP Results
for the six months ended March 31, 2023 and fiscal year 2023. As a
result, the Company made the corresponding change to the prior
period comparative metrics to conform with this new definition. See
“Unaudited Reconciliations of GAAP and Non-GAAP Results” at the end
of this press release.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231215513432/en/
For investor and media inquiries, please contact:
MOGU Inc. Ms. Qi Feng Phone: +86-571-8530-8201 E-mail:
ir@mogu.com
Christensen
In China Ms. Crystal Lai Phone: +852 2232 3907
E-mail:crystal.lai@christensencomms.com
In the United States Ms. Linda Bergkamp Phone: +1-480-614-3004
Email: linda.bergkamp@christensencomms.com
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