MOGU Inc. (NYSE: MOGU) (“MOGU” or the "Company"), a leading
online fashion and lifestyle destination in China, today announced
its unaudited financial results for the third quarter of fiscal
year 2019 ended December 31, 2018.
Third Quarter Fiscal Year 2019 Highlights
- Gross Merchandise Value
(GMV1) for the twelve-month period ended December
31, 2018 was RMB16,978 million (US$2,469 million2), an increase of
21.5% year-over-year.
- Total revenues were RMB367.2
million (US$53.4 million), an increase of 20.3%
year-over-year.
- Active buyers3 in the
twelve-month period ended December 31, 2018 increased to 34.5
million from 33.9 million during the same period last year
- Live Video Broadcast business
continued to grow strongly with associated GMV increasing 177.8%
year-over-year and average Mobile MAUs who clicked on a live video
broadcast in the twelve-month period ended December 31, 2018
increasing 43.6%.
“We recorded healthy growth during the quarter with total GMV
increasing 21.5% in the twelve-month period ended December 31,
2018, driven primarily by strong growth in our live video broadcast
business.” commented by Mr. Qi Chen, Chairman and Chief Executive
Officer of MOGU. “Live video broadcast not only provides users with
a more fun, engaging, and interactive fashion discovery experience,
but also allows us to gather data on current fashion trends and
what users want which allows us to create a more efficient fashion
industry value chain. As we continue enriching the fashion content
on our platform and serving more users, merchants and influencers,
our focus will expand to include optimizing and elevating the
supply chain for fashion products. While this will be a difficult
challenge, we strongly believe that these efforts will greatly
benefit all participants across our ecosystem.”
Ms. Helen Wu, Chief Financial Officer, commented, “We generated
total revenues of RMB367.2 million during the quarter, an increase
of 20.3% year-over-year and 57.2% sequentially. Our loss from
operations improved to RMB97.7 million (US$14.2 million) during the
quarter from RMB202.5 million during the same period last year. Our
net loss also improved to RMB42.2 million (US$6.1 million) during
the quarter from RMB156.1 million during the same period last year.
We will continue to execute our strategy which focuses on growing
our live video broadcast and prime services offering businesses for
merchants which carry higher commission rates and will further
drive revenue growth.”
Third Quarter Fiscal Year 2019 Financial Results
Total revenues increased 20.3% to RMB367.2 million
(US$53.4 million) from RMB305.2 million during the same quarter of
fiscal year 2018. The increase was primarily attributable to
increases in commission revenues and other revenues, which were
partially offset by a decrease in revenues from marketing
services.
- Revenues from marketing services
decreased by 9.6% to RMB131.4 million (US$19.1 million) from
RMB145.4 million in the same period of fiscal year 2018, primarily
due to the Company’s decision to strategically increase its focus
on the live video broadcast businesses as an effective and
efficient content format to improve user engagement and experience,
which affected the amount of marketing service properties available
on MOGU’s platform and the number of its marketing services
customers.
- Commission revenues increased by
34.7% to RMB175.6 million (US$25.5 million) from RMB130.3 million
in the same period of fiscal year 2018, primarily attributable to
the growth in GMV and a slightly higher average commission
rate.
- Other revenues increased by
104.6% to RMB60.2 million (US$8.8 million) from RMB29.4 million in
the same period of fiscal year 2018, primarily attributable to the
growth in online direct sales.
Total costs and expenses decreased by 8.4% to RMB464.9
million (US$67.6 million) from RMB507.6 million in the same period
of fiscal year 2018, primarily due to decreases in amortization of
intangible assets, research and development expenses and sales and
marketing expenses, which were partially offset by increased cost
of revenues and general and administrative expenses.
Cost of revenues increased by 21.1% to RMB100.4 million (US$14.6
million) from RMB82.9 million in the same period of fiscal year
2018, primarily due to costs associated with increased online
direct sales as part of the Company’s trial launch of its beauty
product online direct sales business.
Sales and marketing expenses decreased by 8.6% to RMB204.7
million (US$29.8 million) from RMB223.9 million in the same period
of fiscal year 2018, primarily due to lower spending on customer
incentive programs as the Company further refines its sales and
marketing strategies.
Research and development expenses decreased by 22.2% to RMB55.3
million (US$8.0 million) from RMB71.0 million in the same period of
fiscal year 2018, primarily due to a decrease in payroll costs
associated with lower employee headcount as the Company continues
to optimize its organizational structure.
General and administrative expenses increased by 110.2% to
RMB47.9 million (US$7.0 million) from RMB22.8 million in the same
period of fiscal year 2018, primarily due to an increase in
share-based compensation expenses.
Amortization of intangible assets decreased by 39.3% to RMB66.6
million (US$9.7 million) from RMB109.8 million in the same period
of fiscal year 2018, primarily due to a decrease in amortization of
the intangible assets of an acquired company which was fully
amortized in February 2018 and was partially offset by an increase
in the amortization of the intangible assets recorded as a result
of the new business cooperation agreement MOGU entered into with
Tencent in July 2018.
Other net income increased by 265.4% to RMB10.0 million (US$1.5
million) from RMB2.7 million in the same period of fiscal year
2018, primarily due to a government grant the Company received
during the quarter.
Loss from operations was RMB97.7 million (US$14.2
million), compared to loss from operations of RMB202.5 million in
the same period of fiscal year 2018.
Interest income was RMB7.7 million (US$1.1 million),
compared to interest income of RMB8.1 million in the same period of
fiscal year 2018.
Share of results of equity investee was RMB14.8 million
(US$2.2 million) for the period.
Net loss was RMB42.2 million (US$6.1 million), compared
to RMB156.1 million in the same period of fiscal year 2018.
Adjusted EBITDA4 was negative RMB5.3 million
(US$0.8 million), compared to negative RMB73.1 million in the same
period of fiscal year 2018.
Adjusted net profit5 was RMB13.7 million (US$2.0
million), compared to net loss of RMB81.7 million in the same
period of fiscal year 2018.
Basic and diluted loss per ADS were RMB4.03 (US$0.59) and
RMB4.03 (US$0.59), respectively, compared with RMB15.02 and
RMB15.02, respectively, in the same period of fiscal year 2018. One
ADS represents 25 Class A ordinary shares.
Cash and cash equivalents, Restricted cash and Short-term
investments were RMB1,614.2 million (US$234.8 million) as of
December 31, 2018, compared with RMB1,355.4 million as of March 31,
2018.
Conference Call
The Company will host a conference call to discuss the earnings
at 7:30 a.m. Eastern Time on Monday, February 25, 2019 (8:30 p.m.
Beijing/Hong Kong Time on the same day).
Dial-in numbers for the live conference call are as follows:
International: +1 647 689 5649 Mainland China, North:
+86 108 007 141 191 Mainland China, South: +86 108 001 401 195
United States: +1 877 824 0239 Hong Kong: +852 800 901 563
Passcode: Mogu
A telephone replay of the call will be available after the
conclusion of the conference call until 11:59 PM ET on March 4,
2019.
Dial-in numbers for the replay are as follows:
International: +1 416 621 4642 United States: +1 800
585 8367 Passcode: 9478068
A live and archived webcast of the conference call will be
available on the Investor Relations section of MOGU’s website at
http://ir.mogu-inc.com.
Use of Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses
nonGAAP measures, such as Adjusted EBITDA and Adjusted net
profit/(loss), as supplemental measures to review and assess
operating performance. The presentation of these nonGAAP 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, gain on
deconsolidation of a subsidiary, income tax benefits, gain from
investment disposals,share of results of equity investee,
share-based compensation expenses, amortization of intangible
assets, and depreciation of property and equipment. The Company
defines Adjusted net profit/(loss) as net loss excluding gain of
deconsolidation of a subsidiary, gain from investment disposals,
share-based compensation expenses, amortization of intangible
assets, and adjustments for tax effects. See “Unaudited
Reconciliations of GAAP and NonGAAP Results” at the end of this
press release.
The Company presents these nonGAAP financial measures because
they are used by management to evaluate operating performance and
formulate business plans. The Company believes that the nonGAAP
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 nonGAAP 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 nonGAAP financial measures are not defined under U.S. GAAP
and are not presented in accordance with U.S. GAAP. The nonGAAP
financial measures have limitations as analytical tools. The
Company’s nonGAAP 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 nonGAAP measures may differ from the
nonGAAP information used by other companies, including peer
companies, and therefore their comparability may be limited. The
Company compensates for these limitations by reconciling the
nonGAAP 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 nonGAAP financial measures, please
see the table captioned “Unaudited Reconciliations of GAAP and
NonGAAP 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; 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 leading online fashion and lifestyle
destination in China. MOGU provides young people with a more
accessible and enjoyable shopping experience for everyday fashion,
particularly as they increasingly live their lives online. Through
innovative use of content, MOGU’s platform provides a vibrant and
dynamic community for people to discover and share the latest
fashion trends with others, and offers users a truly comprehensive
shopping experience.
For more information on MOGU, please visit:
http://ir.mogu-inc.com.
1 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 aimed 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 December 31, 2018, which was RMB6.8755 to
US$1.00. The percentages stated in this press release are
calculated based on the RMB amounts.
3 “Active buyers” refers to registered user accounts that placed
one or more orders on MOGU’s platform in a given period, regardless
of whether the products are sold, delivered or returned. If a buyer
registered two or more user accounts on MOGU’s platform and placed
orders on its platform through each of those registered user
accounts, the number of active buyers would, under this
methodology, be counted as the number of registered user accounts
that such buyer used to place the orders.
4 Adjusted EBITDA represents net loss before (i) interest
income, gain on deconsolidation of a subsidiary, income tax
benefits, gain from investment disposals and share of results of
equity investee, and (ii) certain non-cash expenses, consisting of
share-based compensation expenses, amortization of intangible
assets and depreciation of property and equipment. See “Unaudited
Reconciliations of GAAP and NonGAAP Results” at the end of this
press release.
5 Adjusted net profit/(loss) represents net loss excluding (i)
gain of deconsolidation of a subsidiary, (ii) gain from investment
disposals, (iii) share-based compensation expenses, (iv)
amortization of intangible assets, (v) adjustments for tax effects.
See “Unaudited Reconciliations of GAAP and NonGAAP Results” at the
end of this press release.
MOGU INC. Unaudited Interim Condensed Consolidated
Balance Sheets (All amounts in thousands, except for share
and per share data) As of March 31,
As of December 31, 2018 2018 RMB
RMB US$ ASSETS Current assets: Cash and
cash equivalents 1,224,393 1,266,172 184,157 Restricted cash 1,004
1,005 146 Short-term investments 130,000 347,000 50,469
Inventories, net 110 4,663 678 Loan receivables, net 104,247
131,346 19,103 Prepayments and other current assets 188,862 163,341
23,757 Amounts due from related parties 7,179 862 125
Total
current assets 1,655,795 1,914,389 278,435
Non-current assets: Property, equipment and software, net
16,511 11,176 1,625 Intangible assets, net 116,770 1,038,642
151,064 Goodwill 1,568,653 1,568,653 228,151 Investments 201,037
220,204 32,027 Other non-current assets 18,755 9,265 1,348
Total
non-current assets 1,921,726 2,847,940
414,215 Total assets 3,577,521
4,762,329 692,650 LIABILITIES, MEZZANINE
EQUITY AND SHAREHOLDERS’ (DEFICIT)/EQUITY Current
liabilities: Accounts payable 12,270 16,509 2,401 Salaries and
welfare payable 20,654 50,760 7,383 Advances from customers 37
1,385 201 Taxes payable 8,523 6,527 949 Amounts due to related
parties 20,103 6,213 904 Accruals and other current liabilities
608,486 509,291 74,073
Total current liabilities
670,073 590,685 85,911 Non-current
liabilities: Deferred tax liabilities 25,233 8,302 1,207
Total non-current liabilities 25,233 8,302
1,207 Total liabilities 695,306 598,987
87,118 Total mezzanine equity 7,384,872
- - Shareholders’ (deficit)/equity
Ordinary shares 31 177 25 Statutory reserves 1,979 2,475 360
Additional paid-in capital - 9,360,233 1,361,389 Accumulated other
comprehensive (loss)/income (3,650) 85,186 12,390 Accumulated
deficit (4,501,017) (5,284,729) (768,632) Total MOGU Inc.
shareholders’ (deficit)/equity (4,502,657) 4,163,342 605,532
Total shareholders’ (deficit)/equity (4,502,657)
4,163,342
605,532 Total liabilities, mezzanine equity and
shareholders’ (deficit)/equity 3,577,521
4,762,329 692,650 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
three months ended For the nine months ended December
31, December 31, 2017 2018
2017 2018 RMB RMB
US$ RMB RMB US$ Net
revenues Marketing services revenues 145,380 131,396 19,111
400,253 324,449 47,189 Commission revenues 130,336 175,577 25,537
331,485 391,230 56,902 Other revenues 29,441 60,231 8,760
53,802 141,006 20,508
Total revenues
305,157 367,204 53,408 785,540
856,685 124,599 Cost of revenues (exclusive of
amortization of intangible assets shown separately below) (82,919)
(100,419) (14,605) (241,739) (252,734) (36,759) Sales and marketing
expenses (223,886) (204,721) (29,775) (628,727) (565,529) (82,253)
Research and development expenses (71,017) (55,252) (8,036)
(219,778) (179,236) (26,069) General and administrative expenses
(22,779) (47,886) (6,965) (77,795) (121,574) (17,682) Amortization
of intangible assets (109,755) (66,633) (9,691) (329,241) (149,862)
(21,797) Other income, net 2,735 9,993 1,453 10,367
6,141 893
Loss from operations (202,464)
(97,714) (14,211) (701,373) (406,109)
(59,068) Interest income 8,130 7,724 1,123 27,132 24,422
3,552 Gain of deconsolidation of a subsidiary 13,592 - - 13,592 - -
Gain from investment disposals - 31,236 4,543 -
31,236 4,543
Loss before income tax and share of results
of equity investees (180,742) (58,754)
(8,545) (660,649) (350,451) (50,973)
Income tax benefits 24,651 1,778 259 76,670 12,355 1,797 Share of
results of equity investee - 14,816 2,155 - (7,394)
(1,075)
Net loss (156,091) (42,160)
(6,131) (583,979) (345,490) (50,251)
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 three months ended For
the nine months ended December 31, December 31,
2017 2018 2017 2018
RMB RMB US$ RMB RMB
US$ Net loss attributable to non-controlling
interests
111 - - 116 - -
Net loss attributable to
MOGU Inc. (156,202) (42,160) (6,131)
(584,095) (345,490) (50,251) Accretion on
convertible redeemable preferred shares to redemption value
(174,756) (139,262) (20,255) (507,646) (509,903) (74,162) Deemed
dividend to holders of mezzanine equity - - - -
(89,076) (12,956)
Net loss attributable to MOGU Inc's
ordinary shareholders (330,958) (181,422)
(26,386) (1,091,741) (944,469)
(137,369) Net loss (156,091) (42,160)
(6,131) (583,979) (345,490) (50,251)
Other comprehensive income/(loss): Foreign currency
translation adjustments, net of nil tax (13,727) 3,340 486 (48,634)
82,497 11,999 Share of other comprehensive income/(loss) of equity
method investee - 34 5 - (110) (16) Unrealized securities holding
gains, net of tax 472 3,197 465 3,953 6,449
938
Total comprehensive loss (169,346)
(35,589) (5,175) (628,660) (256,654)
(37,330) Total comprehensive loss attributable to
non-controlling
interests
111 - - 116 - -
Total comprehensive loss
attributable to MOGU Inc. (169,457) (35,589)
(5,175) (628,776) (256,654)
(37,330) Net loss attributable to MOGU Inc's
ordinary shareholders (330,958) (181,422)
(26,386) (1,091,741) (944,469)
(137,369) 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 three months
ended For the nine months ended December 31,
December 31, 2017 2018 2017
2018 RMB RMB US$
RMB RMB US$ Net loss per share
attributable to ordinary shareholders Basic (0.60) (0.16)
(0.02) (1.98) (1.21) (0.18) Diluted (0.60) (0.16) (0.02) (1.98)
(1.21) (0.18)
Net loss per ADS Basic (15.02) (4.03)
(0.59) (49.55) (30.25) (4.40) Diluted (15.02) (4.03) (0.59) (49.55)
(30.25) (4.40)
Weighted average number of shares used in
computing net loss per share Basic 550,825,006 1,126,645,958
1,126,645,958 550,797,978 780,640,722 780,640,722 Diluted
550,825,006 1,126,645,958 1,126,645,958 550,797,978 780,640,722
780,640,722
Share-based compensation expenses included
in: Cost of revenues 1,179 3,568 519 3,483 10,465 1,522 General
and administrative expenses 1,085 12,894 1,875 2,951 39,405 5,731
Sales and marketing expenses 533 2,074 302 1,937 6,209 903 Research
and development expenses 1,653 4,647 676 4,617 13,107 1,907 4,450
23,183 3,372 12,988 69,186 10,063
MOGU INC.
Unaudited Interim Condensed Consolidated Statements of Cash
Flows (All amounts in thousands, except for share and per
share data) Three months ended December
31, Nine months ended December 31, 2017
2018 2017 2018 RMB RMB
US$ RMB RMB US$
Net cash (used in) / provided by operating activities (125,028)
29,128 4,236 (177,833) (235,270) (34,219) Net cash provided
by/(used in) investing activities 226,401 (78,646) (11,439) 258,514
(223,379) (32,489) Net cash provided by financing activities
2,344
425,791
61,930
6,169
437,955 63,698 Effect of foreign exchange rate changes on cash and
cash equivalents and restricted cash
(13,392)
(1,566) (228) (48,299) 62,474 9,086 Net increase in cash and cash
equivalents 90,325
374,707
54,499
38,551
41,780
6,076
Cash and cash equivalents and restricted cash at beginning of
period 1,219,721 892,470 129,804 1,271,495 1,225,397 178,227
Cash and cash equivalents and restricted cash at end of period
1,310,046 1,267,177 184,303 1,310,046 1,267,177 184,303
MOGU INC. Reconciliations of GAAP and Non-GAAP
Results (All amounts in thousands, except for share and per
share data) For the three months ended
December 31, For the nine months ended December 31,
2017 2018 2017 2018
RMB RMB US$ RMB RMB
US$ Net loss (156,091)
(42,160) (6,131) (583,979) (345,490)
(50,251) Less: Share of result of equity investees -
(14,816) (2,155) - 7,394 1,075 Less: Income tax benefits (24,651)
(1,778) (259) (76,670) (12,355) (1,797) Less: Gain from investment
disposals - (31,236) (4,543) - (31,236) (4,543) Less: Gain of
deconsolidation of a subsidiary (13,592) - - (13,592) - - Less:
Interest income (8,130) (7,724) (1,123) (27,132) (24,422)
(3,552)
Loss from operations (202,464)
(97,714) (14,211) (701,373) (406,109)
(59,068) Add: Share-based compensation expenses 4,450
23,183 3,372 12,988 69,186 10,063 Add: Amortization of intangible
assets 109,755 66,633 9,691 329,241 149,862 21,797 Add:
Depreciation of property and equipment 15,152 2,625 382
49,259 9,780 1,422
Adjusted EBITDA (73,107)
(5,273) (766) (309,885)
(177,281) (25,786) Net Loss
(156,091) (42,160) (6,131) (583,979)
(345,490) (50,251) Less: Gain from investment
disposals - (31,236) (4,543) - (31,236) (4,543) Less: Gain of
deconsolidation of a subsidiary (13,592) - - (13,592) - - Add:
Share based compensation 4,450 23,183 3,372 12,988 69,186 10,063
Add: Amortization of intangible assets 109,755 66,633 9,691 329,241
149,862 21,797 Less: Adjusted for tax effects (26,232) (2,688)
(391) (78,696) (14,322) (2,083)
Adjusted
net (loss)/profit (81,710) 13,732
1,998 (334,038) (172,000)
(25,017)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190225005352/en/
MOGU Inc.Qi FengPhone: +86-571-8530-8201E-mail:
ir@mogu-inc.com
Christensen
In ChinaMr. Christian ArnellPhone: +86-10-5900-1548E-mail:
carnell@christensenir.com
In USMs. Linda BergkampPhone: +1-480-614-3004Email:
lbergkamp@christensenir.com
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