Popular App Momo Saw Revenue Shrink in First Quarter
Contributed by: kellyseal on Wednesday, June 17 2020 @ 09:49 am
Last modified on Wednesday, June 17 2020 @ 10:10 am
Beijing-based social app Momo is the latest company to see its revenue fall for the first quarter of 2020 due to the economic repercussions of a global pandemic. Interestingly, while other social networks and dating apps have seen an increase in users over the same period, Momo reported a decline there, too.
According to PanDaily[*1] , Momo’s net revenues decreased by 3.5% year over year to $3.59 billion Chinese yuan. The bulk of the revenue - 64.9% - came from live-streaming services on Momo and its popular dating app Tantan. Tantan on the other hand reported an increase in revenue in the first quarter of 29.3 percent from Q1 of 2019. Tantan contributed 10 percent of Momo’s overall revenue for Q1 of 2020.
The social platform’s monthly active users also declined year over year, from 114.4 million in March 2019 to 108 million in March 2020.
Momo reported these findings on an earnings call with investors, attributing the losses to the pandemic and people less willing to spend money on their platform.
The total number of paying users for the company’s live video service and premium value-added service were 12.8 million for the first quarter of 2020, compared to 14.0 million for the first quarter of 2019. Out of the 12.8 million, roughly 4.2 million came from Tantan.
Momo reported a 13% year to year drop in revenue overall in the first quarter, but interestingly, the company also reported an increase in profits from Q1 of 2019 to Q1 of 2020 - from 286.6 million yuan to 537.7 million yuan. Despite fewer paying users, the company is seeing a bigger profit overall.
Momo also said that value-added services like the expansion of its popular virtual gift business contributed to a growth in income as well. Momo reported that it made up $166 million yuan of its earnings, a 30 percent increase from 2019.
"Despite the macro headwind, we are seeing plenty of growth opportunities ahead of us. We will continue to pursue these opportunities and drive value for our shareholders," Yan Tang, the chief executive officer of Momo, said in a statement.
Tang added: "I am proud that the team has been able to adapt well to the changing environment and navigate through the challenges with solid execution against our strategic goals.”
Still, the company’s stock is faltering after the news. Shares in the Beijing-based Momo Inc. (Nasdaq: MOMO) declined 5% by midday Thursday after the company reported its earnings and 6 million of its users had fallen off or turned to other dating apps.