Dating and social networking platform Momo saw shrinking revenues and decreasing numbers of paying users in the first quarter, as the coronavirus lockdown diminishes users’ willingness to spend on the platform, the company said in its earnings results Thursday.
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Momo’s net revenues for the first three months of 2020 decreased by 3.5% year on year to RMB 3.59 billion ($507.6 billion), exceeding the average estimate of $493.9 million of 8 analysts compiled by Yahoo Finance.
The bulk of the revenue, or 64.9%, came from the company’s live-streaming services on Momo and Tantan, which recorded a 13% year on year decrease in the first quarter. The company attributed the drop to the impact on spending will of the top-spending users caused by the COVID-19 pandemic.
Value-added services contributed $166 million to the total net revenues for the period, marking a 30% increase despite the influence of the coronavirus. The company said the growth was driven primarily by the expansion of Momo’s virtual gift business.
In terms of apps, the company’s Momo app accounted for close to 90% of the revenues for the first quarter but recorded a 6.3% year on year revenue drop. Tantan, which saw a 29.3% year on year rise in revenue for the period due to increased user spending, comprising around 10% of the company’s Q1 revenues.
As of March, the monthly active users (MAUs) of the Momo app is around 108 million. Total paying users of the company’s live video service and 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, 4.2 million came from Tantan.
Despite lower numbers of paying users, Momo achieved a net income of RMB 537.7 million in the first quarter of 2020, compared to RMB 286.6 million during the same period in 2019.
“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. Despite the macro headwind, we are seeing plenty of growth opportunities ahead of us,” said Tang Yan, chairman and CEO of Momo.
For the second quarter of 2020, the company estimated its total net revenues to be between RMB 3.8 billion and RMB 3.9 billion, representing a decrease of 8.5% to 6.1% year over year, citing the potential impact of the COVID-19 outbreak on the Chinese economy.