MOGU Announces Third Quarter Fiscal Year 2021 Unaudited Financial Results
02/25/2021 - 04:30 AM
MOGU Inc. (NYSE: MOGU) (“MOGU” or the "Company"), a leading KOL-driven online fashion and lifestyle destination in China, today announced its unaudited financial results for the third quarter of fiscal year 2021 ended December 31, 2020.
“Our KOLs on MOGU Live are increasingly important as they continuously provide differentiated shopping experience,” said Chen Qi, Chairman and Chief Executive Officer of MOGU. “Looking forward, we aim to further amplify our KOLs' fashion influence. We are confident that we can leverage their supply chain and fashion curation capabilities to serve wider audience from offline and overseas."
"MOGU Live is our key growth driver and it has delivered 20.9% growth year over year. MOGU live is now accounted for 80.3% of our total GMV." added Mr. Raymond Huang, Chief Strategy Officer. “Our Net loss has been narrowed to RMB 36.7 million, and on non-GAAP basis, we have achieved positive Adjusted EBITDA to RMB 1.2 million this quarter, reflecting strong operating efficiency and disciplined approach in our capital allocation.".
Third Quarter Fiscal Year 2021 Highlights
■ Live Video Broadcast business continued to grow stronger with associated GMV for the third quarter of fiscal year 2021 increasing by 20.9% year-over-year to RMB4,051 million (US$620.8 million ). LVB associated GMV for the third quarter of fiscal year 2021 accounted for 80.3% of total GMV. Active buyers of the LVB1 in the twelve-month period ended December 31, 2020 grew by 9.4% year-over-year to 3.5 million.
■ Gross Merchandise Value (GMV2 ) for the third quarter of fiscal year 2021 was RMB5,046 million (US$773.3 million 3 ), a decrease of 19.9% year-over-year. GMV for the twelve-month period ended December 31, 2020 was RMB13,698 million (US$2,099.3 million ), a decrease of 25.1% year-over-year.
Third quarter Fiscal Year 2021 Financial Results
Total revenues decreased by 45.6% to RMB146.5 million (US$22.5 million ) from RMB269.5 million during the same quarter of fiscal year 2020.
Commission revenues decreased by 29.8% to RMB99.2 million (US$15.2million ) from RMB141.2million in the same period of fiscal year 2020, primarily due to the restructuring of the Company’s business towards a LVB-focused model.
Marketing services revenues decreased by 75.9% to RMB17.4 million (US$2.7million ) from RMB72.5 million in the same period of fiscal year 2020. The decrease was primarily due to the restructuring of the Company’s business towards a LVB-focused model.
Other revenues decreased by 46.4% to RMB29.9 million (US$4.6million ) from RMB55.9 million in the same period of fiscal year 2020, primarily due to a decrease in online direct sales.
Cost of revenues decreased by 48.3% to RMB51.0 million (US$7.8 million ) from RMB98.6 million in the same period of fiscal year 2020, which was primarily due to a decrease in the costs associated with decreased online direct sales and IT related expenses.
Sales and marketing expenses decreased by 63.4% to RMB76.5 million (US$11.7million ) from RMB209.3 million in the same period of fiscal year 2020, primarily due to optimized spending on branding and user acquisition activities.
Research and development expenses decreased by 14.5% to RMB27.2 million (US$4.2 million ) from RMB31.9 million in the same period of fiscal year 2020, primarily due to a decrease of share-based compensation expenses.
General and administrative expenses decreased by 32.4% to RMB29.1 million (US$4.5 million ) from RMB43.0 million in the same period of fiscal year 2020, primarily due to a decrease of share-based compensation expenses.
Amortization of intangible assets increased by 10.3% to RMB113.5 million (US$17.4 million ) from RMB102.9 million in the same period of fiscal year 2020.
Loss from operations was RMB123.2 million (US$18.9 million ), compared to loss from operations of RMB1,594.9 million in the same period of fiscal year 2020, primarily attributable to a goodwill impairment incurred in the third quarter of fiscal year 2020.
Net gain from investments was RMB 91.2 million (US$ 14.0 million ), compared to loss from investment of RMB33.9 million in the same period of fiscal year 2020, primarily due to one of the Company’s investee repurchased a majority portion of the Company’s investment in it in October 2020.
Net loss attributable to MOGU Inc.’s ordinary shareholders was RMB36.7 million (US$5.6 million ), compared to a net loss attributable to MOGU Inc’s ordinary shareholders of RMB1,634.6 million in the same period of fiscal year 2020.
Adjusted EBITDA4 was RMB1.2 million (US$0.2 million ), compared to negative RMB86.7 million in the same period of fiscal year 2020.
Adjusted net loss5 was RMB8.9 million (US$1.4 million ), compared to adjusted net loss of RMB95.6 million in the same period of fiscal year 2020.
Basic and diluted loss per ADS were RMB 0.36 (US$ 0.05) and RMB 0.36 (US$ 0.05) , respectively, compared with RMB14.97 and RMB14.97, respectively, in the same period of fiscal year 2020. One ADS represents 25 Class A ordinary shares.
Cash and cash equivalents, Restricted cash and Short-term investments were RMB820.1 million (US$125.7 million ) as of December 31, 2020, compared with RMB1,095.4 million as of March 31, 2020.
Conference Call
MOGU's management will host an earnings conference call at 6:30 AM U.S. Eastern Time on Thursday, February 25, 2021 (7:30 PM 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, 2021.
Dial-in numbers for the replay are as follows:
International:
+1 416 621 4642
United States:
+1 800 585 8367
Passcode:
1353957
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, loss/(gain) from investments, net, income tax expenses, share of results of equity investee, goodwill impairment, 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 loss/(gain) from investments, net, goodwill impairment, share-based compensation expenses, amortization of intangible assets, and adjustments for tax effects. Beginning from the second quarter of fiscal year 2020, we combined each of (i) investment gain/(loss), (ii) gain on deconsolidation of a subsidiary and (iii) gain from investment disposals, into loss from investments. The related financial statements prior to July 1, 2019 have been recast to reflect this change. 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; 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 leading 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 December 31,
2020
2020
RMB
RMB
US$
ASSETS
Current assets:
Cash and cash equivalents
856,567
659,326
101,046
Restricted cash
807
807
124
Short-term investments
238,000
160,000
24,521
Inventories, net
2,926
1,068
164
Loan receivables, net
113,111
140,262
21,496
Prepayments and other current assets
99,108
98,821
15,145
Amounts due from related parties
57
157
24
Total current assets
1,310,576
1,060,441
162,520
Non-current assets:
Property, equipment and software, net
14,109
10,781
1,652
Intangible assets, net
813,011
506,050
77,556
Goodwill
186,504
186,504
28,583
Investments
102,373
62,211
9,534
Other non-current assets
14,183
163,111
24,998
Total non-current assets
1,130,180
928,657
142,323
Total assets
2,440,756
1,989,098
304,843
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable
17,080
32,703
5,012
Salaries and welfare payable
6,032
22,736
3,484
Advances from customers
103
62
10
Taxes payable
6,342
14,430
2,211
Amounts due to related parties
12,018
6,714
1,029
Accruals and other current liabilities
393,536
336,684
51,599
Total current liabilities
435,111
413,329
63,345
Non-current liabilities:
Deferred tax liabilities
21,529
18,026
2,763
Other non-current liabilities
3,644
2,441
374
Total non-current liabilities
25,173
20,467
3,137
Total liabilities
460,284
433,796
66,482
Shareholders’ equity
Ordinary shares
180
181
27
Treasury stock
(6,566)
(117,296)
(17,976)
Statutory reserves
2,630
2,630
403
Additional paid-in capital
9,431,740
9,452,008
1,448,584
Accumulated other comprehensive income
201,796
86,429
13,246
Accumulated deficit
(7,649,308)
(7,868,650)
(1,205,923)
Total MOGU Inc. shareholders’ equity
1,980,472
1,555,302
238,361
Total shareholders’ equity
1,980,472
1,555,302
238,361
Total liabilities and shareholders’ equity
2,440,756
1,989,098
304,843
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,
2019
2020
2019
2020
RMB
RMB
US$
RMB
RMB
US$
Net revenues
Commission revenues
141,231
99,179
15,200
371,928
253,389
38,834
Marketing services revenues
72,459
17,431
2,671
224,833
59,400
9,103
Other revenues
55,850
29,935
4,588
119,564
78,739
12,067
Total revenues
269,540
146,545
22,459
716,325
391,528
60,004
Cost of revenues (exclusive of
amortization of intangible assets shown separately below)
(98,591)
(50,959)
(7,810)
(235,167)
(145,244)
(22,260)
Sales and marketing expenses
(209,274)
(76,543)
(11,731)
(534,993)
(186,385)
(28,565)
Research and development expenses
(31,884)
(27,245)
(4,175)
(138,324)
(83,897)
(12,858)
General and administrative expenses
(43,000)
(29,089)
(4,458)
(116,698)
(77,337)
(11,852)
Amortization of intangible assets
(102,898)
(113,469)
(17,390)
(244,182)
(259,697)
(39,800)
Goodwill impairment
(1,382,149)
-
-
(1,382,149)
-
-
Other income, net
3,372
27,530
4,219
11,404
42,380
6,495
Loss from operations
(1,594,884)
(123,230)
(18,886)
(1,923,784)
(318,652)
(48,836)
Interest income
7,430
4,789
734
23,218
15,213
2,331
(Loss)/Gain from investments, net
(33,918)
91,184
13,975
(66,550)
91,184
13,975
Loss before income tax and
share of results of equity investees
(1,621,372)
(27,257)
(4,177)
(1,967,116)
(212,255)
(32,530)
Income tax expenses
(769)
(9,437)
(1,446)
(528)
(7,087)
(1,086)
Share of results of equity investee
(12,497)
-
-
(114,104)
-
-
Net loss
(1,634,638)
(36,694)
(5,623)
(2,081,748)
(219,342)
(33,616)
Net loss attributable to MOGU Inc.
(1,634,638)
(36,694)
(5,623)
(2,081,748)
(219,342)
(33,616)
Net loss attributable to
MOGU Inc's ordinary shareholders
(1,634,638)
(36,694)
(5,623)
(2,081,748)
(219,342)
(33,616)
Net loss
(1,634,638)
(36,694)
(5,623)
(2,081,748)
(219,342)
(33,616)
Other comprehensive income/(loss):
Foreign currency translation adjustments,
net of nil tax
(16,326)
(38,914)
(5,964)
86,811
(78,073)
(11,965)
Share of other comprehensive income /(loss)
of equity method investee
123
-
-
(145)
-
-
Unrealized securities holding losses, net of tax
-
(34,603)
(5,303)
(6,759)
(37,294)
(5,716)
Total comprehensive loss
(1,650,841)
(110,211)
(16,890)
(2,001,841)
(334,709)
(51,297)
Total comprehensive loss
attributable to MOGU Inc.
(1,650,841)
(110,211)
(16,890)
(2,001,841)
(334,709)
(51,297)
Net loss attributable to
MOGU Inc's ordinary shareholders
(1,634,638)
(36,694)
(5,623)
(2,081,748)
(219,342)
(33,616)
Net loss per share attributable
to ordinary shareholders
Basic
(0.60)
(0.01)
(0.00)
(0.77)
(0.08)
(0.01)
Diluted
(0.60)
(0.01)
(0.00)
(0.77)
(0.08)
(0.01)
Net loss per ADS
Basic
(14.97)
(0.36)
(0.05)
(19.18)
(2.06)
(0.32)
Diluted
(14.97)
(0.36)
(0.05)
(19.18)
(2.06)
(0.32)
Weighted average number of shares
used in computing net loss per share
Basic
2,729,385,471
2,557,169,038
2,557,169,038
2,713,973,736
2,659,049,836
2,659,049,836
Diluted
2,729,385,471
2,557,169,038
2,557,169,038
2,713,973,736
2,659,049,836
2,659,049,836
Share-based compensation
expenses included in:
Cost of revenues
1,983
659
101
458
1,908
292
General and administrative expenses
12,360
3,290
504
33,811
10,828
1,659
Sales and marketing expenses
3,287
1,420
218
8,558
4,041
619
Research and development expenses
3,634
1,296
199
12,756
2,916
447
MOGU INC.
Unaudited Interim Condensed Consolidated Statements of Cash Flows
(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,
2019
2020
2019
2020
RMB
RMB
US$
RMB
RMB
US$
Net cash (used in)/provided by
operating activities
(37,692)
12,052
1,847
(156,962)
(27,929)
(4,280)
Net cash provided by/(used in )
investing activities
12,937
94,252
14,445
(255,010)
(36,584)
(5,607)
Net cash used in financing activities
(2,049)
(7,523)
(1,153)
(27,822)
(110,154)
(16,882)
Effect of foreign exchange rate
changes on cash and cash equivalents
and restricted cash
(5,934)
(11,150)
(1,709)
28,414
(22,574)
(3,460)
Net (decrease)/increase in cash
and cash equivalents and restricted cash
(32,738)
87,631
13,430
(411,380)
(197,241)
(30,229)
Cash and cash equivalents and
restricted cash at beginning of period
899,074
572,502
87,740
1,277,716
857,374
131,399
Cash and cash equivalents and
restricted cash at end of period
866,336
660,133
101,170
866,336
660,133
101,170
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
For the nine months ended
December 31
December 31,
2019
2020
2019
2020
RMB
RMB
US$
RMB
RMB
US$
Net loss
(1,634,638)
(36,694)
(5,623)
(2,081,748)
(219,342)
(33,616)
Add:
Share of result of equity investees
12,497
-
-
114,104
-
-
Add:
Loss/(gain) from investments, net
33,918
(91,184)
(13,975)
66,550
(91,184)
(13,975)
Add:
Goodwill impairment
1,382,149
-
-
1,382,149
-
-
Add:
Income tax expenses
769
9,437
1,446
528
7,087
1,086
Less:
Interest income
(7,430)
(4,789)
(734)
(23,218)
(15,213)
(2,331)
Loss from operations
(212,735)
(123,230)
(18,886)
(541,635)
(318,652)
(48,836)
Add:
Share-based compensation expenses
21,264
6,665
1,022
55,583
19,693
3,017
Add:
Amortization of intangible assets
102,898
113,469
17,390
244,182
259,697
39,800
Add:
Depreciation of property and equipment
1,877
4,298
659
5,342
7,881
1,208
Adjusted EBITDA
(86,696)
1,202
185
(236,528)
(31,381)
(4,811)
Net loss
(1,634,638)
(36,694)
(5,623)
(2,081,748)
(219,342)
(33,616)
Add:
Loss/(gain) from investments, net
33,918
(91,184)
(13,975)
66,550
(91,184)
(13,975)
Add:
Share-based compensation expenses
21,264
6,665
1,022
55,583
19,693
3,017
Add:
Goodwill impairment
1,382,149
-
-
1,382,149
-
-
Add:
Amortization of intangible assets
102,898
113,469
17,390
244,182
259,697
39,800
Less:
Adjusted for tax effects
(1,161)
(1,161)
(178)
(1,548)
(3,483)
(534)
Adjusted net loss
(95,570)
(8,905)
(1,364)
(334,832)
(34,619)
(5,308)
__________________________
1 “Active buyers of the LVB” refers to registered user accounts that placed one or more orders in one of the LVB channels on our platform, regardless of whether the products are sold, delivered or returned. If a buyer registered two or more user accounts on our platform and placed orders on our platform through those different registered user accounts, the number of active buyers would, under this methodology, be counted as the number of the registered user accounts that such buyer used to place the orders;
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 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, 2020, which was RMB6.5250 to US$1.00 . The percentages stated in this press release are calculated based on the RMB amounts.
4 Adjusted EBITDA represents net loss before (i) interest income, loss/(gain) from investments, net, income tax expenses, share of results of equity investee and 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.
5 Adjusted net loss represents net loss excluding (i) loss/(gain) 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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