MOGU Announces Second Quarter Fiscal Year 2021 Unaudited Financial Results

30-Nov-2020 Intellasia | BusinessWire | 4:30 PM Print This Post

     Live Video Broadcast (“LVB”) Business Maintains Robust Growth Momentum with GMV Increasing 42.2% YoY in the Second quarter

    LVB GMV for the Second quarter Accounted for 74.4% of total GMV

HANGZHOU, China--(BUSINESS WIRE)--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 second quarter of fiscal year 2021 ended September 30, 2020.

"In the post-COVID environment, we were glad to see our KOLs have leveraged strong supply chain in China and delivered another strong quarter for MOGU Live." said Chen Qi, Chairman and Chief Executive Officer of MOGU. "We believe that MOGU Live is our best response to the structural change in the fashion supply chain landscape in China. Manufacturers' best products and rapid manufacturing capabilities can be digitalized and presented to our consumers in the most immersive and interactive fashion. Looking forward, we will remain dedicated to providing the best fashion shopping experience to our consumers."

"We continue to invest in user engagement and conversion and our active MOGU live buyers increased by 20.7% year over year." added Mr. Raymond Huang, Chief Strategy Officer. "Our live video broadcasting business is our key growth driver and it has delivered 42.2% growth year over year. MOGU live accounted for 74.4% of our total GMV in the second quarter of fiscal year 2021."

Second Quarter Fiscal Year 2021 Highlights

  • Gross Merchandise Value (GMV1) for the second quarter of fiscal year 2021 was RMB3,112 million (US$458.3 million2), a decrease of 25.3% year-over-year. GMV for the twelve-month period ended September 30, 2020 was RMB14,951 million (US$2,202.0 million), a decrease of 16.1% year-over-year.
  • Live Video Broadcast business continued to grow stronger with associated GMV for the second quarter of fiscal year 2021 increasing by 42.2% year-over-year to RMB2,316 million (US$341.1 million). LVB associated GMV for the second quarter of fiscal year 2021 accounted for 74.4% of total GMV. Active buyers of the LVB3 in the twelve-month period ended September 30, 2020 grew by 20.7% year-over-year to 3.5 million.

Second quarter Fiscal Year 2021 Financial Results

Total revenues decreased by 43.1% to RMB112.5 million (US$16.6 million) from RMB197.9 million during the same quarter of fiscal year 2020.

  • Commission revenues decreased by 32.0% to RMB68.9 million (US$10.1 million) from RMB101.3 million in the same period of fiscal year 2020, primarily due to the restructuring of the Company’s business towards a LVB-focused model. Commission revenue from the LVBbusiness grew year-over-year and wasin line with the continued year-over-year growth in LVB-associated GMV.
  • Marketing services revenuesdecreased by 71.5% to RMB18.0 million (US$2.6 million) from RMB63.1million 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 23.4% to RMB25.7 million (US$3.8million) from RMB33.5 million in the same period of fiscal year 2020, primarily due to a decrease in online direct sales.

Cost of revenues decreased by 40.1% to RMB45.5 million (US$6.7 million) from RMB76.0 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 73.5% to RMB47.9 million (US$7.1 million) from RMB180.8 million in the same period of fiscal year 2020, primarily due to optimized spending on user acquisition activities and user incentive programs resulting from the restructuring of the Company’s business and also due to measures we conducted to counter the adverse impact of COVID-19.

Research and development expenses decreased by 45.0% to RMB27.7 million (US$4.1 million) from RMB50.3 million in the same period of fiscal year 2020, primarily as a result of headcount optimization we conducted to counter the adverse impact of COVID-19.

General and administrative expenses decreased by 37.4% to RMB24.7 million (US$3.6 million) from RMB39.5 million in the same period of fiscal year 2020, primarily due to a decrease of payroll expenses.

Amortization of intangible assets decreased by 1.4% to RMB75.8 million (US$11.2 million) from RMB76.8 million in the same period of fiscal year 2020.

Loss from operations was RMB100.5 million (US$14.8 million), compared to loss from operations of RMB223.6 million in the same period of fiscal year 2020.

Net loss attributable to MOGU Inc.’s ordinary shareholders was RMB93.7 million (US$13.8 million), compared to a net loss attributable to MOGU Inc’s ordinary shareholders of RMB326.6 million in the same period of fiscal year 2020.

Adjusted EBITDA4 was negative RMB15.2 million (US$2.2 million), compared to negative RMB124.6 million in the same period of fiscal year 2020.

Adjusted net loss5 was RMB11.3 million (US$1.7 million), compared to adjusted net loss of RMB196.9 million in the same period of fiscal year 2020.

Basic and diluted loss per ADS were RMB 0.87 (US$ 0.13) and RMB 0.87 (US$ 0.13), respectively, compared with RMB3.0 and RMB3.0, 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 RMB802.5 million (US$118.2 million) as of September 30, 2020, compared with RMB1,095.4 million as of March 31, 2020.

Subsequent event

In October 2020, one of the Company's investee repurchased a majority portion of the Company’s investment in the investee for a total cash consideration of approximately US$16.0 million (equivalent to RMB107.1million), of which US$14.4 million was received in October 2020. As a result, a gain from the investment will be recognized in the quarter ended December 31, 2020.

Conference Call

MOGU's management will host an earnings conference call at 6:30 AM U.S. Eastern Time on Monday, November 30, 2020 (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 December 7, 2020.

Dial-in numbers for the replay are as follows:

International:

+1 416 621 4642

United States:

+1 800 585 8367

Passcode:

3347189

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 from investments, net, income tax benefits, 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 loss from investments, net, 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 September 30,

2020

2020

RMB

RMB

US$

ASSETS

Current assets:

Cash and cash equivalents

856,567

571,695

84,202

Restricted cash

807

807

118

Short-term investments

238,000

230,000

33,875

Inventories, net

2,926

1,975

291

Loan receivables, net

113,111

112,985

16,641

Prepayments and other current assets

99,108

82,299

12,122

Amounts due from related parties

57

36

5

Total current assets

1,310,576

999,797

147,254

Non-current assets:

Property, equipment and software, net

14,109

13,794

2,032

Intangible assets, net

813,011

642,024

94,560

Goodwill

186,504

186,504

27,469

Investments

102,373

120,868

17,802

Other non-current assets

14,183

121,258

17,859

Total non-current assets

1,130,180

1,084,448

159,722

Total assets

2,440,756

2,084,245

306,976

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

17,080

20,259

2,984

Salaries and welfare payable

6,032

13,642

2,009

Advances from customers

103

65

10

Taxes payable

6,342

1,289

190

Amounts due to related parties

12,018

6,753

995

Accruals and other current liabilities

393,536

347,239

51,143

Total current liabilities

435,111

389,247

57,331

Non-current liabilities:

Deferred tax liabilities

21,529

25,761

3,794

Other non-current liabilities

3,644

2,866

422

Total non-current liabilities

25,173

28,627

4,216

Total liabilities

460,284

417,874

61,547

Shareholders’ equity

Ordinary shares

180

181

26

Treasury stock

(6,566)

(109,667)

(16,152)

Statutory reserves

2,630

2,630

387

Additional paid-in capital

9,431,740

9,445,237

1,391,133

Accumulated other comprehensive income

201,796

159,946

23,557

Accumulated deficit

(7,649,308)

(7,831,956)

(1,153,522)

Total MOGU Inc. shareholders’ equity

1,980,472

1,666,371

245,429

Total shareholders’ equity

1,980,472

1,666,371

245,429

Total liabilities and shareholders’ equity

2,440,756

2,084,245

306,976

 

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 six months ended

 

September 30,

September 30,

 

2019

2020

2019

2020

 

RMB

RMB

US$

RMB

RMB

US$

 

Net revenues

 

Commission revenues

101,315

68,901

10,148

230,697

154,210

22,713

 

Marketing services revenues

63,130

17,977

2,648

152,374

41,969

6,181

 

Other revenues

33,478

25,650

3,778

63,714

48,804

7,188

 

Total revenues

197,923

112,528

16,574

446,785

244,983

36,082

 

 

Cost of revenues (exclusive of amortization of intangible assets shown separately below)

 

 

(75,972)

(45,488)

(6,700)

(136,576)

(94,285)

(13,887)

 

Sales and marketing expenses

(180,758)

(47,938)

(7,061)

(325,719)

(109,842)

(16,178)

 

Research and development expenses

(50,258)

(27,654)

(4,073)

(106,440)

(56,652)

(8,344)

 

General and administrative expenses

(39,482)

(24,721)

(3,641)

(73,698)

(48,248)

(7,106)

 

Amortization of intangible assets

(76,815)

(75,750)

(11,157)

(141,284)

(146,228)

(21,537)

 

Other income, net

1,775

8,523

1,255

8,032

14,850

2,187

 

Loss from operations

(223,587)

(100,500)

(14,803)

(328,900)

(195,422)

(28,783)

 

Interest income

7,405

5,660

834

15,788

10,424

1,535

 

Loss from investments, net

(32,632)

-

-

(32,632)

-

-

 

Loss before income tax and share of results of equity investees

(248,814)

(94,840)

(13,969)

(345,744)

(184,998)

(27,248)

 

Income tax benefits

578

1,103

162

241

2,350

346

 

Share of results of equity investee

(78,348)

-

-

(101,607)

-

-

 

Net loss

(326,584)

(93,737)

(13,807)

(447,110)

(182,648)

(26,902)

 

 

Net loss attributable to MOGU Inc.

(326,584)

(93,737)

(13,807)

(447,110)

(182,648)

(26,902)

 

Net loss attributable to MOGU Inc's ordinary shareholders

(326,584)

(93,737)

(13,807)

(447,110)

(182,648)

(26,902)

 

Net loss

(326,584)

(93,737)

(13,807)

(447,110)

(182,648)

(26,902)

 

Other comprehensive income/(loss):

 

 

 

 

 

 

 

Foreign currency translation adjustments, net of nil tax

49,756

(38,300)

(5,641)

103,137

(39,159)

(5,767)

 

Share of other comprehensive income /(loss) of equity method investee

110

-

-

(268)

-

-

 

Unrealized securities holding losses, net of tax

(6,759)

(2,691)

(396)

(6,759)

(2,691)

(396)

 

Total comprehensive loss

(283,477)

(134,728)

(19,844)

(351,000)

(224,498)

(33,065)

 

Total comprehensive loss attributable to MOGU Inc.

(283,477)

(134,728)

(19,844)

(351,000)

(224,498)

(33,065)

 

Net loss attributable to MOGU Inc's ordinary shareholders

(326,584)

(93,737)

(13,807)

(447,110)

(182,648)

(26,902)

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share attributable to ordinary shareholders

 

Basic

(0.12)

(0.03)

(0.01)

(0.16)

(0.07)

(0.01)

 

Diluted

(0.12)

(0.03)

(0.01)

(0.16)

(0.07)

(0.01)

 

 

Net loss per ADS

 

Basic

(3.00)

(0.87)

(0.13)

(4.12)

(1.68)

(0.25)

 

Diluted

(3.00)

(0.87)

(0.13)

(4.12)

(1.68)

(0.25)

 

 

Weighted average number of shares used in computing net loss per share

 

Basic

2,720,892,161

2,692,172,477

2,692,172,477

2,702,715,560

2,710,268,598

2,710,268,598

 

Diluted

2,720,892,161

2,692,172,477

2,692,172,477

2,702,715,560

2,710,268,598

2,710,268,598

 

 

 

 

Share-based compensation expenses included in:

 

Cost of revenues

1,434

729

107

(1,525)

1,249

184

 

General and administrative expenses

12,137

4,613

679

21,451

7,538

1,110

 

Sales and marketing expenses

2,498

1,291

190

5,271

2,621

386

 

Research and development expenses

4,514

1,192

176

9,122

1,620

239

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 six months ended

September 30,

September 30,

2019

2020

2019

2020

RMB

RMB

US$

RMB

RMB

US$

Net cash used in operating activities

(89,391)

(31,382)

(4,622)

(119,270)

(39,981)

(5,889)

Net cash used in investing activities

(148,798)

(116,622)

(17,177)

(267,947)

(130,836)

(19,270)

Net cash used in financing activities

(18,966)

(97,095)

(14,301)

(25,773)

(102,631)

(15,116)

Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash

17,814

(11,149)

(1,642)

34,348

(11,424)

(1,683)

Net decrease in cash and cash equivalents and restricted cash 

(239,341)

(256,248)

(37,742)

(378,642)

(284,872)

(41,958)

Cash and cash equivalents and restricted cash at beginning of period

1,138,415

828,750

122,062

1,277,716

857,374

126,278

Cash and cash equivalents and restricted cash at end of period

899,074

572,502

84,320

899,074

572,502

84,320

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 six months ended

September 30,

September 30,

2019

2020

2019

2020

RMB

RMB

US$

RMB

RMB

US$

Net loss

(326,584)

(93,737)

(13,807)

(447,110)

(182,648)

(26,902)

 

Add:

Share of result of equity investees

78,348

-

-

101,607

-

-

Add:

Loss from investments, net

32,632

-

-

32,632

-

-

Less:

Income tax benefits

(578)

(1,103)

(162)

(241)

(2,350)

(346)

Less:

Interest income

(7,405)

(5,660)

(834)

(15,788)

(10,424)

(1,535)

 

Loss from operations

(223,587)

(100,500)

(14,803)

(328,900)

(195,422)

(28,783)

 

Add:

Share-based compensation expenses

20,583

7,825

1,152

34,319

13,028

1,919

Add:

Amortization of intangible assets

76,815

75,750

11,157

141,284

146,228

21,537

Add:

Depreciation of property and equipment

1,626

1,768

260

3,465

3,583

528

Adjusted EBITDA

(124,563)

(15,157)

 

(2,234)

(149,832)

(32,583)

(4,799)

 

Net loss

(326,584)

(93,737)

(13,807)

(447,110)

(182,648)

(26,902)

 

Add:

Loss from investments, net

32,632

-

-

32,632

-

-

Add:

Share-based compensation expenses

20,583

7,825

1,152

34,319

13,028

1,919

Add:

Amortization of intangible assets

76,815

75,750

11,157

141,284

146,228

21,537

Less:

Adjusted for tax effects

(387)

(1,161)

(171)

(387)

(2,322)

(342)

 

Adjusted net loss

(196,941)

(11,323)

(1,669)

(239,262)

(25,714)

(3,788)

 

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 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, 2020, which was RMB6.7896 to US$1.00. The percentages stated in this press release are calculated based on the RMB amounts.
3 “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;
4 Adjusted EBITDA represents net loss before (i) interest income, loss from investments, net, income tax benefits 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 loss represents net loss excluding (i) loss from investments, net, (ii) share-based compensation expenses, (iii) amortization of intangible assets, (iv) adjustments for tax effects.


Contacts

For investor and media inquiries, please contact:

MOGU Inc.
Raymond Huang
Phone: +86-571-8530-8201
E-mail: [email protected]

Christensen
In China
Mr. Eric Yuan
Phone: +86-10-5900-1548
E-mail: [email protected]

In the United States
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: [email protected]


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