Q1 2020 Earnings Call
Until that time your lines will again be placed on musical. Thank you for your picture.
Good morning, My name is Amy and I will be your conference operator today at this time I would like to welcome everyone to the Mogas first quarter of fiscal years 2020 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question and answer session. If you would like to ask a question. Please press Star then the number one on your telephone keypad to withdraw your question press the pound key. Thank you Christian Charnaux you may begin your conference.
Thank you Hello, everyone and thank you for joining US today mobile is earnings release was distributed earlier today and its available on the IR website at IR Dot mobile gosh Inc. Dot com.
It's wells on business wire services.
On the call today from a group Mr. shark, Cenci, Chairman and Chief Executive Officer.
Ms., Helen Xu Chief Financial Officer, and Mr., Sean Zhang IR director.
Mr. Chen will review business operations and company highlights followed by Mr., Wu, who will discuss the financials.
All three will be available to take your answer during the Q and a session that follows.
Before we begin I'd like to remind you that this conference contains forward looking statements within the meaning of section 21 E of the Securities Exchange Act 934, as amended and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward looking statements can be identified by Terminologies, such as will expects anticipates future intends plans believes estimates targets going forward outlook and similar statements.
Such statements are based upon managements current expectations and current market and operating conditions and relate to events that involve known or unknown risks uncertainties and other factors all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results performance or achievements to differ materially from those in the forward looking statements further information regarding these and other risks uncertainties or factors.
It's included in the Companys filings with the U.S. Securities and Exchange Commission.
The company does not undertake any obligation to update any forward looking statement as a result of new information future events or otherwise, except as required under applicable law.
It is now my pleasure pleasure to introduce Mr. Chen. Please go ahead.
[laughter] Hello, everyone.
Thank you for joining us today.
Well this all new mobile nine years ago, we had a strong belief that fashion should it be accessible for everyone.
Yes, Dan.
Well have skiing striving to congrats.
Fashion industry and create equal opportunities for everyone.
Regarding yeah.
Calm and backlogs.
To get involved at Experis, how unique fashion content products and technology.
On this mission with data our goal to become a refreshing to them in a way to especially on the lifestyle destination.
Well you have diversified our business to satisfy customers increasing demands for personalized fashion content on a shopping experience.
How does it and I will ask the corridor, where how to over 60000, the feminine care hours as long as I'm tempted to something like video broadcast a hole.
All the 3000 at a 100 hours.
Highly engaging lobbied your back half the average day.
Oh like video broadcast business maintained a triple digit growth for the past 11 quarters, they've jambi contribution to our total JV also diebold less overlap the year.
All of these metrics demonstrate the massive massive market opportunity expanding addressable market and the additional capacity well open it up I'll pass on growth and scale.
I'll focus during the second quarter.
Remains all impacting improving our user experience kind of keeping that triple digit growth of library of our casegoods.
By attracting more fashion and lifestyle kilowatt hours from different backgrounds or with a wider for I T cell killing.
We have launched four kilowatt hour training camps at home, so going so well hang on the tongue south.
Ought to increase the number of new like video broadcast a halt.
I know we are already seeing great results from our new up on a call me health.
Some in your house has the RMB 1 billion savvy you have single fashion.
The last three months of training and with our supply chain support.
Well not only increasing the number of scale hours were also expanding our live video broadcast the supply chain support.
Into more categories, including cosmetic jewelry home goods and lifestyle products.
We are seeing more and more successful stories out of this approach.
I want to share with you won't truly successful story.
Without Cheney honest project called Wong of all Topicals Cameleon Fox the all handled before.
So on the 16 million jury in one session.
This is a record high end jewelry category across the whole industry.
As a pioneer things like video broadcasting industry were glad to see its popularity continue to grow rapidly amount all internet users.
[noise] I know who are facing some big challenges as we are not as the only one who wants to increase their market share in live video broadcasting industry.
I will have to deal with the challenge of a switching our revenue model from a traditional online marketplace to new generation pale out based on high fashion powerful.
Yeah, but I also know that.
This is the right time to do a lot of things because it's clear that live video broadcast has quickly become you're wrong, because I'm, most popular and effective content formats.
The job the user engagement sales conversion and entertainment.
Especially I think fashion industry.
This has been a day, two and strengthened our commitment and China, It's loved video broadcast industry.
While most of past problems Fox on Mail service mail users.
Well, the only wong focusing on female users and I have already created a whole valuation all like video broadcast inside our ecosystem.
[noise] therefore.
Well you have really good position to build a leading.
Okay centered live video broadcast platform to serve and entertain I held a number of female customers.
In order to achieve this goal were deploying three key strategies.
Fourth.
Well first of all you have things like video broadcast the infrastructure honest apart, so I'll kill ours, which has already well with the most comprehensive and established things in the industry.
This includes.
User traffic out of supply chain.
Marketing on the brining sports training and coaching data kind of software, that's where our customer services and financial services.
Second.
Well actually increasing the total number of active care ours, and a broadcaster hours per day.
We believe the diversity and depth of our care our community is crucial to satisfy our expanding customer base.
And then lastly, wrap your routing innovative monetization tools.
To help attract chaos and a foster as they are creative creativity.
This will also help out.
Diversifying our revenue model in the future.
In conclusion I'm pleased with the solid progress has been made the oriented.
This past quarter.
And I'm excited about is the direction we are heading.
I am.
Confident that we will capture.
The enormous opportunities of live video broadcast for female customers.
With the right strategies in place.
We will continue to drive long term growth. So our kids are choosing fashion and lifestyle destination model.
A girl like video broadcast related JV to account for over 50% of total joundi within the next the Transmode.
With that.
I would like to hand, the call of our Samuel Adams.
But for all financial results this quarter.
Thank you Charlotte, Thanks, again, everybody for joining our call Tonight I will walk you through our first quarter fiscal year 2020 financials.
I always leave year over year comparison is the best way to review our performance. So unless otherwise stated all percentage changes I'm going to give will be on that basis. So lets review the financials. We delivered another year of healthy GMB growth over the past 12 months with GE v., increasing 12.4% when compared to last year. Our focus remains on growing our GMI from likely to broadcasting, which increased to a increase of 30, 161.5% during the same period.
Nearly double when compared to the same quarter last year for total revenues were 248.9 million RMB, a slight decrease of 2.8% year on year. The decrease was mainly driven by the commission revenue, which increased by 10% year over year to RMB 129.4 million largely offset by the 12.3% year over year decrease in a marketing service revenue.
The Commission revenue was 129.4 million arms, and an increase about 10% primarily due to the growth you know are likely to broadcast.
Business and and a slight improved the commission rate, we expect that our commission rate. The overall Oh all over a commission rate will continue to improve Florida whole platform as we increase the GMI contribution from the likely to broadcast and continuous continues to improve he its operational efficiency and also the continue to expand our client service offering in collaboration with our lack of the broadcast business as well as the restructuring upgrade our marketplace business.
Marketing service revenue were 89.2 million RMB, a decrease over 12.3%. The decrease was mainly due to the growth in attributable catch business, which affected the amount of marketing service property.
Available on our platform and also a decrease in the total number of a transaction emergence as a result of our ongoing optimization upgrade of the merger structure on a platform to improve the overall quality.
Other revenue was 30.2 million RMB, a decrease of 17.3% primarily due to a decrease in the technology supporting services that we provided to a newly established equity investee. During the same quarter in last fiscal year, which has seen stand up gradually expand its own back office technology supporting functions.
Total costs and expenses were 354.2 million RMB, a decrease of 4.9%, which I will go into more details with you below first of all costs of revenue were 60.6 million RMB a decrease of 17.3%. This was primarily due to a decrease in the payroll costs, including a reversal of share based compensation expenses previously recognized as a result of headcount optimization, which was partially offset by an increase in IP ready expenses associated with the likely to broadcast business grows.
Sales and marketing expenses came at 145 million RMB, a decrease of 20.8% year over year, primarily due to a lower spending are you the acquisition expenses and also the user incentive program.
R&D expenses were 16, sorry, <unk> expenses were 56.2 million RMB down by almost 11%.
Primarily due to decrease in payroll costs, which were in line with the decrease in headcount as a result of the headcount optimization.
And the last one that the general and administrative expenses were 34.2 million RMB, an increase of 6.6% primarily due to a decrease in payroll costs, including share based compensation expenses, which were in line with the decrease in headcount as a result of head count optimization and during this quarter the share as a result of the equity Investee was negative 23 point.
2 million RMB, the net loss narrowed to 120.5 million RMB compared to a 309.3 million RMB in the first quarter last fiscal year.
Oh, the adjusted EBITDA was a loss of 25.3 million RMB compared to a loss of 38.9 million RMB in the same period last year.
Adjusted net loss was 42.3 million RMB compared to a net loss of a semi pool point 9 million RMB in the same period of fiscal year 2019, So the basic and diluted per loss per Ats, what 1.1 to RMB compared to a 13.49 RMB in the same period of last year.
Going forward as we focus we continue to build on the live video broadcast business. We expect to commission back money to continue drive to total revenue and our live video broadcast business grow to account for a more significant portion of our business so with that I would like to.
Open the call for company.
Thank you at this time, we will be conducting our question and answer session.
In order to ask a question. Please press Star then the number one on your telephone keypad to allow for as many questions as possible. We ask that you. Please limit your question to one.
Pause for a brief moment to compile acuity roster.
Your first question comes from the line of Charlie Chen with China Renaissance Charlie Your line is open.
Hi management. Thank you for taking my question. My first question is about the revenue so I would like to understand a little bit more about the granularity of the.
Gross driver so basically the GMB growth is driven by.
More host hours or more GMB per broadcasting hour or change of categories. So what is the breakdown on.
Contribution the gym, we grows by each factor more hours or more units GMB per hour. So she can you share with us about this condition. Thank you.
Please pause for one second as we translate for shark.
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Got it.
This is all account eating so go into effect just highlight us targeting young woman equate Bakken Dota two needs homes in polite way talk and order.
Through ball.
As you can do the shops this without any one month.
Gentlewoman sizing up and go through bought a payout five that IGI.
So before the end of Hotshot is I mean, you can sort of.
B. Johnson Matthey about so you did highlight hawk and noticed again that can kind of hold on sort out some.
Hi, Toni so youre right up until now in the past 10 quarters. These are the two main drivers of our online video broadcast business.
We are in the early stage. The main driver has been the increase for the growth of total work half hours, but in the past year.
We have seen growth in JV per hour driven by our increase basically my video broadcast infrastructure, including training improving operating efficiencies supply chain improving conversion.
With this infrastructure establish going forward, we're going to focus again.
In growing the total number of active live video broadcast host as well as the total number of sessions or the light video broadcast hours per day.
All right. Thank you.
And again, if you would like to ask a question. Please press Star then the number one on your telephone keypad again to ask an audio question. Please press Star then the number one on your telephone keypad.
And your next question comes from the line of Ashley's Zhou with Credit Suisse. Ashley Your line is open.
Thanks management for taking my questions two questions from me why is that we gave some guidance on the full year targets in Dnbi and revenue growth second wise about the take credit because we are disclosing januvia and revenue in a different line. So just want to see how the take rate looks like for like video broadcasting and also for traditional marketplace.
Thank you.
One second as we translate for sharp please.
<unk>.
Hi, Thank you actually a question I'll take your question.
I think from a from GMB perspective, I think give an idea of what the full year 2020, our navy to broadcast the business will continue to grow at its been growing on a year over year every quarter on those three digit growth rate. So this will be maintained even for the 2020 and for the overall at this stage, we will actually provide guidance for the overall platform because at the moment, we are actually doing the transformation of our marketplace, which will going forward be more sort of.
In collaboration with the library broadcast and.
So at this stage, probably it will be premature to give the overall software because going through transformation there will be some challenges and uncertainties going forward, but then for the Navy book broadcast visit it's been pretty much established very confident that.
For the full 2020, we will continue to deliver a three digit growth in TV.
And in terms of the.
Take rate to your question as we see that the take rate overall has been improving every quarter and so we're pretty confident that actually as we continue to improve the operational efficiency that will there are still room to increase the take rate in this business.
Thank you.
Your next question comes from the line of Charlie Chan with China Renaissance Charlie Your line is open.
Charlie if you're on mute. Please unmute your line is open.
Okay. Good Yeah management. Thanks for taking my question and again I have a question regarding the cash flow I can see for the past quarter. It seems that the piano numbers seems to be much better than a quarter a year ago, but.
The operating cash flow actually was kind of worse than a year ago and also investing cash flow seems to be a higher as well so.
Can you explain the difference between the appeal now and the cash flows are what is the driver for us.
I mean large amounts of cash outflow for this quarter. Thank you.
Yes, I'll take that Charlie to your question, Yes to your question and you can actually look at operating cash flow, which has the assay in food.
But I think investing cash it's actually mainly about our.
The investment in the short term security using the cash on balance so.
That's actually.
Its usually offset each other.
So it's either in investing we do not have a lot of capex into the fixed asset et cetera.
The mine is actually mainly related to the.
Two two we actually influence outflows on on on the capital deployed in short term investments.
Oh, Okay sure Okay. Thank you.
And again, if you would like to ask a question. Please press Star then the number one on your telephone keypad.
As a reminder, that star then the number one on your telephone keypad.
There are no further questions I will now turn the call back over to Christian Arnell for closing.
Thank you everyone for joining the call Tonight, if you have any questions or comments. Please don't hesitate to reach out to anyone here at mogul. This concludes the call have a good night.
Thank you. This concludes today's conference call. Thank you for your participation you may now disconnect.