China’s social networking platform Momo Inc (ADR) (NASDAQ:MOMO) recently announced this year’s first quarter unaudited results indicating that net revenues rose year over year by 64% to reach a figure of $435.1 million. The net income that was attributable to Momo Inc rose to a figure of $129.9 million in Q1 compared to a figure of $90.7 million for the same period a year ago. After the impressive results shares of the Chinese social networking platform rallied with the stock rising by almost 15%.
The number of monthly active users of Momo Inc rose from 85.2 million in 2017’s first quarter to 103.3 million in 2018’s first quarter. The total number of paying users of the value added services as well as live video service was 8.1 million in the reported quarter. In 2017’s first quarter the number users was 7 million.
Value added services
Momo’s value added services include virtual gift revenues and membership subscription revenues. In the reported quarter the revenues generated by value added services was $37 million and this was a year-over-year increase of 62%. The rise in revenues in this category was as a result of the growth in paying users as well as the rise in average revenue per paying user. In 2018’s first quarter total paying users were 5.1 million compared to the 4.3 million which was reported in 2017’s first quarter.
According to the chief executive officer and chairman of Momo Inc, Yan Tang, outstanding results were achieved and the community grow both in engagement and size and withstood the negative seasonality. Per Tang the strong topline performance as well as the company’s operating leverage allowed significant investments to be made for future growth.
Last month for instance Momo acquired Tantan, a dating app firm which has increased the number of users significantly. Tantan has also managed to monetize since the year started and continues to demonstrate future potential.
Momo acquired Tantan in a stock and cash deal worth close to $800 million. Slightly over $600 million was cash while the rest was in newly issued shares. The takeover had initially been announced in February this year. Tantan is offered referred to as the Tinder of China.