Shares of Momo (NASDAQ: MOMO) have plunged today, down by 16% as of 12:30 p.m. EST, after the company reported third-quarter earnings. The results were mostly in line with expectations, but guidance for the fourth quarter fell short.
Revenue in the third quarter rose 51% to $536 million, compared to the $535.3 million in sales that analysts were modeling for and Momo's guidance of $525 million to $540 million in sales. Non-GAAP net income came in at $114.3 million, or $0.53 per American depositary share (ADS). That bottom-line result was also on target relative to the consensus estimate of $0.53 per ADS in adjusted profits. The Chinese social networking company had 110.5 million monthly active users (MAUs) at the end of the quarter, up from 94.4 million MAUs a year ago.
Image source: Momo.
Momo finished the quarter with $1.5 billion in cash and cash equivalents, after generating $50.9 million in operating cash flow. The company attributed a decline in operating cash flow to revenue from the TV show Phanta City that has not been collected yet and is currently accounted for as accounts receivable.
"I am pleased that we delivered solid operational and financial results for the quarter." CEO Yan Tang said in a statement. "At the same time we continued to push forward on product and operational fronts, in order to build up longer term growth drivers as we start to look beyond 2018 into next year."
In terms of guidance, Momo expects revenue in the fourth quarter to be in the range of 3.65 billion yuan to 3.75 billion yuan ($531 million to $545 million), while analysts were expecting over 3.8 billion yuan in sales ($555 million). Note that these U.S. dollar amounts are translated based on current exchange rates, and Momo specifically opted not to provide outlook in U.S. dollar terms due to "recent volatility and uncertainty in foreign exchange rate."
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