Press-Releases

MOGU Announces Unaudited Financial Results for the Six Months Ended September 30, 2022


HANGZHOU, China–(BUSINESS WIRE)–MOGU Inc. (NYSE: MOGU) (“MOGU” or the “Company”), a KOL-driven online fashion and lifestyle destination in China, today announced its unaudited financial results for the six months ended September 30, 2022.

Mr. Chen Qi, Chairman and Chief Executive Officer of MOGU, commented, “In 2022, the Live eCommerce industry faced many challenges, including ongoing macro environment uncertainty, the impact of the COVID-19 resurgence in China on consumption demand and an intensifying competition amongst the major live platforms. In particular, COVID-19 travel restrictions affected the fulfillment of orders nationwide resulting in both sales volume and revenue coming in below expectations. The Gross Merchandise Value (“GMV2”) and revenue of MOGU decreased by 48.1% and 32.2% to RMB2,828 million (US$397.6 million1) and RMB114.8 million (US$16.1 million) period-over-period, respectively. Despite these challenges, we proactively explored new opportunities.”

“During the first half of fiscal year of 2023, our total revenues decreased by 32.2% to RMB114.8 million. We continued to take a holistic approach to improve our operating efficiency and optimize costs throughout the Company to reduce loss from operations. The adjusted EBITDA and loss from operations were negative RMB17.1 million and RMB48.1 million, compared with negative RMB72.7 million and RMB430.1 million, respectively, for the same period of fiscal year 2022. We are continuing to explore new business opportunities to diversify our revenue structure.” added Ms. Qi Feng, Financial Controller.

Highlights for the Six Months ended September 30, 2022

  • Total revenues for the six months ended September 30, 2022 decreased by 32.2% to RMB114.8 million (US$16.1 million) from RMB169.5 million during the same period of the fiscal year 2022.
  • Live Video Broadcast (LVB) associated GMV for the six months ended September 30, 2022 decreased by 45.6% period-over-period to RMB2,703 million (US$379.9 million1). LVB associated GMV for the six months ended September 30, 2022 accounted for 95.6% of our total GMV.
  • Gross Merchandise Value (GMV2) for the six months ended September 30, 2022 was RMB2,828 million (US$397.6 million), a decrease of 48.1% period-over-period.

Financial Results for the Six Months ended September 30, 2022

Total revenues for the six months ended September 30, 2022 decreased by 32.2% to RMB114.8 million (US$16.1 million) from RMB169.5 million during the same period of the fiscal year 2022.

  • Commission revenues for the six months ended September 30, 2022 decreased by 38.6% to RMB71.7 million (US$10.1 million) from RMB116.8 million in the same period of the fiscal year 2022, primarily attributable to the lower GMV due to the heightened competitive environment and the COVID-19 pandemic resurgence.
  • Marketing services revenues for the six months ended September 30, 2022 decreased by 77.1% to RMB3.0 million (US$0.4 million) from RMB13.0 million in the same period of the fiscal year 2022, primarily due to the challenging competitive environment.
  • Financing solutions revenues for the six months ended September 30, 2022 decreased by 67.7% to RMB6.9 million (US$1.0 million) from RMB21.5 million in the same period of the fiscal year 2022. The decrease was primarily due to the decrease in the service fee of loans to users in line with the lower GMV.
  • Technology service revenues for the six months ended September 30, 2022 increased by 170.8% to RMB28.1 million(US$3.9 million) from RMB10.4 million in the same period of fiscal year 2022, primarily attributable to the combination of Hangzhou Ruisha Technology Co. Ltd. (“Ruisha”) in July 2021, which is committed to providing brands merchants with one-stop and customized services for full-domain operations, including a wide variety of operational services, data platforms, and other software services, as well as value-added services such as traffic placement.
  • Other revenues for the six months ended September 30, 2022 decreased by 34.0% to RMB5.2 million (US$0.7 million) from RMB7.8 million in the same period of the fiscal year 2022.

Cost of revenues for the six months ended September 30, 2022 decreased by 29.9% to RMB59.6 million (US$8.4 million) from RMB85.1 million in the same period of the fiscal year 2022, which was primarily due to the decrease in payroll, IT-related expenses and payment handling and outsourcing costs, correlating with overall reduction in revenue.

Sales and marketing expenses for the six months ended September 30, 2022 decreased by 64.8% to RMB32.6 million (US$4.6 million) from RMB92.8 million in the same period of the fiscal year 2022, primarily due to optimized spending on branding and user acquisition activities, in line with reduction in revenue.

Research and development expenses for the six months ended September 30, 2022 decreased by 53.7% to RMB20.9 million (US$2.9 million) from RMB45.2 million in the same period of the fiscal year 2022, primarily due to a decrease in payroll costs.

General and administrative expenses for the six months ended September 30, 2022 decreased by 22.2% to RMB32.7 million (US$4.6 million) from RMB42.1 million in the same period of the fiscal year 2022, primarily due to a decrease in professional service fees and payroll costs.

Amortization of intangible assets for the six months ended September 30, 2022 decreased by 87.5% to RMB20.0 million (US$2.8 million) from RMB160.2 million in the same period of the fiscal year 2022, primarily because the majority of the intangible assets recorded as a result of the business cooperation agreement MOGU entered into with Tencent in July 2018 have been fully amortized as of March 31, 2022.

Loss from operations for the six months ended September 30, 2022 was RMB48.1 million (US$6.8 million), compared to a loss from operations of RMB430.1 million in the same period of the fiscal year 2022, primarily attributable to the goodwill impairment of RMB186.5 million and more amortization of intangible assets incurred in the first half of the fiscal year 2022.

Net loss attributable to MOGU Inc. for the six months ended September 30, 2022 was RMB57.4 million (US$8.1 million), compared to a net loss attributable to MOGU Inc. of RMB411.9 million in the same period of the fiscal year 2022.

Adjusted EBITDA3 for the six months ended September 30, 2022 was negative RMB17.1 million (US$2.4 million), compared to negative RMB72.7 million in the same period of the fiscal year 2022.

Adjusted net loss4 for the six months ended September 30, 2022 was RMB11.8 million (US$1.7 million), compared to an adjusted net loss of RMB69.9 million in the same period of the fiscal year 2022.

Basic and diluted loss per ADS for the six months ended September 30, 2022 were RMB6.79 (US$0.95) and RMB6.79 (US$0.95), respectively, compared with RMB49.07 and RMB49.07, respectively, in the same period of the fiscal year 2022. Each ADS represents 300 Class A ordinary shares.

Cash and cash equivalents, Restricted cash and Short-term investments were RMB604.8 million (US$85.0 million) as of September 30, 2022, compared with RMB636.3 million as of March 31, 2022.

Use of Non-GAAP Financial Measures

In evaluating the business, the Company considers and uses non-GAAP measures, such as Adjusted EBITDA and Adjusted net loss as supplemental measures to review and assess operating performance. The presentation of these non-GAAP 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, interest expense, (gain)/loss from investments, net, income tax benefits, share of results of equity investees, goodwill impairment, share-based compensation expenses, amortization of intangible assets, and depreciation of property and equipment. The Company defines Adjusted net loss as net loss excluding (gain)/loss from investments, net, goodwill impairment, share-based compensation expenses, amortization of intangible assets, and adjustments for tax effects. See “Unaudited Reconciliations of GAAP and Non-GAAP Results” at the end of this press release.

The Company presents these non-GAAP financial measures because they are used by management to evaluate operating performance and formulate business plans. The Company believes that the non-GAAP 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 non-recurring in nature or may not be indicative of the Company’s core operating results and business outlook. The Company also believes that the non-GAAP 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 non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. The Company’s non-GAAP 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 non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the non-GAAP 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 non-GAAP financial measures, please see the table captioned “Unaudited Reconciliations of GAAP and Non-GAAP 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 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,

 

2022

 

2022

 

RMB

 

RMB

 

US$

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

438,608

 

 

392,970

 

 

55,243

 

Restricted cash

809

 

 

809

 

 

114

 

Short-term investments

196,853

 

 

211,049

 

 

29,669

 

Inventories, net

79

 

 

84

 

 

12

 

Loan receivables, net

26,788

 

 

9,739

 

 

1,369

 

Prepayments and other current assets

55,135

 

 

54,073

 

 

7,600

 

Amounts due from related parties

640

 

 

779

 

 

110

 

Total current assets

718,912

 

 

669,503

 

 

94,117

 

Non-current assets:

 

 

 

 

 

Property, equipment and software, net

7,702

 

 

5,881

 

 

827

 

Intangible assets, net

89,822

 

 

74,414

 

 

10,461

 

Right-of-use assets*

 

 

12,394

 

 

1,742

 

Goodwill

63,460

 

 

63,460

 

 

8,921

 

Investments

72,120

 

 

61,392

 

 

8,630

 

Other non-current assets

214,964

 

 

236,363

 

 

33,227

 

Total non-current assets

448,068

 

 

453,904

 

 

63,808

 

Total assets

1,166,980

 

 

1,123,407

 

 

157,925

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

 

Short-term borrowings

10,064

 

 

11,635

 

 

1,636

 

Accounts payable

17,950

 

 

15,564

 

 

2,188

 

Salaries and welfare payable

12,311

 

 

9,455

 

 

1,329

 

Advances from customers

901

 

 

326

 

 

46

 

Taxes payable

3,265

 

 

2,171

 

 

305

 

Amounts due to related parties

4,694

 

 

2,990

 

 

420

 

Current portion of lease liabilities*

 

 

6,675

 

 

938

 

Accruals and other current liabilities

272,638

 

 

262,085

 

 

36,845

 

Total current liabilities

321,823

 

 

310,901

 

 

43,707

 

Non-current liabilities:

 

 

 

 

 

Non-current lease liabilities*

 

 

3,175

 

 

446

 

Deferred tax liabilities

12,112

 

 

10,877

 

 

1,529

 

Other non-current liabilities

890

 

 

332

 

 

47

 

Total non-current liabilities

13,002

 

 

14,384

 

 

2,022

 

Total liabilities

334,825

 

 

325,285

 

 

45,729

 

SHAREHOLDERS’ EQUITY

 

 

 

 

 

Ordinary shares

181

 

 

181

 

 

25

 

Treasury stock

(136,113

)

 

(137,446

)

 

(19,322

)

Statutory reserves

3,331

 

 

3,331

 

 

468

 

Additional paid-in capital

9,471,101

 

 

9,479,937

 

 

1,332,668

 

Accumulated other comprehensive income

69,016

 

 

86,325

 

 

12,135

 

Accumulated deficit

(8,617,780

)

 

(8,675,218

)

 

(1,219,543

)

Total MOGU Inc. shareholders’ equity

789,736

 

 

757,110

 

 

106,431

 

Non-controlling interests

42,419

 

 

41,012

 

 

5,765

 

Total shareholders’ equity

832,155

 

 

798,122

 

 

112,196

 

Total liabilities and shareholders’ equity

1,166,980

 

 

1,123,407

 

 

157,925

 

*On April 1, 2022, the Company adopted ASC 842, Leases and used the additional transition method to initially apply this new lease standard at the adoption date. Right-of-use assets and lease liabilities were recognized on the Company’s consolidated financial statements.

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 six months ended

 

 

September 30,

 

 

2021

 

2022

 

 

RMB

 

RMB

 

US$

Net revenues

 

 

 

 

 

 

Commission revenues

 

116,807

 

 

71,700

 

 

10,079

 

Marketing services revenues

 

13,006

 

 

2,982

 

 

419

 

Financing solutions revenues

 

21,485

 

 

6,930

 

 

974

 

Technology service revenues

 

10,368

 

 

28,077

 

 

3,947

 

Other revenues

 

7,808

 

 

5,157

 

 

725

 

Total revenues

 

169,474

 

 

114,846

 

 

16,144

 

 

 

 

 

 

 

 

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

 

(85,133

)

 

(59,641

)

 

(8,384

)

Sales and marketing expenses

 

(92,772

)

 

(32,646

)

 

(4,589

)

Research and development expenses

 

(45,227

)

 

(20,922

)

 

(2,941

)

General and administrative expenses

 

(42,095

)

 

(32,741

)

 

(4,603

)

Amortization of intangible assets

 

(160,190

)

 

(20,022

)

 

(2,815

)

Goodwill impairment

 

(186,504

)

 

 

 

 

Other income, net

 

12,310

 

 

3,066

 

 

431

 

Loss from operations

 

(430,137

)

 

(48,060

)

 

(6,757

)

Interest income

 

7,001

 

 

9,013

 

 

1,267

 

Interest expense

 

 

 

(328

)

 

(46

)

Gain/(loss) from investments, net

 

7,822

 

 

(19,431

)

 

(2,732

)

Loss before income tax and share of results of equity investees

 

(415,314

)

 

(58,806

)

 

(8,268

)

Income tax benefits

 

1,715

 

 

1,086

 

 

153

 

Share of results of equity investee

 

(418

)

 

(1,125

)

 

(158

)

Net loss

 

(414,017

)

 

(58,845

)

 

(8,273

)

Net loss attributable to non-controlling interests

 

(2,091

)

 

(1,407

)

 

(198

)

Net loss attributable to MOGU Inc.

 

(411,926

)

 

(57,438

)

 

(8,075

)

Net loss

 

(414,017

)

 

(58,845

)

 

(8,273

)

Other comprehensive income/(loss):

 

 

 

 

 

 

Foreign currency translation adjustments, net of nil tax

 

(10,656

)

 

18,495

 

 

2,600

 

Unrealized securities holding losses, net of tax

 

(10,213

)

 

(1,186

)

 

(167

)

Total comprehensive loss

 

(434,886

)

 

(41,536

)

 

(5,840

)

Total comprehensive loss attributable to non-controlling interests

 

(2,091

)

 

(1,407

)

 

(198

)

Total comprehensive loss attributable to MOGU Inc.

 

(432,795

)

 

(40,129

)

 

(5,642

)

 

 

 

 

 

 

 

Net loss per share attributable to ordinary shareholders

 

 

 

 

 

 

Basic

 

(0.16

)

 

(0.02

)

 

(0.00

)

Diluted

 

(0.16

)

 

(0.02

)

 

(0.00

)

 

 

 

 

 

 

 

Net loss per ADS

 

 

 

 

 

 

Basic

 

(49.07

)

 

(6.79

)

 

(0.95

)

Diluted

 

(49.07

)

 

(6.79

)

 

(0.95

)

 

 

 

 

 

 

 

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

 

 

 

 

 

 

Basic

 

2,518,428,173

 

 

2,537,852,017

 

 

2,537,852,017

 

Diluted

 

2,518,428,173

 

 

2,537,852,017

 

 

2,537,852,017

 

 

 

 

 

 

 

 

Share-based compensation expenses included in:

 

 

 

 

 

 

Cost of revenues

 

1,241

 

 

808

 

 

114

 

General and administrative expenses

 

3,668

 

 

5,069

 

 

713

 

Sales and marketing expenses

 

2,762

 

 

2,448

 

 

344

 

Research and development expenses

 

244

 

 

511

 

 

71

 

 

MOGU INC.

Unaudited Interim Condensed Consolidated Statements of Cash Flows

(All amounts in thousands, except for share and per share data)

 

 

 

For the six months ended

 

September 30,

 

 

2021

 

2022

 

 

RMB

 

RMB

 

US$

Net cash used in operating activities

 

(73,528

)

 

(16,020

)

 

(2,252

)

Net cash provided by/(used in) investing activities

 

49,458

 

 

(28,155

)

 

(3,957

)

Net cash used in financing activities

 

(8,365

)

 

(2,972

)

 

(418

)

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

 

(2,594

)

 

1,509

 

 

212

 

Net decrease in cash and cash equivalents and restricted cash 

 

(35,029

)

 

(45,638

)

 

(6,415

)

Cash and cash equivalents and restricted cash at beginning of period

 

542,884

 

 

439,417

 

 

61,772

 

Cash and cash equivalents and restricted cash at end of period

 

507,855

 

 

393,779

 

 

55,357

 

MOGU INC.

Reconciliations of GAAP and Non-GAAP Results

(All amounts in thousands, except for share and per share data)

 

 

 

For the six months ended

 

September 30,

 

 

2021

 

2022

 

 

RMB

 

RMB

 

US$

 

Net loss

 

(414,017

)

 

(58,845

)

 

(8,273

)

 

 

 

 

 

 

 

 

Add:

Interest expense

 

 

 

328

 

 

46

 

Less:

Income tax benefits

 

(1,715

)

 

(1,086

)

 

(153

)

Less:

Interest income

 

(7,001

)

 

(9,013

)

 

(1,267

)

Add:

Amortization of intangible assets

 

160,190

 

 

20,022

 

 

2,815

 

Add:

Depreciation of property and equipment

 

2,797

 

 

2,067

 

 

291

 

 

 

 

 

 

 

 

 

 

EBITDA

 

(259,746

)

 

(46,527

)

 

(6,541

)

 

 

 

 

 

 

 

 

Add:

Goodwill impairment

 

186,504

 

 

 

 

 

Add:

Share-based compensation expenses

 

7,915

 

 

8,836

 

 

1,242

 

Add:

Share of result of equity investees

 

418

 

 

1,125

 

 

158

 

Less:

(Gain)/loss from investments, net

 

(7,822

)

 

19,431

 

 

2,732

 

 

Adjusted EBITDA

 

(72,731

)

 

(17,135

)

 

(2,409

)

 

 

 

 

 

 

 

 

 

Net loss

 

(414,017

)

 

(58,845

)

 

(8,273

)

 

 

 

 

 

 

 

 

Less:

(Gain)/loss from investments, net

 

(7,822

)

 

19,431

 

 

2,732

 

Add:

Share-based compensation expenses

 

7,915

 

 

8,836

 

 

1,242

 

Add:

Goodwill impairment

 

186,504

 

 

 

 

 

Add:

Amortization of intangible assets

 

160,190

 

 

20,022

 

 

2,815

 

Less:

Adjusted for tax effects

 

(2,672

)

 

(1,235

)

 

(174

)

 

 

 

 

 

 

 

 

 

Adjusted net loss

 

(69,902

)

 

(11,791

)

 

(1,658 

)

1 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, 2022, which was RMB7.1135 to US$1.00. The percentages stated in this press release are calculated based on the RMB amounts.

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 Adjusted EBITDA represents net loss before (i) interest income, interest expense, (gain)/Loss from investments, net, income tax benefits and share of results of equity investee, 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.

4 Adjusted net loss represents net loss excluding (i) (gain)/Loss 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.

Contacts

For investor and media inquiries:

MOGU Inc.

Ms. Qi Feng

Phone: +86-571-8530-8201

E-mail: ir@mogu.com

Christensen Advisory

In China

Mr. Eric Yuan

Phone: +86-10-5900-1548

E-mail: eric.yuan@christensencomms.com

In the United States

Ms. Linda Bergkamp

Phone: +1-480-614-3004

Email: linda.bergkamp@christensencomms.com



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