NQ Mobile Inc. Reports Unaudited Financial Results For the First Quarter of 2015
PR Newswire NQ Mobile Inc.
May 19, 2015 5:00 PM
BEIJING and DALLAS, May 19, 2015 /PRNewswire/ -- NQ Mobile Inc. ("NQ Mobile" or the "Company") (NQ), a leading global provider of mobile internet services, today announced its unaudited financial results for the first quarter of 2015.
Highlights for First Quarter 2015
Quarterly Net Revenues were $89.2 million in the first quarter of 2015, an 11.8% increase year-over-year from $79.8 million in the same period in 2014, exceeding the Company's previously issued guidance of $85.0 million to $86.0 million.
Net Loss attributable to NQ Mobile was $17.0 million or net loss per ADS was $0.19 in the first quarter of 2015, a 21.3% improvement compared with a net loss of $21.7 million or a 44.1% improvement compared with a net loss per ADS of $0.34 in the same period in 2014.
Non-GAAP Net Income attributable to NQ Mobile was $0.45 million or diluted Non-GAAP earnings per ADS was $0.00 compared with Non-GAAP net income of $9.6 million or diluted Non-GAAP earnings per ADS of $0.13 in the same period in 2014.
Total Share Based Compensation Expenses fell to $12.5 million, a 46.6% decline year-over-year from $23.4 million in the same period in 2014.
Operating Metrics as of March 31, 2015
As a reminder, beginning in the third quarter of 2014, the Company began presenting the operating metrics of average monthly active user accounts ("MAUs") as redefined to include many emerging businesses previously not included in the Company's user account metrics. The MAUs presented herein include the user accounts in Showself, NQ Live and Music Radar, among others. As such, the MAUs presented herein should only be compared to operating metrics in the third quarter of 2014 and thereafter and not be compared to operating metrics in earlier historical periods, because there is not a way to accurately compare such results. The MAUs for the period presented herein and going forward are expected to be better aligned with the key underlying trends of a mobile internet platform company focused on driving mobile consumer traffic and engagement that can be monetized. The MAU statistics do not include the users addressed by the installation of the Company's advertising SDK into third-party applications. These indirect users generate impressions and search traffic that the Company can monetize outside of the user accounts generated directly by the Company's own portfolio of products and applications.
Average Monthly Active User Accounts as of March 31, 2015: 175.4 million.
"We are encouraged to see our performance in the first quarter of 2015," said Dr. Vincent Wenyong Shi, Chairman of NQ Mobile, "The management team remains committed to executing our business strategies and we are off to a good start. Our topline growth remains strong and we are beginning to see results from our efforts to increase monetization of our traffic-based mobile entertainment businesses. We look forward to the future while maintaining our focus on executing and delivering results."
First Quarter 2015 Results
Revenues
Net revenues in the first quarter of 2015 increased 11.8% year-over-year to $89.2 million from $79.8 million in the same period in 2014.
Mobile value added service revenues decreased 8.2% year-over-year to $25.1 million from $27.3 million in the same period in 2014. The decrease in mobile value added service revenues was due to the decrease in consumer mobile security revenues, which in turn was primarily due to the Company's moving its focus away from premium security services and focusing more on mobile applications and services. This decrease was offset partially by the growth in mobile gaming revenues and live mobile social video platform revenues. The increase in mobile gaming revenues was primarily the result of the rapid expansion of FL Mobile's business in both domestic and overseas markets, which has subsequently contributed to mobile gaming revenues increasing by 76.7% year-over-year from the same period in 2014. In addition, the fast growth of Showself's business led to the increase in our live mobile social video platform revenues
Advertising revenues increased 4.3% year-over-year to $17.5 million from $16.8 million in the same period in 2014. The growth was due to increased monetization through advertising and successful third party application referrals resulting mainly from WAPS and Fanyue, the Company's online and offline advertising networks.
Enterprise mobility revenues increased 33.6% year-over-year to $46.0 million from $34.4 million in the same period in 2014. The growth primarily resulted from the Company's premium distribution channel with Apple Inc. and the launch of several new generations of Apple products in late 2014 which carried forward in the first quarter of 2015.
Other revenues decreased 54.8% year-over-year to $0.6 million from $1.2 million in the same period in 2014. Other revenues are generated primarily by providing technical contract services to third parties and fluctuate as such business is driven by individual projects.
Cost of Revenues
Cost of revenues in the first quarter of 2015 increased 39.8% year-over-year to $70.4 million from $50.4 million in the same period in 2014. The year-over-year increase was primarily due to higher cost of products for the enterprise mobility business, which totaled $41.3 million in the first quarter of 2015 compared to $31.5 million in the same period last year. In addition, the cost of revenue sharing, which is incurred mainly for the Company's mobile game business and live mobile social video platform increased to $8.2 million in the first quarter of 2015 compared to $3.8 million in the same period last year.
Gross Profit and Gross Margin
Gross profit in the first quarter of 2015 decreased 36.2% to $18.8 million from $29.4 million in the same period in 2014. Gross margin, or gross profit as a percentage of net revenues, was 21.0% in the first quarter of 2015, compared with 36.9% in the same period in 2014. Excluding the impact from the enterprise mobility business and costs associated with an increase in sales, gross margin was 39.0% in the first quarter of 2015, down from 60.8% in the same period in 201