Momo Inc. shares moved sharply lower on Tuesday after the market was disappointed with the company’s third quarter financial results. Revenue rose 125.7% to $15.16 million – beating consensus estimates by $15.16 million – and net income of 45 cents per share beat consensus estimates by seven cents per share. Despite these strong numbers, the report appeared to disappoint many investors, and the stock has moved more than 20% lower since the beginning of the week.
Most of the third quarter gains came from growth in Momo’s live video service, which grew 179% to $302.6 million. In contrast, mobile marketing fell 1.4% to $17.4 million, mobile games fell 13.6% to $8 million, and other services fell from $3.4 million to just $129,000. The positive news for the company is that monthly active users rose to 94.4 million from 77.4 million, while paying users of live video reached 4.1 million alongside increases in average revenue per paying user. (See also: Why Shares of China’s Momo Are on a Tear.)
Momo may have reported strong third quarter financial results, but investors were not impressed. …read more
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