Scienjoy Holding Corporation Reports Nine months ended September 30, 2023 Unaudited Financial Results

BEIJING, Dec. 15, 2023 /PRNewswire/ — Scienjoy Holding Corporation (“Scienjoy”, the “Company”, or “we”) (NASDAQ: SJ), an interactive entertainment leader in the Chinese market, today announced its unaudited financial results for the nine months ended September 30, 2023.

Nine Months 2023 Operating and Financial Summary

  • Total net revenues decreased to RMB1,036.6 million (US$142.1 million) for the nine months ended September 30, 2023 from RMB1,419.4 million in the same period of 2022.    
  • Gross profit decreased to RMB138.6 million (US$19.0 million) for the nine months ended September 30, 2023 from RMB278.2 million in the same period of 2022.    
  • Income from operations decreased to RMB8.5 million (US$1.2 million) for the nine months ended September 30, 2023 from RMB169.3 million in the same period of 2022. If excluded one-time provision for credit loss of RMB16.3 million, our income from operation would amount to RMB24.8 million (US$3.4 million) for the nine months ended September 30, 2023.     
  • Net loss attributable to the Company’s shareholders was RMB34.7 million (US$4.8 million) for the nine months ended September 30, 2023, as compared with a net income attributable to the Company’s shareholders of RMB189.4 million in the same period of 2022. If excluded one-time expenses amounting to RMB58.5 million including investment impairment, share of unrealized loss, and provision for credit loss, the Company would have net income attributable to the Company’s shareholders of RMB23.8 million (US$3.3 million) for the nine months ended September 30, 2023.    
  • Adjusted net loss attributable to the Company’s shareholders was RMB22.0 million (US$3.0 million) for the nine months ended September 30, 2023, as compared with a net income adjusted attributable to the Company’s shareholders of RMB172.5 million in the same period of 2022.    
  • As of September 30, 2023, the Company had cash and cash equivalent balance of RMB198.7 million (US$27.2 million), increased by 13.4% from RMB175.3 million as of December 31, 2022.    
  • Total paying users were 458,590 for the nine months ended September 30, 2023, compared to 596,449 in the same period of 2022.    
  • Active broadcasters were 147,923 for the nine months ended September 30, 2023, increased from 126,518 in the same period of 2022, primarily due to our expansion in the overseas market.

Mr. Victor He, Chairman and Chief Executive Officer of Scienjoy, commented, “I am delighted to unveil our exciting developments in SJ Verse and other progress. SJ Media, arising from the merger between BeeLive and NUJOOM ALMASHREQ MEDIA L.L.C (“NUJOOM”), has evolved into an AI-enabled live streaming platform, providing unparalleled interactive experiences. SuperJ is reshaping the retail landscape with its distinctive ‘pay less and get a surprise’ model, elevating the lifestyle dimension of SJ Verse. DVCC TECHNOLOGY L.L.C (“DVCC”), our comprehensive race event platform, continues to deliver thrilling entertainment to our audience. However, our journey doesn’t stop here. The upcoming year holds the promise of even more enriching content and innovative product lines as we remain committed to leveraging AI to redefine digital entertainment and create a lifestyle metaverse ecosystem anchored in SJ Verse.”

Mr. Denny Tang, Chief Financial Officer of Scienjoy, added, “Navigating through an increasingly competitive landscape of China’s mobile live streaming in the third quarter of 2023, we experienced a modest decrease in total net revenues. We are proactively optimizing our cost structures while maintaining operational efficiency and investing in our core business. Excluding the impact of one-time expenses and losses, we would achieve net profit for the nine months ended September 30, 2023. In addition, our cash and cash equivalents increased by 13.4% compared to December 31, 2022, reflecting our healthy and resilient operational status. We continued to prioritize our metaverse strategy and global business expansion, empowering our metaverse business through strategic partnership and investment. Our research expenses in innovation witnessed a continuous increase, which showcases our commitment to innovation in AI technology and metaverse. Going forward, we will be dedicated to translating our current collaboration and research fruits into profitable products and business growth. We have full confidence that significant growth opportunities lie in the global metaverse industry, and the Company will lead the way to create sustainable value for our shareholders.”

Nine Months 2023 Financial Results

Total net revenues decreased by 27.0% to RMB1,036.6 million (US$142.1 million) for the nine months ended September 30, 2023 from RMB1,419.4 million in the same period of 2022, primarily caused by decrease of paying users and average revenue per paying user (“ARPPU”) due to competitive landscape of China’s mobile live streaming market. 

Cost of revenues decreased by 21.3% to RMB898.0 million (US$123.1 million) for the nine months ended September 30, 2023 from RMB1,141.2 million in the same period of 2022. This decrease was primarily attributable to a year-over-year decrease of RMB215.3 million, or 21.0%, in the Company’s revenue sharing fees and content costs. Cost did not decrease as fast as revenue since some fixed cost did not reduce proportionately with revenue.

Gross profit decreased by 50.2% to RMB138.6 million (US$19.0 million) for the nine months ended September 30, 2023 from RMB278.2 million in the same period of 2022.

Total operating expenses for the nine months ended September 30, 2023 increased by 19.3% to RMB130.0 million (US$17.8 million) for the nine months ended September 30, 2023 from RMB108.9 million in the same period of 2022. However, if excluded one-time provision for credit loss of RMB16.3 million on loan receivable and RMB2.5 million office renovation expenses, our income from operation would amount to RMB111.2 million (US$15.2 million), consistent with the same period of last year.

  • Sales and marketing expenses significantly decreased by 61.9% to RMB0.5 million (US$74,000) for the nine months ended September 30, 2023 from RMB1.4 million in the same period of 2022, primarily due to fewer marketing activities as the Company tightened the budget based on current operating needs.    
  • General and administrative expenses increased by18.5% to RMB54.8 million (US$7.5 million) for the nine months ended September 30, 2023 from RMB46.3 million in the same period of 2022, primarily caused by increase of RMB3.7 million in share-based compensation and RMB2.5 million office renovation expenses.    
  • Research and development expenses increased by 7.4% to RMB57.7 million (US$7.9 million) for the nine months ended September 30, 2023 from RMB53.7 million in the same period of 2022, primarily due to increased R&D spending in technology innovation.    
  • Provision for doubtful accounts increased by 125.0% to RMB17.0 million (US$2.3 million) for the nine months ended September 30, 2023 from RMB7.6 million in the same period of 2022, primary due to one-time credit loss provision of RMB16.3 million for the loan receivable.

Income from operations decreased by 95.0% to RMB8.5 million (US$1.2 million) for the nine months ended September 30, 2023 from RMB169.3 million in the same period of 2022. If excluded one-time provision for credit loss of RMB16.3 million, our income from operation would amount to RMB24.8 million (US$3.4 million) for the nine months ended September 30, 2023.  

Change in fair value of contingent consideration amounted to a loss of RMB1.8 million (US$243,000) for the nine months ended September 30, 2023, as compared to a gain of RMB 16.1 million in the same period of 2022. Change in fair value of contingent consideration is derived from earn out liabilities resulted from historical acquisitions. The fair value of the contingent consideration is re-measured at each reporting period, and the change in fair value is recognized as either income or expense. 

Change in fair value of warrants liability decreased to a gain of RMB 0.2 million (US$23,000) for the nine months ended September 30, 2023 from a gain of RMB10.3 million in the same period of 2022. The fair value of the Company’s warrants derivative liability assumed from the SPAC acquisition is re-measured to its fair value at the end of each reporting period, with the change being recorded as other expense or gain.

Change in fair value of investment in marketable security decreased to a gain of RMB1.1 million (US$152,000) for the nine months ended September 30, 2023 from a gain of RMB1.4 million for the same period of 2022. The change was primarily attributable to the fair value changes in investments in publicly traded company.

Investment loss amounted to RMB41.8 million (US$5.7 million) for the nine months ended September 30, 2023 as compared with an investment income of RMB0.9 million in the same period of 2022. The investment loss for the nine months ended September 30, 2023 was primarily attributable to both one-time share of unrealized loss of RMB30.4 million and an impairment loss of 11.8 million in the long-term investments.

Net loss amounted to RMB37.3 million (US$5.1 million) for the nine months ended September 30, 2023, as compared to a net income of RMB191.7 million in the same period of 2022. 

Net loss attributable to the Company’s shareholders amounted to RMB34.7 million (US$4.8 million) for the nine months ended September 30, 2023, as compared to a net income attributable to the Company’s shareholders of RMB189.4 million in the same period of 2022. If excluded one-time expenses amounting to RMB58.5 million in investment impairment, share of unrealized loss, and provision for credit loss, the Company had net income attributable to the Company’s shareholders of RMB23.8 million (US$3.3 million) for the nine months ended September 30, 2023.

Adjusted net loss attributable to the Company’s shareholders amounted to RMB22.0 million (US$3.0 million) for the nine months ended September 30, 2023, as compared to a net income adjusted attributable to the Company’s shareholders of RMB172.5 million in the same period of 2022.

Basic and diluted net loss attributable to the Company’s shareholders per ordinary share were both RMB0.86 (US$0.12) for the nine months ended September 30, 2023. In comparison, basic and diluted net income attributable to the Company’s shareholders per ordinary share were both RMB4.92 in the same period of 2022.

Adjusted basic and diluted net loss attributable to the Company’s shareholders per ordinary share were both RMB0.54 (US$0.07) for the nine months ended September 30, 2023. In comparison, adjusted basic and diluted net income attributable to the Company’s shareholders per ordinary share were both RMB4.48 in the same period of 2022.

As of September 30, 2023, the Company had cash and cash equivalents of RMB198.7 million (US$27.2 million), which represented an increase of 13.4% from RMB175.3 million as of December 31, 2022.

Business Outlook

The Company expects its total net revenues to be in the range of RMB365 million to RMB400 million in the fourth quarter of 2023. This forecast reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change, particularly with respect to the potential impact of COVID-19 on the economy in China and other markets around the world. 

About Scienjoy Holding Corporation

Scienjoy Holdings Corporation (NASDAQ: SJ) is a pioneering Nasdaq-listed interactive entertainment leader. Driven by the vision of shaping a metaverse lifestyle, Scienjoy leverages AI-powered technology to create immersive experiences that resonate with global audiences, fostering meaningful connections and redefining entertainment. For more information, please visit http://ir.scienjoy.com/

Use of Non-GAAP Financial Measures

Adjusted net income is calculated as net income adjusted for change in fair value of contingent consideration, change in fair value of warrant liability and share based compensation. Adjusted basic and diluted net income per ordinary share is non-GAAP net income (loss) attributable to ordinary shareholders divided by weighted average number of ordinary shares used in the calculation of non-GAAP basic and diluted net income per ordinary share. The non-GAAP financial measures are presented to enhance investors’ overall understanding of the Company’s financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. Investors are encouraged to review the reconciliation of the historical non-GAAP financial measures to its most directly comparable GAAP financial measures. As non-GAAP financial measures have material limitations as analytical metrics and may not be calculated in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measures as a substitute for, or superior to, such metrics in accordance with US GAAP.

For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of Non-GAAP Results” near the end of this release.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB7.2960 to US$1.00, the noon buying rate in effect on September 30, 2023, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB amounts could have been, or could be, converted, realized or settled in U.S. dollars at that rate on September 30, 2023, or at any other rate.

Safe Harbor Statement

Certain statements made in this release are “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, are: the ability to manage growth; ability to identify and integrate other future acquisitions; ability to obtain additional financing in the future to fund capital expenditures; fluctuations in general economic and business conditions; costs or other factors adversely affecting our profitability; litigation involving patents, intellectual property, and other matters; potential changes in the legislative and regulatory environment; a pandemic or epidemic. The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in the Company’s filings with the Securities and Exchange Commission (“SEC”) from time to time. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Such information speaks only as of the date of this release.

Investor Relations Contact

Denny Tang

Chief Financial Officer

Scienjoy Holding Corporation

+86-10-64428188

ir@scienjoy.com 

Tina Xiao

Ascent Investor Relations

+1-646-932-7242

investors@ascent-ir.com 

 

 

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except share and per share data or otherwise stated)




As of

December 31,



As of

September,




2022



2023




RMB



RMB



USD


ASSETS










Current assets










Cash and cash equivalents



175,292




198,748




27,241


Accounts receivable, net



316,657




225,137




30,857


Prepaid expenses and other current assets



115,170




80,822




11,077


Amounts due from related parties



1,115




427




59


Investment in marketable security



40,548




41,661




5,710


Total current assets



648,782




546,795




74,944















Property and equipment, net



2,735




2,105




289


Intangible assets, net



419,055




413,872




56,726


Goodwill



172,781




172,781




23,682


Long term investment



234,176




241,545




33,106


Long term deposits and other assets



953




955




131


Right-of-use assets-operating lease



19,209




13,953




1,912


Deferred tax assets



4,337




4,992




684


Total non-current assets



853,246




850,203




116,530


TOTAL ASSETS



1,502,028




1,396,998




191,474















LIABILITIES AND SHAREHOLDERS’ EQUITY













Current liabilities













Bank loan



5,000








Accounts payable



116,251




55,531




7,611


Accrued salary and employee benefits



12,428




12,226




1,676


Accrued expenses and other current liabilities



13,264




5,056




693


Contingent consideration – earn-out liability



4,336




6,110




837


Warrant liabilities



166








Income tax payable



13,531




17,237




2,363


Lease liabilities-operating lease -current



7,174




7,882




1,080


Deferred revenue



93,383




91,763




12,577


Total current liabilities



265,533




195,805




26,837















Non-current liabilities













Deferred tax liabilities



61,236




60,172




8,247


Lease liabilities-operating lease -non-current



12,773




5,798




795


Total non-current liabilities



74,009




65,970




9,042


TOTAL LIABILITIES



339,542




261,775




35,879















Commitments and contingencies


























EQUITY













Ordinary share, no par value, unlimited Class A ordinary shares and

   Class B ordinary shares authorized, 36,684,668 Class A ordinary

   shares and 2,925,058 Class B ordinary shares issued and

   outstanding as of December 31, 2022, respectively.
38,113,879

   Class A ordinary shares and 2,925,058 Class B ordinary shares

   issued and outstanding as of September
30, 2023, respectively*













Class A ordinary shares



396,880




421,155




57,725


Class B ordinary shares



23,896




23,896




3,275


Shares to be issued



33,923




20,817




2,853


Treasury stocks



(16,482)




(16,482)




(2,259)


Statutory reserves



39,208




42,437




5,816


Retained earnings



665,099




627,130




85,955


Accumulated other comprehensive income



18,070




16,980




2,327


Total shareholders’ equity



1,160,594




1,135,933




155,692


Non-controlling interests



1,892




(710)




(97)


Total equity



1,162,486




1,135,223




155,595


TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY



1,502,028




1,396,998




191,474


 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND

COMPREHENSIVE INCOME

(All amounts in thousands, except share and per share data or otherwise stated)




For nine months ended




September 30,



September 30,



September 30,




2022



2023



2023




RMB



RMB



US$


Live streaming – consumable virtual items revenue



1,377,720




1,001,169




137,222


Live streaming – time based virtual items revenue



21,037




18,823




2,580


Technical services and others



20,658




16,573




2,271


Total revenues



1,419,415




1,036,565




142,073


Cost of revenues



(1,141,205)




(898,006)




(123,082)


Gross profit



278,210




138,559




18,991


Operating expenses













Sales and marketing expenses



(1,427)




(543)




(74)


General and administrative expenses



(46,253)




(54,831)




(7,515)


Provision for doubtful accounts



(7,552)




(16,989)




(2,329)


Research and development expenses



(53,716)




(57,665)




(7,904)


Total operating expenses



(108,948)




(130,028)




(17,822)


Income from operations



169,262




8,531




1,169


Change in fair value of contingent consideration



16,065




(1,774)




(243)


Change in fair value of warrants liability



10,340




169




23


Change in fair value of investment in marketable

security



1,368




1,112




152


Investment income (loss)



854




(41,794)




(5,728)


Interest income



2,000




2,244




308


Interest expense



(37)




(137)




(19)


Other income (expenses), net



6,110




1,524




209


Foreign exchange loss, net



(1,112)




274




38


Income (loss) before income taxes



204,850




(29,851)




(4,091)


Income tax expenses



(13,192)




(7,491)




(1,027)


Net income (loss)



191,658




(37,342)




(5,118)


Less: net income (loss)attributable to noncontrolling

interest



2,296




(2,602)




(357)


Net income (loss) attributable to the Company’s

shareholders



189,362




(34,740)




(4,761)















Other comprehensive income (loss):













Other comprehensive income (loss) – foreign

currency translation adjustment



1,299




(1,090)




(149)


Comprehensive income (loss)



192,957




(38,432)




(5,267)


Less: comprehensive income (loss) attributable to

non-controlling interests



2,296




(2,602)




(357)


Comprehensive income (loss) attributable to the

Company’s shareholders



190,661




(35,830)




(4,910)















Weighted average number of shares:













Basic



38,518,087




40,594,241




40,594,241


Diluted



38,524,528




40,594,241




40,594,241


Earnings (loss) per share:













Basic



4.92




(0.86)




(0.12)


Diluted



4.92




(0.86)




(0.12)


 

 

 

Reconciliations of Non-GAAP Results

(All amounts in thousands, except share and per share data or otherwise stated)




For the nine months ended




September 30,



September 30,



September 30,




2022



2023



2023




RMB



RMB



US$


Net income (loss) attributable to the Company’s

   shareholders



189,362




(34,740)




(4,761)


Less:













Change in fair value of contingent consideration



16,065




(1,774)




(243)


Change in fair value of warrants liability



10,340




169




23


Share based compensation



(9,515)




(11,169)




(1,531)


Adjusted net income (loss) attributable to the

   Company’s shareholders*



172,472




(21,966)




(3,010)















Adjusted net income (loss) per ordinary share













Basic



4.48




(0.54)




(0.07)


Diluted



4.48




(0.54)




(0.07)


“Adjusted net income (loss) attributable to the Company’s shareholders” is defined as net income (loss) attributable to the Company’s shareholders excluding change in fair value of contingent consideration, change in fair value of warrant liability and share based compensation. For more information, refer to “Use of Non-GAAP Financial Measures” and “Reconciliations of Non-GAAP Results” at the end of this press release.

 

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SOURCE Scienjoy Holding Corporation

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