Videos lift Momo to 421% rise in revenue as strategic move pays off

Updated 2017-05-25 10:30:31 Global Times

Buoyed by robust growth in live-streaming video services, the revenue of social media platform Momo jumped 421 percent year-on-year to 5.2 million in the first quarter of 2017.

Adjusted first-quarter earnings stood at 44 cents a share, up 630 percent from the same period in 2016, according to the company's unaudited financial results released on Tuesday. Momo is listed on the NASDAQ.

Monthly active users stood at 85.2 million as of March 31, a record high and up from 72.3 million a year earlier.

"The strong performance in the first quarter was a result of Momo's strategic move into the booming live video business, which enabled the company to quickly capitalize on the service and achieve a business revival," Liu Dingding, a Beijing-based independent industry analyst, told the Global Times on Wednesday.

In the first quarter, Momo's live video service revenue grew 9.1 percent year-on-year to 2.6 million, representing 80 percent of total revenue, the results showed.

Chairman and CEO Tang Yan said in a conference call Wednesday that it was the company's social media function that made its live video service a success. "Looking ahead, we will push forward with our strategy to drive the video transition and introduce more entertaining content to support recreational activities."

Tang stressed that the platform will focus on short video services for the rest of the year.

"Venture capital and private equity funds have been keen on pumping money into the short video industry in the past two months, so Momo's priority [in this area] will allow it to ride another boom in market opportunities," Liu said. But he also said that making a profit from the business will present financial challenges this year.

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