Scienjoy Holding Corporation Reports Interim Nine months ended September 30, 2021 Unaudited Financial Results


    Revenues up 52.5% Year Over Year

    Adjusted Net Income up 37.5% Year Over Year

    Nine months 2021 Revenues and Adjusted Net Income Approach Fiscal Year 2020 Results

    BEIJING, Nov. 22, 2021 /PRNewswire/ -- Scienjoy Holding Corporation ("Scienjoy", the "Company", or "We") (NASDAQ: SJ), a leading live entertainment mobile streaming platform in China, today announced its unaudited financial results for the nine months ended September 30, 2021.

    Nine Months 2021 Operating and Financial Highlights

    • Total net revenues for the nine months ended September 30, 2021 increased by 52.5% to RMB1,171.2 million (US$181.8 million) from RMB767.8 million in the same period of 2020.
    • Gross profit for the nine months ended September 30, 2021 increased by 27.4% to RMB232.4 million (US$36.1 million) from RMB182.4 million in the same period of 2020.
    • Net income for the nine months ended September 30, 2021 increased by 7.7% to RMB237.5 million (US$36.9 million) from RMB220.5 million in the same period of 2020.
    • Adjusted net income for the nine months ended September 30, 2021 increased by 37.5% to RMB182.6 million (US$28.3 million) from RMB132.8 million in the same period of 2020.
    • Total paying users for the nine months ended September 31,2021 decreased by 10.8% to 648,465 from 727,385 in the same period of 2020.
    • Active broadcasters for the nine months ended September 31,2021 increased by 28.2% to 250,497 from 195,422 in the same period of 2020.
    • As of September 30, 2021, the Company had RMB291.9 million (US$45.3 million) in cash and cash equivalents, which represented an increase of 29.9% from RMB224.8 million as of December 31, 2020.

    Mr. Victor He, Chairman and Chief Executive Officer of Scienjoy, commented, "Scienjoy has continued to achieve outstanding financial and operational results in the first nine months of 2021. Our revenues and adjusted net income for the nine months of 2021 are close to the full year results of fiscal year 2020, which reflect tremendous growth in our business. We have made significant progress on improving operating efficiency through refined operations and continued to invest and adopt extensive cutting-edge technologies to improve overall users' experience. The rapid growth number of active broadcasters has proved our strong capabilities in addressing increasing demands for livestreaming. Looking forward, we are committed to building the metaverse in the livestreaming field, by using Artificial Intelligence (AI), Augmented Reality (AR), Virtual Reality (VR), Mixed Reality (MR), big data, and blockchain to upgrade the fundamental elements of livestreaming settings and expand the offerings of livestreaming content. With the continuous development and application of advanced technologies, we aim to fulfill the fast-evolving expectations of our users and broadcasters, which are building an interactive connection between users and broadcasters and customizing their own experiences with a vast variety of contents and features. We remain optimistic and believe that we are well positioned to continue to capture the opportunity in the rapidly expanding and evolving market for live entertainment mobile streaming."

    Mr. Denny Tang, Chief Financial Officer of Scienjoy, added, "We continued to deliver strong financial results in the first nine months of 2021 as we focused on investing in technologies to improve our platform and delivering the attractive experiences to our users and broadcasters. The significant increase in revenue and adjusted net income demonstrated the attractiveness of our platform. Looking ahead, we will still be dedicated to facilitating user growth, enhancing monetization and developing our technologies and ambition in building metaverse in livestreaming. We are confident that we will continue to generate significant revenue and provide greater value to our shareholders in the long term."

    Nine Months 2021 Financial Results

    Total net revenues for the nine months ended September 30, 2021 increased by 52.5% to RMB1,171.2 million (US$181.8 million) from RMB767.8 million in the same period of 2020, because more quality content are provided through our integrated multiple live streaming platforms including Beelive platforms we acquired in September 2020 and our ARPPU for the nine months ended September 30, 2021 increased by 70% comparing to the same period of last year, partially offset by decrease in number of paying users.

    Cost of revenues for the nine months ended September 30, 2021 increased by 60.4% to RMB938.8 million (US$145.7 million) from RMB585.4 million in the same period of 2020. The increase was primarily attributable to a 58.7%, or RMB297.0 million, year-over-year increase in the Company's revenue sharing fees and content costs, which was consistent with the 28.2% year-over-year increase in active broadcasters as well as the growth of the Company's overall live streaming operations for the nine months ended September 30, 2021. In addition, the Company incurred share based compensation of RMB3.4 million for the nine months ended September 30, 2021 and no such expense incurred in the same period of last year.

    Gross profit for the nine months ended September 30, 2021 increased by 27.4% to RMB232.4 million (US$36.1 million) from RMB182.4 million in the same period of 2020.

    Total operating expenses for the nine months ended September 30, 2021 increased to RMB85.6 million (US$13.3 million) from RMB41.5 million in the same period of 2020. 

    • Sales and marketing expenses for the nine months ended September 30, 2021 kept constant at RMB3.7 million (US$0.6 million) as compared to the same period of 2020.
    • General and administrative expenses for the nine months ended September 30, 2021 significantly increased to RMB38.6 million (US6.0 million) from RMB19.7 million in the same period of 2020.The increase was primarily because we had a share based compensation of RMB3.6 Million (US$0.6 million) and higher listing-related professional fees, employee salary and welfare and amortization of intangible assets as compared to the same period of 2020.
    • Research and development expenses for the nine months ended September 30, 2021 increased by 91.6% to RMB39.8 million (US$6.2 million) from RMB20.8 million in the same period of 2020. The increase was due to higher R&D headcount and the Company had share based compensation of RMB5.4 million (US$0.8 million) in the first nine months ended September 30, 2021.
    • Provision for doubtful accounts for the nine months ended September 30, 2021 was RMB3.4 million (US$0.5 million) as compared to a recovery for doubtful accounts of RMB2.7 million in the same period of 2020

    Income from operations for the nine months ended September 30, 2021 increased by 4.2% to RMB146.8 million (US$22.8 million) from RMB140.9 million in the same period of 2020.

    Change in fair value of contingent consideration for the nine months ended September 30, 2021 decreased by 48.1% to RMB45.5 million (US$7.1 million) from RMB87.6 million in the same period of 2020. Change in fair value of contingent consideration is derived from the Company's reverse recapitalization with Wealthbridge Acquisition Limited on May 7, 2020, and acquisition of BeeLive on August 10, 2020, which involved payments of future contingent consideration upon the achievement of certain financial performance targets and specific market price levels. Earn out liabilities are recorded for the estimated fair value of the contingent consideration on the merger date. 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 for the nine months ended September 30, 2021 amount to RMB21.8 million (US$3.4 million). The Company's warrants assumed from SPAC acquisition that have complex terms, such as a clause in which the warrant agreements contain a cash settlement provision whereby the holders could settle the warrants for cash upon a fundamental transaction that is considered outside of the control of management are considered to be a derivative that are recorded as a liability at fair value. The warrant derivative liability is adjusted 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 for the nine months ended September 30, 2021 amount to RMB27.6 million (US$4.3 million) In January 2021, the Company, through its wholly owned subsidiary, Scienjoy Inc., purchased from Cross Wealth Investment Holding Limited, an entity related to two directors of the Company, 606,061 ordinary shares of Goldenbridge Acquisition Limited ("Goldenbridge") for an aggregated consideration of US$2 million. Goldenbridge was formed as a special purpose acquisition company. The investment was classified as investment in marketable security, which is adjusted to its fair value at the end of each reporting period, with the change being recorded as other expense or gain.

    Net income for the nine months ended September 30, 2021 increased by 7.7% to RMB237.5 million (US$36.9 million) from RMB220.5 million in the same period of 2020. 

    Adjusted net income for the nine months ended September 30, 2021 increased by 37.5% to RMB182.6 million (US$28.3 million) from RMB132.8 million in the same period of 2020.

    Basic and diluted net income per ordinary share for the nine months ended September 30, 2021 were both RMB7.73 (US$1.20). In comparison, basic and diluted net income per ordinary share for the nine months ended September 30, 2020 were both RMB10.14, respectively.

    Adjusted basic and diluted net income per ordinary share for the nine months ended September 30, 2021 were both RMB5.94 (US$0.92). In comparison, both adjusted basic and diluted net income per ordinary share for the nine months ended September 30, 2020 were RMB6.11.

    As of September 30, 2021, the Company had cash and cash equivalents of RMB291.9 million (US$45.3 million) compared to RMB224.8 million as of December 31, 2020.

    Business Outlook

    The Company expects its total net revenues to be in the range of RMB393 million to RMB455 million in the fourth quarter of 2021. This forecast reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change, particularly in respect to the potential impact of COVID-19 on the economy in China and other markets around the world.

    About Scienjoy Holding Corporation Limited

    Founded in 2011, Scienjoy is a leading mobile livestreaming platform in China, and its core mission is to build a livestreaming service ecosystem to delight and entertain users. With approximately 250 million registered users, Scienjoy currently operates four livestreaming platform brands, including Showself, Lehai, Haixiu, and BeeLive, which features both the Mifeng Chinese version and BeeLive International version. Scienjoy uniquely combines a gamified business approach to livestreaming, in-depth knowledge of the livestreaming industry, and cutting-edge technologies such as blockchain, augmented reality (AR), virtual reality (VR), and big data, to create a unique user experience. Scienjoy is devoted to building a livestreaming Metaverse to provide users with the ultimate immersive experience, a social media network that transcends time and space, a digital community that spans virtual and physical reality, and a content-rich ecosystem. 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 RMB6.4434 to US$1.00, the noon buying rate in effect on September 30, 2021, 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, 2021, 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

    Ray Chen
    VP, Investor relations
    Scienjoy Inc.
    +86-10-64428188
    ray.chen@scienjoy.com

    Tina Xiao
    Ascent Investor Relations
    +1 (917) 609-0333
    tina.xiao@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 30




    2020



    2021



    2021




    RMB



    RMB



    US$


    ASSETS










    Current assets










    Cash and cash equivalents



    224,768




    291,879




    45,299


    Accounts receivable, net



    228,214




    228,478




    35,459


    Prepaid expenses and other current assets



    13,753




    26,750




    4,151


    Amounts due from related parties



    7




    13,007




    2,019


    Investment in marketable security



    -




    40,606




    6,302


    Total current assets



    466,742




    600,720




    93,230















    Property and equipment, net



    1,356




    1,475




    229


    Intangible assets, net



    239,634




    236,686




    36,733


    Goodwill



    92,069




    92,069




    14,289


    Long term investments



    5,000




    53,000




    8,225


    Long term deposits and other non-current assets



    1,382




    12,139




    1,884


    Deferred tax assets– non-current



    5,654




    5,147




    799


    Total non-current assets



    345,095




    400,516




    62,159


    TOTAL ASSETS



    811,837




    1,001,236




    155,389















    LIABILITIES AND SHAREHOLDERS' EQUITY













    LIABILITIES













    Current liabilities:













    Accounts payable



    67,089




    35,406




    5,496


    Accrued salary and employee benefits



    18,141




    12,155




    1,886


    Accrued expenses and other current liabilities



    12,358




    7,365




    1,143


    Current portion of contingent consideration – earn-out liability



    92,183




    52,783




    8,192


    Income tax payable



    8,581




    11,245




    1,745


    Loan payables - related parties



    -




    11,468




    1,780


    Deferred revenue



    49,567




    70,744




    10,979


    Warrants liabilities



    29,558




    5,090




    790


    Total current liabilities



    277,477




    206,256




    32,011


    Non-current liabilities













    Deferred tax liabilities - non current



    59,729




    58,992




    9,155


    Contingent consideration – earn-out liability



    15,116




    8,175




    1,269


    Total non-current liabilities



    74,845




    67,167




    10,424


    TOTAL LIABILITIES



    352,322




    273,423




    42,435


    Commitments and contingencies













    Shareholders' equity













    Ordinary share, no par value, unlimited shares authorized, 27,037,302 and

    30,844,642 shares issued and outstanding as of December 31, 2020 and September

    30, 2021, respectively



    (96,349)




    133,719




    20,753


    Shares to be issued



    200,100




    -




    -


    Statutory reserves



    18,352




    28,824




    4,473


    Retained earnings



    322,610




    549,643




    85,303


    Accumulated other comprehensive income



    14,802




    15,627




    2,425


    Total shareholder's equity



    459,515




    727,813




    112,954


    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY



    811,837




    1,001,236




    155,389


     

     

    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,






    2020



    2021



    2021






    RMB



    RMB



    US$


    Live streaming - consumable virtual items revenue





    743,882




    1,133,248




    175,877


    Live streaming - time based virtual items revenue





    20,431




    25,527




    3,962


    Technical services





    3,491




    12,416




    1,927


    Total revenues





    767,804




    1,171,191




    181,766


    Cost of revenues





    (585,379)




    (938,797)




    (145,699)


    Gross profit





    182,425




    232,394




    36,067


    Operating expenses















    Sales and marketing expenses





    (3,739)




    (3,746)




    (581)


    General and administrative expenses





    (19,739)




    (38,606)




    (5,992)


    Recovery (provision) for doubtful accounts





    2,746




    (3,405)




    (528)


    Research and development expenses





    (20,770)




    (39,793)




    (6,176)


    Total operating expenses





    (41,502)




    (85,550)




    (13,277)


    Income from operations





    140,923




    146,844




    22,790


    Interest income





    2,154




    1,882




    293


    Other income (expenses), net





    (4,778)




    (84)




    (13)


    Foreign exchange (loss) gain, net





    983




    (34)




    (5)


    Change in fair value of contingent consideration





    87,648




    45,463




    7,056


    Change in fair value of warrants liability





    -




    21,830




    3,388


    Change in fair value of investment in marketable security





    -




    27,648




    4,291


    Income before income taxes





    226,930




    243,549




    37,800


    Income tax benefit (expenses)





    (6,465)




    (6,044)




    (938)


    Net income





    220,465




    237,505




    36,862


    Other comprehensive income - foreign currency translation adjustment





    5,282




    825




    128


    Comprehensive income attributable to the Company's shareholders





    225,747




    238,330




    36,990


    Weighted average number of shares:















    Basic and diluted





    21,746,691




    30,728,931




    30,728,931


    Earnings per share:















    Basic and diluted





    10.14




    7.73




    1.20



     

     

    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,






    2020



    2021



    2021






    RMB



    RMB



    US$














    Net income





    220,465




    237,505




    36,862


    Less:















    Change in fair value of contingent consideration





    87,648




    45,463




    7,056


    Change in fair value of warrants liability





    -




    21,830




    3,388


    Share based compensation





    -




    (12,367)




    (1,919)


    Adjusted net income*





    132,817




    182,579




    28,337

















    Adjusted net income per ordinary share















    Basic and diluted





    6.11




    5.94




    0.92



    "Adjusted net income" is defined as net income 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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