On September 3rd, Zhiwen Group announced its unaudited financial performance for the second quarter of 2024. According to the financial report, in the second quarter of 2024, Zhiwen Group's net revenue reached 2.691 billion yuan, which is not measured according to US Generally Accepted Accounting Principles. The net profit attributable to Zhiwen Group in the second quarter of 2024 was 449 million yuan.
Tang Yan, Chairman and CEO of Zhiwen Group, stated that they achieved good financial performance in the second quarter, and Momo's cash cow business continued to produce in a good community ecosystem. In terms of innovative business, while strengthening the localization process, we are more confident in the revenue growth opportunities in overseas markets.
In terms of core business, the revenue of Momo and Tantan in the second quarter of 2024 was 2.457 billion yuan and 234 million yuan respectively, not measured according to US Generally Accepted Accounting Principles, with net profits of 430 million yuan and 20 million yuan respectively. Specifically, the revenue from live streaming services in the second quarter was 1.303 billion yuan; Value added service revenue was 1.345 billion yuan, including revenue from virtual gift services and membership subscription services; Mobile marketing revenue was 42 million yuan.
The cost and expenditure of Zhiwen Group continue to decline, with a cost and expenditure of 2.275 billion yuan in the second quarter of 2024, a year-on-year decrease of 9.6%. Regarding the reduction in costs and expenses, Zhiwen Group stated that this is due to the decrease in revenue sharing between Momo App and Tantan App and live streaming hosts, the decrease in revenue sharing between Momo App's virtual gift service and recipients of virtual gifts, the decrease in compensation and option reward expenses, and the decrease in fair value of newly granted options.
The continuous reduction in costs and expenses of Zhiwen Group has significantly improved the company's operational efficiency and profitability. This not only reflects the management's precise grasp of cost control, but also provides more funding space for the company's future research and development, market expansion, and other aspects. "Zhang Yi, CEO and Chief Analyst of iMedia Consulting, told Securities Daily reporters that cost optimization helps enhance the company's financial resilience, make it more resilient to market fluctuations, and create greater value returns for shareholders.
In terms of cash flow, as of June 30, 2024, Zhiwen Group held cash, cash equivalents, short-term deposits, long-term deposits, short-term restricted cash, and long-term restricted cash of 14.316 billion yuan, and as of December 31, 2023, it was 13.479 billion yuan. The net cash generated from operating activities in the second quarter of 2024 was 475 million yuan.
On March 14, 2024, the board of directors of Zhiwen Group approved a revision to the "Stock Repurchase Plan", extending its duration until June 30, 2026 and expanding its scale to repurchase up to a total value of $286.1 million worth of stocks.
Based on the above plan, as of September 3, 2024, Zhiwen Group has repurchased approximately 30.9 million American Depositary Shares (ADS) in the public market, with a total amount of approximately $174.6 million and an average payment price of $5.63 per ADS.
The sustained and vigorous share repurchases by Zhiwen Group are conducive to demonstrating company confidence, stabilizing stock prices, and enhancing investor confidence, especially during market fluctuations. Moreover, repurchases reduce circulating shares, increase earnings per share and return on equity, and enhance the company's profitability. "An anonymous securities analyst told Securities Daily reporters that repurchases are also an effective means of capital operation, which can optimize capital structure and improve the efficiency of fund utilization.