MOGU Announces Unaudited Financial Results For the Six Months Ended March 31, 2023 and Fiscal Year 2023

HANGZHOU, China–(BUSINESS WIRE)–MOGU Inc. (NYSE: MOGU) (“MOGU” or the “Company”), a KOL-driven online fashion and lifestyle destination in China, today announced its unaudited financial results for the six months ended March 31, 2023 and fiscal year 2023.
Mr. Fan Yiming, Chief Executive Officer of MOGU, commented, “Fiscal Year 2023 has been an extremely challenging year. The competitive environment of online shopping continued to intensify and several surges in COVID-19 cases in China resulted in supply chain and logistics disruptions.
The Gross Merchandise Value (“GMV1”) and revenue of MOGU for the second half of fiscal year 2023 decreased by 38.0% and 30.2%, to RMB3,241 million and RMB117.2 million period-over-period, respectively.The declining GMV was driven by weakening demand in the fashion & accessories category, which was partially offset by accelerating growth for healthcare and food.
Consumer behavior has shifted during the Covid-19 pandemic. As many customers temporarily adopted a more conservative consumption attitude, they tend to exercise more prudence on discretionary spending like fashion and accessories. Meanwhile, people pay more attention to their health and general well-being, which in turn leads to more interest and willingness to consume healthcare related products. In response to this trend, we have proactively adjusted our product offerings and expanded our product portfolio with a variety of healthcare products, groceries, household supplies and foods. Our goal is to offer our customers a wider variety of products while providing a more enjoyable shopping experience.”
“During the second half of fiscal year of 2023, our total revenues decreased by 30.2%, as compared with the same period of fiscal year 2022, to RMB117.2 million. We continued to take a holistic approach to improve our financial performance. The adjusted EBITDA (non-GAAP) and loss from operations were negative RMB6.8 million and RMB139.4 million, compared with negative RMB16.3 million and RMB240.3 million, respectively, for the same period of fiscal year 2022. We will also continue to explore new business opportunities to diversify our revenue structure,” added Ms. Qi Feng, Financial Controller of MOGU.
Highlights For the Six Months Ended March 31, 2023

Total revenues for the six months ended March 31, 2023 decreased by 30.2% to RMB117.2 million (US$17.1 million) from RMB168.0 million during the same period of fiscal year 2022.

Live video broadcast (“LVB”) associated GMV for the six months ended March 31, 2023 decreased by 34.7% period-over-period to RMB3,165 million (US$460.9 million2).

GMV for the six months ended March 31, 2023 was RMB3,241 million (US$471.9 million), a decrease of 38.0% period-over-period.

Financial Results For the Six Months Ended March 31, 2023
Total revenues for the six months ended March 31, 2023 decreased by 30.2% to RMB117.2 million (US$17.1 million) from RMB168.0 million during the same period of fiscal year 2022.

Commission revenues for the six months ended March 31, 2023 decreased by 31.0% to RMB75.8 million (US$11.0 million) from RMB109.9 million in the same period of fiscal year 2022, primarily attributable to the lower GMV due to the heightened competitive environment and the COVID-19 pandemic resurgence.

Marketing services revenues for the six months ended March 31, 2023 decreased by 70.6% to RMB1.4 million (US$0.2 million) from RMB4.9 million in the same period of fiscal year 2022, primarily due to the challenging competitive environment.

Financing solutions revenues for the six months ended March 31, 2023 decreased by 42.0% to RMB6.0 million (US$0.9 million) from RMB10.4 million in the same period of fiscal year 2022. The decrease was primarily due to the decrease in the service fee of loans to users in line with the lower GMV.

Technology service revenues for the six months ended March 31,2023 decreased by 13.8% to RMB30.8 million (US$4.5 million) from RMB35.7 million in the same period of fiscal year 2022, primarily attributable to the decrease of software services revenue.

Other revenues for the six months ended March 31, 2023 decreased by 55.3% to RMB3.2 million (US$0.5 million) from RMB7.1 million in the same period of fiscal year 2022, primarily due to the decrease of promotion services revenue provided to financial institutions under the impact of the COVID-19 pandemic.

Cost of revenues for the six months ended March 31, 2023 decreased by 27.2% to RMB54.2 million (US$7.9 million) from RMB74.5 million in the same period of fiscal year 2022, which was primarily due to a decrease in payroll, IT-related expenses and payment handling and outsourcing costs, in line with the overall reduction in revenue.
Sales and marketing expenses for the six months ended March 31, 2023 decreased by 37.0% to RMB35.1 million (US$5.1 million) from RMB55.6 million in the same period of fiscal year 2022, primarily due to optimized spending on branding and user acquisition activities, in line with the overall reduction in revenue.
Research and development expenses for the six months ended March 31, 2023 decreased by 56.8% to RMB16.1 million (US$2.4 million) from RMB37.4 million in the same period of fiscal year 2022, primarily due to a decrease in payroll costs.
General and administrative expenses for the six months ended March 31, 2023 decreased by 17.2% to RMB30.7 million (US$4.5 million) from RMB37.1 million in the same period of fiscal year 2022, primarily due to a decrease in professional service fees and payroll costs.
Amortization of intangible assets for the six months ended March 31, 2023 decreased by 76.2% to RMB40.0 million (US$5.8 million) from RMB168.0 million in the same period of fiscal year 2022, primarily because the majority of the intangible assets recorded as a result of the business cooperation agreement MOGU entered into with Tencent in July 2018 have been fully amortized as of March 31, 2022.
Impairment of goodwill and intangible assets for the six months ended March 31, 2023 increased by 73.2% to RMB84.7 million (US$12.3 million) from RMB48.9 million in the same period of fiscal year 2022, primarily due to the Company’s recognition of a full impairment charge of RMB 63.5 million against its remaining goodwill balance and impairments totaling RMB21.2 million for intangible assets which had been recorded in connection with the acquisition of Ruisha Technology. The recorded impairments resulted from weaker-than-expected operating results which reflect an increasingly competitive business environment and the related limited future economic benefit expected to be generated from these intangible assets. As of March 31, 2023, the carrying value of the Company’s goodwill is $0.
Loss from operations for the six months ended March 31, 2023 was RMB139.4 million (US$20.3 million), compared to loss from operations of RMB240.3 million in the same period of fiscal year 2022.
Net loss attributable to MOGU Inc. for the six months ended March 31, 2023 was RMB113.9 million (US$16.6 million), compared to a net loss attributable to MOGU Inc. of RMB227.9 million in the same period of fiscal year 2022.
Adjusted EBITDA3 for the six months ended March 31, 2023 was negative RMB6.8 million (US$1.0 million), compared to negative RMB16.3 million in the same period of fiscal year 2022.
Adjusted net loss4 for the six months ended March 31, 2023 was RMB40.0 million (US$5.8 million), compared to an adjusted net loss of RMB180.6 million in the same period of fiscal year 2022.
Basic and diluted loss per ADS5 for the six months ended March 31, 2023 were RMB13.29 (US$1.93) and RMB13.29 (US$1.93), respectively, compared with RMB27.13 and RMB27.13, respectively, in the same period of fiscal year 2022. One ADS represents 300 Class A ordinary shares.
Cash and cash equivalents, Restricted cash and Short-term investments were RMB562.8 million (US$82.0 million) as of March 31, 2023, compared with RMB636.3 million as of March 31, 2022.
Fiscal Year 2023 Financial Results
Total revenues decreased by 31.2% to RMB232.1 million (US$33.8 million) from RMB337.5 million in fiscal year 2022.

Commission revenues decreased by 34.9% to RMB147.5 million (US$21.5 million) from RMB226.7 million in fiscal year 2022, primarily attributable to the lower GMV due to the heightened competitive environment.

Marketing services revenues decreased by 75.3% to RMB4.4 million (US$0.6 million) from RMB17.9 million in fiscal year 2022. The decrease was primarily due to the challenging competitive environment.

Financing solutions revenues decreased by 59.4% to RMB12.9 million (US$1.9 million) from RMB31.9 million in the same period of fiscal year 2022. The decrease was primarily due to the decrease in service fees of loans to users in line with the lower GMV.

Technology service revenues increased by 27.8% to RMB58.9 million (US$8.6 million) from RMB46.1 million in the fiscal year 2022, primarily attributable to the incremental year-over-year revenue contribution of Hangzhou Ruisha Technology Co., Ltd. (“Ruisha”), a business acquired in July 2021. This acquisition demonstrates the Company’s commitment to providing brand merchants with one-stop and customized services for full-domain operations, including a wide variety of operational services, data platforms and other software services, as well as value-added services such as traffic placement.

Other revenues decreased by 44.1% to RMB8.3 million (US$1.2 million) from RMB14.9 million in fiscal year 2022, primarily due to the COVID -related decrease in promotion services revenue provided to financial institutions.

Cost of revenues decreased by 28.6% to RMB113.9 million (US$16.6 million) from RMB159.6 million in fiscal year 2022, which was primarily due to a decrease in payroll, IT-related expenses and payment handling and outsourcing costs, in line with the overall reduction in revenue.
Sales and marketing expenses decreased by 54.4% to RMB67.7 million (US$9.9 million) from RMB148.4 million in fiscal year 2022, primarily due to optimized spending on branding and user acquisition activities, in line with the overall reduction in revenue.
Research and development expenses decreased by 55.1% to RMB37.1 million (US$5.4 million) from RMB82.6 million in fiscal year 2022, primarily due to a decrease in payroll costs.
General and administrative expenses decreased by 19.9% to RMB63.4 million (US$9.2 million) from RMB79.2 million in fiscal year 2022, primarily due to a decrease in professional service fees and payroll costs.
Amortization of intangible assets decreased by 81.7% to RMB60.0 million (US$8.7 million) from RMB328.2 million in fiscal year 2022, primarily because the majority of the intangible assets recorded as a result of the business cooperation agreement MOGU entered into with Tencent in July 2018 have been fully amortized as of March 31, 2022.
Impairment of goodwill and intangible assets for the year ended March 31, 2023 was RMB84.7 million (US$12.3 million), compared to RMB235.4 million in the fiscal year 2022. As of March 31, 2023, the goodwill of the Company has been fully impaired.
Loss from operations was RMB187.4 million (US$27.3 million), compared to loss from operations of RMB670.5 million in fiscal year 2022.
Net loss attributable to MOGU Inc. was RMB171.3 million (US$24.9 million), compared to a net loss attributable to MOGU Inc. of RMB639.8 million in fiscal year 2022.
Adjusted EBITDA was negative RMB23.9 million (US$3.5 million), compared to negative RMB89.1 million in fiscal year 2022.
Adjusted net loss was RMB71.8 million (US$10.5 million), compared to an adjusted net loss of RMB410.7 million in fiscal year 2022.
Basic and diluted loss per ADS were RMB20.12 (US$2.93) and RMB20.12 (US$2.93) respectively, compared with RMB76.17 and RMB76.17, respectively, in fiscal year 2022. One ADS represents 300 Class A ordinary shares.
Use of Non-GAAP Financial Measures
In evaluating the business, the Company considers and uses non­GAAP measures, such as Adjusted EBITDA and Adjusted net income/loss as supplemental measures to review and assess operating performance. The presentation of these non­GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The Company defines Adjusted EBITDA as net loss before interest income, interest expense, (gain)/loss from investments, net, income tax benefits, share of results of equity investees, goodwill impairment, share-based compensation expenses, amortization of intangible assets, and depreciation of property and equipment. The Company defines Adjusted net loss as net loss excluding (gain)/loss from investments, net, goodwill impairment, share-based compensation expenses, and adjustments for tax effects. The Company excluded “amortization of intangible assets” as a non-recurring item in the presentation of adjusted net loss in its Unaudited Reconciliations of GAAP and Non-GAAP Results for the six months ended March 31, 2023 and fiscal year 2023. As a result, the Company made the corresponding change to the prior period comparative metrics to conform with the new definition. See “Unaudited Reconciliations of GAAP and Non­GAAP Results” at the end of this press release.
The Company presents these non­GAAP financial measures because they are used by management to evaluate operating performance and formulate business plans. The Company believes that the non­GAAP financial measures help identify underlying trends in its business by excluding certain expenses, gain/loss and other items that are not expected to result in future cash payments or that are non­recurring in nature or may not be indicative of the Company’s core operating results and business outlook. The Company also believes that the non­GAAP financial measures could provide further information about the Company’s results of operations, enhance the overall understanding of the Company’s past performance and future prospects.
The non­GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non­GAAP financial measures have limitations as analytical tools. The Company’s non­GAAP financial measures do not reflect all items of income and expense that affect the Company’s operations and do not represent the residual cash flow available for discretionary expenditures. Further, these non­GAAP measures may differ from the non­GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the non­GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating performance. The Company encourages you to review the Company’s financial information in its entirety and not rely on a single financial measure.
For more information on the non­GAAP financial measures, please see the table captioned “Unaudited Reconciliations of GAAP and Non­GAAP Results” set forth at the end of this press release.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident,” “potential,” “continue” or other similar expressions. Among other things, the business outlook and quotations from management in this announcement, as well as MOGU’s strategic and operational plans, contain forward-looking statements. MOGU may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about MOGU’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: MOGU’s growth strategies; the risk that COVID-19 or other health risks in China or globally could adversely affect its operations or financial results; its future business development, results of operations and financial condition; its ability to understand buyer needs and provide products and services to attract and retain buyers; its ability to maintain and enhance the recognition and reputation of its brand; its ability to rely on merchants and third-party logistics service providers to provide delivery services to buyers; its ability to maintain and improve quality control policies and measures; its ability to establish and maintain relationships with merchants; trends and competition in China’s e­commerce market; changes in its revenues and certain cost or expense items; the expected growth of China’s e­commerce market; PRC governmental policies and regulations relating to MOGU’s industry, and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in MOGU’s filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and MOGU undertakes no obligation to update any forward-looking statement, except as required under applicable law.
About MOGU Inc.
MOGU Inc. (NYSE: MOGU) is a KOL-driven online fashion and lifestyle destination in China. MOGU provides people with a more accessible and enjoyable shopping experience for everyday fashion, particularly as they increasingly live their lives online. By connecting merchants, KOLs and users together, MOGU’s platform serves as a valuable marketing channel for merchants, a powerful incubator for KOLs, and a vibrant and dynamic community for people to discover and share the latest fashion trends with others, where users can enjoy a truly comprehensive online shopping experience.

MOGU INC.

Unaudited Condensed Consolidated Balance Sheets

(All amounts in thousands, except for share and per share data)

 
 

 
 
 
 
 
 

 
As of March 31,
 
As of March 31,

 
2022
 
2023

 
RMB
 
RMB
 
US$

ASSETS
 

 
 
 
 
 
 

Current assets:
 

 
 
 
 
 
 

Cash and cash equivalents
438,608

 
416,201
 
 
60,604
 

Restricted cash
809

 
810
 
 
118
 

Short-term investments
196,853

 
145,836
 
 
21,235
 

Inventories, net
79

 
144
 
 
21
 

Loan receivables, net
26,788

 
7,229
 
 
1,053
 

Prepayments, receivables and other current assets
55,135

 
69,126
 
 
10,066
 

Amounts due from related parties
640

 
1,260
 
 
183
 

Total current assets
718,912

 
640,606
 
 
93,280
 

Non-current assets:
 

 
 
 
 
 
 

Property, equipment and software, net
7,702

 
194,589
 
 
28,334
 

Intangible assets, net
89,822

 
12,554
 
 
1,828
 

Right-of-use assets*
–

 
5,441
 
 
792
 

Goodwill
63,460

 
–
 
 
–
 

Investments
72,120

 
69,318
 
 
10,093
 

Other non-current assets
214,964

 
63,640
 
 
9,267
 

Total non-current assets
448,068

 
345,542
 
 
50,314
 

Total assets
1,166,980

 
986,148
 
 
143,594
 

 
 

 
 
 
 
 
 

LIABILITIES AND SHAREHOLDERS’ EQUITY
 

 
 
 
 
 
 

Current liabilities:
 

 
 
 
 
 
 

Short-term borrowings
10,064

 
–
 
 
–
 

Accounts payable
17,950

 
8,179
 
 
1,191
 

Salaries and welfare payable
12,311

 
13,550
 
 
1,973
 

Advances from customers
901

 
245
 
 
36
 

Taxes payable
3,265

 
4,446
 
 
647
 

Amounts due to related parties
4,694

 
4,196
 
 
611
 

Current portion of lease liabilities*
–

 
2,654
 
 
386
 

Accruals and other current liabilities
272,638

 
270,717
 
 
39,419
 

Total current liabilities
321,823

 
303,987
 
 
44,263
 

Non-current liabilities:
 

 
 
 
 
 
 

Non-current lease liabilities*
–

 
753
 
 
110
 

Deferred tax liabilities
12,112

 
3,369
 
 
491
 

Other non-current liabilities
890

 
–
 
 
–
 

Total non-current liabilities
13,002

 
4,122
 
 
601
 

Total liabilities
334,825

 
308,109
 
 
44,864
 

Shareholders’ equity
 

 
 
 
 
 
 

Ordinary shares
181

 
181
 
 
26
 

Treasury stock
(136,113)

 
(137,446)
 
 
(20,014)
 

Statutory reserves
3,331

 
3,331
 
 
485
 

Additional paid-in capital
9,471,101

 
9,484,664
 
 
1,381,074
 

Accumulated other comprehensive income
69,016

 
82,396
 
 
11,999
 

Accumulated deficit
(8,617,780)

 
(8,789,084)
 
 
(1,279,790)
 

Total MOGU Inc. shareholders’ equity
789,736

 
644,042
 
 
93,780
 

Non-controlling interests
42,419

 
33,997
 
 
4,950
 

Total shareholders’ equity
832,155

 
678,039
 
 
98,730
 

Total liabilities and shareholders’ equity
1,166,980

 
986,148
 
 
143,594
 

 

*On April 1, 2022, the Company adopted ASC 842, Leases and, as acceptable under the Standard, elected not to retrospectively adjust prior periods. Right-of-use assets and lease liabilities were recognized on the Company’s consolidated financial statements in connection with the adoption of the Standard.

MOGU INC.

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss

(All amounts in thousands, except for share and per share data)

 
 

 

 

 

 

 

 
For the six months ended

For the year ended

 
March 31,

March 31,

 
2022

2023

2022

2023

 
RMB

RMB

US$

RMB

RMB

US$

Net revenues
 

 

 

 

 

 

Commission revenues
109,935

75,814

11,039

226,742

147,514

21,480

Marketing services revenues
4,882

1,434

209

17,888

4,416

643

Financing service revenues
10,367

6,017

876

31,852

12,947

1,885

Technology service revenues
35,709

30,790

4,483

46,077

58,867

8,572

Other revenues
7,102

3,175

462

14,910

8,332

1,213

Total revenues
167,995

117,230

17,069

337,469

232,076

33,793

 
 

 

 

 

 

 

Cost of revenues (exclusive of amortization of intangible assets shown separately below)
(74,468)

(54,243)

(7,898)

(159,601)

(113,884)

(16,583)

Sales and marketing expenses
(55,638)

(35,063)

(5,106)

(148,410)

(67,709)

(9,859)

Research and development expenses
(37,414)

(16,146)

(2,351)

(82,641)

(37,068)

(5,398)

General and administrative expenses
(37,083)

(30,704)

(4,471)

(79,178)

(63,445)

(9,238)

Amortization of intangible assets
(167,964)

(39,970)

(5,820)

(328,154)

(59,992)

(8,736)

Impairment of goodwill and intangible assets
(48,890)

(84,693)

(12,332)

(235,394)

(84,693)

(12,332)

Other income, net
13,117

4,201

612

25,427

7,267

1,058

Loss from operations
(240,345)

(139,388)

(20,297)

(670,482)

(187,448)

(27,295)

Interest income
6,902

8,463

1,232

13,903

17,476

2,545

Interest expense
–

(357)

(52)

–

(685)

(100)

(Loss)/gain from investments, net
(7,590)

816

119

232

(18,615)

(2,711)

Loss before income tax and share of results of equity investees
(241,033)

(130,466)

(18,998)

(656,347)

(189,272)

(27,561)

Income tax benefits
12,797

7,577

1,103

14,512

8,663

1,261

Share of results of equity investee, net of tax
(121)

2,008

292

(539)

883

129

Net loss
(228,357)

(120,881)

(17,603)

(642,374)

(179,726)

(26,171)

Net loss attributable to non-controlling interests
(483)

(7,015)

(1,021)

(2,574)

(8,422)

(1,226)

 
 

 

 

 

 

 

Net loss attributable to MOGU Inc.
(227,874)

(113,866)

(16,582)

(639,800)

(171,304)

(24,945)

Net loss
(228,357)

(120,881)

(17,603)

(642,374)

(179,726)

(26,171)

Other comprehensive loss:
 

 

 

 

 

 

Foreign currency translation adjustments, net of nil tax
(6,744)

(4,231)

(616)

(17,400)

14,264

2,077

Unrealized securities holding losses, net of tax
(516)

302

44

(10,729)

(884)

(129)

Total comprehensive loss
(235,617)

(124,810)

(18,175)

(670,503)

(166,346)

(24,223)

Total comprehensive loss attributable to non-controlling interests
(483)

(7,015)

(1,021)

(2,574)

(8,422)

(1,226)

Total comprehensive loss attributable to MOGU Inc.
(235,134)

(117,795)

(17,154)

(667,929)

(157,924)

(22,997)

 
 

 

 

 

 

 

Net loss per share attributable to ordinary shareholders
 

 

 

 

 

 

Basic
(0.09)

(0.04)

(0.01)

(0.25)

(0.07)

(0.01)

Diluted
(0.09)

(0.04)

(0.01)

(0.25)

(0.07)

(0.01)

 
 

 

 

 

 

 

Net loss per ADS*
 

 

 

 

 

 

Basic
(27.13)

(13.29)

(1.93)

(76.17)

(20.12)

(2.93)

Diluted
(27.13)

(13.29)

(1.93)

(76.17)

(20.12)

(2.93)

 
 

 

 

 

 

 

Weighted average number of shares used in computing net loss per share
 

 

 

 

 

 

Basic
2,520,103,689

2,570,915,725

2,570,915,725

2,519,948,060

2,554,338,579

2,554,338,579

Diluted
2,520,103,689

2,570,915,725

2,570,915,725

2,519,948,060

2,554,338,579

2,554,338,579

 
 

 

 

 

 

 

Share-based compensation expenses included in:
 

 

 

 

 

 

Cost of revenues
631

640

93

1,872

1,448

211

General and administrative expenses
3,121

2,786

406

6,789

7,855

1,144

Sales and marketing expenses
1,143

950

138

3,905

3,398

495

Research and development expenses
(352)

351

51

(108)

862

126

 

Contacts
For investor and media inquiries:
MOGU Inc.
Ms. Qi Feng
Phone: +86-571-8530-8201
E-mail: ir@mogu.com
Christensen
In China
Mr. Eric Yuan
Phone: +86-10-5900-1548
E-mail: eric.yuan@christensencomms.com
In the United States
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: linda.bergkamp@christensencomms.com Read full story here