PR Newswire | Nov 22, 2021 07:01AM EST

2021 Unaudited Financial Results

11/22 06:00 CST

Scienjoy Holding Corporation Reports Interim Nine months ended September 30, 2021 Unaudited Financial ResultsRevenues up 52.5% Year Over YearAdjusted Net Income up 37.5% Year Over YearNine months 2021 Revenues and Adjusted Net Income Approach Fiscal Year 2020 Results BEIJING, Nov. 22, 2021

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 profitfor 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 considerationfor 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 liabilityfor 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 incomefor 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 sharefor 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 HoldingCorporation 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 ChenVP, Investor relationsScienjoy Inc.+86-10-64428188ray.chen@scienjoy.com

Tina XiaoAscent Investor Relations+1 (917) 609-0333tina.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 (96,349) 133,719 20,753

30, 2021, respectively

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 5,282 825 128adjustment

Comprehensive income attributable to the Company's 225,747 238,330 36,990shareholders

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 valueof contingent consideration, change in fair value of warrant liability andshare based compensation. For more information, refer to "Use of Non-GAAPFinancial Measures" and "Reconciliations of Non-GAAP Results" at the end ofthis press release.

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SOURCE Scienjoy Holding Corporation