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Scienjoy Holding Corporation Reports Fiscal Year 2022 Financial Results

Scienjoy Holding Corporation Reports Fiscal Year 2022 Financial Results

Annual Revenues Increased by 17.0% Year Over Year

Net Income Increased by 14.8% Year Over Year

BEIJING, April 28, 2023 /PRNewswire/ -- Scienjoy Holding Corporation ("Scienjoy", the "Company", or "We") (NASDAQ: SJ), a leading live entertainment mobile streaming platform in China, today announced its financial results for the year ended December 31, 2022.

Fiscal Year 2022 Operating and Financial Highlights

  • Total net revenues increased by 17.0% to RMB1,953.3 million (US$283.2 million) for the year ended December 31, 2022 from RMB1,669.4 million for the year ended December 31, 2021.
  • Gross profit was RMB283.2 million (US$41.1 million) for the year ended December 31, 2022, compared to RMB304.5 million for the year ended December 31, 2021.
  • Net income increased by 14.8% to RMB195.2 million (US$28.3 million) for the year ended December 31, 2022 from RMB170.0 million for the year ended December 31, 2021.
  • Net income attributable to the Company's shareholders increased by 13.7% to RMB193.3 million (US$28.0 million) for the year ended December 31, 2022 from RMB170.0 million for the year ended December 31, 2021.
  • Adjusted net income attributable to the Company's shareholders was RMB181.4 million (US$26.3 million) for the year ended December 31, 2022, compared to RMB219.0 million for the year ended December 31, 2021.
  • Total paying users were 702,372 for the year ended December 31, 2022, compared to 840,640 for the year ended December 31, 2021.
  • The Company has 320.2 million registered users by the end of December 31, 2022. 
  • As of December 31, 2022, the Company had cash and cash equivalents of RMB175.3 million (US$25.4 million), compared to RMB240.9 million as of December 31, 2021.

Mr. Victor He, Chairman and Chief Executive Officer of Scienjoy, commented, "We proudly to share our solid financial performance during fiscal year 2022. Our ability to maintain healthy growth in a challenging macroeconomic climate demonstrates our unwavering commitment to delivering engaging content on our integrated live streaming platforms while ensuring operational efficiency. To sustain this growth trajectory, we've identified key objectives and strategies. Firstly, we expect to focus on elevating the quality of content and investing in cutting-edge technology to attract more users and enhance features on our live streaming platforms. Secondly, we're dedicated to pursuing a live streaming metaverse strategy and building a comprehensive digital industry ecosystem. By investing in virtual reality, augmented reality, and artificial intelligence technologies, we aim to develop our live streaming metaverse project and set ourselves apart from competitors in the industry. Additionally, constructing a robust mobile live streaming ecosystem will enable us to expand and diversify our business lines and tap into new opportunities for growth. We're confident that these initiatives will not only generate strong results but also create value for our users and shareholders. As we forge ahead, our commitment is to scale our business and leverage our valuable assets and experienced team to enrich user experiences on our platforms, fostering long-term loyalty and satisfaction."

Mr. Denny Tang, Chief Financial Officer of Scienjoy, added, "Despite the challenging and uncertain macroeconomic environment during fiscal year 2022, we have achieved a 17.0% year-over-year increase in total net revenues and a 14.8% year-over-year increase in net income. These strong financial results are a testament to the success of our strategy to scale our business, which has led to significant growth in our key financial metrics, showcasing the resilience of our business model, our dedication to enhancing operational efficiency, and our ability to successfully execute our growth strategy. We anticipate this positive trend to persist, and we aim to make considerable progress on our key strategic initiatives, driving continued growth and innovation. We believe our talented team will maintain its ability to execute our strategic initiatives cost-effectively with greater insight, ensuring that Scienjoy stays competitive in the industry. Our focus remains on refining our platforms, offering unparalleled experiences to our users, and staying at the cutting edge of industry innovation. We expect to reap the benefits of our efforts thus far, and we are confident in our ability to achieve our long-term revenue and growth targets, ultimately delivering value to our shareholders and users alike."

Fiscal Year 2022 Financial Results 

Total net revenues increased by 17.0% to RMB1,953.3 million (US$283.2 million) for the year ended December 31, 2022 from RMB1,669.4 million for the year ended December 31, 2021. This increase was driven by more quality content provided through our integrated multiple live streaming platforms including Hongren platform we acquired in January 2022. For the year ended December 31, 2022, the number of paying user was 702,372, decreased from 840,640 paying user for the year ended December 31, 2021. Our average ARPPU increased by 39%, from RMB1,963 for the year ended December 31, 2021 to RMB 2,725 for the for the year ended December 31, 2022. 

Cost of revenues increased by 22.4%, to RMB1,670.1 million (US$242.2 million) for the year ended December 31, 2022 from RMB1,364.9 million for the year ended December 31, 2021. The increase was primarily attributable to a 29%, or RMB341.2 million, year-over-year increase in the Company's revenue sharing fees and content costs. We have to increase sharing fee ratio in the growth and competitive landscape of China's mobile live streaming market.  

Gross profit decreased by 7.0% to RMB283.2 million (US$41.1million) for the year ended December 31, 2022 from RMB304.5 million for the year ended December 31, 2021. Gross margin for the years ended December 31, 2022 and 2021 was 14% and 18%. As we continued to increase the revenue sharing fee ratio, it decreased the gross margin in short run but will attract more high-quality broadcasters and enhance the quality of our content offerings. 

Total operating expenses decreased by 3.7% to RMB133.4 million (US$19.3million) for the year ended December 31, 2022 from RMB138.5 million for the year ended December 31, 2021. 

  • Sales and marketing expenses significantly decreased by 55.8%, to RMB2.1 million (US$0.3 million) for the year ended December 31, 2022 from RMB4.8 million for the year ended December 31, 2021. This decrease was mainly due to fewer promotional activities.
  • General and administrative expenses decreased by 6.5%, to RMB61.0 million (US$8.8 million) for the year ended December 31, 2022 from RMB65.2 million for the year ended December 31, 2021. The decrease was primarily due to a decrease of RMB9.5 million in share base compensations, partially offset by more consulting and professional fees due to the expansion of the Company and amortization of intangible asset.
  • Research and development expenses decreased by 3.6% to RMB67.5 million (US$9.8 million) for the year ended December 31, 2022 from RMB70.0 million for the year ended December 31, 2021 due to a decrease of RMB13.9 million in share base compensations, partially offset by higher employee salary and welfare as a result of increased R&D headcounts.
  • Provision for doubtful accounts was RMB2.7 million (US$9.8 million) for the year ended December 31 2022 as compared to a recovery of doubtful accounts of RMB1.6 million for the year ended December 30, 2021, due to slow collection.

Change in fair value of contingent consideration decreased to RMB13.1 million (US$1.9 million) for the year ended December 31 2022 from RMB33.6 million for the year ended December 31 2021. Change in fair value of contingent consideration is derived from the Company's reverse recapitalization with Wealthbridge Acquisition Limited on May 7, 2020, acquisition of BeeLive on August 10, 2020 and acquisition of Hongren on January 1, 2022, 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 decreased to RMB10.8 million (US$1.6 million) for the year ended December 31 2022 from RMB16.4 million in fiscal year 2021. 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 decreased to RMB1.8 million (US$0.3 million) for the year ended December 31 2022 from RMB25.8 million for the year ended December 31 2021. In January 2021, the Company, through its wholly owned subsidiary, Scienjoy Inc., purchased from Cross Wealth Investment Holding Limited, an entity related to one 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.

Investment income amounted to RMB25.4 million (US$3.7 million) for the year ended December 31, 2022, compared to an investment loss of RMB3.0 million for the year ended December 31, 2021. On October 9, 2021, the Company signed an investment agreement to invest up to RMB 150 million into Qingdao Sixiang Zhuohong Private Equity LP ("Qingdao LP"), which further invests in broadcaster, IT, Big Data, Artificial Intelligence and logistic industry. The Qingdao LLP is managed by two unrelated general partners (GPs). The Company, as a Limited partner, neither participate in the daily operation of Qingdao LP, nor has the exclusive rights to control the partnership meeting and investment decisions. As a result, the Company considers it has significant influence on this investment based on its voting power.

Net income increased by 14.8%, to RMB195.2 million (US$28.3 million) for the year ended December 31, 2022 from RMB170.0 million for the year ended December 31, 2021  

Net income attributable to the Company's shareholders increased by13.7% to RMB193.3 million (US$28.0 million) for the year ended December 31, 2022 from RMB170.0 million for the year ended December 31, 2021.

Adjusted net income attributable to the Company's shareholders decreased to RMB 181.4 million (US$26.3 million) for the year ended December 31, 2022 from RMB219.0 million for the year ended December 31, 2021. 

Basic and diluted net income attributable to the Company's shareholders per ordinary share were both RMB4.92 (US$0.71) for the year ended December 31, 2022. In comparison, basic and diluted net income attributable to the Company's shareholders per ordinary share were both RMB5.51 for the year ended December 31, 2021, respectively.

Adjusted basic and diluted net income attributable to the Company's shareholders per ordinary share were both RMB4.62 (US$0.67) for the year ended December 31, 2022. In comparison, adjusted basic and diluted net income attributable to the Company's shareholders per ordinary share were both RMB7.10 for the year ended December 31, 2021, respectively.

As of December 31, 2022, the Company had cash and cash equivalents of RMB175.3 million (US$25.4 million) compared to RMB240.9 million as of December 31, 2021.

Business Outlook

The Company expects its total net revenues to be in the range of RMB 280 million to RMB 330 million in the first quarter of 2023. 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 livestreamingservice ecosystem to delight and entertain users. With over 300 million registered users, Scienjoy currently operates fivelivestreaming platform brands, including Showself, Lehai, Haixiu, and BeeLive, which features both the Mifeng Chinese versionand BeeLive International version, and Hongle.tv. 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 Metaverseto 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 https://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 RMB6.8972 to US$1.00, the noon buying rate in effect on December 31, 2022, 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 December 31, 2022, 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

Denny Tang
Chief Financial Officer
Scienjoy Holding Corporation
+86-10-64428188
ir@scienjoy.com 

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

 

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except share and per share data or otherwise stated)



As of December 31,




2021



2022



2022




RMB



RMB



USD


ASSETS










Current assets










      Cash and cash equivalents



240,947




175,292




25,415


      Accounts receivable, net



206,307




316,657




45,911


      Prepaid expenses and other current assets



165,409




115,170




16,699


      Amounts due from related parties



1,059




1,115




162


      Investment in marketable security



38,789




40,548




5,879


Total current assets



652,511




648,782




94,066















      Property and equipment, net



1,674




2,735




397


      Intangible assets, net



235,870




419,055




60,757


      Goodwill



92,069




172,781




25,051


       Long term investment



101,727




234,176




33,952


       Long term deposits and other assets



1,152




953




138


       Right-of-use assets



-




19,209




2,785


       Deferred tax assets



4,352




4,337




629


Total non-current assets



436,844




853,246




123,709


TOTAL ASSETS



1,089,355




1,502,028




217,775















LIABILITIES AND SHAREHOLDERS' EQUITY













Current liabilities













Bank loan



-




5,000




725


        Accounts payable



85,801




116,251




16,855


        Accrued salary and employee benefits



24,533




12,428




1,802


        Accrued expenses and other current liabilities



16,181




13,264




1,923


        Current portion of contingent consideration – earn-out liability



10,638




4,336




629


        Warrant liabilities



10,324




166




24


        Income tax payable



8,282




13,531




1,962


        Lease liabilities-current



-




7,174




1,040


        Deferred revenue



65,405




93,383




13,539


Total current liabilities



221,164




265,533




38,499















Non-current liabilities













Deferred tax liabilities



58,746




61,236




8,878


Lease liabilities-non-current



-




12,773




1,852


Total non-current liabilities



58,746




74,009




10,730


TOTAL LIABILITIES



279,910




339,542




49,229


Commitments and contingencies Shareholders' equity*













     Ordinary share, no par value, unlimited Class A ordinary shares
     and 6Class B ordinary shares authorized, 28,219,583 Class A
     ordinary shares and 2,625,058 Class B ordinary shares issued
     and outstanding as of December 31, 2021, respectively.
     36,684,668 Class A ordinary shares and 2,925,058 Class B
     ordinary shares issued and outstanding as of December 31,
     2022, respectively













     Class A ordinary shares



140,196




396,880




57,542


     Class B ordinary shares



13,041




23,896




3,465


     Shares to be issued



128,119




33,923




4,918


     Treasury stocks



-




(16,482)




(2,390)


     Statutory reserves



31,775




39,208




5,685


     Retained earnings



479,199




665,099




96,430


     Accumulated other comprehensive income



17,115




18,070




2,622


Total shareholders' equity



809,445




1,160,594




168,272


Noncontrolling interest



-




1,892




274


Total equity



809,445




1,162,486




168,546


TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY



1,089,355




1,502,028




217,775


 

 

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE
INCOME

(All amounts in thousands, except share and per share data or otherwise stated)


For the years ended December 31,





2021



2022



2022






RMB



RMB



USD


Live streaming - consumable virtual items
   revenue





1,617,056




1,886,179




273,470


Live streaming - time based virtual item revenue





32,905




27,683




4,014


Technical services and others





19,397




39,395




5,712


Total revenue





1,669,358




1,953,257




283,196


Cost of revenues





(1,364,902)




(1,670,068)




(242,137)


Gross profit





304,456




283,189




41,059


Sales and marketing expenses





(4,807)




(2,127)




(308)


General and administrative expenses





(65,233)




(61,005)




(8,845)


Research and development expenses





(70,039)




(67,538)




(9,792)


(Provision for) recovery of doubtful accounts





1,592




(2,739)




(397)


Income from operations





165,969




149,780




21,717


Interest income, net





3,962




2,506




363


Other income (loss), net





(90)




11,443




1,659


Foreign exchange gain (loss), net





105




(1,493)




(216)


Change in fair value of investment





25,831




1,760




255


Change in fair value of warrant liabilities





16,421




10,776




1,562


Investments income (loss)





(2,998)




25,449




3,690


Change in fair value of contingent consideration





(33,584)




13,071




1,895


Income before income taxes





175,616




213,292




30,925


Income tax expense





(5,604)




(18,067)




(2,619)


Net income





170,012




195,225




28,306


Less: net income attributable to
    noncontrolling interest





-




1,892




274


Net income attributable to the Company's
    shareholders





170,012




193,333




28,032

















  Other comprehensive income:















Other comprehensive income - foreign
    currency translation adjustment





2,313




955




138


Comprehensive income





172,325




196,180




28,444


Less: comprehensive income attributable to
    non-controlling interests





-




1,892




274


Comprehensive income attributable to the
    Company's shareholders





172,325




194,288




28,170

















Weighted average number of shares *















Basic





30,842,183




39,263,147




39,263,147


Diluted





30,842,183




39,263,147




39,263,147

















Earnings per share















Basic





5.51




4.92




0.71


Diluted





5.51




4.92




0.71


 

 

Reconciliations of Non-GAAP Results


(All amounts in thousands, except share and per share data or otherwise stated)




For the years ended




December 31,



December 31,



December 31,




2021



2022



2022




RMB



RMB



US$












Net income attributable to the Company's
shareholders



170,012




193,333




28,032


Less:













Change in fair value of contingent consideration



(33,584)




13,071




1,895


Change in fair value of warrants liability



16,421




10,776




1,562


Share based compensation



(31,857)




(11,954)




(1,733)


Adjusted net income attributable to the
Company's shareholders*



219,032




181,440




26,308















Adjusted net income per ordinary share













Basic



7.10




4.62




0.67


Diluted



7.10




4.62




0.67


"Adjusted net income attributable to the Company's shareholders" is defined as net income attributable to the Company's shareholders 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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