MOGU Announces Unaudited Financial Results for the Six Months Ended September 30, 2024

MOGU Announces Unaudited Financial Results for the Six Months Ended September 30, 2024 11/22/2024 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 September 30, 2024. Mr. Fan Yiming, Chief Executive Officer of MOGU, commented, "In the first half of fiscal year 2025, China’s online retail industry entered a phase of intense competition for existing markets, marked by a further decline in consumer purchasing appetite. All major platforms responded by implementing highly competitive product pricing and user benefits to attract customers, resulting in a sharper-than-expected decline in MOGU’s user traffic during this period. Meanwhile, the platform faced challenges with the lifecycle of key opinion leaders (KOLs), which led to a decline in live streaming hours and sales. Consequently, MOGU’s gross merchandise value (GMV 1 ) declined year-on-year in the first half of fiscal year 2025. To address these challenges, we have been launching targeted marketing initiatives focusing on high-value members during this fiscal year, with an aim to increase both retention rates and average revenue per user (ARPU) for these members. Meanwhile, we leveraged the supply chain resources and service capabilities that we have developed over the years to actively explore new business opportunities on other platforms. To date, MOGU has successfully signed dozens of fashion KOLs from other social e-commerce platforms. After four months of operation, MOGU has quickly become a live streaming service provider on these platforms. Additionally, we formed live-streaming management partnerships with some brands, helping them to establish a stable business model. We believe these two new segments present growth potential and will contribute to MOGU’s overall expansion beyond its core platform." “During the first half of fiscal year of 2025, our total revenues decreased by 25.7% to RMB61.9 million for the same period of fiscal year 2024. The loss from operations was RMB41.4 million, compared to RMB52.1 million for the same period of fiscal year 2024. Despite the efforts to improve operational efficiency, the increasing cost of acquiring new customers and a decline in revenue prevented us from achieving our targeted operational results. Looking ahead, we will continue to focus on cost reduction and efficiency enhancements and continue looking for new revenue growth opportunities. We believe that these measures will contribute to our overall financial resilience and sustainable growth,” added Ms. Qi Feng, Financial Controller. Highlights for the Six Months Ended September 30, 2024 Total revenues for the six months ended September 30, 2024 decreased by 25.7% to RMB61.9 million (US$8.8 million) from RMB83.3 million during the same period of fiscal year 2024. Live video broadcast (“LVB”) associated GMV for the six months ended September 30, 2024 decreased by 34.7% period-over-period to RMB1,395 million (US$198.8 million 2 ). GMV for the six months ended September 30, 2024 was RMB1,442 million (US$205.5 million), a decrease of 34.3% period-over-period. ______________________________ 1 GMV are to gross merchandise volume, refers to the total value of orders placed on the MOGU platform regardless of whether the products are sold, delivered or returned, calculated based on the listed prices of the ordered products without taking into consideration any discounts on the listed prices. Buyers on the MOGU platform are not charged for separate shipping fees over the listed price of a product. If merchants include certain shipping fees in the listed price of a product, such shipping fees will be included in GMV. As a prudent matter aiming at eliminating any influence on MOGU’s GMV of irregular transactions, the Company excludes from its calculation of GMV transactions over a certain amount (RMB100,000) and transactions by users over a certain amount (RMB1,000,000) per day. 2 The U.S. dollar (US$) amounts disclosed in this press release, except for those transaction amounts that were actually settled in U.S. dollars, are presented solely for the convenience of the readers. The conversion of Renminbi (RMB) into US$ in this press release is based on the exchange rate set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of September 30, 2024, which was RMB7.0176 to US$1.00. The percentages stated in this press release are calculated based on the RMB amounts. Financial Results For the Six Months Ended September 30, 2024 Total revenues for the six months ended September 30, 2024 decreased by 25.7% to RMB61.9 million (US$8.8 million) from RMB83.3 million during the same period of fiscal year 2024. Commission revenues for the six months ended September 30, 2024 decreased by 36.6% to RMB35.3 million (US$5.0 million) from RMB55.6 million in the same period of fiscal year 2024, primarily attributable to the lower GMV due to the heightened competitive environment. Financing solutions revenues for the six months ended September 30, 2024 decreased by 29.2% to RMB3.8 million (US$0.55 million) from RMB5.4 million in the same period of fiscal year 2024. The decrease was primarily due to the decrease in the service fee of loans to users in line with the lower GMV. Technology services revenues for the six months ended September 30, 2024 increased by 12.8% to RMB20.7 million (US$3.0 million) from RMB18.4 million in the same period of fiscal year 2024, primarily attributable to the increase of revenue generated by one-stop customized services provided by Ruisha to corporate customers. Other revenues for the six months ended September 30, 2024 decreased by 37.9% to RMB2.0 million (US$0.3 million) from RMB3.1 million in the same period of fiscal year 2024. Cost of revenues for the six months ended September 30, 2024 decreased by 20.2% to RMB39.6 million (US$5.6 million) from RMB49.6 million in the same period of fiscal year 2024, which was primarily due to a decrease in IT-related expenses of RMB5.1 million and a decrease in payroll costs of RMB1.6 million, in line with the overall trend of reduction in revenue. Sales and marketing expenses for the six months ended September 30, 2024 decreased by 29.3% to RMB26.4 million (US$3.8 million) from RMB37.3 million in the same period of fiscal year 2024, primarily due to a decrease in performance-related bonus of RMB4.5 million and user acquisition costs of RMB4.6 million. Research and development expenses for the six months ended September 30, 2024 decreased by 11.1% to RMB12.3 million (US$1.8 million) from RMB13.9 million in the same period of fiscal year 2024 due to a decrease in performance-related bonus. General and administrative expenses for the six months ended September 30, 2024 decreased by 2.8% to RMB27.1 million (US$3.9 million) from RMB27.9 million in the same period of fiscal year 2024, primarily due to a decrease in performance-related bonus. Amortization of intangible assets for the six months ended September 30, 2024 decreased by 95.9% to RMB0.1 million (US$0.01 million) from RMB1.8 million in the same period of the fiscal year 2024, primarily because the intangible assets recorded as a result of the acquisition of Hangzhou Ruisha Technology Co., Ltd. (“Ruisha Technology”) had been fully amortized and impaired as of September 30, 2023. Impairment of intangible assets for the six months ended September 30, 2024 decreased by 100.0% to nil from RMB9.9 million in the same period of fiscal year 2024, primarily due to the Company’s recognition of a full impairment charge of RMB9.9 million against its intangible assets arising from the acquisition of Ruisha Technology in the same period of fiscal year 2024. Loss from operations for the six months ended September 30, 2024 was RMB41.4 million (US$5.9 million), compared to the loss from operations of RMB52.1 million in the same period of fiscal year 2024. Net loss attributable to MOGU Inc. for the six months ended September 30, 2024 was RMB24.1 million (US$3.4 million), compared to the net loss attributable to MOGU Inc. of RMB35.4 million in the same period of fiscal year 2024. Adjusted EBITDA 3 for the six months ended September 30, 2024 was negative RMB35.0 million (US$5.0 million), compared to negative RMB34.0 million in the same period of fiscal year 2024. Adjusted net loss 4 for the six months ended September 30, 2024 was RMB38.3 million (US$5.5 million), compared to the adjusted net loss of RMB32.8 million in the same period of fiscal year 2024. Basic and diluted loss per ADS for the six months ended September 30, 2024 were RMB2.76 (US$0.39) and RMB2.76 (US$0.39), respectively, compared with RMB4.11 and RMB4.11, respectively, in the same period of fiscal year 2024. One ADS represents 300 Class A ordinary shares. Cash and cash equivalents, Restricted cash and Short-term investments were RMB356.4 million (US$50.8 million) as of September 30, 2024, compared with RMB420.6 million as of March 31, 2024. ______________________________ 3 Adjusted EBITDA represents net loss before (i) interest income, gain from investments, net, income tax (benefits)/expenses and share of results of equity method investees, impairment of intangible assets and (ii) certain non-cash expenses, consisting of share-based compensation expenses, amortization of intangible assets, and depreciation of property and equipment. See “Unaudited Reconciliations of GAAP and Non-GAAP Results” at the end of this press release. 4 Adjusted net loss represents net loss excluding (i) gain from investments, net, (ii) share-based compensation expenses, (iii) impairment of intangible assets, (iv) adjustments for tax effects. See “Unaudited Reconciliations of GAAP and Non-GAAP Results” at the end of this press release. Use of Non-GAAP Financial Measures In evaluating the business, the Company considers and uses non-GAAP measures, such as Adjusted EBITDA and Adjusted net income/loss as supplemental measures to review and assess operating performance. The presentation of these non-GAAP 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, gain from investments, net, income tax (benefits)/expenses, share of results of equity investees, impairment of intangible assets, 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 from investments, net, impairment of intangible assets, share-based compensation expenses, and adjustments for tax effects. See “Unaudited Reconciliations of GAAP and Non-GAAP Results” at the end of this press release. The Company presents these non-GAAP financial measures because they are used by management to evaluate operating performance and formulate business plans. The Company believes that the non-GAAP 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 non-GAAP 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 non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools. The Company’s non-GAAP 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 non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the non-GAAP 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 non-GAAP financial measures, please see the table captioned “Unaudited Reconciliations of GAAP and Non-GAAP 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; 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, September 30, 2024 2024 RMB RMB US$ ASSETS Current assets: Cash and cash equivalents 358,787 84,356 12,021 Restricted cash 511 511 73 Short-term investments 61,312 271,525 38,692 Inventories, net 98 67 10 Loan receivables, net 31,564 28,759 4,098 Prepayments, receivables and other current assets 54,956 95,562 13,617 Amounts due from related parties 587 331 47 Total current assets 507,815 481,111 68,558 Non-current assets: Property and equipment, net 299,741 299,996 42,749 Intangible assets, net 949 871 124 Right-of-use assets 2,576 1,650 235 Investments 81,808 54,058 7,703 Other non-current assets 45,473 49,411 7,041 Total non-current assets 430,547 405,986 57,852 Total assets 938,362 887,097 126,410 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable 6,862 3,567 508 Salaries and welfare payable 6,936 5,254 749 Advances from customers 207 627 89 Taxes payable 1,285 2,436 347 Amounts due to related parties 5,341 4,490 640 Current portion of lease liabilities 1,888 374 53 Accruals and other current liabilities 299,317 295,641 42,129 Total current liabilities 321,836 312,389 44,515 Non-current liabilities: Non-current lease liabilities 773 386 55 Deferred tax liabilities 1,299 — — Total non-current liabilities 2,072 386 55 Total liabilities 323,908 312,775 44,570 Shareholders’ equity Ordinary shares 181 181 26 Treasury stock (137,446 ) (138,269 ) (19,703 ) Statutory reserves 3,331 3,331 475 Additional paid-in capital 9,489,254 9,489,994 1,352,313 Accumulated other comprehensive income 89,567 72,084 10,272 Accumulated deficit (8,856,494 ) (8,880,623 ) (1,265,479 ) Total MOGU Inc. shareholders’ equity 588,393 546,698 77,904 Non-controlling interests 26,061 27,624 3,936 Total shareholders’ equity 614,454 574,322 81,840 Total liabilities and shareholders’ equity 938,362 887,097 126,410 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 September 30, 2023 2024 RMB RMB US$ Net revenues Commission revenues 55,619 35,275 5,027 Marketing services revenues 746 63 9 Financing solutions revenues 5,403 3,827 545 Technology services revenues 18,388 20,734 2,955 Other revenues 3,146 1,954 278 Total revenues 83,302 61,853 8,814 Cost of revenues (exclusive of amortization of intangible assets shown separately below) (49,602 ) (39,560 ) (5,637 ) Sales and marketing expenses (37,274 ) (26,362 ) (3,757 ) Research and development expenses (13,879 ) (12,332 ) (1,757 ) General and administrative expenses (27,914 ) (27,143 ) (3,868 ) Amortization of intangible assets (1,826 ) (75 ) (11 ) Impairment of intangible assets (9,945 ) — — Other income, net 5,059 2,172 310 Loss from operations (52,079 ) (41,447 ) (5,906 ) Interest income 7,142 3,120 445 Gain from investments, net 1,267 16,468 2,347 Loss before income tax and share of results of equity investees (43,670 ) (21,859 ) (3,114 ) Income tax benefits/(expenses) 1,662 (7 ) (1 ) Share of results of equity method investees (504 ) (700 ) (100 ) Net loss (42,512 ) (22,566 ) (3,215 ) Net (loss)/gain attributable to non-controlling interests (7,105 ) 1,563 223 Net loss attributable to MOGU Inc. (35,407 ) (24,129 ) (3,438 ) Net loss (42,512 ) (22,566 ) (3,215 ) Other comprehensive income/(loss): Foreign currency translation adjustments, net of nil tax 4,970 (1,231 ) (175 ) Unrealized securities holding gains/(losses), net of tax 1,702 (16,252 ) (2,316 ) Total comprehensive loss (35,840 ) (40,049 ) (5,706 ) Total comprehensive (loss)/gain attributable to non-controlling interests (7,105 ) 1,563 223 Total comprehensive loss attributable to MOGU Inc. (28,735 ) (41,612 ) (5,929 ) Net loss per share attributable to ordinary shareholders Basic (0.01 ) (0.01 ) (0.00 ) Diluted (0.01 ) (0.01 ) (0.00 ) Net loss per ADS Basic (4.11 ) (2.76 ) (0.39 ) Diluted (4.11 ) (2.76 ) (0.39 ) Weighted average number of shares used in computing net loss per share Basic 2,581,758,960 2,620,311,457 2,620,311,457 Diluted 2,581,758,960 2,620,311,457 2,620,311,457 Share-based compensation expenses included in: Cost of revenues 415 34 5 General and administrative expenses 1,763 604 86 Sales and marketing expenses 419 14 2 Research and development expenses 192 88 13 MOGU INC. Unaudited Condensed Consolidated Statements of Cash Flows (All amounts in thousands, except for share and per share data) For the six months ended September 30, 2023 2024 RMB RMB US$ Net cash used in operating activities (32,907 ) (28,953 ) (4,126 ) Net cash used in investing activities (20,779 ) (244,012 ) (34,771 ) Net cash used in financing activities — (822 ) (117 ) Effect of foreign exchange rate changes on cash and cash equivalents and restricted cash 3,336 (644 ) (92 ) Net decrease in cash and cash equivalents and restricted cash (50,350 ) (274,431 ) (39,106 ) Cash and cash equivalents and restricted cash at beginning of period 417,011 359,298 51,200 Cash and cash equivalents and restricted cash at end of period 366,661 84,867 12,094 MOGU INC. Unaudited Reconciliations of GAAP and Non-GAAP Results (All amounts in thousands, except for share and per share data) For the six months ended September 30, 2023 2024 RMB RMB US$ Net loss (42,512 ) (22,566 ) (3,215 ) Less: Income tax (benefits)/expenses (1,662 ) 7 1 Less: Interest income (7,142 ) (3,120 ) (445 ) Add: Amortization of intangible assets 1,826 75 11 Add: Depreciation of property and equipment 3,529 5,636 803 EBITDA (45,961 ) (19,968 ) (2,845 ) Add: Impairment of intangible assets 9,945 — — Add: Share-based compensation expenses 2,789 740 106 Add: Share of result of equity method investees 504 700 100 Less: Gain from investments, net (1,267 ) (16,468 ) (2,347 ) Adjusted EBITDA (33,990 ) (34,996 ) (4,986 ) Net loss (42,512 ) (22,566 ) (3,215 ) Add: Gain from investments, net (1,267 ) (16,468 ) (2,347 ) Add: Share-based compensation expenses 2,789 740 106 Add: Impairment of intangible assets 9,945 — — Less: Adjusted for tax effects (1,755 ) — — Adjusted net loss (32,800 ) (38,294 ) (5,456 ) Source: MOGU Inc.