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NQ Mobile (NQ) Posts Wider Q3 Loss of 19c/ADS; Issues Q4, FY14 Revs Outlook; Announces Director Changes

December 18, 2014 5:17 PM EST

NQ Mobile (NYSE: NQ) reported Q3 EPS of ($0.19), versus ($0.04) reported last year. Revenue for the quarter came in at $81.2 million, versus $54.2 million reported last year.

Highlights For Period From January 1, 2014 to September 30, 2014

  • Recorded Net Revenues of $242.6 million for the first three quarters ended September 30, 2014.
  • Generated a total of $22.0 million in operating cash flow for the first three quarters ended September 30, 2014.
  • The Company has maintained a strong balance sheet position despite numerous extraordinary items, total cash, cash equivalents and term deposits as of September 30, 2014 was $278.3 million.
  • Non-GAAP net income attributable to NQ Mobile for the first three quarters ended September 30, 2014 was $23.0 million.
  • Net Revenues for the fourth quarter of 2014 expected to be between $82 and $83 million.
  • Full year 2014 Net Revenues expected to range from $325 million to $326 million, up from the previously stated guidance range of $320 to $325 million.

The Company is herein presenting, for the first time, the operating metrics of average monthly active user accounts ("MAUs") as redefined to include many emerging businesses previously not included in the Company's user account metrics. The MAUs presented herein include the user accounts in NQ Live, Music Radar and more recent investments such as Yipai and Showself, among others. As such, the MAUs presented herein should not be compared to previously reported operating metrics in historical periods because there is not a way to accurately compare such results. The MAUs for the period presented herein and going forward are expected to be better aligned with the key underlying trends of a mobile Internet platform company focused on driving mobile consumer traffic and engagement that can be monetized by advertising services. The MAU statistics do not include the users addressed by the installation of the Company's advertising SDK into third-party applications or users addressed by the integration of the Company's audio and image-based search technologies into third-party applications These indirect users generate impressions and search traffic that the Company can monetize outside of the user accounts generated directly by the Company's own portfolio of products and applications.

Average Monthly Active User Accounts as of September 30, 2014: 159.0 million

Guidance:

The Company expects net revenues to be in the range of $82 million and $83 million for the fourth quarter of 2014, bringing the expected full year net revenues to the range of $325 million to $326 million, up from the previously issued range of $320 million to $325 million.

Board Changes

NQ Mobile also announced today changes to its Board of Directors. A new independent director, Mr. Roland Wu, has been appointed to the Board, effective immediately. In addition, Mr. James Ding and Mr. Xiuming Tao are stepping down from their positions on the Board for personal reasons, effective immediately. At the same time, Mr. Justin Chen has been appointed the chairman of the Corporate Governance and Nominating Committee of the Board. After the appointment of Mr. Roland Wu and the resignation of Messrs. James Ding and Xiuming Tao, the Company now has a total of nine directors on its Board, including five independent directors.

Mr. Roland Wu joins NQ Mobile's Board with extensive experience and in-depth capital markets knowledge, having served in key management roles at several Hong Kong-listed companies over the last fourteen years. He has recently served as Executive Director of China Tycoon Beverage Holdings Limited and Bestway International Holdings Limited. Additionally, Mr. Wu has served as a portfolio manager at Haitong International Asset Management Company and as an investment analyst at Baoying Fund Management Co., Ltd. He has an MBA from Nankai University and a Bachelor of Computer Science from Beijing Jiaotong University.

"We would like to thank both Messers. James Ding and Xiuming Tao for their loyal service and dedication to NQ Mobile over the years, particularly over the past year while we faced many challenges. On behalf of our entire organization, we wish them well on their many other endeavors," commented Chairman, Chief Operating Officer and Acting Chief Financial Officer of NQ Mobile, Dr. Vincent Wenyong Shi. "We also welcome Mr. Wu as a new independent director and look forward to benefitting from his knowledge and experience as NQ Mobile focuses on delivering solid growth in 2015 and beyond."

For earnings history and earnings-related data on NQ Mobile (NQ) click here.



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