Yalla Group Limited (YALA) Reports Q1 Revenues Beat; Provides 2Q Revenues Guidance Above Consensus

May 10, 2021 5:09 PM EDT
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Yalla Group Limited (NYSE: YALA) reported Q1 EPS of $. Revenue for the quarter came in at $67.6 million versus the consensus estimate of $48.34 million.

First Quarter Ended March 31, 2021 Financial and Operating Highlights

  • Revenues were US$67.6 million in the first quarter of 2021, representing an increase of 221.0% from the first quarter of 2020.- Revenues generated from chatting services in the first quarter of 2021 were US$54.8 million. - Revenues generated from games services in the first quarter of 2021 were US$12.8 million.
  • Net income was US$19.8 million in the first quarter and net margin was 29.3%, representing an increase of 114.6% from the first quarter of 2020.
  • Non-GAAP net income[1] was US$33.6 million in the first quarter, representing an increase of 263.7% from the first quarter of 2020. Non-GAAP net margin was 49.7% in the first quarter of 2021.
  • Average MAUs[2] increased by 206.9% to 18.8 million in the first quarter of 2021 from 6.1 million in the first quarter of 2020.
  • The number of paying users[3] on our platform increased by 260.4% to 5.8 million in the first quarter of 2021 from 1.6 million in the first quarter of 2020.

"We had a stellar first quarter marked by strong results in both operational and financial metrics. Yalla Group's total revenue increased by 39.9% quarter-over-quarter and reached US$67.6 million, exceeding the upper end of our guidance range by 7.4%. This exceptional performance was driven by our continued efforts to expand our user community, effective conversion of active users into paying users, and further advancement in monetization capabilities," said Mr.Yang Tao, Founder, Chairman and Chief Executive Officer of Yalla. " We continue to enrich and expand our product offerings, including Yalla, Yalla Ludo, and various new products in the pipeline, and we believe enhancing product synergies is an essential part of our plan in growing a comprehensive Yalla ecosystem and attracting new users. In addition, strong product synergies will drive efficiencies in user acquisition, encourage new product adoption and build strong platform affinity among our user base."

"This year marks Yalla Group's fifth anniversary, and we are proud to say that we have affirmed our mission to build the most popular destination for online social networking and entertainment activities in MENA over the past five years, and are continually enriching our product offerings to better serve local users. Looking ahead, we will keep enthusiastically monitoring trends in MENA's local culture, expanding our friendly community, and building an integrated and synergistic ecosystem with diverse products and services tailored to local users' needs," concluded Mr.Yang.

"Our strong performance sustained into the first quarter, " said Ms. Karen Hu, Chief Financial Officer of Yalla. "As we steadfastly executed our growth strategy that prioritizes user experience and community development, our revenues and non-GAAP net income rose by 221.0% and 263.7% year-over-year to reach US$67.6 million and US$33.6 million in the first quarter of 2021 respectively. Non-GAAP net margin was 49.7%, an indication of the robustness of our business model and disciplined execution. As we entered into the second quarter, with the Ramadan fasting period taking place across MENA between 13th April and 12th May in 2021, we expect to have a relatively moderate revenue growth due to potentially reduced social and entertainment activities, which is an annual seasonal impact. Looking ahead, we will leverage our team's deep local insights, continue to develop the Yalla ecosystem and enhance our brand building to further pave the runway for long-term growth, as we are committed to delivering a superb experience to our users and meaningful returns for shareholders."

GUIDANCE:

Yalla Group Limited sees Q2 2021 revenue of $65-71 million, versus the consensus of $63.25 million.

  • For the second quarter of 2021, the management of the Company currently expects revenues to be between US$65.0 million and US$71.0 million, which would represent an increase of approximately 105.2% to 124.1% from US$31.7 million for the second quarter of 2020.
  • The above outlook is based on the current market conditions and reflects the Company management's current and preliminary estimates of market and operating conditions and customer demand, which are all subject to change.

For earnings history and earnings-related data on Yalla Group Limited (YALA) click here.



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