NEW YORK, May 3, 2021 /PRNewswire/ -- As the pandemic continues to put a strain on the worldwide economy, one of the side effects is the sharp increase in online streaming content consumption. Video streaming companies have come up with new solutions to the isolation problem. For instance, Netflix launched a Google Chrome browser extension named Netflix Party, which allows users to access content in groups. In addition, advances in streaming services now allow users to directly transmit media anywhere, at any time. In fact, the development of technologies such as artificial intelligence, 5G, and cloud all allow providers to deliver optimal streaming services to their users. For instance, cloud-based video streaming solutions are increasing the reach of video content, which is further influencing the market growth. Additionally, online video viewer growth rates showed no sign of slowing down even before the pandemic. After it started, growth rates accelerated. Scienjoy Holding Corporation (NASDAQ: SJ), Baidu, Inc. (NASDAQ: BIDU), Amazon.com, Inc. (NASDAQ: AMZN), Activision Blizzard, Inc. (NASDAQ: ATVI), Zoom Video Communications, Inc. (NASDAQ: ZM)
Social media has played a major role in the development of the current live streaming infrastructure. Live streaming sites have gained precedence in light of emerging social media platforms and affordable data consumption plans.This is attributed to public figures, celebrities, and government agencies using the software to reach the masses. Furthermore, the growing popularity of online gaming and esports tournaments is evidence of the large potential of the industry.
Scienjoy Holding Corporation (NASDAQ: SJ) just announced, "Scienjoy Holding Corporation Reports Fiscal Year 2020 Unaudited Financial Results, Unaudited Quarterly Revenues Exceeded Guidance Forecasts for Third and Fourth Quarters, and Unaudited Annual Revenues Increased by 33.6% Year Over Year
Fiscal Year 2020 Operating and Unaudited Financial Highlights
- Total net revenues increased by 33.6% to RMB1,222.2 million (US$187.3 million) from RMB914.6 million in fiscal year 2019, and the Company's net revenue exceeded its guidance forecasts for the third and fourth quarters of fiscal year 2020.
- Gross profit was RMB262.2 million (US$40.2 million), representing a year-over-year increase of 35.2% in fiscal year 2020 as compared to a year-over-year increase of 30.3% in fiscal year 2019. Gross margin further improved to 21.5% in fiscal year 2020 from 21.2% in fiscal year 2019 and 20.0% in fiscal year 2018.
- Net income increased by 17.5% to RMB176.1 million (US$27.0 million) from RMB149.9 million in fiscal year 2019.
- Adjusted net income1 increased by 24.2% to RMB186.3 million (US$28.5 million) from RMB149.9 million in fiscal year 2019.
- Earnout targets for both Scienjoy and Beelive in fiscal year 2020 were fulfilled.
- Total paying users increased by 30% to 904,568 from 697,475 in fiscal year 2019.
- Total number of active broadcasters increased by 455.2% to 192,389 from 34,651 in fiscal year 2019.
- As of December 31, 2020, the Company had RMB224.8 million (US$34.4 million) in cash and cash equivalents, which represented an increase of 63.6% from RMB137.4 million as of December 31, 2019.
1. "Adjusted net income" is defined as net income excluding change in fair value of contingent consideration and warrant liabilities. For more information, refer to "Use of Non-GAAP Financial Measures" and "Reconciliations of Non-GAAP Results" at the end of this press release.
Mr. Victor He, Chairman and Chief Executive Officer of Scienjoy, commented, "We concluded the full year of 2020 with robust operating and financial performances despite the macro uncertainties. Our success was mainly due to our visionary growth strategies in domestic and international markets as well as our commitment to upgrading our products through state-of-the-art technologies and cultivating a more convenient and engaging social community. During the year, for example, we focused on engaging with more broadcasters to expand the breadth and depth of our content offerings and thus augment our total paying user base. Meanwhile, we also actively explored new and promising opportunities in other live streaming segments, such as voice live streaming, e-commerce, and MCN. In August 2020, to penetrate new markets and expand our geographic coverage around the world, we acquired the global live streaming platform Beelive. Looking ahead, we plan to continue expanding our leadership in live entertainment mobile streaming, diversifying our revenue streams, and capitalizing on opportunities with strong growth potential in the post-pandemic world to fuel the healthy growth of our platform ecosystem."
Mr. Denny Tang, Chief Financial Officer of Scienjoy, added, "In 2020, we continued to deliver solid financial results, recording double-digit growth for both our top and bottom lines in the period. Moreover, our net revenues exceeded our previously stated guidance forecasts in both the third and fourth quarters of 2020, further displaying the resiliency of our business and our steady growth trajectory. For the full year, our continuous efforts to optimize our cost structures and maintain effective cost management practices enabled us to augment our gross margin and generate positive net income for our shareholders. Looking ahead, as the pandemic continues to come gradually under control in and outside of China, we remain confident that our sufficient capital reserves, healthy revenue growth, and balanced operational performance will fuel our sustainable growth over the long term."
Fiscal Year 2020 Financial Results
Total net revenues in fiscal year 2020 increased by 33.6% to RMB1,222.2 million (US$187.3 million) from RMB914.6 million in fiscal year 2019. This increase was driven by the Company's increasing ability to attract and retain paying users and broadcasters to its platform. The number of paying users in fiscal year 2020 was 904,568, increasing by 30% from 697,475 in fiscal year 2019. The Company's paying ratio in fiscal year 2020 improved to 2.7% from 2.1% in fiscal year 2019.
Cost of revenues in fiscal year 2020 increased by 33.2% to RMB959.9 million (US$147.1 million) from RMB720.6 million in fiscal year 2019. This increase was primarily attributable to a year-over-year increase of 39% in the Company's revenue sharing fees and content costs, which was in line with the growth of the Company's live streaming operations in fiscal year 2020. Other costs in fiscal year 2020 increased by 70% year over year, which was consistent with the increase in revenue. User acquisition costs in fiscal year 2020 decreased by 8% year over year to RMB87.1 million (US$13.3) as a result of the Company's ability to attract more viewers through its improved brand awareness and more quality content contributed by broadcasters.
Gross profit in fiscal year 2020 increased by 35.2% to RMB262.2 million (US$40.2 million) from RMB194.0 million in fiscal year 2019. Gross margin in fiscal year 2020, fiscal year 2019, and fiscal year 2018 was 21.5%, 21.2%, and 20.0%, respectively. As the Company continued to expand its brand influence and enhance the quality of its content offerings, it also improved its gross margin in turn.
Total operating expenses in fiscal year 2020 increased by 77.1% to RMB67.5 million (US$10.4 million) from RMB38.1 million in the fiscal year 2019…"
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Baidu, Inc. (NASDAQ: BIDU) announced last November that the Company had entered into definitive agreements with JOYY Inc. ("JOYY"). Pursuant to the agreements, Baidu will acquire JOYY's domestic video-based entertainment live streaming business in China ("YY Live"), which includes YY mobile app, YY.com website and PC YY, among others, for an aggregate purchase price of approximately USD 3.6 Billion in cash, subject to certain adjustments. The closing of the transaction is subject to certain conditions and is currently expected to occur in the first half of 2021. "Baidu has built a vibrant mobile ecosystem in the past few years to enable the fast growth of our non-advertising revenues by increasing log in users, adding social engagement to our platform and expanding non-advertising offerings, including membership, live streaming and online games. This transaction will catapult Baidu into a leading platform for live streaming and diversify our revenue source," said Robin Li, Co-Founder and CEO of Baidu.
Amazon.com, Inc. (NASDAQ: AMZN), Amazon Music and Twitch announced last September, the incorporation of Twitch's live streaming functionality into the Amazon Music app, enabling fans to engage with artists in brand-new ways and move seamlessly between live streams and recorded music. iOS and Android artists across the world can connect live with Amazon Music's customers across all streaming tiers. "The combination of live streaming, coupled with the on-demand playback of songs on Amazon Music is groundbreaking," said Ryan Redington, Director, Amazon Music. "We're providing artists with more tools to instantly engage with fans, and this new feature couldn't arrive at a more crucial time in the industry. More than 1,000 artists have already connected their Amazon Music accounts to Twitch, and this is just day one. Together with Twitch, we're making it possible for artists across all genres, at all moments of their careers, to harness the social power of live streaming to create more engagement with their recorded catalog."
Activision Blizzard, Inc. (NASDAQ: ATVI) and Google announced last year, a multi-year strategic relationship to power new player experiences. Google Cloud will serve as the preferred provider for Activision Blizzard's game hosting infrastructure and YouTube as its exclusive streaming partner worldwide, excluding China, for live broadcasts of its popular esports leagues and events — including Overwatch League, Call of Duty League, Hearthstone Esports, and more. "We've worked closely with Activision Blizzard for the past few years across mobile titles to boost its analytics capabilities and overall player experience," said Sunil Rayan, Head of Gaming, Google Cloud. "We are excited to now expand our relationship and help power one of the largest and most renowned game developers in the world."
Zoom Video Communications, Inc. (NASDAQ: ZM) announced back in October its new end-to-end encryption (E2EE) is now available to users globally, free and paid, for meetings with up to 200 participants. This feature is available immediately as a technical preview, meaning that the company is proactively soliciting feedback from users for the next 30 days. E2EE is available on Zoom desktop client version 5.4.0 for Mac and PC, the Zoom Android app, and Zoom Rooms, with the Zoom iOS app pending Apple App Store approval. "We're very proud to bring Zoom's new end-to-end encryption to Zoom users globally today," said Zoom CISO Jason Lee. "This has been a highly requested feature from our customers, and we're excited to make this a reality. Kudos to our encryption team who joined us from Keybase in May and developed this impressive security feature within just six months."
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