Scienjoy(SJ) - 2025 Q1 - Quarterly Report

First Quarter 2025 Operating and Financial Summaries This section provides an overview of Scienjoy's Q1 2025 financial performance, highlighting operational efficiency and strategic global expansion Company Overview Scienjoy Holding Corporation, a Nasdaq-listed interactive entertainment leader in the Chinese market, announced its financial results for the first quarter ended March 31, 2025 - Scienjoy Holding Corporation (NASDAQ: SJ) is an interactive entertainment leader in the Chinese market[2] Executive Commentary and Key Financial Highlights Despite a slight decline in total revenues, Scienjoy achieved a substantial increase in gross profit and gross margin, with income from operations up 33.3% year over year, reflecting a focus on operational efficiency and strategic cost management - Scienjoy's Q1 2025 results reflect continued focus on operational efficiency and strategic cost management, leading to a substantial increase in gross profit and gross margin despite a slight revenue decline[4] - The company is advancing global expansion through its Dubai hub, establishing a strong foundation for a dual AI model combining an AI-focused app with an offline presence for revenue generation and marketing[4] - Income from operations increased by 33.3% year over year, demonstrating effective cost management and value extraction from a targeted paying user base[4] First Quarter 2025 Key Financial Highlights | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change (%) | | :------------------------------------- | :--------------------- | :--------------------- | :------------- | | Total revenues | 307.3 | 316.3 | -2.8% | | Gross profit | 59.5 | 53.1 | +12.1% | | Gross margin | 19.4% | 16.8% | +2.6 pp | | Income from operations | 13.7 | 10.3 | +33.3% | | Net loss | (13.0) | 2.8 (Net Income) | N/A | | Net loss attributable to shareholders | (9.1) | 6.6 (Net Income) | N/A | | Adjusted net loss attributable to shareholders | (5.5) | 9.0 (Net Income) | N/A | | Cash and cash equivalents (as of March 31, 2025) | 286.5 | 252.5 (as of Dec 31, 2024) | +13.5% | First Quarter 2025 Financial Results This section provides a detailed analysis of Scienjoy's Q1 2025 revenues, costs, operating expenses, and net income, including key user and financial metrics Total Revenues and User Metrics Total revenues decreased by 2.8% year-over-year to RMB307.3 million, primarily due to a decline in paying users from 164,044 to 151,971, attributed to the competitive landscape of China's mobile live streaming market Total Revenues (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :----------- | :--------------------- | :--------------------- | :--------- | | Total revenues | 307.3 | 316.3 | -2.8% | - The decrease in total revenues was primarily caused by a decrease in paying users due to the competitive landscape of China's mobile live streaming market[6] Total Paying Users (Q1 2025 vs Q1 2024) | Metric | Q1 2025 | Q1 2024 | YoY Change | | :------------- | :------ | :------ | :--------- | | Total paying users | 151,971 | 164,044 | -7.36% | Cost of Revenues and Gross Profit Cost of revenues decreased by RMB15.4 million, mainly due to lower revenue sharing fees, partially offset by increased user acquisition costs, leading to a 12.1% increase in gross profit to RMB59.5 million and a rise in gross margin to 19.4% Cost of Revenues (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :------------- | :--------------------- | :--------------------- | :--------- | | Cost of revenues | 247.8 | 263.2 | -5.85% | - The decrease in cost of revenues was primarily attributable to a RMB22.9 million decrease in revenue sharing fees, offset by a RMB7.0 million increase in user acquisition costs[7] Gross Profit and Margin (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :---------- | :--------------------- | :--------------------- | :--------- | | Gross profit | 59.5 | 53.1 | +12.1% | | Gross margin | 19.4% | 16.8% | +2.6 pp | - The increase in gross margin was due to higher average live streaming revenue per paying user (ARPPU), indicating effective conversion of high-quality paying users[8] Operating Expenses Total operating expenses increased by 7.0% to RMB45.8 million in Q1 2025, driven by increases in sales and marketing and general and administrative expenses, partially offset by a decrease in research and development expenses Total Operating Expenses (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :------------------- | :--------------------- | :--------------------- | :--------- | | Total operating expenses | 45.8 | 42.8 | +7.0% | Sales and Marketing Expenses Sales and marketing expenses increased slightly due to more marketing activities Sales and Marketing Expenses (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :----------------------- | :--------------------- | :--------------------- | :--------- | | Sales and marketing expenses | 2.1 | 2.0 | +6.3% | - The increase in sales and marketing expenses was primarily attributable to more marketing activities[15] General and Administrative Expenses General and administrative expenses rose, primarily driven by increased professional consultant fees General and Administrative Expenses (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :----------------------------- | :--------------------- | :--------------------- | :--------- | | General and administrative expenses | 23.4 | 19.9 | +17.2% | - The increase in general and administrative expenses was primarily due to an increase of RMB3.8 million in professional consultant fees[15] Research and Development Expenses Research and development expenses decreased, mainly due to lower technical service fees Research and Development Expenses (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :--------------------------- | :--------------------- | :--------------------- | :--------- | | Research and development expenses | 19.6 | 21.5 | -8.8% | - The decrease in research and development expenses was due to a decrease of RMB2.4 million in technical service fees[15] Provision for Credit Losses The company recorded a provision for credit losses, shifting from a prior recovery, due to slower collections Provision for Credit Losses (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | Change | | :------------------------ | :--------------------- | :--------------------- | :----- | | Provision for credit losses | 0.8 | (0.6) (Recovery) | N/A | - The shift to a provision for credit losses from a recovery was due to slow collection[15] Income from Operations Income from operations significantly increased by 33.3% to RMB13.7 million in Q1 2025, reflecting improved operational efficiency and cost management Income from Operations (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :------------------- | :--------------------- | :--------------------- | :--------- | | Income from operations | 13.7 | 10.3 | +33.3% | Other Income and Expenses The company experienced a substantial increase in loss from the change in fair value of investment in marketable security, rising by 654.1% to RMB24.3 million, primarily due to fair value changes in publicly traded company investments Change in Fair Value of Investment in Marketable Security (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :------------------------------------------------ | :--------------------- | :--------------------- | :--------- | | Change in fair value of investment in marketable security | (24.3) (Loss) | (3.2) (Loss) | +654.1% | - The significant increase in loss from marketable security investment fair value changes was primarily attributable to fair value changes in investments in a publicly traded company[10] Investment Loss (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | YoY Change | | :--------------- | :--------------------- | :--------------------- | :--------- | | Investment loss | (0.4) | (2.2) | -81.8% | - The investment loss was primarily attributable to share of unrealized loss in long-term investments[11] Net Income (Loss) and Earnings Per Share (EPS) Despite a strong increase in income from operations, Scienjoy reported a net loss of RMB13.0 million for Q1 2025, primarily driven by a significant unrealized loss from marketable security investments Net Income (Loss) (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | Change | | :----------- | :--------------------- | :--------------------- | :----- | | Net income (loss) | (13.0) (Loss) | 2.8 (Income) | N/A | - The net loss for Q1 2025 was primarily attributable to an unrealized loss of RMB24.3 million from the change in fair value of investment in marketable security, despite a 33.3% increase in income from operations[12] Net Income (Loss) Attributable to Shareholders (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | Change | | :------------------------------------------ | :--------------------- | :--------------------- | :----- | | Net income (loss) attributable to shareholders | (9.1) (Loss) | 6.6 (Income) | N/A | Basic and Diluted Net Loss Per Ordinary Share (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB) | Q1 2024 (RMB) | Change | | :---------------------------------------------------- | :------------ | :------------ | :----- | | Basic and diluted net loss per ordinary share | (0.22) | 0.16 | N/A | Adjusted Net Income (Loss) Attributable to Shareholders (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB million) | Q1 2024 (RMB million) | Change | | :---------------------------------------------------- | :--------------------- | :--------------------- | :----- | | Adjusted net income (loss) attributable to shareholders | (5.5) (Loss) | 9.0 (Income) | N/A | Adjusted Basic and Diluted Net Loss Per Ordinary Share (Q1 2025 vs Q1 2024) | Metric | Q1 2025 (RMB) | Q1 2024 (RMB) | Change | | :---------------------------------------------------------- | :------------ | :------------ | :----- | | Adjusted basic and diluted net loss per ordinary share | (0.13) | 0.22 | N/A | Cash and Cash Equivalents As of March 31, 2025, the company's cash and cash equivalents increased by RMB33.9 million to RMB286.5 million from December 31, 2024 Cash and Cash Equivalents (As of March 31, 2025 vs Dec 31, 2024) | Metric | As of March 31, 2025 (RMB million) | As of Dec 31, 2024 (RMB million) | Change | | :------------------------ | :---------------------------------- | :---------------------------------- | :------- | | Cash and cash equivalents | 286.5 | 252.5 | +33.9 | About Scienjoy Holding Corporation This section provides a concise description of Scienjoy as a Nasdaq-listed interactive entertainment leader leveraging AI for metaverse experiences Company Description Scienjoy is a Nasdaq-listed interactive entertainment leader leveraging AI-powered technology to create immersive experiences and foster connections, with a vision to shape a metaverse lifestyle - Scienjoy is a pioneering Nasdaq-listed interactive entertainment leader driven by the vision of shaping a metaverse lifestyle[18] - The company leverages AI-powered technology to create immersive experiences that resonate with global audiences, fostering meaningful connections and redefining entertainment[18] Use of Non-GAAP Financial Measures This section explains the definition and purpose of Scienjoy's non-GAAP financial measures, such as adjusted net income, for investor understanding Definition and Purpose Scienjoy uses Adjusted net income and Adjusted basic/diluted net income per ordinary share as non-GAAP financial measures to provide investors with a better understanding of its financial performance - 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[19] - Adjusted basic and diluted net income per ordinary share is non-GAAP net income (loss) attributable to ordinary shareholders divided by the weighted average number of ordinary shares[19] - These non-GAAP 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, GAAP financial information[19] Exchange Rate Information This section details the specific exchange rate used for RMB to US dollar conversions in the report and clarifies its representational limitations Exchange Rate Details The report uses an exchange rate of RMB7.2567 to US$1.00, the noon buying rate on March 31, 2025, for convenience, without representation of actual convertibility - Translations from RMB to U.S. dollars are made at a rate of RMB7.2567 to US$1.00, the noon buying rate in effect on March 31, 2025[21] - The Company makes no representation that RMB amounts could have been, or could be, converted, realized or settled in U.S. dollars at that rate[21] Safe Harbor Statement This section presents a disclaimer regarding forward-looking statements, outlining inherent risks and uncertainties that may affect actual future results Forward-Looking Statements Disclaimer This section includes a safe harbor statement regarding forward-looking statements, highlighting that such statements involve known and unknown risks, uncertainties, and other important factors that could cause actual results to differ materially - The release contains 'forward-looking statements' subject to risks, uncertainties, assumptions, and other important factors that could cause actual results to differ materially from those discussed[22] - Important factors include managing growth, future acquisitions, financing, economic conditions, litigation, regulatory changes, and pandemics[22] Investor Relations Contacts This section provides essential contact information for investor and media inquiries regarding Scienjoy Holding Corporation Contact Information Contact information for investor and media inquiries is provided, including the Chief Financial Officer of Scienjoy and Ascent Investor Relations LLC - Investor and media inquiries can be directed to Denny Tang, Chief Financial Officer of Scienjoy Holding Corporation, or Tina Xiao of Ascent Investor Relations LLC[23][24] UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS This section presents the company's unaudited financial position, including assets, liabilities, and equity, as of March 31, 2025 Balance Sheet Data The unaudited condensed consolidated balance sheets provide a snapshot of Scienjoy's assets, liabilities, and equity as of March 31, 2025, and December 31, 2024, showing total assets of RMB1,411.5 million at the end of Q1 2025 Unaudited Condensed Consolidated Balance Sheets (Selected Data) | Metric (RMB thousand) | As of Dec 31, 2024 | As of Mar 31, 2025 | | :--------------------- | :----------------- | :----------------- | | Cash and cash equivalents | 252,540 | 286,482 | | Total current assets | 544,644 | 538,543 | | Total non-current assets | 860,541 | 872,987 | | TOTAL ASSETS | 1,405,185 | 1,411,530 | | Total current liabilities | 160,769 | 164,504 | | Total non-current liabilities | 59,100 | 70,770 | | TOTAL LIABILITIES | 219,869 | 235,274 | | Total equity | 1,185,316 | 1,176,256 | | TOTAL LIABILITIES AND EQUITY | 1,405,185 | 1,411,530 | UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) This section details the company's unaudited financial performance, including revenues, expenses, and net loss, for Q1 2025 Income Statement and Comprehensive Income Data The unaudited condensed consolidated statements of operations and comprehensive income (loss) detail the company's revenues, expenses, and net loss for the three months ended March 31, 2025, compared to the same period in 2024, showing a net loss of RMB12.96 million Unaudited Condensed Consolidated Statements of Operations (Selected Data) | Metric (RMB thousand) | For three months ended Mar 31, 2024 | For three months ended Mar 31, 2025 | | :------------------------------------------ | :---------------------------------- | :---------------------------------- | | Total revenue | 316,299 | 307,335 | | Cost of revenues | (263,212) | (247,842) | | Gross profit | 53,087 | 59,493 | | Sales and marketing expenses | (1,988) | (2,113) | | General and administrative expenses | (19,930) | (23,352) | | Research and development expenses | (21,527) | (19,562) | | Recovery of (provision for) credit losses | 643 | (754) | | Income from operations | 10,285 | 13,712 | | Change in fair value of investment in marketable security | (3,227) | (24,334) | | Net income (loss) | 2,806 | (12,958) | | Net income (loss) attributable to the Company's shareholders | 6,580 | (9,090) | | Basic earnings (loss) per share | 0.16 | (0.22) | | Diluted earnings (loss) per share | 0.16 | (0.22) | Reconciliations of Non-GAAP Results This section provides a clear reconciliation of GAAP to non-GAAP financial measures, specifically for net income and earnings per share Non-GAAP Reconciliation Table This section provides a reconciliation of GAAP net income (loss) attributable to the Company's shareholders to adjusted net income (loss) attributable to the Company's shareholders, showing the impact of share-based compensation Reconciliations of Non-GAAP Results (Q1 2025 vs Q1 2024) | Metric (RMB thousand) | For three months ended Mar 31, 2024 | For three months ended Mar 31, 2025 | | :---------------------------------------------------- | :---------------------------------- | :---------------------------------- | | Net income (loss) attributable to the Company's shareholders | 6,580 | (9,090) | | Less: Share based compensation | (2,435) | (3,575) | | Adjusted net income (loss) attributable to the Company's shareholders | 9,015 | (5,515) | | Adjusted net income (loss) per ordinary share - Basic | 0.22 | (0.13) | | Adjusted net income (loss) per ordinary share - Diluted | 0.22 | (0.13) |