Sound Group Inc. Reports First Half of 2024 Unaudited Financial Results

Core Insights - Sound Group Inc. reported a significant decline in net revenues and a net loss for the first half of 2024 compared to the same period in 2023, indicating challenges in user engagement and monetization strategies [3][5][15]. Financial Performance - Net revenues for the six months ended June 30, 2024, were RMB 924.0 million (US$ 127.1 million), down from RMB 1,223.8 million in the same period of 2023, representing a decrease of approximately 24.5% [3][5]. - The company recorded a net loss of RMB 36.5 million (US$ 5.0 million) for the first half of 2024, compared to a net income of RMB 59.9 million in the same period of 2023 [15][16]. - Average total mobile monthly active users (MAUs) decreased to 35.7 million from 47.6 million year-over-year [3]. Cost Structure - Cost of revenues decreased to RMB 677.6 million (US$ 93.2 million) from RMB 853.0 million in the previous year, primarily due to reduced revenue sharing fees to content creators and lower operational costs [6]. - Gross profit was RMB 246.3 million (US$ 33.9 million), down from RMB 370.8 million, leading to a gross margin of 27%, compared to 30% in the same period of 2023 [7][8]. Operating Expenses - Operating expenses totaled RMB 290.6 million (US$ 40.0 million), a decrease from RMB 320.4 million in the same period of 2023 [8]. - Research and development expenses were RMB 122.9 million (US$ 16.9 million), down from RMB 147.1 million, reflecting a reduction in staff-related costs [9]. - Selling and marketing expenses slightly decreased to RMB 123.2 million (US$ 17.0 million) from RMB 126.4 million, attributed to lower branding and marketing expenditures [10]. Shareholder Returns - The company initiated a share repurchase program in December 2023, with an authorization to repurchase up to US$ 3.0 million worth of shares over 12 months. As of June 30, 2024, it had repurchased shares worth US$ 1.4 million [21]. Balance Sheet Highlights - As of June 30, 2024, the company had cash and cash equivalents of RMB 464.9 million (US$ 64.0 million) [22]. - Total assets decreased to RMB 536.9 million (US$ 73.9 million) from RMB 566.6 million as of December 31, 2023 [35].