Sungy Mobile craters on Q4 miss, weak Q1 guidance
- In addition to missing Q4 estimates, Sungy Mobile (GOMO -22.3%) has guided for Q1 revenue of RMB42M-RMB46M ($6.7M-$7.4M), well below a sole analyst estimate of $12.2M and down sharply from Q1 2014's $15.6M.
- CEO Yuqiang Deng tries to offer a positive take on the numbers: He notes MAUs for Sungy's GO mobile apps rose to 111M in Q4 (from 97M in Q3 and 94M in Q4 2013), and insists the revenue weakness is due to a "temporarily shift in focus from monetization to marketing and product development." Sungy's Android utility and launcher apps face plenty of competition.
- Mobile app product/service revenue fell to RMB36.4M ($5.9M) from RMB50.9M a year ago, mobile reading services revenue to RMB18.6M ($3M) from RMB26.3M, and mobile portal marketing service revenue to RMB13.6M ($2.2M) from RMB14.5M.
- Gross margin fell to 59.3% from Q3's 61.2% and Q4 2013's 75.1% - distribution fees, content acquisition costs, and amortization costs related to the GetJar acquisition are blamed. Contributing to the EPS miss: While revenue fell 26% Y/Y, GAAP operating expenses rose 133% Y/Y to RMB123.1M ($19.8M).
- Shares have plunged to new post-IPO lows.
- Q4 results, PR
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