Moatable, Inc.

Total net revenues for Q1 2019 were $110.4 million, down 18% from the prior year period. Kaixin revenues were $104.6 million, up 8% year over year, while auto sales revenue was $102.6 million, down 17%, and other revenue was $7.7 million, down 25%. Cost of revenue was $101.5 million versus $123.5 million a year ago; operating expenses were $19.9 million, down 42%; operating loss was $11.1 million versus $23.7 million; net loss attributable to the company was $27.9 million versus $41.6 million; non-GAAP adjusted loss from continuing operations was $8.2 million versus $11.3 million; and non-GAAP adjusted net loss was $7.4 million versus $18.8 million. For Q2 2019, the company guided revenue to $98 million-$103 million.

Joe Chen said the company is effectively a new business after the social networking divestiture and other portfolio changes, with Kaixin Auto now the main operating focus. He emphasized Kaixin’s premium used-car positioning, its nationwide dealer network, and the opportunity to add financing, insurance brokering, and repair/maintenance services to improve monetization and retention. His tone was confident and explanatory, with repeated emphasis that the company is still in a development/incubation phase but has significant runway.

Thomas Ren highlighted that the first quarter reflected lower revenue but improved profitability metrics, helped by lower operating expenses and reduced share-based compensation. He cited cost of revenue of $101.5 million, operating expenses of $19.9 million, and share-based compensation of $2.8 million versus $12.3 million a year earlier. He also noted that operating loss, net loss, and adjusted losses all improved year over year, and guided second-quarter revenue to $98 million-$103 million based on current market conditions.

An analyst asked about Renren’s long-term strategy after the spinoff/divestitures and about Kaixin’s short- and long-term strategy after its financing. Chen answered that Renren’s old social-networking business lost the network-effect battle to larger rivals, so the company has become materially different and is now focused on Kaixin plus incubating smaller B2B/SaaS businesses. On Kaixin, he said the company raised only about $30 million-$40 million, still needs capital because it is a retailer with inventory, and plans to keep raising debt capital to grow inventory and scale the business. He also said the premium-used-car niche is different from lower-end segments because customers want an offline, high-touch experience, which he believes Kaixin is uniquely positioned to provide at scale.