Moatable, Inc.

First quarter 2019 total net revenues were $110.4 million, representing an 18% decrease year over year. 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%; selling and marketing was $6.7 million, down 32%; R&D was $6.8 million, up 6%; and G&A was $6.4 million, down 64%. Operating loss improved to $11.1 million from $23.7 million; net loss attributable to the company improved to $27.9 million from $41.6 million; non-GAAP adjusted loss from continuing operations improved to $8.2 million from $11.3 million; and non-GAAP adjusted net loss improved to $7.4 million from $18.8 million. The company guided second-quarter 2019 revenue to $98 million to $103 million.

Joe Chen said the company has essentially become a new business after the social network divestiture and other portfolio changes, with Kaixin and SaaS as the remaining focus areas. He described the long-term direction as increasingly B2B-oriented, combining dealership operations with enterprise software and technology support. On Kaixin, he stressed a premium used-car niche, national dealer expansion, and value-added services as the path to growth and profitability.

Thomas Ren highlighted the quarter’s revenue mix and cost improvements, noting Kaixin revenue of $104.6 million, cost of revenue of $101.5 million, and operating expenses of $19.9 million. He attributed lower auto sales revenue partly to the closure of the Jinan dealership and said the company does not expect financing income from the old floor-financing business in the near future. He also pointed to share-based compensation falling to $2.8 million from $12.3 million. For the next quarter, he guided revenue to $98 million to $103 million based on current market conditions.

In Q&A, Tina Long asked about Renren’s long-term strategy after the spinoff/sale of assets and Kaixin’s short- and long-term strategy after the recent capital raise and IPO. Joe Chen answered that Renren has shifted away from the old social network model and is now focused on newer businesses, especially Kaixin and SaaS, with a longer-term tilt toward B2B and internal enterprise software. On Kaixin, he said the company raised only about $30 million to $40 million, wants to keep raising debt capital, and intends to use inventory efficiently while expanding the premium used-car model. He also said premium cars require a stronger offline presence than lower-priced cars, which he sees as Kaixin’s differentiator.