Renren Inc.

Total net revenues were $110.4 million in Q1 2019, down 18% from the same period in 2018. 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%; loss from operations 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. For Q2 2019, management guided to revenue of $98 million to $103 million.

Joe Chen framed the company as fundamentally transformed after the social networking business divestiture and prior asset sales, saying the public company is now focused mainly on Kaixin and incubating smaller SaaS businesses. He described the long-term direction as moving toward more B2B-oriented businesses, including software to support dealer operations, while still building out Kaixin’s premium used-car network. His tone was confident and explanatory, emphasizing that Kaixin is positioned around a differentiated premium segment and that the business is approaching profitability.

Thomas Ren focused on the quarter’s financial improvement and the cost structure. He highlighted that operating expenses fell to $19.9 million, share-based compensation dropped to $2.8 million from $12.3 million, and the company narrowed both operating loss and net loss year over year. He also said the company expects second-quarter revenue of $98 million to $103 million and noted that financing income from the former floor-financing business should not contribute in the near future.

In Q&A, analysts asked about Renren’s long-term strategy after the spinoff/sale of legacy assets and about Kaixin’s short- and long-term plans after the recent U.S. listing. Joe Chen said Renren is now effectively a new company focused on Kaixin plus incubating other small businesses, and that the broader direction is toward B2B and enterprise software. On Kaixin, he said the company raised only about $30 million to $40 million, intends to keep raising debt capital, and wants to expand inventory while riding the growth of China’s premium used-car market.