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NQ Mobile Inc. (NQ)
Q1 2013 Earnings Conference Call
May 16, 2013 08:00 am ET
Henry Yu Lin – Chairman, Co-Chief Executive Officer
Omar Sharif Khan – Co-Chief Executive Officer, Director
Suhai Ji – Chief Financial Officer
Will Yiwei Jiang – Vice President, Strategy
Michelle Ma – IR Director
Mark Murphy – Piper Jaffray
Michael Walkley – Canaccord-Genuity
Andy Yeung – Oppenheimer
Jun Zhang – Wedge Partners
Fred Ziegel – Topeka Capital Markets
Previous Statements by NQ
» NQ Mobile's CEO Discusses Q4 2012 Results - Earnings Call Transcript
» NQ Mobile's CEO Discusses Q3 2012 Results - Earnings Call Transcript
» NQ Mobile's CEO Discusses Q2 2012 Results - Earnings Call Transcript
I would now like to hand the time over to your host for today, Ms. Michelle Ma, NQ Mobile Director of Investor Relations and Corporate Development. Thank you. Please go ahead Ms. Ma.
Hello everyone and welcome to NQ Mobile’s first quarter 2013 earnings conference call. The company’s earning results was released earlier today and available on company’s IR website at ir.nq.com, as well as earnings newswire services.
Today you will hear opening remarks from NQ Mobile’s co-CEOs, Dr. Henry Lin and Omar Khan, followed by our Chief Financial Officer, Suhai Ji, who will take you through the company’s operational and financial results for the first quarter 2013, and give guidance for the second quarter and full year of 2013. After their prepared remarks, Dr. Lin, Mr. Khan, Mr. Ji, our Chief Strategy Officer, Will Jiang will be available to answer your questions.
Before we continue, please note that the discussion today will contain certain forward-looking statements made under the Safe Harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectation. NQ Mobile does not assume any obligation to update any forward-looking statements except as required under applicable law.
Also please note that some of the information to be discussed includes non-GAAP financial measures as defined in Regulation G. The most direct comparable U.S. GAAP financial measures and the information reconciling those non-GAAP financial measures to NQ Mobile’s financial results prepared in accordance with U.S. GAAP are included in NQ Mobile’s earning release, which has been posted on company’s IR website.
Finally, as a reminder, this conference is being recorded. In addition, a webcast of this conference call will be available on NQ Mobile’s Investor Relations website.
I will now turn the call over to NQ Mobile’s Founder, Chairman and Co-CEO, Dr. Lin.
Thank you, Michelle, and welcome to everyone on the call. I’m pleased to report that we achieved a strong first quarter with record revenues of US$33.2 million, achieving almost the high end of our previously issued guidance. This marks our eighth straight quarters of delivering up on our issued guidance. I’m very proud of the track record by building for executing all our commitments.
Our strategy is to become a leading mobile internet platform company, as firmly taken hold. Our new user activation engine continues to perform as our registered user accounts in our consumer business now exceeds 403 million accounts including both security and gaming.
What is even more impressive is that we have nearly 125 million monthly active users in our consumer business. Our goal is to broaden the monetization opportunities of price to this engaged user base. I’m proud to announce that for our security applications, we have now started to commercially launch an integrated offer where we can monetize users through offering them advertising, third-party applications referrals and mobile games, the addition to traditional [premium security operators].
We have also launched to new [developed web] games which had become a great success in our iOS platform in China. And both literally ranked in the top 20 grossing iOS games in China. Our enterprise mobility business continue it significant growth with an outstanding quarter and improved its margin significantly by growing its software and services business, with a strong first quarter in the books. We’re looking forward to an amazing 2013.
With that I’d like to hand the call to my partner and NQ Mobile’s co-CEO, Omar Khan, who will give you more details on some of the key developments in our business.
Omar Sharif Khan
Thank you, Henry, and hello to everyone on the call. As Henry mentioned, we are very pleased with our first quarter results. We have continued to globalize our business. The international markets outside of Greater China now accounts for approximately 56% of the total mobile consumer mobile revenues. As a smartphone explosion continues around the world and approaches nearly 40% penetration by the end of 2014, we remain confident in the international growth of our security and privacy business. In addition as we have committed in the past, we continue to deliver scale from our investments in our international business. Our consumer business achieves 33.4% net operating margins on a non-GAAP basis, up from 30.7% in the previous quarter.
Consistent with what we unveil that our analyst and investor day, last November, our strategic transition to becoming a leading mobile internet platform provider has firmly taken shape and become a reality. This transition enables us to stay on track to deliver the $100 million, $200 million and $500 million strategy, otherwise known as the 125 strategy.
Our consumer mobile internet platform business is driven through user acquisition, engagement and motorization. Our consumer user acquisition platform remains extremely efficient and productive. Across our consumer products focused on user acquisition, which include products such as NQ Mobile Security, NQ Mobile Vault, FL Game Center, FL Download Center. We added over 52 million new registered user accounts and nearly 15 million new active user accounts in the first quarter.