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NQ Mobile Inc. (NQ)
Q2 2013 Earnings Conference Call
August 12, 2013 8:00 PM ET
Michelle Ma – Director-Investor Relations
Matt Mathison – Vice President-Capital Markets
Henry Lin – Co-Founder and Co-Chief Executive Officer
Omar Sharif Khan – Co-Chief Executive Officer
Suhai Ji – Chief Financial Officer
Mark R. Murphy – Piper Jaffray, Inc.
Mike Walkley – Canaccord Genuity, Inc.
Jiong Shao – Macquarie Capital Securities Ltd.
Andy Yeung – Oppenheimer Securities
Jun Zhang – Wedge Securities, LLC
William Huang – Barclays Capital Asia Ltd.
Previous Statements by NQ
» NQ Mobile's Management Discusses Q1 2013 Results - Earnings Call Transcript
» 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 call over to your first speaker today, Ms. Michelle Ma, Director of Investor Relations and Corporate Development. Thank you. Please go ahead ma’am.
Good evening and good morning Asia. Welcome to NQ Mobile’s second quarter 2013 earnings conference call. On today’s call, we have NQ Mobile’s Co-Founder and Co-CEO, Dr. Henry Lin; Co-CEO, Omar Khan; CFO, Suhai Ji; and Vice President, Matt Mathison. We thank you all for joining us today.
Before we begin, I like to read you the Safe Harbor disclaimer. Please note that 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 expectations. NQ Mobile does not assume any obligations 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 information reconciling those non-GAAP financial measures to NQ Mobile’s financial results prepared in according with U.S. GAAP will be included in NQ Mobile’s regular earning release and filings, which will occur in August.
Finally, as a reminder, this conference is being recorded. A webcast of this conference is available on NQ Mobile’s IR website at ir.nq.com. I would also like to point everyone to our presentation that can be found on our IR website. We’ll following that presentation on our call today and we encourage you to view that with us.
With that, I will like to turn the call over to our Vice President, Matt Mathison.
Thank you, Michelle, and welcome, everyone. It is an exciting time to be at NQ. It is an exciting time to be at the vanguard of many of the most groundbreaking trends and technology, and it is an exciting time to be executing on the vision of becoming a mobile Internet platform company with global reach and accelerating monetization opportunities. Even though, it is very accelerating, we are celebrating our successes. We have a very clear vision and a thorough plan to execute, and collectively, everyone at the company is focused and working tirelessly to make that vision become a near-term reality.
The takeaway from this call today is that we are proud of what we have accomplished, but this is only just the beginning. As we begin this earnings call and before I turn the call over to the rest of the management team, to discuss our second quarter results and provide an update on our business, I want to highlight a few things and it’s on page four of the slide presentation.
Number one, the platform business model is working. Our user acquisition engine is expanding and our user base along with it. Our monetization efforts and working and showing real and tangible evidence of accelerating revenue growth. We are uniquely and strongly positioned in key areas of the mobile platform environment, namely security related products, gaming and entertainment, advertising and enterprise.
Number two, as our platform business is taking hold; it is now time to clearly lay out the right metrics and framework for measuring our progress and success. The earnings release today and our conference call will lay out the proper framework going forward. As discussed on our first quarter results, we are now reporting our revenues in four different segments: mobile value added service, which includes our consumer security and gaming business; advertising, enterprise, which is our NationSky business; and other.
Also I’m sure that you noticed that our operating metrics section in the earnings release today contained a new metric, premium users, this metric simply reflects revenue generating users. The metric includes subscription users, which was previously reported as paying accounts, plus any user that also generates revenues indirectly either through the offer wall or advertising channels. Since our strategy involved accelerating and expanding the monetization of our user base, this premium user metric and the revenues they generate are how we are measuring our success.
Number three; we are also making great progress on the areas that need improvement. This is an endless pursuit for one that we will continue to openly communicate; previously highlighted areas of improvement that the company is focused on include the creation of shareholder value, DSOs and expanding our monetization path beyond direct payment for premium products. I am pleased to report that we are improving in each of these areas. This quarter’s results are only the beginning of the evidence that these improvements are underway.
Now, I am pleased to turn the call over to our Co-Founder and Co-CEO, Dr. Henry Lin. Following his remarks; our Co-CEO, Omar Khan will discuss business highlights and trends, and our CFO; Suhai Ji will then provide the financial discussion on the quarter and the outlook.
We’re now on page five of the slide presentation. Dr. Lin?
Morning, thank you, Matt, and thank you, everyone for joining us. And today, I am pleased to announce that we have achieved record revenues this quarter of US$41.3 million. We’ve also achieved record non-GAAP earning per share of $0.26. Our business continued to outperform expectations with no longer talk about becoming a mobile Internet platform company. We are a mobile Internet platform company today. We’re one of the world’s leading user acquisition engines.
In the first half of this year alone, we have engaged alone $27 million new active user accounts. We have now proven that our platform is working to monetize competitive user base. We’re now successfully generating not only security subscription revenue, but gaining revenue and advertising revenue as well. In addition, we have built Enterprise Mobility business in hyper growth mode, we renowned 100% to meet to our mobile Internet platform’s trend.
As a leading mobile Internet platform company, we will continue to grow our user base around the world and broaden our monetization capabilities. While expanding our products and specialties through leading R&D programs and continuous innovation, we’re creating more than 40 new patents per year with many new technologies in the pipeline to improve mobile discovery and engagements such as next generation voice and image-based mobile search.