CooTek Q2 Revenue Declines 34%, Margin Contracts

Mobile internet company CooTek (Cayman) Inc CTK reported a second-quarter FY21 revenue decline of 34% year-on-year to $83.2 million, missing the analyst estimate of $182.9 million. Continuous restructuring of portfolio products drove the decline.
Mobile advertising revenues decreased 35% Y/Y to $82.1 million.
Drivers: Monthly active users of the portfolio products declined 16% Y/Y to 70.0 million.
MAUs of the online literature products dropped 36% Y/Y to 18.1 million.
The revenues from the IP business of Fengdu Novel recorded 194% Q/Q growth. In addition, the mobile games portfolio has been further strengthened both in the domestic and overseas markets.
The gross margin contracted 610 bps to 89.4% as costs jumped 55% Y/Y.
Adjusted net income per ADS of $0.02 beat the estimate of $(0.02).
CooTek held $39 million in cash and equivalents and used $17.5 million in operating cash flow.
Price Action: CTK shares traded higher by 5.59% at $1.51 in premarket on the last check Wednesday.