Viomi Technology Shares Gain After Q1 Earnings Beat, Margin Expansion, Robust Q2 Guidance

Viomi Technology Co Ltd VIOT reported first-quarter FY21 revenue growth of 64% year-on-year to $191.6 million, beating the analyst consensus of $141.7 million.
Continued launches, the significant increase in new product sales, overseas market expansion, and the low-base effect of the Q1 of 2020 due to pandemic drove the growth.
Revenues from the IoT Home portfolio rose 111.5% Y/Y to $140.3 million, home water solutions declined 4% Y/Y to $15.8 million, consumables remained flat at $9.9 million, and small appliances and others increased by 6.4% Y/Y to $25.6 million.
The number of cumulative household users grew 51.4% Y/Y to 5.6 million, with the percentage of household users with at least two connected products expanded 200 basis points to 20.4%.
Gross margin expanded 230 basis points to 21.1% from a high margin shift, including the launch of new Viomi-branded water purifiers and sweeper robots, along with optimizing margins across product lines and cost control measures.
Non-GAAP operating income rose 142.2% Y/Y to $9.7 million. The margin expanded 163 basis points to 5%.
Non-GAAP net income increased 106.8% Y/Y to $10 million, translating to EPS of $0.13, beating the analyst consensus of $0.10.
Viomi held $251.2 million in cash and equivalents.
Guidance: Viomi sees Q2 revenue guidance of RMB1.72 billion - RMB1.85 billion.
Price action: VIOT shares traded higher by 6.62% at $8.7 in the premarket session on the last check Thursday.