FingerMotion (NASDAQ: FNGR) Optimistic About Continuous Growth As It Exceeds Quarterly Revenue Milestone Of Over $10 Million

A recent report by Grand View Research showed that global mobile payments transactions were valued at over $2 trillion in 2022. Thanks to players like FingerMotion Inc. FNGR, the sector is continuously witnessing impressive growth.

With the global mobile payment market valued at $52.21 billion in 2022 and expected to grow at a compound annual growth rate (CAGR) of 36.2% from 2023 to 2030, companies like FingerMotion could be set for growth as they ride the wave.

FingerMotion has been an evolving technology company with a core competency in mobile payment and recharge platform solutions in China. As the customer base of its primary business continues to grow, the company says it is developing additional value-added technologies to market to its users.

Founded in 2014, the company’s vision has been to rapidly grow its user base through organic means and develop this growth into an ecosystem of users with high engagement rates utilizing its innovative applications.

FingerMotion believes that developing a highly engaged ecosystem of users would position it to onboard larger customer bases as it hopes to serve over one billion users in China and eventually expand the model to other regional markets.

For investors, the company’s financial results for Q3 ended November 30, 2022, could be a clear indication that FingerMotion is a company to pay attention to.

Q3 2023 Financial Results

A summary of the Q3 2022 financial Results released on January 17 Indicates:

• Reported record quarterly revenue of $11.40 million (includes SMS & MMS, Telecommunications Products & Services businesses, and Big Data).
• Reported a quarterly increase in revenues of 93% compared to Q3 2022.
• Reported sequential quarterly growth in revenue of $6.42 million from Q2 2023, representing a 129% increase quarter over quarter.
• Reported quarterly increase in Telecommunications Products & Services business revenue of $7.07 million or 215% compared to Q3 2022.
• Reported quarterly Big Data revenue of $.19 million compared to nil in Q3 2022.
• Reported quarterly decline in SMS & MMS business revenue of $1.75 million or 67% compared to Q3 2022.
• Reported quarterly cost of revenue of $10.54 million which was an increase of $5.61 million or 114% compared to Q3 2022.
• Reported a quarterly loss of $2.52 million, which was an increase of $1.49 million or 143% compared to Q3 2022.
• Basic and Diluted loss per share of $0.06 versus a loss per share of $0.02 for Q3 2022.
• On November 30, 2022, FingerMotion had $11,870,256 in cash, a working capital surplus of $16,713,400 and a positive shareholders' equity of $12,193,986.
• Total Assets were $21.90 million, Total Current Liabilities were $4.87 million, and Total Liabilities were $9.71 million.
• 46,316,635 common shares were issued and outstanding as of November 30, 2022.

FingerMotion says it exceeded the quarterly milestone of over $10 million in revenue for the quarter and anticipates even greater revenue growth in the upcoming months as it deploys some of the $11 million held in reserve, which was raised pursuant to private placements in November 2022.

“The Chinese’ lockdowns’ are over now, but during the quarter, they still had an impact on the company’s revenue mix. The company managed the quarter by focusing available resources to the top-up business as our corporate SMS customers were not interested in driving traffic to retail establishments that were closed,” Martin Shen, CEO of FingerMotion, said.

The company expects a resumption of the upward trend and a dramatic acceleration in topline revenue growth now that China has opened up again.

“While margins were temporarily depressed, they are expected to rebound substantially in the ensuing quarter. We are also encouraged to see the start of revenue from mobile phone sales and subscriptions. We are very optimistic that we will see notable growth in this area and the Big Data in the future,” Shen added.

A further probe into the financial results showed that general and administrative expenses increased by $114,686 (8%) during the quarter due to an increase in consulting, travel, and other expenses related to funding and promotional activities.

Research and development expenses also increased to $180,158 during the quarter, which was up 14% due to higher data access fees charged by the telecom companies.

FingerMotion also used the announcement to hint that the device protection business is nearing the end of its test phase, and the company anticipates a full launch by the end of this fiscal year.

Other players in the industry include Affirm Holdings Inc. AFRM and Fiserv Inc. FISV.

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