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CooTek Jumps on Revenue Slide

Mobile internet company CooTek (Cayman) Inc (NYSE: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. 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.

Said Chairman Karl Zhang, "We are pleased to return to profitability while keeping a positive quarter-over-quarter revenue growth in the second quarter of 2021," commented Mr. Karl Zhang , CooTek's Chairman. "We remain committed to our content-focused strategy by continuously enhancing our product portfolio and optimizing our product features.

“We are encouraged by the solid implementation of the business plan driven by our online literature and mobile games products. With enriching and high-quality content incubation, Fengdu Novel has been expanding the exclusive content distribution and IP business.”

CTK shares rocketed 18 cents, or 12.6% at $1.61 early Wednesday.