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KongZhong profits down 50% on increased revenue costs

May 20, 2015 5:50 PM ETKongZhong Corporation (KZ) StockBy: Jason Aycock, SA News Editor
  • Game maker KongZhong (NASDAQ:KZ) posted profits that declined more than 50% for Q1 despite 3% revenue growth, as gross profit fell 18%.
  • The company had a pause in new smartphone games in Q1; "However, moving into the second quarter and the remainder of 2015, we expect to significantly increase the release of high-quality smartphone games," says CEO Leilei Wang, starting with a June open beta for Western fantasy card battle game Super God Battle Squad.
  • Revenue by segment: Internet games, $26.4M (up 6.5%); Mobile games, $10.6M (up 30.8%); Wireless value-added services, $13.6M (down 16%).
  • In mainland China, monthly average users of 1.9M (up 12.6%); aggregated monthly paying acounts of 333K (up 18.9%); average revenue per user of 163 yuan (about $26.28, down 10%).
  • At quarter's end, $190.1M in cash and equivalents. The firm sees Q2 revenues at $51M-$52M; gross profit of $19M-$20M; and non-GAAP net income around $5M.
  • Conference call at 7:30 p.m. ET.
  • Press Release

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KongZhong Corporation