Lizhi Tumbles 13% After Q1 Losses Widen

The audio entertainment platform will look to grow its podcast business.
Jennifer ChanJun 02,2021,19:45

Shares in Lizhi Inc. (Nasdaq: LIZI) dropped as much as 13% on Wednesday after it posted widened losses for the first quarter.

For the three months ending March, the audio entertainment platform’s revenue came in 34% year-over-year higher at 495.05 million yuan ($75.56 million), according to a statement posted by the company Tuesday after the markets closed.

The bulk of the Guangzhou-based company’s revenue was generated by its audio entertainment segment, which was driven “continuous growth in MAUs,” its paying users, and commercialization of apps, according to Lizhi. In the quarter, Lizhi counted an average of 59.7 million mobile MAUs, up 10% from the same period last year.

However, Lizhi’s net loss in the quarter widened to 70.04 million yuan ($10.69 million) versus 48.24 million yuan a year ago.

While the stock is still is up year-to-date, Lizhi’s stock has lost more than of its value since peaking at $15.82 per American depositary share in February. Like many other tech growth stocks, Lizhi has fallen on fears interest rates increasing. It did, however, gain last week Apple’s App Store recommending its podcast platform app.

Currently, Lizhi’s podcast segment accounts for a small percentage of the company’s total revenue. For the first quarter, Lizhi generated $877,00 from its podcast, advertising and other revenues. Lizhi will hope to grow that further going forward.

I recommended a buy on Lizhi in April, given its collaborations with major automakers this year and regarding the pullback opportunity that was presented. Lizhi has partnerships with XPeng Inc. (NYSE: XPEV), ECARX, and ENOVATE Motors for built-in car integration of its audio products.

“The LIZHI Podcast also tried the live streaming podcast feature for the in-car scenario, which was first unveiled on the smart in-car operating system of XPeng Motors,” Marco Lai, the founder and chief executive officer of Lizhi told analysts on an earnings call.

“We expect to connect and integrate in-car podcast usage with mobile podcast usage so that users can enjoy immersive and interactive podcast experiences in the in-car scenario as well.”

Lizhi did not provide an outlook for the second quarter.

Topics:Lizhi, XPeng.