Shares of dating-app operator Momo (NASDAQ:MOMO) surged as much as 10.2% higher on Wednesday morning, peaking right around noon EDT. The company, widely known as "the Tinder of China," released its second-quarter earnings report before the opening bell, breezing past analyst expectations across the board.
In the second quarter, Momo's net revenues rose 58% year over year to $494 million. Adjusted earnings nearly doubled from $0.35 to $0.66 per American Depositary Share. The analyst consensus called for earnings near $0.61 per ADS on something like $480 million in top-line sales.
Looking ahead, Momo's third-quarter revenue guidance points to approximately $537 million, roughly 50% above the sales of the same period in 2017. Wall Street companies will need to update their estimates, which had been pointing to a more modest $518 million result.
Momo achieved these good-looking growth rates without adding a ton of users to its core service. The Momo dating app sported 108 million average monthly users during the second quarter, a relatively modest 18% year-over-year improvement.
Instead, the company is adding fuel to its revenue fires through 64% more paying users of its live video and value-added services: virtual gift cards, users paying for higher rankings in search results, and so on. In short, Momo is squeezing more money out of each user these days, helped by the recent acquisition of value-added service specialist TanTan.
You never quite know what to expect from the stock market when Momo posts a strong quarterly report. Big jumps have been as common as large drops in recent quarters, despite a steady cadence beat-raise, beat-raise, beat-raise. Today, investors embraced the report with open arms. Momo's stock now sits 95% above its 52-week lows but 20% below yearly highs, right in line with year-ago prices. Volatility, thy name is Momo.