Shares of Qutoutiao (NASDAQ:QTT) popped as much as 10.5% early Tuesday, then settled to trade up 5.1% as of 12:30 p.m. EDT after the China-based mobile content platform announced first-quarter 2019 results. That said, investors should note the move only partly recouped the stock's nearly 10% plunge on Monday ahead of the quarterly release -- a move that appeared to be driven not by company-specific news, but rather by broader trade tensions between China and the United States.
In any case, quarterly revenue nearly quintupled on a year-over-year basis to 1.118 billion yuan ($166.7 million), near the high end of guidance for a range of 1.1 billion to 1.2 billion yuan. On the bottom line, that translated to an adjusted net loss of $92 million, or $0.37 per American depositary share (ADS). Analysts on average were expecting the company to report a slightly narrower net loss of $0.36 per ADS on lower revenue of $160.3 million.
Investors were less impressed by the company's simultaneous announcement that CEO Lei Li has resigned for personal reasons -- though he'll remain a director and vice chairman of the board. Company chairman Eric Siliang Tan will take the helm as CEO.
But Qutoutiao's underlying business momentum seemed encouraging. Combined daily active users rose 21.4% sequentially from last quarter and more than tripled year over year to 37.5 million. Average daily time spent by each of those users also remained roughly flat from last quarter, but nearly doubled on a year-over-year basis to 62.1 minutes.
Tan credited this growth to their products' ability to "bring fun and value to our users," including reliable information on health-related topics, a new distribution agreement with Ultimate Fighting Championship, and a new dedicated mini-video section within the app "to respond to the rapidly increasing user appetite for this format."
"We are pleased to see net revenues reaching a level almost five times as high as one year ago," added co-CFO Jingbo Wang. "It has been a transformational 12 months with user base expanding almost fourfold and monetization enhanced."
For the second quarter of 2019, Qutoutiao expects revenue between 1.38 billion yuan and 1.42 billion yuan, well below Wall Street's consensus estimates for 1.63 billion yuan.
After coupling Qutoutiao's reasonably strong quarter with its massive plunge since mid-March -- including a more than 40% drop in April after the company said it would raise cash through a dilutive new share offering -- it seems the market was willing to forgive its light outlook and executive turnover for the time being.