CooTek Announces 3rd Quarter 2020 Unaudited Results.

SHANGHAI: CooTek (Cayman) Inc. (NYSE: CTK) ("CooTek" or the "Company"), a fast-growing global mobile internet company, today reported unaudited financial results for the third quarter ended September 30, 2020.

Third Quarter 2020 Highlights

Net revenue was US$105.7 million, an increase of 238% from US$31.3 million during the same period last year.

Gross profit was US$98.9 million, an increase of 261% from US$27.4 million during the same period last year.

Gross profit margin was 93.6%, an increase of 6% year-over-year.

Net loss was US$22.0 million, compared with net loss of US$16.2 million during the same period last year.

Adjusted net loss[1] (Non-GAAP) was US$20.5 million, compared with adjusted net loss (Non-GAAP) of US$15.4 million during the same period last year.

The Company's Portfolio Products[2] contributed approximately 99% of total revenues, with a focus on three main categories: online literature, scenario-based content apps, and casual games.

September 2020 Operational Highlights

Average daily active users ("DAUs") of the Company's Portfolio Products were 27.7 million, an increase of 16% from 23.9 million in September 2019. Monthly active users ("MAUs") of the Company's Portfolio Products were 94.8 million, an increase of 40% from 67.5 million in September 2019.

Average DAUs of the Company's online literature products were 10.0 million, increased significantly from 2.0 million in September 2019. MAUs of the Company's online literature products were 29.5 million, increased significantly from 11.0 million in September 2019. The average daily reading time[3] of the key product Fengdu Novel users further increased to 130 minutes in September 2020 from 110 minutes in June 2020.

Average DAUs of the Company's TouchPal Smart Input were 130.0 million. MAUs of the Company's TouchPal Smart Input were 169.4 million.

"I am pleased to report a resilient third quarter with revenue of US$105.7 million compared to US$31.3 million a year ago," commented Mr. Karl Zhang, CooTek's Chairman. "Driven by the strategic enhancement of our content ecosystem, we further upgraded and strengthened our core products aiming at delivering the sustainable business growth. We reinforced the market position of Fengdu Novel which ranked 3rd in terms of MAUs in free online literature market in China[4] with continuous growth in our user base. With its DAUs exceeding 10 million during the third quarter of 2020, Fengdu Novel constituted the core component of our content-rich portfolio with a strong emphasis on balancing its user expansion and user retention. We have been rapidly developing its customized content production model which contribute to its competitive user stickiness. Going forward, we will strive to further expand our content ecosystem by leveraging the core strength of Fengdu Novel and the growth synergy that we can achieve among the three main business segments of content-rich mobile apps."

Mr. Robert Cui, CooTek's CFO further commented, "Despite the growth pressure in global mobile internet advertising market, we still increased our revenue by 238% during the third quarter of 2020 compared to the same period in 2019. More importantly, we have witnessed solid growth in our online literature business in terms of its user base and revenue since the first quarter of 2019. We will continue to invest in the content and user expansion of Fengdu Novel by maintaining a reasonable return on investment level...