EX-99.1 2 ea023373501ex99-1_cheer.htm PRESS RELEASE - CHEER HOLDING REPORTS FULL YEAR 2024 FINANCIAL RESULTS - MARCH 10, 2025

Exhibit 99.1

 

Cheer Holding Reports Full Year 2024 Financial Results

 

BEIJING, March 10, 2025 (GLOBE NEWSWIRE) -- Cheer Holding, Inc. (NASDAQ: CHR) (“Cheer Holding,” or the “Company”), a leading provider of advanced mobile internet infrastructure and platform services, today announced its financial results for the full year ended December 31, 2024.

 

Operating Highlights For The Year Ended December 31, 2024

 

Total downloads of CHEERS Apps were approximately 523.3 million as of December 31, 2024, representing a growth of 10.4% from December 31, 2023. Specifically:

 

CHEERS Video

 

●Accumulated downloads of CHEERS Video grew by 6.3% YoY to approximately 436 million as of December 31, 2024.
●Monthly Active Users of CHEERS Video increased by 4.4% to approximately 52.3 million.
●Daily Time Spent for using CHEERS Video during 2024 was approximately 60 minutes.

 

CHEERS e-Mall

 

●Accumulated downloads of CHEERS e-Mall grew by 13.5% YoY to approximately 60.7 million as of December 31, 2024.
●Monthly Active Users of the CHEERS e-Mall increased by 6.2% YoY to approximately 6.9 million.
●Repurchase Rate on CHEERS e-Mall for the 360 days period during 2024 was 39.7%.

 

Cheer Real

 

●Accumulated downloads of CheerReal grew by 57.6% YoY to approximately 14.5 million as of December 31, 2024.
●Monthly Active Users of CheerReal increased by 7.7% to approximately 1.4 million.
●Digital Art Collections listed on CheerReal during 2024 were 25,856 units.

 

CHEERS Telepathy

 

●Accumulated downloads of CHEERS Telepathy grew by 830.8% YoY to approximately 12.1 million as of December 31, 2024.
●Monthly Active Users of CHEERS Telepathy platform increased by 733.3% to approximately 2.5 million.
●Average Monthly Visits during 2024 were approximately 3.4 million.

 

Financial Highlights For The Year Ended December 31, 2024

 

●Revenues reached $147.2 million.
●Net Income reached $26 million.
●Net cash provided by operating activities was approximately $22.9 million.

 

 

 

 

Selected Financial Results

 

Revenues

 

Our revenues were about $147.2 million for the year ending December 31, 2024, down approximately $5.1 million or 3.37% from $152.3 million in 2023. This decline was primarily driven by a $4.8 million drop in advertising revenue, as customers reduced their advertising orders in response to cost-saving measures amid a challenging macroeconomic environment.

 

Operating expenses

 

Operating expenses consists of cost of revenues, selling and marketing, general and administrative and research and development expense.

 

－Our cost of revenues decreased slightly by about $0.1 million or 0.41%, from approximately $39.5 million in 2023 to approximately $39.4 million in 2024, aligning with revenue trends. However, our gross margin fell due to reduced service fees charged to advertising customers. We anticipate increased advertising revenues from continuous investments in advertising business, though it may take time to see results.

 

－Sales and marketing expenses mainly include salaries and benefits for the sales team, user acquisition costs, advertising fees, travel expenses, and CHEERS e-Mall marketing costs. These expenses fell by about $0.9 million, from approximately $76.2 million in 2023 to around $75.3 million in 2024. This decrease was primarily due to the depreciation of the RMB, which reduced the USD value of revenues when converted. Excluding foreign exchange effects, these expenses rose by about 0.41%.

 

－General and administrative expenses, consisting primarily of salaries and benefits of our management and bad debt provision expense for accounts receivable and professional service fees, decreased by approximately $2.2 million to around $3.5 million in 2024, from approximately $5.7 million in 2023. The change was mainly due to provision of expected credit losses against accounts receivable of approximately $2.1 million in the year 2023, while the Company reversed the provision in 2024.

 

－Research and development expenses rose significantly from $1.6 million in 2023 to approximately $3.4 million in 2024, driven by continued investment in IT infrastructure, user-friendliness upgrades, and continual implementation on content driven strategies.

 

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Net income

 

As a result of the foregoing, we had a net income of approximately $26.0 million in the year ended December 31, 2024, as compared to a net income of approximately $30.5 million in the year ended December 31, 2023.

 

Cash, cash equivalents and working capital

 

As of December 31, 2024 and 2023, our principal sources of liquidity were cash and cash equivalents of approximately $197.7 million and $194.2 million, respectively. Working capital at December 31, 2024 was approximately $265.7 million.

 

About Cheer Holding, Inc.

 

As a preeminent provider of next-generation mobile internet infrastructure and platform services in China, Cheer Holding is dedicated to building a digital ecosystem that integrates “platforms, applications, technology, and industry” into a cohesive system, thereby creating a new, open business environment for web3.0 that leverages AI technology. The Company is developing a 5G+VR+AR+AI shared universe space that builds on cutting-edge technologies including blockchain, cloud computing, extended reality, and digital twin.

 

Cheer Holding’s portfolio includes a wide range of products and services, such as Polaris Intelligent Cloud, CHEERS Telepathy, CHEERS Open Data Platform, CHEERS Video, CHEERS e-Mall, CheerReal, CheerCar, CheerChat, CHEERS Fresh Group-Buying E-commerce Platform, Digital Innovation Research Institute, CHEERS Livestreaming, variety show series, IP short video matrix, and more. These offerings provide diverse application scenarios that seamlessly blend “online/offline” and “virtual/reality” elements.

 

With “CHEERS+” at the core of Cheer Holding’s ecosystem, the Company is committed to consolidating and strengthening its core competitiveness, and achieving long-term sustainable and scalable growth.

 

For more information, please visit http://ir.gsmg.co/.

 

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Safe Harbor Statement

 

Certain statements made in this release are “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, are: the ability to manage growth; ability to identify and integrate other future acquisitions; ability to obtain additional financing in the future to fund capital expenditures; fluctuations in general economic and business conditions; costs or other factors adversely affecting our profitability; litigation involving patents, intellectual property, and other matters; potential changes in the legislative and regulatory environment; a pandemic or epidemic; the occurrence of any event, change or other circumstances that could affect the Company’s ability to continue successful development and launch of its metaverse experience centers, AI initiatives and technology infrastructure; the possibility that the Company may not succeed in developing its new lines of businesses due to, among other things, changes in the business environment and technological developments, competition, changes in regulation, or other economic and policy factors; disruptions or other business interruptions that may affect the operations of our products and services, the possibility that the Company’s new lines of business may be adversely affected by other economic, business, and/or competitive factors; other factors, risks and uncertainties set forth in documents filed by the Company with the Securities and Exchange Commission from time to time, including the Company’s latest Annual Report on Form 20-F filed with the SEC on March 10, 2025. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Such information speaks only as of the date of this release.

 

For investor and media inquiries, please contact:

 

Wealth Financial Services LLC

 

Connie Kang, Partner

 

Email: ckang@wealthfsllc.com

 

Tel: +86 1381 185 7742 (CN)

 

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CHEER HOLDING, INC.

CONSOLIDATED BALANCE SHEETS

(In U.S. dollars in thousands, except share and per share data)

 

  

December 31,

2024

  

December 31,

2023

 
Assets        
Current assets:        
Cash and cash equivalents  $197,660   $194,227 
Restricted cash   -    298 
Accounts receivable, net   77,074    81,170 
Prepayment and other current assets, net   30,834    31,179 
Total current assets   305,568    306,874 
           
Property, plant and equipment, net   33    85 
Intangible assets, net   40,531    20,255 
Deferred tax assets   72    41 
Unamortized produced content, net   16    - 
Right-of-use assets   371    377 
Total non-current assets   41,023    20,758 
TOTAL ASSETS  $346,591   $327,632 
           
Liabilities and Shareholders’Equity          
Current liabilities:          
Short-term bank loans  $9,590   $4,216 
Accounts payable   2,039    9,599 
Contract liabilities   27    130 
Accrued liabilities and other payables   1,941    3,764 
Due to related parties   1,100    - 
Other taxes payable   25,095    28,178 
Lease liabilities current   109    330 
Total current liabilities   39,901    46,217 
           
Long-term bank loan   1,370    1,408 
Lease liabilities non-current   250    - 
Total non-current liabilities   1,620    1,408 
TOTAL LIABILITIES  $41,521   $47,625 
           
Shareholders’ Equity          
Preferred shares (par value of $0.0001 per share; 2,000,000 shares authorized as of December 31, 2024 and 2023; nil and nil shares issued and outstanding as of December 31, 2024 and 2023, respectively)  $-   $- 
Class A Ordinary shares (par value of $0.001 per share; 200,000,000 shares authorized as of December 31, 2024 and 2023; 10,285,568 and 10,070,012 shares issued and outstanding as of December 31, 2024 and 2023, respectively)*   10    10 
Class B Ordinary shares (par value of $0.001 per share; 500,000 shares and nil shares authorized as of December 31, 2024 and 2023; 500,000 and nil shares issued and outstanding as of December 31, 2024 and 2023, respectively)   -    - 
Additional paid-in capital   113,485    106,215 
Statutory reserve   1,411    1,411 
Retained earnings   207,128    181,162 
Accumulated other comprehensive loss   (17,041)   (8,869)
TOTAL CHEER HOLDING, INC SHAREHOLDERS’ EQUITY   304,993    279,929 
Non-controlling interest   77    78 
TOTAL SHAREHOLDERS’ EQUITY   305,070    280,007 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $346,591   $327,632 

 

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CHEER HOLDING, INC.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In U.S. dollars in thousands, except share and per share data)

 

   For the Years Ended December 31, 
   2024   2023   2022 
             
Revenues  $147,196   $152,327   $157,079 
                
Operating expenses:               
Cost of revenues   (39,388)   (39,549)   (40,580)
Selling and marketing   (75,289)   (76,200)   (82,534)
General and administrative   (3,499)   (5,658)   (5,908)
Research and development   (3,428)   (1,635)   (1,331)
Total operating expenses   (121,604)   (123,042)   (130,353)
                
Income from operations   25,592    29,285    26,726 
                
Other income (expenses):               
Interest income (expense), net   262    3    (93)
Change in fair value of warrant liability   -    86    (62)
Other income, net   80    1,215    282 
Total other income   342    1,304    127 
                
Income before income tax   25,934    30,589    26,853 
Income tax benefit (expense)   34    (61)   (413)
Net income   25,968    30,528    26,440 
Less: net gain (loss) attributable to non-controlling interest   2    51    (450)
Net income attributable to Cheer Holding, Inc.’s shareholders  $25,966   $30,477   $26,890 
                
Other comprehensive loss               
Unrealized foreign currency translation loss   (8,175)   (2,233)   (13,357)
Comprehensive income   17,793    28,295    13,083 
Less: comprehensive (loss) gain attributable to non-controlling interests   (1)   3    (478)
Comprehensive income attributable to Cheer Holding, Inc.’s shareholders  $17,794   $28,292   $13,561 
                
Earnings per ordinary share               
Basic and dilutive  $2.51   $3.53   $3.95 
                
Weighted average shares used in calculating earnings per ordinary share               
Basic and dilutive   10,327,198    8,637,504    6,812,387 

  

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CHEER HOLDING, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In U.S. dollars in thousands)

 

   For the Years Ended December 31, 
   2024   2023   2022 
CASH FLOWS FROM OPERATING ACTIVITIES:            
Net income  $25,968   $30,528   $26,440 
Adjustments to reconcile net income to net cash provided by operating activities:               
(Reversal of provision) provision for doubtful accounts   (20)   2,096    440 
Provision for unamortized produced content   -    112    770 
Depreciation and amortization   3,781    3,385    2,884 
Amortization of right-of-use assets   41    394    454 
Loss from early termination of right-of-use assets   15    -    - 
Deferred income tax (benefits) expense   (33)   63    (53)
Share based compensation for employees   1,745    -    - 
Share based compensation for non-employees   -    -    391 
Written off of property and equipment   2    2    - 
Amortization of loan origination fees   10    16    76 
Change in fair value of warrant liability   -    (86)   62 
Income from waive of other payables   (156)   -    - 
Changes in assets and liabilities               
Accounts receivable   1,924    15,205    (42,105)
Prepayment and other current assets   (514)   (22,270)   16,872 
Unamortized produced content   (16)   682    170 
Accounts payable   (7,402)   3,325    (5,576)
Contract liabilities   (101)   (14)   (356)
Accrued liabilities and other payables   -    (370)   565 
Other taxes payable   (2,347)   9,477    7,346 
Lease liabilities   (22)   (371)   (641)
Net cash provided by operating activities   22,875    42,174    7,739 
                
CASH FLOWS FROM INVESTING ACTIVITIES:               
Purchase of property, plant and equipment   (1)   (3)   (25)
Purchase of intangible assets   (24,861)   -    - 
Prepayments for acquisition of intangible assets   -    -    (7,964)
Net cash used in investing activities   (24,862)   (3)   (7,989)
                
CASH FLOWS FROM FINANCING ACTIVITIES:               
Proceeds from short-term bank loans   12,507    4,660    6,096 
Repayments of short-term bank loans   (6,949)   (4,802)   (6,244)
Proceeds from long-term bank loans   -    1,412    - 
Payment of loan origination fees   (32)   (58)   (87)
Contribution (withdrawal of) from shareholders   5,525    (791)   743 
Borrowings from related parties   -    1,600    - 
Repayments to related parties   (500)   -    - 
Proceeds from issuance of ordinary shares in connection with a private placement   -    80,000    - 
Net cash provided by financing activities   10,551    82,021    508 
                
Effect of exchange rate changes   (5,429)   (149)   (7,078)
                
Net increase (decrease) in cash and cash equivalents   3,135    124,043    (6,820)
Cash, cash equivalents and restricted cash, at beginning of year   194,525    70,482    77,302 
Cash, cash equivalents and restricted cash, at end of year  $197,660   $194,525   $70,482 
                
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:               
Interests paid  $325   $271   $247 
Income tax paid  $-   $-   $- 
                
SUPPLEMENTAL DISCLOSURE OF NON-CASH FLOW INFORMATION:               
Acquisition of intangible assets from prepayments  $4,464   $4,464   $- 
Right-of-use assets obtained in exchange for operating lease liabilities  $385   $-   $- 

 

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