BEIJING, March 14, 2024 (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, 2023.

Full Year 2023 Operating Highlights

Total Downloads of CHEERS Apps was approximately 474 million as of December 31, 2023, compared to approximately 377 million as of December 31, 2022. Specifically:

CHEERS Video

Monthly Active Users of CHEERS Video increased by 5% to approximately 50.1 million.
Daily Time Spent on CHEERS Video was 59 minutes during the commercial year of 2023.

CHEERS e-Mall

Monthly Active Users of CHEERS e-Mall increased by 71% to approximately 6.5 million.
Repurchase Rate on CHEERS e-Mall was 39.6% during the commercial year of 2023.

CheerReal

Monthly Active Users of CheerReal platform was approximately 1.3 million.
Number of Digital Art Collections listed on CheerReal platform was 767 units.

CHEERS Telepathy

Monthly Active Users of CHEERS Telepathy platform was approximately 300 thousand.

CHEERS Open Data

Total Number of User Engagement was 27 million.
Platform Daily Usage was more than 150 thousand.

Full Year 2023 Financial Highlights

Revenues reached $152.3 million.
Net Income reached $30.5 million.
Net Cash Provided by Operating Activities was approximately $42.2 million.

Full Year 2023 Selected Financial Results

Revenues

Our revenues for the year ended December 31, 2023 were approximately $152.3 million, representing a decrease of approximately $4.8 million, or 3.03% from approximately $157.1 million for the year ended December 31, 2022. The change in revenues was mainly affected by depreciation of RMB during the year ended December 31, 2023, leading to a lower USD amount in translation of revenues from RMB into USD.

Without the impact of fluctuation of foreign exchange rates, our revenues for the year ended December 31, 2023 increased by approximately RMB22.1 million (approximately $3.1 million), or 2.09% as compared with the revenues for the same period of 2022. The increase in the revenues was primarily attributable to increase in advertising revenues of approximately RMB32.4 million as a result of continuous efforts to expand our customer base through improving our content production quality.

For the years ended December 31, 2023 and 2022, 97.9% and 96.8% of our revenues derived from advertising services.

Operating expenses

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

Cost of revenues decreased by approximately $1.0 million, or 2.54%, from approximately $40.6 million for the year ended December 31, 2022 to approximately $39.5 million for the year ended December 31, 2023. Similar to the changes in revenues, the decrease in cost of revenues was primarily caused by depreciation of RMB during the year ended December 31, 2023.
Sales and marketing expenses decreased by approximately $6.3 million, to approximately $76.2 million for the year ended December 31, 2023 from approximately $82.5 million for the year ended December 31, 2022. The decrease was mainly due to a decrease in promotion service charge of approximately $5.9 million because the Company reduced cost in marketing and promotion.
General and administrative expenses was stable at approximately $5.7 million and $5.9 million, respectively, for the year ended December 31, 2023 and 2022.
Research and development expenses for the years ended December 31, 2023 and 2022 were approximately $1.6 million and approximately $1.3 million, respectively. Such increase was primarily due to the continued investment in the IT infrastructure, user-friendliness upgrades, and continual implementation on content driven strategies.

Net income

We had a net income of approximately $30.5 million in the year ended December 31, 2023, as compared to a net income of approximately $26.4 million in the year ended December 31, 2022.

Cash, cash equivalents and working capital

As of December 31, 2023 and 2022, the Company's principal sources of liquidity were cash and cash equivalents of approximately $194.2 million and $70.5 million, respectively. Working capital at December 31, 2023 was approximately $260.7 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/.

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; 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 22, 2023, as amended. 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)

CHEER HOLDING, INC.

(Formerly known as "Glory Star New Media Group Holdings Limited")

CONSOLIDATED BALANCE SHEETS

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


	December 31, 2023			December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	194,227		$	70,482
Restricted cash		298			-
Accounts receivable, net		81,170			98,034
Prepayment and other current assets		31,179			15,329
Total current assets		306,874			183,845
Property, plant and equipment, net		85			160
Intangible assets, net		20,255			20,297
Deferred tax assets		41			103
Unamortized produced content, net		-			807
Right-of-use assets		377			750
Prepayment and other non-current assets, net		-			1
Total non-current assets		20,758			22,118
TOTAL ASSETS	$	327,632		$	205,963

Liabilities and Equity
Current liabilities:
Short-term bank loans	$	4,216		$	4,421
Accounts payable		9,599			6,405
Contract liabilities		130			147
Accrued liabilities and other payables		3,764			2,632
Other taxes payable		28,178			19,090
Lease liabilities current		330			208
Total current liabilities		46,217			32,903
Long-term bank loan		1,408			-
Lease liabilities non-current		-			471
Warrant liability		-			86
Total non-current liabilities		1,408			557
TOTAL LIABILITIES	$	47,625		$	33,460

Equity
Ordinary shares (par value of $0.001 per share; 200,000,000 shares authorized as of December 31, 2023 and 2022; 10,070,012 and 6,812,440 shares issued and outstanding as of December 31, 2023 and 2022, respectively)*	$	10		$	7
Additional paid-in capital		106,215			27,009
Statutory reserve		1,411			1,411
Retained earnings		181,162			150,685
Accumulated other comprehensive loss		(8,869	)		(6,684	)
TOTAL CHEER HOLDING, INC SHAREHOLDERS' EQUITY		279,929			172,428
Non-controlling interest		78			75
TOTAL EQUITY		280,007			172,503
TOTAL LIABILITIES AND EQUITY	$	327,632		$	205,963

CHEER HOLDING, INC.

(Formerly known as "Glory Star New Media Group Holdings Limited")

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,

2023

2022

2021

Revenues

152,327

157,079

153,012

Operating expenses:

Cost of revenues

(39,549

)

(40,580

)

(34,944

)

Selling and marketing

(76,200

)

(82,534

)

(77,520

)

General and administrative

(5,658

)

(5,908

)

(3,341

)

Research and development

(1,635

)

(1,331

)

(920

)

Total operating expenses

(123,042

)

(130,353

)

(116,725

)

Income from operations

29,285

26,726

36,287

Other income (expenses):

Interest income (expense), net

(93

)

(513

)

Change in fair value of warrant liability

(62

)

809

Other income (expense), net

1,215

282

(255

)

Total other income

1,304

127

Income before income tax

30,589

26,853

36,328

Income tax expense

(61

)

(413

)

(976

)

Net income

30,528

26,440

35,352

Less: net gain (loss) attributable to non-controlling interest

(450

)

Net income attributable to Cheer Holding, Inc.'s shareholders

30,477

26,890

35,287

Other comprehensive income (loss)

Unrealized foreign currency translation (loss) gain

(2,233

)

(13,357

)

2,945

Comprehensive income

28,295

13,083

38,297

Less: comprehensive gain (loss) attributable to non-controlling interests

(478

)

119

Comprehensive income attributable to Cheer Holding, Inc.'s shareholders

28,292

13,561

38,178

Earnings per ordinary share

Basic and dilutive*

3.53

3.95

5.40

Weighted average shares used in calculating earnings per ordinary share

Basic and dilutive*

8,637,504

6,812,387

6,538,118

CHEER HOLDING, INC.

(Formerly known as "Glory Star New Media Group Holdings Limited")

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In U.S. dollars in thousands)

For the Years Ended December 31,

2023

2022

2021

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

30,528

26,440

35,352

Adjustments to reconcile net income to net cash provided by operating activities:

Provision (reversal of provision) for doubtful accounts

2,096

440

(268

)

Provision for unamortized produced content

112

770

Depreciation and amortization

3,385

2,884

2,090

Amortization of right-of-use assets

394

454

426

Deferred income tax expense (benefits)

(53

)

713

Share based compensation for employees

Share based compensation for non-employees

391

181

Loss on disposal of property and equipment

Gains on disposal of a subsidiary

(26

)

Amortization of loan origination fees

104

Change in fair value of warrant liability

(86

)

(809

)

Changes in assets and liabilities

Accounts receivable

15,205

(42,105

)

19,904

Prepayment and other current assets

(22,270

)

16,872

(10,681

)

Unamortized produced content

682

170

(537

)

Accounts payable

3,325

(5,576

)

4,750

Contract liabilities

(14

)

(356

)

(87

)

Accrued liabilities and other payables

(370

)

565

(9,236

)

Other taxes payable

9,477

7,346

4,964

Lease liabilities

(371

)

(641

)

(389

)

Net cash provided by operating activities

42,174

7,739

46,455

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property, plant and equipment

)

(25

)

(72

)

Prepayments for acquisition of intangible assets

(7,964

)

(2,718

)

Cash disposed for sales of subsidiaries

(12

)

Return for short term investment

1,751

Net cash used in investing activities

)

(7,989

)

(1,051

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from short-term bank loans

4,660

6,096

5,114

Repayments of short-term bank loans

(4,802

)

(6,244

)

(6,818

)

Proceeds from long-term bank loans

1,412

Payment of loan origination fees

(58

)

(87

)

(68

)

Contribution from shareholders

(791

)

743

Borrowings from related parties

1,600

Repayments to related parties

(232

)

Proceeds from issuance of ordinary shares in connection with a private placement

80,000

15,290

Net cash provided by financing activities

82,021

508

13,286

Effect of exchange rate changes

(149

)

(7,078

)

881

Net increase (decrease) in cash and cash equivalents

124,043

(6,820

)

59,571

Cash, cash equivalents and restricted cash, at beginning of year

70,482

77,302

17,731

Cash, cash equivalents and restricted cash, at end of year

194,525

70,482

77,302

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Interests paid

271

247

336

Income tax paid

NONCASH INVESTING AND FINANCING ACTIVITIES

Acquisition of intangible assets from prepayments

4,464

RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO THE CONSOLIDATED BALANCE SHEETS


	December 31, 2023		December 31, 2022
Cash and cash equivalents	$	194,227	$	70,482
Restricted cash		298		-
	$	194,525	$	70,482

Cheer Holding Reports Full Year 2023 Financial Results