Scienjoy 2025 Q1 Earnings Misses Targets as Net Income Drops 561.8%

Scienjoy (SJ) reported its fiscal 2025 Q1 earnings on Jun 04th, 2025. The company missed expectations with a notable decline in net income, swinging to a loss of $0.22 per share from a profit of $0.16 per share in the previous year. Scienjoy did not provide specific quantitative guidance for the upcoming quarters but conveyed confidence in its strategic priorities. Despite revenue challenges, the company is focused on enhancing operational efficiency and expanding its global presence, particularly through advancements in the AI sector.

Revenue

Scienjoy experienced a 2.8% decline in total revenue for Q1 2025, amounting to $307.33 million, down from $316.30 million in Q1 2024. The live streaming segment, primarily driven by consumable virtual items, generated $294.47 million, while time-based virtual items contributed $4.86 million. Revenue from technical services and other sources totaled $8 million, culminating in the overall revenue of $307.33 million.

Earnings/Net Income

Scienjoy swung to a loss of $0.22 per share in 2025 Q1 from a profit of $0.16 per share in 2024 Q1 (237.5% negative change). Meanwhile, the company reported a net loss of $-12.96 million in 2025 Q1, reflecting a 561.8% deterioration from the net income of $2.81 million achieved in 2024 Q1. The EPS performance was disappointing due to significant losses.

Price Action

The stock price of Scienjoy has edged up 0.64% during the latest trading day, has climbed 5.74% during the most recent full trading week, and has jumped 8.22% month-to-date.

Post Earnings Price Action Review

The strategy to buy Scienjoy shares following a revenue miss and hold them for 30 days proved ineffective, resulting in a substantial loss of 72.18%. This performance starkly contrasts with the benchmark return of 31.80%, leading to an excess return of -103.98%. The Sharpe ratio stood at -0.29, indicating unfavorable risk-adjusted returns, with a maximum drawdown of -88.91% and volatility reaching 100.88%. These figures demonstrate the high-risk nature of the strategy, which failed to yield positive outcomes and significantly underperformed compared to the benchmark. Investors should be cautious about employing similar strategies given the historical data.

CEO Commentary

Mr. Victor He, Chairman and Chief Executive Officer of Scienjoy, emphasized the Company’s commitment to operational efficiency and strategic cost management despite a slight decline in total revenues. He noted a significant increase in gross profit and gross margin, highlighting the effectiveness of their long-term growth strategy, particularly global expansion via the Dubai hub. The CEO conveyed confidence in the company’s ability to scale operations and adapt to market dynamics, stating that the momentum observed from late 2024 through Q1 2025 lays a solid foundation for further growth, reinforcing their focus on creating sustainable long-term shareholder value.

Guidance

Scienjoy does not provide specific quantitative guidance for revenue or EPS for the upcoming quarters. However, the leadership expressed a qualitative outlook focused on executing strategic priorities, enhancing operational excellence, and pursuing high-quality growth. The CEO indicated confidence in the company’s trajectory, particularly through advancements in their AI sector initiatives and ongoing efforts to expand their user base and market presence globally.

Additional News

In recent developments, Scienjoy Holding Corporation participated in investor conferences, showcasing its plans for future growth and innovation in the entertainment sector. The company has been actively engaging with investors to highlight its strategic initiatives, including its expansion into the Middle East through its Dubai hub, aimed at fostering global growth and strengthening its position in the interactive entertainment market. Additionally, Scienjoy announced strategic investments aimed at enhancing its metaverse transformation, further solidifying its commitment to leveraging AI and other innovative technologies to deliver immersive experiences to users worldwide. These moves underscore Scienjoy's dedication to advancing its business model and exploring new opportunities for growth.