Chinese mobile wireless value-added services firm KongZhong Corporation announced its unaudited third quarter 2009 financial results and stated its profit and revenue grew over the previous quarter.
Total revenues increased 40% year-over-year and increased 9% quarter-over-quarter to USD35.1 million. Net income in the quarter was USD4.50 million, a 27% increase compared with the previous quarter's net income of USD3.55 million and a net loss in the third quarter of 2008.
Chairman and Chief Executive Officer Wang Leilei said, "Overall, our mobile games business continued to lead the China market with 20% sequential growth and over 200% year-over-year growth. We believe we are still in the early development phase of the Chinese mobile game market and through our strong game development capabilities, have become a preferred partner for all the Chinese mobile operators who are seeking to grow the mobile games market in the coming 3G era."
Wireless value-added services revenues in the quarter increased 15% year-on-year and 6% sequentially to USD25.39 million. Revenues from 2.5G services accounted for approximately 20% of total WVAS revenues while revenues from 2G services represented the remaining 80% in the third quarter.
Total mobile game revenues in the quarter were USD8.2 million, a 246% increase from the same period last year and a 21% increase from 2Q09. Revenues from downloadable games were USD7.09 million or 86% of total mobile game revenues, representing a 274% increase from the same period last year and a 41% sequential increase. Revenues from mobile multi-player online games were USD1.12 million, an increase of 134% from the same period last year but a decrease of 37% from the previous quarter. The company stated that the sequential decline was due to a number of factors, including seasonal factors and promotional activities associated with the transition from our older, more established mobile online game, "Tian Jie", to our more recently launched mobile online game, "Feng Shen". Revenues from "Tian Jie" accounted for 97% mobile online game revenues, compared to "Feng Shen" which accounted for the remaining 3%.
Total gross profit was USD17.92 million in the third quarter of 2009, an 8% increase sequentially and a 54% increase compared to the same period last year. Total gross margin was stable in the quarter at 51% compared with 51% sequentially, and 4% higher compared with 47% in the same period last year.