CPOP Pop Culture Group Company Ltd

XIAMEN, China, Oct. 28, 2022 /PRNewswire/ -- Pop Culture Group Co., Ltd ("Pop Culture" or the "Company") (Nasdaq: CPOP), a hip-pop culture company in China, today reported its financial results for the fiscal year ended June 30, 2022.

Fiscal Year 2022 Financial Highlights

• Total revenue was $32.28 million, an increase of 26% from $25.53 million in fiscal year 2021.
• Revenue from event hosting was $14.71 million, a decrease of 2% from $14.98 million in fiscal year 2021.
• Revenue from brand promotion was $8.73 million, an increase of 1,064% from $0.75 million in fiscal year 2021.
• Revenue from event planning and execution was $8.42 million, a decrease of 8% from $9.20 million in fiscal year 2021.
• Gross profit was $6.25 million, a decrease of 14% from $7.22 million in fiscal year 2021.
• Net income was $0.69 million, compared with $4.27 million in fiscal year 2021.
• Basic and diluted earnings per share were $0.04, compared with $0.25 in fiscal year 2021. 

Fiscal Year 2022 Operational Highlights

• The Company's concerts and hip-hop events generated an aggregate attendance of 203,233 during the fiscal year ended June 30, 2022.
• The Company's online hip-hop programs generated over 210 million views during the fiscal year ended June 30, 2022.
• The Company served 21 clients in 56 events with respect to event planning and execution during the fiscal year ended June 30, 2022.

Mr. Zhuoqin Huang, Chairman and Chief Executive Officer of Pop Culture, commented, "We continued to deliver recorded performance during fiscal year 2022, as our revenue reached $32.28 million, representing an increase of 26% from fiscal year 2021, despite the challenging and uncertainty macroeconomic headwinds. Our brand promotion business generated an increase of 1,064% in revenue from fiscal year 2021. Our strong financial performance during this year reflected the continued success of our high-quality services to help clients achieve their goals, our expertise and deep understanding of hip-hop culture, and our strong capabilities to meet the needs of our clients."

Mr. Huang continued, "We developed several strategic initiatives to gain competitive edges on the market. We aim to benefit more street dance organizations through our software-as-a-service (SaaS) platform. There were over 60,000 students using the SaaS platform provided by our subsidiary, Shenzhen Jam Box Technology Co., Ltd., as of June 30, 2022, and we expect to continue to upgrade the SaaS platform, implement horizontal growth strategy, and further provide services to companies from the education and training industry. Also, the development of metaverse-related business remains our priority, we will continue to make investment in metaverse-related business to provide a comprehensive of hip-hop experience to users. Looking forward, we aim to leverage the strengths of our intellectual property portfolio and services to strengthen our existing customer base, attract new customers, and enhance our market position. We believe our solid business model and strategic development plan position us well to capture the growth opportunity in the market and maintain our momentum. As we look to fiscal year 2023, we are excited to deliver innovative content and experience to users and generate long-term value for our shareholders."

Fiscal Year 2022 Financial Results  

Revenue

Following table presents the Company's revenue by revenue source and by proportion:

Total revenue increased by $6.75 million, or 26%, to $32.28 million in fiscal year 2022, from $25.53 million in fiscal year 2021.

Revenue from event hosting decreased by $0.27 million, or 2%, to $14.71 million in fiscal year 2022, from $14.98 million in fiscal year 2021. The decrease was primarily because the Company's PRC operating entities postponed most of their Move It campaigns until July 2022 due to the Covid-19 pandemic.

Revenue from brand promotion increased by $7.98 million, or 1,064%, to $8.73 million in fiscal year 2022, from $0.75 million in fiscal year 2021. The increase was generated from clients' increasing investment in online platforms like TikTok, Kuaishou, and Xigua.

Revenue from event planning and execution decreased by $0.78 million, or 8%, to $8.42 million in fiscal year 2022, from $9.20 million in fiscal year 2021. The decrease was primarily attributable to a decrease in the number and size of the events the Company's PRC operating entities undertook.

In fiscal year 2022, other service revenue included music recording service income, digital collection sales income, and SaaS software service income. Other service revenue was $415,664 in fiscal year 2022, a decrease of 31% from fiscal year 2021. Compared with fiscal year 2021, the Company's PRC operating entities generated revenue from certain newly developed businesses, including $350,886 from music recording services, $55,536 from digital collection sales, and $9,242 from SaaS software services in fiscal year 2022. In fiscal year 2021, the Company's PRC operating entities generated advertisement distribution service revenue of $616,292, while they did not generate such revenue in fiscal year 2022.

Cost of Revenue

The cost of revenue increased by $7.73 million, or 42%, to $26.04 million in fiscal year 2022, from $18.30 million in fiscal year 2021.

The cost of revenue was derived from the following sources:

Gross Profit and Gross Margin

Gross profit decreased by $0.98 million, or 14%, to $6.25 million in fiscal year 2022, from $7.22 million in fiscal year 2021. Gross margin was 19% in fiscal year 2022, compared with 28% in fiscal year 2021.

The following table displays the gross profit:

Operating Expenses

Total operating expenses increased by $3.44 million, or 247%, to $4.83 million in fiscal year 2022, from $1.39 million in fiscal year 2021. Operating expenses as a percentage of total revenue increased to 15.0% in fiscal year 2022 from 5.5% in the same period of last year.

Selling and marketing expenses increased by $0.25 million, or 185%, to $0.38 million in fiscal year 2022, from $0.13 million in fiscal year 2021. The increase was primarily due to sales and marketing staff recruitment and compensation for business development.

General and administrative expenses increased by $3.19 million, or 253%, to $4.45 million in fiscal year 2022, from $1.26 million in fiscal year 2021. The increase was mainly driven by two factors: management bonus for calendar year 2021 was issued in the first quarter of fiscal year 2022; and a majority of legal fees occurred in fiscal year 2021 was IPO-related, thus offset as equity-settled capital reserve, while legal fees in fiscal year 2022 were recorded as administrative expenses.

Income from Operations

Income from operations was $1.42 million in fiscal year 2022, compared to $5.83 million in fiscal year 2021.

Income Tax Expenses

Income tax expenses were $871,231 and $1,416,872 for fiscal year 2022 and 2021, respectively. The decrease was primarily from accrued regular income tax in fiscal year 2020 and a preferential tax rate that Company's subsidiaries were entitled to.

Net Income

Net income was $0.69 million in fiscal year 2022, compared with $4.27 million in fiscal year 2021. Net income attributable to the Company's shareholders was $0.79 million in the fiscal year 2022, compared with $4.27 million in fiscal year 2021.

Basic and Diluted Earnings per Share

Basic and diluted earnings per share were $0.04 in fiscal year 2022, compared with basic and diluted earnings per share of $0.25 in fiscal year 2021.

Cash Flows

Net cash used in operating activities was $19.37 million in fiscal year 2022, compared to $4.04 million in fiscal year 2021. Net cash used in investing activities was $0.80 million in fiscal year 2022, compared to $nil in fiscal year 2021. Net cash provided by financing activities was $33.06 million for fiscal year 2022, compared to $3.95 million in fiscal year 2021.

Cash and Cash Equivalents

As of June 30, 2022, the Company had cash and cash equivalents of $14.40 million, compared to $1.32 million as of June 30, 2021.

About Pop Culture Group Co., Ltd

Headquartered in Xiamen, China, Pop Culture Group Co., Ltd is a hip-hop culture company. The Company aims to promote hip-hop culture and its values, and to promote cultural exchanges with respect to hip-hop between the United States and China. With the values of hip-hop culture at its core and the younger generation as its primary target audience, the Company hosts entertainment events, operates hip-hop related online programs, and provides event planning and execution services and brand promotion services to corporate clients. The Company has in recent years focused on developing and hosting its own hip-hop events. For more information, visit the Company's website at http://ir.cpop.cn/.

Forward-Looking Statements

Certain statements made in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties, including the further spread of the COVID-19 virus or new variants thereof, or the occurrence of another wave of cases and the impact it may have on the Company's operations and the demand for the Company's services, and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy, and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to," or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and its other filings with the SEC. 

For more information, please contact:

Pop Culture Group Co., Ltd
Investor Relations Department
Email: ir@cpop.cn 

Ascent Investors Relations LLC
Tina Xiao 
President
Phone: 917-609-0333
Email: tina.xiao@ascent-ir.com   

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SOURCE Pop Culture Group Co., Ltd