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DATE just came out with their Q4 earnings and I'm a little disappointed in the slowdown in revenue growth. In Q3 they had RMB90.9 million (US$14.3 million) in sales and forecasted Q4 sales between RMB88 and 90 million. I thought at the time that they were being very conservative because I thought they were in high growth mode. They came in at Q4 with RMB88.6 million and said that the lower sales was a seasonal slow down and forecasted Q1 sales between RMB90 and 92 million. First off, is there really a seasonality to online dating? Secondly, despite the slow Q4, they are forecasting no growth from Q3 last year to Q1 this year. Also, the sequential decrease in paid users is concerning:

The number of average monthly active user accounts(4) for the fourth quarter of 2011 was 5,179,713, compared to 4,403,262 for the corresponding period of 2010 and 5,560,387 for the previous quarter.

The number of average monthly paying user accounts for the fourth quarter of 2011 was 1,172,159, compared to 761,271 for the corresponding period of 2010 and 1,250,439 for the previous quarter.</I)

Even though they doubled their revenue over the full year, DATE seems to have hit a wall, unless they expect growth to pick up again in Q2.

See the full details below:

Sean did you have any thoughts about the results or conference call?
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I definitely noticed more "seasonality" to dating in China while I was working there. In the US you've got Valentine's Day, which most singles just write-off as a manufactured holiday anyway -- but maybe it's just the high number of singles in China in general(?), for some reason young Chinese take it, along with some other holidays, very seriously.

That all said, I'm not sure if they've experienced "seasonality" before, so I think your instincts are right to be cautious. I'm holding my shares but yeah, I'm going to be watching this more closely.
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