KongZhong Corp. (KONG) blew earnings estimates away and increased guidance for next quarter. They beat eps by 3 cents and revenue by $0.9M. Mobile games up 38%. I could simple repost last quarters commentary on KongZhong’s earnings, as this quarters performance was as spectacular as last.

The following two graphs paint the KongZhong picture. Mobile games are starting to be a significant contributor to the bottom line and WIS is growing into a valuable third string to their bow. At the same time gross and net margins continue to improve. KongZhong is a company firing on all cylinders.

The gross margins for mobile games was stable at a stonking 59%.  Total mobile game revenues in 2Q09 were $6.8 mn, a 368% increase from the same period last year and a 38% increase from 1Q09. WVAS gross margins increased to 49% and WIS to 51%, up respectively 2% and 1% QoQ.

• Revenues exceeded guidance – Total revenues for the Second Quarter of 2009 (“2Q09″) increased 37% year-over-year and increased 9% quarter-over-quarter to $32.3 million (“mn”), exceeding the Company’s 2Q09 revenue guidance of $30.5 mn to $31.5 mn.
• Gross margin increased – Total gross margin improved to 51% in the 2Q09 from 49% in the 1Q09.
• Net income increased – Net income in 2Q09 was $3.55 mn, a 41% increase compared with 1Q09 net income of $2.52 mn. Basic net income per ADS was $0.10 based on 34.71 mn ADS while diluted net income per ADS was $0.09 based on 38.53 mn ADS outstanding as of June 30, 2009.
• Non-GAAP net income increased – Non-GAAP net income was $4.71 mn and Non-GAAP diluted net income per ADS was $0.12 (Non-GAAP Financial Measures are described and reconciled to the corresponding GAAP measures in the section titled “Non-GAAP Financial Measures.”)

Balance Sheet

As of June 30, 2009, the Company had $132 mn in cash and cash equivalents. The decrease of our cash balance in 2Q09 was mainly due to the $9.55 mn in cash used to repurchase shares as part of the Company Share Repurchase Plan during the second quarter.

Stock Repurchase Program

As of June 30, 2009, a total of 1,868,994 ADS of the Company (representing 74,759,760 ordinary shares), were repurchased at an average price of $6.3501 per ADS as part of the Company’s share repurchase program, which began on November 18, 2008. This aggregate figure includes the 568,994 ADS repurchased before March 31, 2009 (representing 22,759,760 ordinary shares).

Business Outlook (For the 3-month period ending September 30, 2009)

Based on information available on August 11, 2009, the Company expects total revenues for the third quarter of 2009 to be between $34 mn and $35 mn. [Analysts were expecting $32M, with a range of $30.5-32.9M]

More on KongZhong

Here’s the earnings report.
The Mighty KongZhong Keeps Climbing
KongZhong Blows Q1 2009 Estimates Away

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