Cheetah Mobile Announces Second Quarter 2017 Unaudited Consolidated Financial Results
BEIJING, Aug. 22, 2017 /PRNewswire/ -- Cheetah Mobile Inc. (NYSE: CMCM) ("Cheetah Mobile" or the "Company"), a leading mobile internet company that aims to provide leading apps for mobile users worldwide and connect users with personalized content on the mobile platform, today announced its unaudited consolidated financial results for the second quarter ended June 30, 2017.
Second Quarter 2017 Financial Highlights
-- Total revenues increased by 14.8% year over year to RMB1,201.6 million
(US$177.2 million), mostly driven by the Company's growth in mobile
revenues, which achieved a record high during the second quarter of
2017.
-- Operating profit increased to RMB66.2 million (US$9.8 million) from an
operating loss of RMB63.0 million in the same period last year.
Non-GAAP operating profit increased by 254.3% year over year to RMB90.4
million (US$13.3 million). In particular, operating profit for the
Company's utility products and related services business increased by
50.6% year over year to RMB212.8 million (US$31.4 million) in the second
quarter of 2017, primarily driven by the Company's effort in optimizing
its utility products' cost and expense structure.
-- Net income attributable to Cheetah Mobile shareholders increased to
RMB70.2 million (US$10.4 million) from a net loss attributable to
Cheetah Mobile shareholders of RMB150.5 million in the same period last
year. Non-GAAP net income attributable to Cheetah Mobile shareholders
increased to RMB94.4 million (US$13.9 million) from a non-GAAP net loss
attributable to Cheetah Mobile shareholders of RMB61.9 million in the
same period last year.
-- The Company generated RMB194.7 million (US$28.7 million) of net cash
from operating activities and RMB185.1 million (US$27.3 million) of free
cash flow(1) in the second quarter of 2017.
[1] Free cash flow is defined
as net cash generated by
operating activities less
capital expenditure
Second Quarter 2017 Key Operating Metrics
-- The number of global mobile monthly active users ("Mobile MAUs") was
581.3 million in June 2017. The number of Mobile MAUs from markets
outside of China, or overseas markets, accounted for 77.3% of the total
number of Mobile MAUs in June 2017.
Mr. Sheng Fu, Cheetah Mobile's Chief Executive Officer, stated, "Our second quarter results remain stable and were in line with management expectations. We have been making adjustments to our utility products and realigning our cost structure. As a result, we continued to generate robust operating profit and cash flow from our utility product business during the second quarter of 2017. Also during the quarter, our mobile game business grew considerably on both top and bottom lines as we continued to expand our game portfolio with new mobile game introductions in early 2017. In addition, we further increased Live.me's user engagement and user stickiness through continued product improvement and content enrichment. We are confident that we remain on track to build a sustainable growth model for the long term."
Mr. Vincent Jiang, Cheetah Mobile's Chief Financial Officer, commented, "We made a concerted effort in controlling our utility products' cost and expenses in the second quarter of 2017. As a result, our operating profit and net cash generated from operating activities for the quarter grew significantly both year over year and quarter over quarter. For the second half of 2017, we have a clear strategy to maintain our utility products' profitability and at the same time grow our Live.me and mobile game businesses.
Because our various business lines are in different phases of growth, in the first quarter of 2017, we reported our revenues according to business lines to help investors better understand our businesses. As we increasingly evaluate our utility products and related services separately from the rest of our business lines to assess their performance and allocate resources, in the second quarter of 2017, we will report our utility products and related services as one operating segment and consolidate our remaining businesses, including our content-driven products and mobile game businesses into one segment called the mobile entertainment business."
Second Quarter 2017 Consolidated Financial Results
REVENUES
Total revenues increased by 14.8% year over year and 0.9% quarter over quarter to RMB1,201.6 million (US$177.2 million) in the second quarter of 2017.
-- Revenues from utility products and related services, which includes
mobile utility applications, internet browsers and PC security software,
decreased by 13.3% year over year while remaining relatively stable
quarter over quarter at RMB820.3 million (US$121.0 million) in the
second quarter of 2017. The year-over-year decrease was primarily due
to a decrease in PC revenues as internet traffic in China continuously
migrates from PC to mobile devices. Revenues from the Company's mobile
utility products remained stable year over year.
-- Revenues from the mobile entertainment business, which includes Live.me,
News Republic, and mobile games, increased by 270.5% year over year and
2.1% quarter over quarter to RMB371.0 million (US$54.7 million). The
year-over-year increase was primarily driven by a rapid growth in
Live.me's broadcasting revenue and the Company's enriched mobile game
portfolio as a result of its continuous new mobile game introductions
earlier this year. The quarter-over-quarter increase was primarily
driven by the growth in the mobile game business.
By platform, revenues generated from the mobile business increased by 34.5% year over year and 3.0% quarter over quarter to RMB1,038.8 million (US$153.2 million) in the second quarter of 2017, primarily driven by the rapid growth of the Company's Live.me business in overseas markets and the increase in its mobile game revenues.
By region, revenues generated from overseas markets increased by 50.3% year over year and remained relatively flat quarter over quarter at RMB842.9 million (US$124.3 million) in the second quarter of 2017.
COST OF REVENUES AND GROSS PROFIT
Cost of revenues increased by 30.0% year over year and remained flat quarter over quarter at RMB461.1 million (US$68.0 million) in the second quarter of 2017. The year-over-year increase was primarily driven by the increased investment in the Company's content-driven products including Live.me and News Republic.
Non-GAAP cost of revenues increased by 29.8% year over year while remaining relatively flat quarter over quarter at RMB460.2 million (US$67.9 million) in the second quarter of 2017.
Gross profit increased by 7.0% year over year and 1.1% quarter over quarter to RMB740.5 million (US$109.2 million) in the second quarter of 2017. Non-GAAP gross profit increased by 7.1% year over year and 1.0% quarter over quarter to RMB741.3 million (US$109.4 million) in the second quarter of 2017.
OPERATING INCOME AND EXPENSES
Total operating expenses decreased by 10.7% year over year and 4.6% quarter over quarter to RMB674.2 million (US$99.5 million) in the second quarter of 2017. Total non-GAAP operating expenses decreased by 2.3% year over year and 4.7% quarter over quarter to RMB650.9 million (US$96.0 million) in the second quarter of 2017.
-- Research and development (R&D) expenses decreased by 26.6% year over
year and 12.7% quarter over quarter to RMB167.0 million (US$24.6
million) in the second quarter of 2017, primarily due to lower R&D
personnel costs of the Company's utility products, partially offset by
increased R&D personnel costs of its artificial intelligence
technologies and content-driven products. Non-GAAP R&D expenses, which
exclude share-based compensation expenses, decreased by 8.4% year over
year and 10.2% quarter over quarter to RMB163.2 million (US$24.1
million) in the second quarter of 2017.
-- Selling and marketing expenses remained relatively flat year over year
and quarter over quarter at RMB413.1 million (US$60.9 million) in the
second quarter of 2017. The Company shifted some of its selling and
marketing budget from its utility products to its content-driven
products. Non-GAAP selling and marketing expenses, which exclude
share-based compensation expenses, remained relatively flat year over
year while decreasing by 1.5% quarter over quarter to RMB408.2 million
(US$60.2 million) in the second quarter of 2017.
-- General and administrative expenses decreased by 37.8% year over year
and 3.5% quarter over quarter to RMB100.0 million (US$14.8 million) in
the second quarter of 2017. The year-over-year decrease was primarily
due to high professional service fees recorded in the second quarter of
2016 in connection with certain acquisition activities. Non-GAAP general
and administrative expenses, which exclude share-based compensation
expenses, decreased by 30.5% year over year and 4.6% quarter over
quarter to RMB85.4 million (US$12.6 million) in the second quarter of
2017.
Operating profit increased to RMB66.2 million (US$9.8 million) in the second quarter of 2017 from an operating loss of RMB63.0 million in the same period last year and an operating profit of RMB26.3 million in the previous quarter.
Non-GAAP operating profit increased by 254.3% year over year and 78.4% quarter over quarter to RMB90.4 million (US$13.3 million) in the second quarter of 2017.
Starting from the second quarter of 2017, the Company will report its operating profit along the following segments:
-- ?Operating profit for utility products and related services increased by
50.6% year over year and 18.8% quarter over quarter to RMB212.8 million
(US$31.4 million) in the second quarter of 2017, mainly due to the
Company's effort in optimizing its utility products' cost and expense
structure.
-- ?Operating loss for the mobile entertainment business was RMB122.1
million (US$18.0 million) in the second quarter of 2017, mainly due to
the Company's increased investments in its content-driven products. The
Company had operating losses of RMB106.2 million in the same period last
year and RMB128.5 million in the previous quarter.
Share-based compensation expenses decreased by 72.7% year over year while remaining relatively flat quarter over quarter at RMB24.2 million (US$3.6 million) in the second quarter of 2017.
OTHER INCOME, NET
Other income, net was RMB23.7 million (US$3.5 million) in the second quarter of 2017, primarily due to gains from disposals of certain investment assets in the second quarter of 2017.
NET INCOME ATTRIBUTABLE TO CHEETAH MOBILE SHAREHOLDERS
Net income attributable to Cheetah Mobile shareholders was RMB70.2 million (US$10.4 million) in the second quarter of 2017 as compared to a net loss attributable to Cheetah Mobile shareholders of RMB150.5 million in the same period last year and a net income attributable to Cheetah Mobile shareholders of RMB91.2 million in the previous quarter.
Non-GAAP net income attributable to Cheetah Mobile shareholders was RMB94.4 million (US$13.9 million) as compared to a non-GAAP net loss attributable to Cheetah Mobile shareholders of RMB61.9 million in the same period last year and a non-GAAP net income attributable to Cheetah Mobile shareholders of RMB115.6 million in the previous quarter.
NET INCOME PER ADS
Diluted income per ADS in the second quarter of 2017 was RMB0.47 (US$0.07) as compared to diluted loss per ADS of RMB1.08 in the prior year period and diluted income per ADS of RMB0.64 in the previous quarter.
Non-GAAP diluted income per ADS in the second quarter of 2017 was RMB0.64 (US$0.09) as compared to non-GAAP diluted loss per ADS of RMB0.44 in the prior year period and non-GAAP diluted income per ADS of RMB0.81 in the previous quarter.
ADJUSTED EBITDA
Adjusted EBITDA (Non-GAAP) increased by 87.1% year over year and 45.0% quarter over quarter to RMB126.6 million (US$18.7 million) in the second quarter of 2017.
CASH AND CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM INVESTMENTS BALANCE
As of June 30, 2017, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB2,383.3 million (US$351.5 million).
CASH FLOW FROM OPERATING ACTIVITIES AND FREE CASH FLOW
In the second quarter of 2017, the Company generated RMB194.7 million (US$28.7 million) of net cash from operating activities and RMB185.1 million (US$27.3 million) of free cash flow.
SHARES ISSUED AND OUTSTANDING
As of June 30, 2017, the Company had a total of 1,436,330,950 Class A and Class B ordinary shares issued and outstanding. One ADS represents 10 Class A ordinary shares.
Business Outlook
For the third quarter of 2017, the Company expects its total revenues to be between RMB1,150 million (US$170 million) and RMB1,210 million (US$178 million), representing a year-over-year increase of 2% to 7%. This estimate represents management's preliminary view as of the date of this release, which is subject to change.
Recent Developments
Departure of the Company's Senior Vince President
Cheetah Mobile today announced that Mr. Yong Chen has resigned as Senior Vice President of the Company for personal reasons, effective June 30, 2017.
Live.me Business's New Financing
On April 28, 2017, Live.me Inc., which operates Live.me, a live video streaming application, raised new funds from a group of investors. The new funding is presented as redeemable non-controlling interests on the Company's balance sheet as of June 30, 2017.
Conference Call Information
The Company will hold a conference call on Tuesday, August 22, 2017 at 7:00 a.m. Eastern Time or 7:00 p.m. Beijing Time to discuss the financial results. Listeners may access the call by dialing the following numbers:
International: +1-412-902-4272
United States Toll Free: +1-888-346-8982
China Toll Free: 4001-201203
Hong Kong Toll Free: 800-905945
Conference ID: Cheetah Mobile
A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.cmcm.com/.
Exchange Rate
This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars in this press release were made at a rate of RMB6.7793 to US$1.00, the exchange rate in effect as of June 30, 2017 as set forth in the H.10 statistical release of the Federal Reserve Board. Such translations should not be construed as representations that RMB amounts could be converted into U.S. dollars at that rate or any other rate, or to be the amounts that would have been reported under accounting principles generally accepted in the United States of America ("U.S. GAAP").
About Cheetah Mobile Inc.
Cheetah Mobile is a leading mobile internet company. It aims to provide leading apps for mobile users worldwide and connect users with personalized content on the mobile platform. Cheetah Mobile's products, including its popular utility applications Clean Master, Security Master and Battery Doctor, help make users' mobile internet experience smarter, speedier, and safer. Leveraging the success of its utility applications, Cheetah Mobile has launched its line of mobile content-driven applications, including News Republic and Live.me.
Cheetah Mobile provides its advertising customers, which include direct advertisers and mobile advertising networks through which advertisers place their advertisements, with direct access to highly targeted mobile users and global promotional channels, which are capable of delivering targeted content to hundreds of millions of users.
Safe Harbor Statement
This press release contains forward-looking statements. These statements, including management quotes and business outlook, constitute forward-looking statements under the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Such statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in the forward-looking statements, including but are not limited to the following: Cheetah Mobile's growth strategies; Cheetah Mobile's ability to retain and increase its user base and expand its product and service offerings; Cheetah Mobile's ability to monetize its platform; Cheetah Mobile's future business development, financial condition and results of operations; competition with companies in a number of industries including internet companies that provide online marketing services and internet value-added services; expected changes in Cheetah Mobile's revenues and certain cost or expense items; and general economic and business condition globally and in China. Further information regarding these and other risks is included in Cheetah Mobile's filings with the U.S. Securities and Exchange Commission. Cheetah Mobile does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
Use of Non-GAAP Financial Measures
To supplement Cheetah Mobile's consolidated financial information presented in accordance with U.S. GAAP, Cheetah Mobile uses the following non-GAAP financial measures:
-- Non-GAAP cost of revenues reflects cost of revenues excluding the
portion of share-based compensation expenses allocated to cost of
revenues.
-- Non-GAAP gross profit reflects gross profit excluding the portion of
share-based compensation expenses allocated to gross profit.
-- Non-GAAP operating income and expenses reflect operating income and
expenses excluding the portion of share-based compensation expenses
allocated to operating expenses.
-- Non-GAAP operating profit reflects operating profit excluding
share-based compensation expenses.
-- Non-GAAP net income attributable to Cheetah Mobile shareholders is net
income attributable to Cheetah Mobile shareholders excluding share-based
compensation expenses.
-- Non-GAAP diluted earnings per ADS is non-GAAP net income attributable to
Cheetah Mobile shareholders excluding net income attributable to
redeemable noncontrolling interests, divided by weighted average number
of diluted ADSs.
-- ?Adjusted EBITDA is earnings before interest, taxes, depreciation,
amortization, other non-operating income and share-based compensation
expenses.
-- Free cash flow is net cash generated by operating activities less
capital expenditure.
The Company believes that separate analysis and exclusion of share-based compensation expenses and the use of Adjusted EBITDA add clarity to the constituent parts of its performance from the cash perspective. The Company reviews these non-GAAP financial measures together with GAAP financial measures to obtain a better understanding of its operating performance. It uses the non-GAAP financial measures for planning, forecasting and measuring results against the forecast. The Company believes that non-GAAP financial measures are useful supplemental information for investors and analysts to assess its operating performance without the effect of share-based compensation expenses, which have been and will continue to be significant recurring expenses in its business. However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact the Company's net income for the period. In addition, because non-GAAP financial measures are not measured in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measure in isolation from or as an alternative to the financial measure prepared in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Cheetah Mobile Inc. Reconciliations of GAAP and Non-GAAP Results" and "Cheetah Mobile Inc. Reconciliation of Net Income Attributable to Cheetah Mobile Shareholders to Adjusted EBITDA (Non-GAAP)" at the end of this release.
Investor Relations Contact
Cheetah Mobile Inc.
Helen Jing Zhu
Tel: +86 10 6292 7779 ext. 1600
Email: helenjingzhu@cmcm.com
ICR, Inc.
Xueli Song
Tel: +1 (646) 417-5395
Email: IR@cmcm.com
CHEETAH MOBILE INC.
Condensed Consolidated Balance Sheets
(Unaudited, amounts in thousands of Renminbi ("RMB") and US dollars ("US$")
As of
-----
31-Dec-16 30-Jun-17 30-Jun-17
RMB RMB USD
ASSETS
Current assets:
Cash and cash equivalents 1,411,000 1,848,638 272,689
Restricted cash 167,751 94,146 13,887
Short-term investments 361,499 440,472 64,973
Accounts receivable 600,885 576,355 85,017
Prepayments and other current assets 571,306 501,812 74,021
Due from related parities 44,278 92,838 13,694
Deferred tax assets 15,527 - -
------ --- ---
Total current assets 3,172,246 3,554,261 524,281
--------- --------- -------
Non-current assets:
Property and equipment, net 117,439 100,044 14,757
Intangible assets, net 227,251 174,464 25,735
Goodwill 943,922 925,049 136,452
Investment in equity investees 100,063 95,271 14,053
Other long term investments 877,094 839,934 123,897
Due from related parities - 3,078 454
Deferred tax assets 74,809 97,423 14,371
Other non-current assets 28,310 28,933 4,268
------
Total non-current assets 2,368,888 2,264,196 333,987
--------- --------- -------
Total assets 5,541,134 5,818,457 858,268
========= ========= =======
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank loans 379,544 381,565 56,284
Accounts payable 194,882 163,638 24,138
Accrued expenses and other current liabilities 1,359,758 1,203,332 177,501
Deferred revenue 48,661 43,635 6,437
Due to related parties 71,167 74,640 11,010
Income tax payable 12,209 12,929 1,907
Total current liabilities 2,066,221 1,879,739 277,277
--------- --------- -------
Non-current liabilities:
Bank loans 118,797 96,465 14,229
Deferred revenue 6,001 5,448 804
Deferred tax liabilities 112,438 109,127 16,097
Other non-current liabilities 36,499 30,883 4,555
------ ------ -----
Total non-current liabilities 273,735 241,923 35,685
------- ------- ------
Total liabilities 2,339,956 2,121,662 312,962
--------- --------- -------
Mezzanine equity
Redeemable noncontrolling interests - 309,073 45,591
--- ------- ------
Shareholders' equity:
Ordinary shares 230 232 34
Treasury stock (178,991) (178,991) (26,403)
Additional paid-in capital 2,725,675 2,785,161 410,832
Retained earnings 237,293 402,620 59,390
Accumulated other comprehensive income 228,145 181,659 26,797
------- ------- ------
Total Cheetah Mobile shareholders' equity 3,012,352 3,190,681 470,650
Noncontrolling interests 188,826 197,041 29,065
------- ------- ------
Total equity 3,201,178 3,387,722 499,715
--------- --------- -------
Total liabilities, mezzanine equity and equity 5,541,134 5,818,457 858,268
========= ========= =======
CHEETAH MOBILE INC.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited, amounts in thousands of Renminbi ("RMB") and US dollars ("US$"), except for number of shares and per share(or ADS) data)
For The Three Months Ended
--------------------------
30-Jun-16 31-Mar-17 30-Jun-17 30-Jun-17
RMB RMB RMB USD
Revenues 1,046,664 1,190,703 1,201,561 177,239
Utility products and related services 946,198 827,225 820,342 121,007
Mobile entertainment 100,137 363,468 371,034 54,730
Others 329 10 10,185 1,502
Cost of revenues (a) (354,710) (457,953) (461,089) (68,014)
-------- -------- -------- -------
Gross profit 691,954 732,750 740,472 109,225
Operating income and expenses:
Research and development (a) (227,496) (191,367) (166,983) (24,631)
Selling and marketing (a) (407,206) (414,264) (413,116) (60,938)
General and administrative (a) (160,735) (103,588) (99,996) (14,750)
Impairment of goodwill and intangible assets - - (172) (25)
Other operating income 40,446 2,784 6,022 888
------ ----- ----- ---
Total operating income and expenses (754,991) (706,435) (674,245) (99,456)
Operating (loss) profit (63,037) 26,315 66,227 9,769
Other income (expense):
Interest income, net 2,715 1,616 3,380 499
Changes in fair value of redemption right and put options granted (308) (233) 82 12
Settlement and changes in fair value of contingent consideration (664) (790) (8,224) (1,213)
Foreign exchange gain (loss), net 486 1,213 (6,627) (978)
Impairment of investments (95,206) - - -
Losses from equity method investments, net (6,070) (367) (477) (70)
Other income, net 17,620 67,708 23,659 3,490
------ ------ ------ -----
(Loss) Income before taxes (144,464) 95,462 78,020 11,509
Income tax expenses (1,964) (4,912) (4,664) (688)
------ ------ ------ ----
Net (loss) income (146,428) 90,550 73,356 10,821
-------- ------ ------ ------
Less: net income (loss) attributable to noncontrolling interests 4,022 (679) 3,157 466
----- ---- ----- ---
Net (loss) income attributable to Cheetah Mobile shareholders (150,450) 91,229 70,199 10,355
======== ====== ====== ======
(Losses) Earnings per share
Basic (0.11) 0.07 0.05 0.01
Diluted (0.11) 0.06 0.05 0.01
(Losses) Earnings per ADS
Basic (1.08) 0.66 0.48 0.07
Diluted (1.08) 0.64 0.47 0.07
Weighted average number of shares outstanding
Basic 1,391,355,172 1,387,446,596 1,392,558,263 1,392,558,263
Diluted 1,391,355,172 1,422,443,105 1,430,957,071 1,430,957,071
Weighted average number of ADSs used in computation
Basic 139,135,517 138,744,660 139,255,826 139,255,826
Diluted 139,135,517 142,244,310 143,095,707 143,095,707
Other comprehensive income (loss), net of tax
Foreign currency translation adjustments 54,165 (8,517) (38,948) (5,745)
Unrealized loss on available-for-sale securities, net (389) - - -
Other comprehensive income (loss) 53,776 (8,517) (38,948) (5,745)
------ ------ ------- ------
Total comprehensive (loss) income (92,652) 82,033 34,408 5,076
Less: Total comprehensive income attributable to 7,117 119 1,380 204
noncontrolling interests
Total comprehensive (loss) income attributable to (99,769) 81,914 33,028 4,872
Cheetah Mobile shareholders
(a) Share-based compensation expenses
Cost of revenues 140 934 872 129
Research and development 49,410 9,571 3,802 561
Selling and marketing 1,300 (188) 4,956 731
General and administrative 37,707 14,051 14,552 2,147
------ ------ ------ -----
Total 88,557 24,368 24,182 3,568
====== ====== ====== =====
CHEETAH MOBILE INC.
Reconciliation of GAAP and Non-GAAP Results
(Unaudited, in'000, except for per share data and percentage)
For The Three Months Ended June 30, 2017
----------------------------------------
GAAP % of Net Share-based % of Net Non-GAAP % of Net Non-GAAP
Result Revenues Compensation Revenues Result Revenues Result ($)
------ -------- ------------ -------- ------ -------- ---------
Revenues 1,201,561 1,201,561 177,239
Cost of revenues (461,089) 38.4% 872 0.1% (460,217) 38.3% (67,886)
Gross profit 740,472 61.6% 872 0.1% 741,344 61.7% 109,353
Research and development (166,983) 13.9% 3,802 0.3% (163,181) 13.6% (24,070)
Selling and marketing (413,116) 34.4% 4,956 0.4% (408,160) 34.0% (60,207)
General and administrative (99,996) 8.3% 14,552 1.2% (85,444) 7.1% (12,604)
Impairment of goodwill and intangible assets (172) 0.0% - 0.0% (172) 0.0% (25)
Other operating income 6,022 0.5% - 0.0% 6,022 0.5% 888
Total operating income and expenses (674,245) 56.1% 23,310 1.9% (650,935) 54.2% (96,018)
Operating profit 66,227 5.5% 24,182 2.0% 90,409 7.5% 13,336
Net income attributable to Cheetah Mobile shareholders 70,199 5.8% 24,182 2.0% 94,381 7.9% 13,922
Diluted earnings per ordinary share (RMB) 0.05 0.01 0.06
Diluted earnings per ADS (RMB) 0.47 0.17 0.64
Diluted earnings per ADS (USD) 0.07 0.02 0.09
For The Three Months Ended March 31, 2017
-----------------------------------------
GAAP % of Net Share-based % of Net Non-GAAP % of Net
Result Revenues Compensation Revenues Result Revenues
------ -------- ------------ -------- ------ --------
Revenues 1,190,703 1,190,703
Cost of revenues (457,953) 38.5% 934 0.1% (457,019) 38.4%
-------- ---- --- --- -------- ----
Gross profit 732,750 61.5% 934 0.1% 733,684 61.6%
Research and development (191,367) 16.1% 9,571 0.8% (181,796) 15.3%
Selling and marketing (414,264) 34.8% (188) 0.0% (414,452) 34.8%
General and administrative (103,588) 8.7% 14,051 1.2% (89,537) 7.5%
Other operating income 2,784 0.2% - 0.0% 2,784 0.2%
----- --- --- --- ----- ---
Total operating income and expenses (706,435) 59.3% 23,434 2.0% (683,001) 57.4%
Operating profit 26,315 2.2% 24,368 2.0% 50,683 4.3%
Net income attributable to Cheetah Mobile shareholders 91,229 7.7% 24,368 2.0% 115,597 9.7%
Diluted earnings per ordinary share (RMB) 0.06 0.02 0.08
Diluted earnings per ADS (RMB) 0.64 0.17 0.81
For The Three Months Ended June 30, 2016
----------------------------------------
GAAP % of Net Share-based % of Net Non-GAAP % of Net
Result Revenues Compensation Revenues Result Revenues
------ -------- ------------ -------- ------ --------
Revenues 1,046,664 1,046,664
Cost of revenues (354,710) 33.9% 140 0.0% (354,570) 33.9%
-------- ---- --- --- -------- ----
Gross profit 691,954 66.1% 140 0.0% 692,094 66.1%
Research and development (227,496) 21.7% 49,410 4.7% (178,086) 17.0%
Selling and marketing (407,206) 38.9% 1,300 0.1% (405,906) 38.8%
General and administrative (160,735) 15.4% 37,707 3.6% (123,028) 11.8%
Other operating income 40,446 3.9% - 0.0% 40,446 3.9%
------ --- --- --- ------ ---
Total operating income and expenses (754,991) 72.1% 88,417 8.4% (666,574) 63.7%
Operating (loss) profit (63,037) 6.0% 88,557 8.5% 25,520 2.4%
Net loss attributable to Cheetah Mobile Shareholders (150,450) 14.4% 88,557 8.5% (61,893) 5.9%
Diluted (losses) earnings per ordinary share (RMB) (0.11) 0.07 (0.04)
Diluted (losses) earnings per ADS (RMB) (1.08) 0.64 (0.44)
CHEETAH MOBILE INC.
Information about Segment
(Unaudited, in'000, except for percentage)
For The Three Months Ended June 30, 2017
----------------------------------------
Utility Products and Mobile Entertainment Others Unallocated* Consolidated
Related Services
----------------
RMB RMB RMB RMB RMB USD
Revenue 820,342 371,034 10,185 - 1,201,561 177,239
Operating profit (loss) 212,849 (122,069) (371) (24,182) 66,227 9,769
Operating margin 25.9% (32.9)% (3.6)% 5.5% 5.5%
For The Three Months Ended March 31, 2017
-----------------------------------------
Utility Products and Mobile Entertainment Others Unallocated* Consolidated
Related Services
----------------
RMB RMB RMB RMB RMB
Revenue 827,225 363,468 10 - 1,190,703
Operating profit (loss) 179,158 (128,478) 3 (24,368) 26,315
Operating margin 21.7% (35.3)% 30.0% 2.2%
For The Three Months Ended June 30, 2016
----------------------------------------
Utility Products and Mobile Entertainment Others Unallocated* Consolidated
Related Services
----------------
RMB RMB RMB RMB RMB
Revenue 946,198 100,137 329 - 1,046,664
Operating profit (loss) 141,368 (106,228) (9,620) (88,557) (63,037)
Operating margin 14.9% (106.1)% (2924.0)% (6.0)%
* Unallocated expenses refer to SBC expenses that are not allocated to individual segments.
Cheetah Mobile Inc.
Revenues Generated from PC-based and Mobile-based Applications and Services
(Unaudited, in '000)
For The Three Months Ended
--------------------------
30-Jun-16 31-Mar-17 30-Jun-17 30-Jun-17
RMB RMB RMB USD
PC 274,329 182,337 162,771 24,010
Mobile 772,335 1,008,366 1,038,790 153,229
------ ------- --------- --------- -------
Total 1,046,664 1,190,703 1,201,561 177,239
===== ========= ========= ========= =======
Cheetah Mobile Inc.
Revenues Generated from Domestic and Overseas Markets
(Unaudited, in '000)
For The Three Months Ended
--------------------------
30-Jun-16 31-Mar-17 30-Jun-17 30-Jun-17
RMB RMB RMB USD
Domestic 485,972 342,383 358,655 52,904
Overseas 560,692 848,320 842,906 124,335
-------- ------- ------- ------- -------
Total 1,046,664 1,190,703 1,201,561 177,239
===== ========= ========= ========= =======
CHEETAH MOBILE INC.
Reconciliation from Net Income Attributable to Cheetah Mobile Shareholders to Adjusted EBITDA (Non-GAAP)
(Unaudited, in '000)
For The Three Months Ended
--------------------------
30-Jun-16 31-Mar-17 30-Jun-17 30-Jun-17
RMB RMB RMB USD
Net (loss) income attributable to Cheetah Mobile shareholders (150,450) 91,229 70,199 10,355
Add:
Income tax expenses 1,964 4,912 4,664 688
Interest income, net (2,715) (1,616) (3,380) (499)
Depreciation and amortization 42,126 36,595 36,166 5,335
Net income (loss) attributable to noncontrolling interests 4,022 (679) 3,157 466
Other non-operating expense (income), net 84,142 (67,531) (8,413) (1,241)
Share-based compensation 88,557 24,368 24,182 3,568
Adjusted EBITDA 67,646 87,278 126,575 18,672
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SOURCE Cheetah Mobile
