58.com Reports Third Quarter 2017 Unaudited Financial Results

BEIJING, Nov. 12, 2017 /PRNewswire/ -- 58.com Inc. (NYSE: WUBA) ("58.com" or the "Company"), China's largest online market place for classifieds, today reported its unaudited financial results for the third quarter ended September 30, 2017.

Third Quarter 2017 Financial Highlights

    --  Total revenues were RMB2,722.5 million (US$410.2 million(1)), a 33.3%
        increase from the same quarter of 2016 in Renminbi amounts, exceeding
        the higher end of the Company's guidance of RMB2,650 million.
    --  Gross margin was 91.6% compared with 91.4% in the same quarter of 2016.
    --  Income from operations was RMB522.4 million (US$78.7 million), compared
        with income from operations of RMB143.2 million in the same quarter of
        2016.
    --  Non-GAAP income from operations(2) was RMB663.4 million (US$99.9
        million), compared with non-GAAP income from operations of RMB266.3
        million in the same quarter of 2016.
    --  Net income attributable to 58.com Inc. was RMB353.3 million (US$53.2
        million), compared with net loss attributable to 58.com Inc. of RMB199.4
        million in the same quarter of 2016.
    --  Non-GAAP net income attributable to 58.com Inc.(3) was RMB478.7 million
        (US$72.1 million), compared with non-GAAP net loss attributable to
        58.com Inc. of RMB18.2 million in the same quarter of 2016.
    --  Basic and diluted earnings per ADS attributable to ordinary shareholders
        were RMB2.42 (US$0.36) and RMB2.38 (US$0.36), respectively. One ADS
        represents two Class A ordinary shares.
    --  Non-GAAP basic and diluted earnings per ADS(4) attributable to ordinary
        shareholders were RMB3.28 (US$0.49) and RMB3.23 (US$0.49), respectively.




    1             This press
                  release
                  contains
                  translations
                  of certain
                  Renminbi
                  amounts into
                  U.S. dollars
                  (US$) solely
                  for the
                  convenience of
                  the reader.
                  Unless
                  otherwise
                  specified, all
                  translations
                  of Renminbi
                  (RMB) amounts
                  into US$
                  amounts in
                  this press
                  release are
                  made at
                  RMB6.6369 to
                  US$1.00, which
                  was the U.S.
                  dollars middle
                  rate announced
                  by the PRC
                  State
                  Administration
                  of Foreign
                  Exchange on
                  September 29,
                  2017. The
                  percentages
                  stated in this
                  press release
                  are calculated
                  based on the
                  Renminbi
                  amounts. On
                  November 10,
                  2017, such
                  exchange rate
                  was RMB6.6282
                  to US$1.00.


    2             Non-GAAP
                  income/(loss)
                  from
                  operations is
                  defined as
                  income/(loss)
                  from
                  operations
                  excluding
                  share-based
                  compensation
                  expenses and
                  amortization
                  of intangible
                  assets
                  resulting from
                  business
                  acquisitions.
                  See
                  "Reconciliation
                  of GAAP and
                  Non-GAAP
                  Results" at
                  the end of
                  this press
                  release.


    3             Non-GAAP net
                  income/(loss)
                  attributable
                  to 58.com Inc.
                  is defined as
                  net income/
                  (loss)
                  attributable
                  to 58.com Inc.
                  excluding
                  share-based
                  compensation
                  expenses of
                  the Company
                  (net of the
                  amount
                  allocated to
                  noncontrolling
                  interests),
                  amortization
                  of intangible
                  assets
                  resulting from
                  business
                  acquisitions,
                  share-based
                  compensation
                  expenses
                  included in
                  share of
                  results of
                  equity
                  investees,
                  loss on
                  conversion of
                  Guazi
                  Convertible
                  Note, gain on
                  deconsolidation
                  and disposal
                  of business
                  and income tax
                  effects of
                  GAAP to non-
                  GAAP
                  reconciling
                  items. See
                  "Reconciliation
                  of GAAP and
                  Non-GAAP
                  Results" at
                  the end of
                  this press
                  release.


    4             Non-GAAP basic
                  and diluted
                  earnings/
                  (loss) per ADS
                  is defined as
                  non-GAAP net
                  income/(loss)
                  attributable
                  to 58.com Inc.
                  divided by
                  weighted
                  average number
                  of basic and
                  diluted ADS.

Management Comments

"We have had another great quarter in which revenue again exceeded the high end of our guidance," commented Mr. Michael Yao, Chairman and Chief Executive Officer of 58.com. "We continued to drive traffic growth and expand user engagement by deploying new and innovative technologies, particularly on our mobile applications. We are the clear market leader in major categories such as jobs, rental and secondary housing in China in terms of traffic and revenues. We continue to see enormous market opportunities and will invest further to grow our platforms while improving operational efficiency."

Mr. Hao Zhou, Chief Financial Officer of 58.com added, "Our operating and net margins and cash flow all improved significantly when compared to a year ago as we continue to focus on improving operational and marketing efficiencies and develop more synergies from further consolidation of 58 and Ganji."

Third Quarter 2017 Financial Results

Revenues

Total revenues were RMB2,722.5 million (US$410.2 million), representing an increase of 33.3% from RMB2,042.6 million in the same quarter of 2016.

Membership revenues were RMB994.1 million (US$149.8 million), an increase of 26.7% from RMB784.4 million in the same quarter of 2016. The increase in membership revenues was primarily driven by an increase in the number of subscription-based paying membership accounts. The total number of subscription-based paying membership accounts on the Company's platforms, which include 58.com, Ganji.com and Anjuke.com, was approximately 2,611,000 during the third quarter of 2017, a 26.3% increase from approximately 2,067,000 in the same quarter of 2016. The Company defines subscription-based paying membership accounts as the registered accounts through which users have purchased the Company's membership subscriptions. The number of subscription-based paying membership accounts in a given period represents the paying merchant members whose membership subscriptions are in their service period at any point during the given period. Some paying merchant members purchase membership services from more than one Company platform which contributes separately to the revenues of each platform.

Online marketing services revenues were RMB1,660.5 million (US$250.2 million), an increase of 38.0% from RMB1,203.1 million in the same quarter of 2016. The increase was primarily driven by the increasing adoption and effectiveness of the Company's various online marketing services such as real-time bidding, priority listing and various other online marketing services.

Cost of Revenues

Cost of revenues was RMB227.8 million (US$34.3 million), an increase of 29.0% from RMB176.6 million in the same quarter of 2016. The year-over-year increase in the Company's cost of revenues was primarily driven by increases in the cost of used goods sold on the Company's Zhuan Zhuan platform.

Gross Profit and Gross Margin

Gross profit was RMB2,494.8 million (US$375.9 million), an increase of 33.7% from RMB1,866.1 million during the same quarter of 2016.

Gross margin was 91.6%, compared with 91.4% during the same quarter of 2016.

Operating Expenses

Operating expenses were RMB1,972.3 million (US$297.2 million), an increase of 14.5% from RMB1,722.8 million in the same quarter of 2016.

Sales and marketing expenses in the third quarter of 2017 were RMB1,346.2 million (US$202.8 million), an increase of 7.3% from RMB1,254.2 million in the same quarter in 2016.

Within sales and marketing expenses, advertising expenses accounted for RMB541.2 million (US$81.5 million) and RMB481.1 million in the third quarter of 2017 and 2016, respectively. The increase was primarily due to an increase in advertising expenses associated with the promotion of the 58.com and Zhuan Zhuan brands, which were partially offset by a decrease in advertising spending on Ganji.

Other sales and marketing expenses in the third quarter of 2017 were RMB805.0 million (US$121.3 million), an increase of 4.1% from RMB773.1 million in the same quarter in 2016. Other sales and marketing expenses primarily include salaries, benefits and sales commissions, as well as office overhead expenses associated with sales, customer service and marketing teams. The increase was primarily driven by increased commissions for the Company's sales, customer service and marketing teams.

Research and development expenses in the third quarter of 2017 were RMB372.9 million (US$56.2 million), an increase of 22.0% from RMB305.5 million in the same quarter of 2016. The increase was primarily due to increased salary costs associated with the hiring of additional employees for the research and development of new features and services.

General and administrative expenses in the third quarter of 2017 were RMB253.3 million (US$38.2 million), an increase of 55.2% from RMB163.2 million in the same quarter of 2016. The increase was primarily driven by an increase in salaries, share-based compensation expenses and other administrative related expenses.

Income from Operations

Income from operations was RMB522.4 million (US$78.7 million) in the third quarter of 2017, compared with income from operations of RMB143.2 million in the same quarter of 2016. Operating margin, defined as income from operations divided by total revenues, was 19.2% in the third quarter of 2017, compared with 7.0% in the same quarter of 2016.

Non-GAAP income from operations was RMB663.4 million (US$99.9 million) in the third quarter of 2017, compared with non-GAAP income from operations of RMB266.3 million in the same quarter of 2016. Non-GAAP operating margin, defined as non-GAAP income from operations divided by total revenues, was 24.3% in the third quarter of 2017, compared with 13.0% in the same quarter of 2016.

Other Expenses

Other expenses in the third quarter of 2017 were RMB81.4 million (US$12.3 million), compared with other expenses of RMB350.2 million in the same quarter of 2016. Other expenses in the third quarter of 2017 mainly included a RMB182.1 million share of results of equity investees, which primarily consisted of a RMB175.1 million share of the net loss attributable to 58 Home's ordinary shareholders calculated based on the Company's ordinary shareholding in 58 Home, which was partially offset by investment income of RMB56.0 million and government subsidies of RMB49.8 million.

Net Income/(Loss) Attributable to 58.com Inc.

Net income attributable to 58.com Inc. was RMB353.3 million (US$53.2 million) in the third quarter of 2017, compared with net loss attributable to 58.com Inc. of RMB199.4 million in the same quarter of 2016. Net margin, defined as net income /(loss) attributable to 58.com Inc. divided by total revenues, was positive 13.0% in the third quarter of 2017, compared with negative 9.8% in the same quarter of 2016.

Non-GAAP net income attributable to 58.com Inc. was RMB478.7 million (US$72.1 million) in the third quarter of 2017, compared with net loss attributable to 58.com Inc. of RMB18.2 million in the same quarter of 2016. Non-GAAP net margin, defined as non-GAAP net income /(loss) attributable to 58.com Inc. divided by total revenues, was positive 17.5% in the third quarter of 2017, compared with negative 0.9% in the same quarter of 2016.

Basic and Diluted Earnings/(Losses) per ADS

Basic and diluted earnings per ADS attributable to ordinary shareholders in the third quarter of 2017 were RMB2.42 (US$0.36) and RMB2.38 (US$0.36), respectively, compared with RMB1.38 for both the basic and diluted losses per ADS attributable to ordinary shareholders in the same quarter of 2016.

Non-GAAP basic and diluted earnings per ADS attributable to ordinary shareholders in the third quarter of 2017 were RMB3.28 (US$0.49) and RMB3.23 (US$0.49), respectively, compared with RMB0.13 for both the non-GAAP basic and diluted losses per ADS attributable to ordinary shareholders in the same quarter of 2016.

Cash Flow

Net cash provided by operating activities was RMB699.1 million (US$105.3 million) in the third quarter of 2017, compared with net cash provided by operating activities of RMB546.8 million in the same quarter of 2016.

Cash and Cash Equivalents, Term Deposits and Short-term Investments

As of September 30, 2017, the Company had cash and cash equivalents, term deposits and short-term investments of RMB4,347.0 million (US$655.0 million).

Shares Outstanding

As of September 30, 2017, the Company had a total of 293,020,285 ordinary shares (including 244,980,025 Class A and 48,040,260 Class B ordinary shares) issued and outstanding. One ADS represents two Class A ordinary shares.

Business Outlook

Based on the Company's current operations, total revenues for the fourth quarter of 2017 are expected to be between RMB2,625 million and RMB2,725 million. This represents a year-over-year increase of 25.3% to 30.1% in Renminbi amounts. These estimates reflect the Company's current and preliminary view, which is subject to change.

Non-GAAP Financial Measures

To supplement the financial measures prepared in accordance with generally accepted accounting principles in the United States, or GAAP, this press release presents non-GAAP income/(loss) from operations, non-GAAP operating margin, non-GAAP net income/(loss) attributable to 58.com Inc., non-GAAP net margin and non-GAAP basic and diluted earnings/(loss) per share and per ADS by excluding share-based compensation expenses of the Company (net of the amount allocated to noncontrolling interests), amortization of intangible assets resulting from business acquisitions, share-based compensation expenses included in share of results of equity investees, loss on conversion of Guazi Convertible Note, gain on deconsolidation and disposal of business and income tax effects of above GAAP to non-GAAP reconciling items. The Company believes these non-GAAP financial measures are important to help investors understand the Company's operating and financial performance, compare business trends among different reporting periods on a consistent basis and assess the Company's core operating results, as they exclude certain expenses that are not expected to result in cash payments. The use of the above non-GAAP financial measures has certain limitations. Share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, non-cash gain or loss and income tax effects resulting from GAAP to non-GAAP reconciling items have been and will continue to be incurred in the future and are not reflected in the presentation of the non-GAAP financial measures, but should be considered in the overall evaluation of the Company's results. The Company compensates for these limitations by providing the relevant disclosure of its share-based compensation expenses of the Company (net of the amount allocated to noncontrolling interests), amortization of intangible assets resulting from business acquisitions, share-based compensation expenses included in share of results of equity investees, loss on conversion of Guazi Convertible Note, gain on deconsolidation and disposal of business and income tax effects of above GAAP to non-GAAP reconciling items, all of which should be considered when evaluating the Company's performance. These non-GAAP financial measures should be considered in addition to financial measures prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP. Reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP financial measure is set forth at the end of this release.

Conference Call

58.com's management will host an earnings conference call on November 13, 2017 at 8:00 a.m. U.S. Eastern Time (9:00 p.m. Beijing / Hong Kong time on the same day).

Dial-in details for the earnings conference call are as follows:


    International:                       +1-412-317-5225

    U.S. Toll Free:                      +1-866-235-9918

    Hong Kong:                           800-905945

    China:                               4001-201203

    Passcode:                            WUBA

Please dial in 15 minutes before the call is scheduled to begin and provide the passcode to join the call.

A telephone replay of the call will be available after the conclusion of the conference call through 8:00 a.m. U.S. Eastern Time, November 20, 2017. The dial-in details for the replay are as follows:


    International:                       +1-412-317-0088

    U.S. Toll Free:                      +1-877-344-7529

    Passcode:                                               10114221

Additionally, a live and archived webcast of the conference call will be available on the Investor Relations section of 58.com's website at http://www.58.com.

About 58.com Inc.

58.com Inc. (NYSE: WUBA) operates China's largest online marketplace for classifieds, as measured by monthly unique visitors on both its www.58.com website and mobile applications. The Company's online marketplace enables local merchants and consumers to connect, share information and conduct business. 58.com's broad, in-depth and high quality local information, combined with its easy-to-use website and mobile applications, has made it a trusted marketplace for consumers. 58.com's strong brand recognition, large and growing user base, merchant network and massive database of local information create a powerful network effect.

Safe Harbor Statements

This press release contains forward-looking statements made under the "safe harbor" provisions of 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," "confident" and similar statements. 58.com may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about 58.com's beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: 58.com's goals and strategies; its future business development, financial condition and results of operations; its ability to retain and grow its user base and network of local merchants for its online marketplace; the growth of, and trends in, the markets for its services in China; the demand for and market acceptance of its brand and services; competition in its industry in China; its ability to maintain the network infrastructure necessary to operate its website and mobile applications; relevant government policies and regulations relating to the corporate structure, business and industry; and its ability to protect its users' information and adequately address privacy concerns. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and 58.com does not undertake any obligation to update such information, except as required under applicable law.

For more information, please contact:

58.com Inc.

ir@58.com

Christensen

In China

Mr. Christian Arnell

Phone: +86-10-5900-1548

E-mail: carnell@christensenir.com

In US

Ms. Linda Bergkamp

Phone: +1-480-614-3004

Email: lbergkamp@ChristensenIR.com


                                                                           58.com Inc.

                                                         UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

                                             (in thousands, except share and per share data, unless otherwise noted)


                                                               As of
                                                               -----

                                                           December 31,                           September 30,              September 30,

                                                                               2016                                     2017                      2017
                                                                               ----                                     ----                      ----

                                                                RMB                                    RMB                        US$

    ASSETS

    Current assets:

    Cash and cash equivalents                                             1,200,457                                1,834,196                   276,363

    Restricted cash-current                                               1,151,940                                  668,014                   100,652

    Term deposits                                                            26,361                                        ?                        ?

    Short-term investments                                                  833,480                                2,512,792                   378,609

    Accounts receivable, net                                                424,892                                  569,243                    85,769

    Prepayments and other current
     assets                                                                 426,056                                  747,988                   112,701
                                                                            -------                                  -------                   -------

    Total current assets                                                  4,063,186                                6,332,233                   954,094
                                                                          ---------                                ---------                   -------

    Non-current assets:

    Restricted cash-non-current                                                   ?                                 792,000                   119,333

    Property and equipment, net                                           1,480,921                                1,376,412                   207,388

    Intangible assets, net                                                1,532,228                                1,365,301                   205,714

    Land use rights, net                                                      3,766                                    3,708                       559

    Goodwill                                                             15,903,677                               15,903,677                 2,396,251

    Long-term investments                                                 2,118,461                                2,003,761                   301,912

    Long-term prepayments and
     other non-current assets                                               223,767                                  308,810                    46,529
                                                                            -------                                  -------                    ------

    Total non-current assets                                             21,262,820                               21,753,669                 3,277,686
                                                                         ----------                               ----------                 ---------

    Total assets                                                         25,326,006                               28,085,902                 4,231,780
                                                                         ==========                               ==========                 =========

    LIABILITIES, MEZZANINE EQUITY AND EQUITY

    Current liabilities:

    Short-term loans                                                      1,842,720                                  581,311                    87,588

    Accounts payable                                                        611,947                                  604,849                    91,134

    Deferred revenues                                                     1,845,846                                2,136,745                   321,949

    Customer advances                                                     1,236,076                                1,406,119                   211,864

    Taxes payable                                                            62,084                                  143,117                    21,564

    Salary and welfare payable                                              553,506                                  540,730                    81,473

    Accrued expenses and other
     current liabilities                                                    727,904                                  562,863                    84,808
                                                                            -------                                  -------                    ------

    Total current liabilities                                             6,880,083                                5,975,734                   900,380
                                                                          ---------                                ---------                   -------

    Non-current liabilities:

    Long-term loan                                                          150,000                                  863,467                   130,101

    Deferred tax liabilities                                                373,810                                  332,774                    50,140

    Other non-current liabilities                                            69,937                                   23,970                     3,612
                                                                             ------                                   ------                     -----

    Total non-current liabilities                                           593,747                                1,220,211                   183,853
                                                                            -------                                ---------                   -------

    Total liabilities                                                     7,473,830                                7,195,945                 1,084,233
                                                                          ---------                                ---------                 ---------

    Mezzanine equity:

    Mezzanine classified
     noncontrolling interests                                                86,457                                1,714,490                   258,327
                                                                             ------                                ---------                   -------

    Total mezzanine equity                                                   86,457                                1,714,490                   258,327
                                                                             ------                                ---------                   -------

    Shareholders' equity:

    Ordinary shares (US$0.00001
     par value, 4,800,000,000                   September 30, 2017,
     Class A and 200,000,000                    respectively)
     Class B shares authorized,
     240,930,737 Class A and
     48,740,260 Class B shares
     issued and outstanding as of
     December 31, 2016 and
     244,980,025 Class A and
     48,040,260 Class B shares
     issued and outstanding as of                                                18                                       18                         3

    Additional paid-in capital                                           20,907,599                               21,289,598                 3,207,762

    Accumulated deficit                                                 (3,070,735)                             (2,136,662)                (321,937)

    Accumulated other
     comprehensive loss                                                   (138,597)                                (63,825)                  (9,617)
                                                                           --------                                  -------                    ------

    Total 58.com Inc.
     shareholders' equity                                                17,698,285                               19,089,129                 2,876,211
                                                                         ----------                               ----------                 ---------

    Noncontrolling interests                                                 67,434                                   86,338                    13,009
                                                                             ------                                   ------                    ------

    Total shareholders' equity                                           17,765,719                               19,175,467                 2,889,220
                                                                         ----------                               ----------                 ---------

    Total liabilities, mezzanine
     equity and shareholders'
     equity                                                              25,326,006                               28,085,902                 4,231,780
                                                                         ==========                               ==========                 =========




                                                                                                      58.com Inc.

                                                                          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                                                                   (in thousands, except share, per share and per ADS data, unless otherwise noted)


                                                                 For the Three Months Ended                                                       For the Nine Months Ended
                                                                 --------------------------                                                       -------------------------

                                                                        September 30,                           September 30,                           September 30,               September 30,                September 30,                 September 30,

                                                                                             2016                                     2017                                     2017                         2016                          2017                         2017
                                                                                             ----                                     ----                                     ----                         ----                          ----                         ----

                                                                             RMB                                     RMB                                     US$                         RMB                          RMB                           US$

    Revenues:

    Membership                                                                            784,369                                  994,107                                  149,785                    2,139,114                     2,750,712                      414,457

    Online marketing services                                                           1,203,112                                1,660,502                                  250,192                    3,174,397                     4,334,005                      653,016

    E-commerce services                                                                    36,371                                   14,664                                    2,209                      122,233                        56,491                        8,512

    Other services                                                                         18,797                                   53,247                                    8,023                       61,610                       162,890                       24,543
                                                                                           ------                                   ------                                    -----                       ------                       -------                       ------

    Total revenues                                                                      2,042,649                                2,722,520                                  410,209                    5,497,354                     7,304,098                    1,100,528

    Cost of revenues(1)                                                                 (176,559)                               (227,761)                                (34,317)                   (494,999)                    (662,644)                    (99,842)
                                                                                         --------                                 --------                                  -------                     --------                      --------                      -------

    Gross profit                                                                        1,866,090                                2,494,759                                  375,892                    5,002,355                     6,641,454                    1,000,686
                                                                                        ---------                                ---------                                  -------                    ---------                     ---------                    ---------

    Operating expenses(1):

    Sales and marketing expenses                                                      (1,254,181)                             (1,346,202)                               (202,836)                 (3,716,678)                  (3,873,773)                   (583,672)

    Research and development expenses                                                   (305,510)                               (372,873)                                (56,182)                   (794,508)                  (1,010,543)                   (152,261)

    General and administrative expenses                                                 (163,152)                               (253,255)                                (38,159)                   (450,991)                    (574,386)                    (86,544)
                                                                                         --------                                 --------                                  -------                     --------                      --------                      -------

    Total operating expenses                                                          (1,722,843)                             (1,972,330)                               (297,177)                 (4,962,177)                  (5,458,702)                   (822,477)
                                                                                       ----------                               ----------                                 --------                   ----------                    ----------                     --------

    Income from operations                                                                143,247                                  522,429                                   78,715                       40,178                     1,182,752                      178,209
                                                                                          -------                                  -------                                   ------                       ------                     ---------                      -------

    Other income/(expenses):

    Interest income/(expenses), net                                                      (17,222)                                   1,664                                      251                     (39,239)                      (9,138)                     (1,377)

    Investment income/(loss), net                                                         (1,632)                                  55,956                                    8,431                     (13,417)                      314,703                       47,417

    Share of results of equity investees                                                (354,332)                               (182,087)                                (27,436)                   (701,562)                    (489,067)                    (73,689)

    Gain on deconsolidation and disposal of businesses                                          ?                                       ?                                       ?                      79,581                             ?                           ?

    Foreign currency exchange income/(loss), net                                          (2,533)                                     313                                       47                      (3,956)                          497                           75

    Others, net                                                                            25,554                                   42,726                                    6,438                     (13,562)                       46,298                        6,976
                                                                                           ------                                   ------                                    -----                      -------                        ------                        -----

    Income/(loss) before tax                                                            (206,918)                                 441,001                                   66,446                    (651,977)                    1,046,045                      157,611

    Income tax benefits/(expenses)                                                         12,169                                 (51,150)                                 (7,707)                      13,341                     (104,545)                    (15,752)
                                                                                           ------                                  -------                                   ------                       ------                      --------                      -------

    Net income/(loss)                                                                   (194,749)                                 389,851                                   58,739                    (638,636)                      941,500                      141,859
                                                                                         --------                                  -------                                   ------                     --------                       -------                      -------

    Add: Net loss/(income) attributable to noncontrolling                                   (556)                                 (1,785)                                   (269)                       3,958                       (3,904)                       (588)
             interests

    Less: Deemed dividend to mezzanine classified noncontrolling                          (4,119)                                (34,809)                                 (5,245)                    (11,113)                     (66,585)                    (10,033)
              interests


    Net income/(loss) attributable to 58.com Inc                                        (199,424)                                 353,257                                   53,225                    (645,791)                      871,011                      131,238
                                                                                         ========                                  =======                                   ======                     ========                       =======                      =======

    Net earnings/(loss) per ordinary share attributable to                                 (0.69)                                    1.21                                     0.18                       (2.26)                         2.99                         0.45
    ordinary shareholders ? basic

    Net earnings/(loss) per ordinary share attributable to                                 (0.69)                                    1.19                                     0.18                       (2.26)                         2.96                         0.45
    ordinary shareholders ? diluted

    Net earnings/(loss) per ADS attributable to ordinary                                   (1.38)                                    2.42                                     0.36                       (4.51)                         5.99                         0.90
    shareholders - basic (1 ADS represents 2 Class A
    ordinary shares)

    Net earnings/(loss) per ADS attributable to ordinary                                   (1.38)                                    2.38                                     0.36                       (4.51)                         5.92                         0.89
    shareholders - diluted (1 ADS represents 2 Class A
    ordinary shares)

    Weighted average number of ordinary shares used in                                288,734,733                              291,777,760                              291,777,760                  286,119,495                   290,853,040                  290,853,040
    computing basic earnings/(loss) per share

    Weighted average number of ordinary shares used in                                288,734,733                              296,419,017                              296,419,017                  286,119,495                   294,437,994                  294,437,994
    computing diluted earnings/(loss) per share


    Note:

                                  (1)    Share?based compensation expenses
                                         were allocated in cost of revenues
                                         and operating expenses as follows:

    Cost of revenues              (509) 1,141   172    103   2,139    322

    Sales and marketing expenses 14,756 19,383 2,920 41,244  51,986  7,833

    Research and development
     expenses                    23,511 30,050 4,528 69,076  91,260 13,750

    General and administrative
     expenses                    27,824 40,459 6,096 89,401 106,441 16,038


                                                                                                                                                             58.com Inc.

                                                                                                                                             Reconciliation of GAAP and Non-GAAP Results

                                                                                                                        (in thousands, except share, ADS, per share and per ADS data, unless otherwise noted)


                                                                                                            For the Three Months Ended                                                      For the Nine Months Ended
                                                                                                            --------------------------                                                      -------------------------

                                                                                                                  September 30,                           September 30,                           September 30,               September 30,             September 30,              September 30,

                                                                                                                                       2016                                     2017                                     2017                      2016                       2017                       2017
                                                                                                                                       ----                                     ----                                     ----                      ----                       ----                       ----

                                                                                                                       RMB                                     RMB                                     US$                         RMB                       RMB                        US$

    GAAP income from operations                                                                                                     143,247                                  522,429                                   78,715                    40,178                  1,182,752                    178,209

    Share-based compensation expenses5                                                                                               65,582                                   85,581                                   12,895                   199,824                    246,374                     37,122

            Amortization of intangible assets resulting from                                                                         57,432                                   55,348                                    8,339                   172,296                    167,517                     25,240
            business acquisitions


    Non-GAAP income from operations                                                                                                 266,261                                  663,358                                   99,949                   412,298                  1,596,643                    240,571
                                                                                                                                    =======                                  =======                                   ======                   =======                  =========                    =======


    GAAP net income/(loss) attributable to 58.com Inc                                                                             (199,424)                                 353,257                                   53,225                 (645,791)                   871,011                    131,238

    Share-based compensation expenses                                                                                                65,582                                   85,581                                   12,895                   199,824                    246,374                     37,122

    Share-based compensation attributable to noncontrolling interests                                                                     ?                                       ?                                       ?                    (151)                         ?                         ?

            Amortization of intangible assets resulting from                                                                         57,432                                   55,348                                    8,339                   172,296                    167,517                     25,240
            business acquisitions

            Share-based compensation expenses included in                                                                            72,594                                  (1,972)                                   (297)                   73,371                      2,386                        359
            share of results of equity investees

    Loss on conversion of Guazi Convertible Note                                                                                          ?                                       ?                                       ?                   84,177                          ?                         ?

    Gain on deconsolidation and disposal of business                                                                                      ?                                       ?                                       ?                 (79,581)                         ?                         ?

    Income tax effects of GAAP to non-GAAP reconciling items6                                                                      (14,358)                                (13,556)                                 (2,043)                 (35,086)                  (41,317)                   (6,225)
                                                                                                                                    -------                                  -------                                   ------                   -------                    -------                     ------

    Non-GAAP net income/(loss) attributable to 58.com Inc                                                                          (18,174)                                 478,658                                   72,119                 (230,941)                 1,245,971                    187,734
                                                                                                                                    =======                                  =======                                   ======                  ========                  =========                    =======


    GAAP operating margin                                                                                                              7.0%                                  19.2 %                                  19.2 %                     0.7%                     16.2%                     16.2%

         Share-based compensation expenses                                                                                             3.2%                                    3.1%                                    3.1%                     3.6%                      3.3%                      3.3%

    Amortization of intangible assets resulting from business acquisitions                                                             2.8%                                    2.0%                                    2.0%                     3.1%                      2.3%                      2.3%
                                                                                                                                        ---                                      ---                                      ---                       ---                        ---                        ---

    Non-GAAP operating margin                                                                                                         13.0%                                   24.3%                                   24.3%                     7.4%                     21.8%                     21.8%
                                                                                                                                       ====                                     ====                                     ====                       ===                       ====                       ====


    GAAP net margin                                                                                                                  (9.8)%                                   13.0%                                   13.0%                  (11.7)%                     11.9%                     11.9%

    Share-based compensation expenses                                                                                                  3.2%                                    3.1%                                    3.1%                     3.6%                      3.3%                      3.3%

    Share-based compensation attributable to noncontrolling interests                                                                     ?                                       ?                                       ?                   (0.0)%                         ?                         ?

            Amortization of intangible assets resulting from                                                                           2.8%                                    2.0%                                    2.0%                     3.1%                      2.3%                      2.3%
            business acquisitions

            Share-based compensation expenses included in                                                                              3.6%                                  (0.1)%                                  (0.1)%                     1.3%                      0.0%                      0.0%
            share of results of equity investees

    Loss on conversion of Guazi Convertible Note                                                                                          ?                                       ?                                       ?                     1.5%                         ?                         ?

    Gain on deconsolidation and disposal of business                                                                                      ?                                       ?                                       ?                   (1.4)%                         ?                         ?

    Income tax effects of GAAP to non-GAAP reconciling items                                                                         (0.7)%                                  (0.5)%                                  (0.5)%                   (0.7)%                    (0.6)%                    (0.6)%
                                                                                                                                      -----                                    -----                                    -----                     -----                      -----                      -----

    Non-GAAP net margin                                                                                                              (0.9)%                                   17.5%                                   17.5%                   (4.3)%                     16.9%                     16.9%
                                                                                                                                      =====                                     ====                                     ====                     =====                       ====                       ====


    Weighted average number of ordinary shares used in computing non-GAAP basic earnings/(loss) per share                       288,734,733                              291,777,760                              291,777,760               286,119,495                290,853,040                290,853,040

    Weighted average number of ordinary shares used in computing non-GAAP diluted earnings/(loss) per share                     288,734,733                              296,419,017                              296,419,017               286,119,495                294,437,994                294,437,994

    Weighted average number of ADS used in computing non-GAAP basic earnings/(loss) per ADS                                     144,367,366                              145,888,880                              145,888,880               143,059,747                145,426,520                145,426,520

    Weighted average number of ADS used in computing non-GAAP diluted earnings/(loss) per ADS                                   144,367,366                              148,209,508                              148,209,508               143,059,747                147,218,997                147,218,997


    Non-GAAP net earnings/(loss) per ordinary share attributable to ordinary shareholders ? basic                                    (0.06)                                    1.64                                     0.25                    (0.81)                      4.28                       0.64

    Non-GAAP net earnings /(loss) per ordinary share attributable to ordinary shareholders ? diluted                                 (0.06)                                    1.61                                     0.24                    (0.81)                      4.23                       0.64

    Non-GAAP net earnings /(loss) per ADS attributable to ordinary shareholders ? basic                                              (0.13)                                    3.28                                     0.49                    (1.61)                      8.57                       1.29

    Non-GAAP net earnings /(loss) per ADS attributable to ordinary shareholders ? diluted                                            (0.13)                                    3.23                                     0.49                    (1.61)                      8.46                       1.27

    5             In the third quarter of 2017,
                  certain share-based awards with
                  redemption features granted to our
                  employees were expected to be
                  settled in cash and were
                  classified as liabilities. The
                  share-based compensation expenses
                  recognized for this type of awards
                  amounted to RMB5.5 million in this
                  period were excluded from the GAAP
                  to non-GAAP reconciliation
                  accordingly.

    6             This is to exclude the income tax
                  benefits related to amortization
                  of intangible assets resulting
                  from business acquisitions
                  calculated at PRC statutory income
                  tax rate of 25% and income tax
                  expense related to dispose of
                  business. Other GAAP to non-GAAP
                  reconciling items have no income
                  tax effect.

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SOURCE 58.com