Ctrip Reports Unaudited Third Quarter of 2017 Financial Results
SHANGHAI, Nov. 1, 2017 /PRNewswire/ -- Ctrip.com International, Ltd. (Nasdaq: CTRP), a leading travel service provider of accommodation reservation, transportation ticketing, packaged tours and corporate travel management in China ("Ctrip" or the "Company"), today announced its unaudited financial results for the third quarter ended September 30, 2017.
Key Highlights
-- Ctrip reported strong financial results in the third quarter of 2017.
-- Net revenue increased 42% year-on-year to RMB7.9 billion in the
third quarter of 2017.
-- Accommodation reservation revenue for the third quarter of 2017
increased 36% year-on-year, primarily driven by an increase in
the accommodation reservation volume.
-- Gross margin was 83% for the third quarter of 2017, improving from
78% for the same period of 2016 and 82% for the second quarter of
2017, due to further efficiency gain.
-- Operating margin for the third quarter of 2017 was 17%. Excluding
share-based compensation charges, Non-GAAP operating margin for the
third quarter of 2017 was 22%, improving from 18% for the same
period of 2016, primarily driven by improvements in overall
operating efficiency and synergies from the invested companies.
-- The Company has continued to strengthen its leading position in
lower-tier cities.
-- In the third quarter of 2017, Ctrip brand's average DAU grew over
60% year-over-year in second-tier cities.
-- Qunar's hotel revenue in the third- and fourth-tier cities has
maintained over 80% growth rates in three consecutive quarters this
year.
-- In the third quarter of 2017, Ctrip and Qunar opened 100 offline
stores across China and we will continue to expand our store network
going forward.
-- Ctrip's international businesses have sustained robust growth momentum.
-- International air ticketing maintained robust volume growth in the
third quarter of 2017, and the tickets sold by our International
Business Unit continued to grow impressively at a triple-digit
percentage rate.
"We are pleased to deliver another quarter of solid results." said Jane Sun, Chief Executive Officer. "The investments we've made in products, services and technologies cement an unrivaled value proposition for our customers and supply chain partners. Customer-centricity is a core value and we will continue to diligently uphold it."
"Ctrip's foundation is based on travel innovation, one-stop experience and best in class 24/7 service," said James Liang, Executive Chairman. "The growth we've delivered through the years has been tremendous yet we're still only touching the tip of the whole travel opportunity. Our successful track record and our ability to stay inquisitive and innovative will further solidify our competitive moat."
Third Quarter of 2017 Financial Results and Business Updates
For the third quarter of 2017, Ctrip reported net revenue of RMB7.9 billion (US$1.2 billion), representing a 42% increase from the same period of 2016. Net revenue for the third quarter of 2017 increased 23% from the previous quarter.
Accommodation reservation revenue for the third quarter of 2017 was RMB2.8 billion (US$424 million), representing a 36% increase from the same period of 2016, primarily driven by an increase in accommodation reservation volume. Accommodation reservation revenue for the third quarter of 2017 increased 22% from the previous quarter, primarily driven by an increase in accommodation reservation volume and seasonality.
Transportation ticketing revenue for the third quarter of 2017 was RMB3.4 billion (US$515 million), representing a 41% increase from the same period of 2016, primarily driven by an increase in ticketing volume and the consolidation of Skyscanner's financial results since December 31, 2016. Transportation ticketing revenue increased 15% from the previous quarter, primarily due to an increase in ticketing volume and seasonality.
Packaged-tour revenue for the third quarter of 2017 was RMB1.0 billion (US$155 million), representing a 27% increase from the same period of 2016, primarily driven by an increase in volume growth of organized tours and self-guided tours. Packaged-tour revenue for the third quarter of 2017 increased 69% from the previous quarter, primarily due to seasonality.
Corporate travel revenue for the third quarter of 2017 was RMB203 million (US$30 million), representing a 22% increase from the same period of 2016, primarily driven by expansion in travel product coverage. Corporate travel revenue for the third quarter of 2017 increased 2% from the previous quarter.
Gross margin was 83% for the third quarter of 2017, compared to 78% for the same period of 2016, and 82% for the previous quarter.
Product development expenses for the third quarter of 2017 increased by 18% to RMB2.2 billion (US$328 million) from the same period of 2016, primarily due to an increase in product development personnel related expenses. Product development expenses for the third quarter of 2017 increased 7% from the previous quarter. Product development expenses for the third quarter of 2017 accounted for 28% of the net revenue. Excluding share-based compensation charges, Non-GAAP product development expenses for the third quarter of 2017 accounted for 25% of the net revenue, which decreased from 27% for the same period of 2016 and the previous quarter.
Sales and marketing expenses for the third quarter of 2017 increased by 58% to RMB2.4 billion (US$357 million) from the same period of 2016, primarily due to an increase in sales and marketing related activities. Sales and marketing expenses for the third quarter of 2017 increased 19% from the previous quarter. Sales and marketing expenses for the third quarter of 2017 accounted for 30% of the net revenue. Excluding share-based compensation charges, Non-GAAP sales and marketing expenses for the third quarter of 2017 accounted for 30% of the net revenue, which increased from 26% for the same period of 2016 and remained consistent with the previous quarter.
General and administrative expenses for the third quarter of 2017 increased by 25% to RMB674 million (US$101 million) from the same period of 2016, primarily due to an increase in general and administrative personnel related expenses and consulting expenses. General and administrative expenses for the third quarter of 2017 increased 11% from the previous quarter. General and administrative expenses for the third quarter of 2017 accounted for 9% of the net revenue. Excluding share-based compensation charges, Non-GAAP general and administrative expenses accounted for 7% of the net revenue, which remained consistent with the same period of 2016 and the previous quarter.
Income from operations for the third quarter of 2017 was RMB1.4 billion (US$204 million), compared to income of RMB447 million for the same period of 2016 and income of RMB645 million for the previous quarter. Excluding share-based compensation charges, Non-GAAP income from operations was RMB1.7 billion (US$262 million), compared to RMB1.0 billion for the same period of 2016 and RMB1.2 billion for the previous quarter.
Operating margin was 17% for the third quarter of 2017, compared to 8% for the same period of 2016, and 10% for the previous quarter. Excluding share-based compensation charges, Non-GAAP operating margin was 22%, compared to 18% for the same period of 2016 and 18% for the previous quarter.
Income tax expense for the third quarter of 2017 was RMB313 million (US$47 million), compared to RMB221 million for the same period of 2016 and RMB529 million for the previous quarter. The change in the Group's effective tax rates is primarily due to the change in profitability in the subsidiaries with different tax rates and certain non-tax deductible losses including the share based compensation.
Net income attributable to Ctrip's shareholders for the third quarter of 2017 was RMB1.2 billion (US$185 million), compared to net income of RMB24 million for the same period of 2016 and net income of RMB327 million for the previous quarter.
Diluted earnings per ADS were RMB2.10 (US$0.32) for the third quarter of 2017. Excluding share-based compensation charges, Non-GAAP diluted earnings per ADS were RMB2.70 (US$0.41) for the third quarter of 2017.
As of September 30, 2017, the balance of cash and cash equivalents, restricted cash and short-term investment was RMB47 billion (US$7 billion).
Business Outlook
For the fourth quarter of 2017, the Company expects the net revenue growth to continue at a year-on-year rate of approximately 25-30%. This forecast reflects Ctrip's current and preliminary view, which is subject to change.
Conference Call
Ctrip's management team will host a conference call at 8:00PM U.S. Eastern Time on November 1, 2017 (or 8:00AM on November 2, 2017 in the Shanghai/Hong Kong Time) following the announcement.
The conference call will be available on Webcast live and replay at: http://ir.ctrip.com. The call will be archived for twelve months at this website.
The dial-in details for the live conference call: U.S. Toll Free Number +1.888.268.4180, International dial-in number +1.617.597.5485, Passcode 731 941 24#. For pre-registration, please click https://www.theconferencingservice.com/prereg/key.process?key=PU4LBP6UX.
A telephone replay of the call will be available after the conclusion of the conference call until November 9, 2017. The dial-in details for the replay: U.S. Toll Free Number +1.888.286.8010, International dial-in number +1.617.801.6888, Passcode 32849003.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are 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 "may," "will," "expect," "anticipate," "future," "intend," "plan," "believe," "estimate," "is/are likely to," "confident" or other similar statements. Among other things, quotations from management and the Business Outlook section in this press release, as well as Ctrip's strategic and operational plans, contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, severe or prolonged downturn in the global or Chinese economy, general declines or disruptions in the travel industry, volatility in the trading price of Ctrip's ADSs, Ctrip's reliance on its relationships and contractual arrangements with travel suppliers and strategic alliances, failure to compete against new and existing competitors, failure to successfully manage current growth and potential future growth, risks associated with any strategic investments or acquisitions, seasonality in the travel industry in the relevant jurisdictions where Ctrip operates, failure to successfully develop Ctrip's existing or future business lines, damage to or failure of Ctrip's infrastructure and technology, loss of services of Ctrip's key executives, adverse changes in economic and political policies of the PRC government, inflation in China, risks and uncertainties associated with PRC laws and regulations with respect to the ownership structure of Ctrip's affiliated Chinese entities and the contractual arrangements among Ctrip, its affiliated Chinese entities and their shareholders, and other risks outlined in Ctrip's filings with the U.S. Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of the issuance, and Ctrip does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
About Non-GAAP Financial Measures
To supplement Ctrip's unaudited condensed consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Ctrip uses non-GAAP financial information related to product development expenses, sales and marketing expenses, general and administrative expenses, income from operations, operating margin, net income attributable to Ctrip's shareholders, and diluted earnings per ordinary share and per ADS, each of which (except for net commission earned) is adjusted from the most comparable GAAP result to exclude the share-based compensation charges recorded under ASC 718, "Compensation-Stock Compensation" and its share-based compensation charges are not tax deductible. Ctrip's management believes the non-GAAP financial measures facilitate better understanding of operating results from quarter to quarter and provide management with a better capability to plan and forecast future periods.
Non-GAAP information is not prepared in accordance with GAAP and may be different from non-GAAP methods of accounting and reporting used by other companies. The presentation of this additional information should not be considered a substitute for GAAP results. A limitation of using non-GAAP financial measures is that non-GAAP measures exclude share-based compensation charges that have been and will continue to be significant recurring expenses in Ctrip's business for the foreseeable future.
Reconciliations of Ctrip's non-GAAP financial data to the most comparable GAAP data included in the consolidated statement of operations are included at the end of this press release.
About Ctrip.com International, Ltd.
Ctrip.com International, Ltd. is a leading travel service provider of accommodation reservation, transportation ticketing, packaged tours, and corporate travel management in China. It is the largest online consolidator of accommodations and transportation tickets in China in terms of transaction volume. Ctrip enables business and leisure travelers to make informed and cost-effective bookings by aggregating comprehensive travel related information and offering its services through an advanced transaction and service platform consisting of its mobile apps, Internet websites and centralized, toll-free, 24-hour customer service center. Ctrip also helps customers book vacation packages and guided tours. In addition, through its corporate travel management services, Ctrip helps corporate clients effectively manage their travel requirements. Since its inception in 1999, Ctrip has experienced substantial growth and become one of the best-known travel brands in China.
For further information, please contact:
Investor Relations
Ctrip.com International, Ltd.
Tel: (+86) 21 3406 4880 X 12229
Email: iremail@ctrip.com
Ctrip.com International, Ltd.
Unaudited Condensed Consolidated Balance Sheets
December 31, 2016 September 30, 2017 September 30, 2017
RMB RMB USD
(unaudited) (unaudited) (unaudited)
ASSETS
Current assets:
Cash and cash equivalents 18,434,681,251 18,323,479,861 2,754,043,837
Restricted cash 1,744,490,307 2,024,575,239 304,296,400
Short-term investment 14,112,862,288 27,062,816,401 4,067,577,954
Accounts receivable, net 4,624,818,322 5,855,141,594 880,035,711
Prepayments and other current assets 6,994,589,672 9,975,341,849 1,499,307,389
Total current assets 45,911,441,840 63,241,354,944 9,505,261,291
Long-term deposits and prepayments 1,147,279,197 847,546,564 127,387,396
Land use rights 99,544,772 97,457,215 14,647,951
Property, equipment and software 5,591,960,081 5,631,471,625 846,417,811
Investment 20,532,822,365 22,609,358,318 3,398,217,173
Goodwill 56,015,185,590 56,265,595,482 8,456,795,197
Intangible assets 13,924,769,931 13,790,776,378 2,072,772,365
Other long-term receivable 815,586,298 325,487,591 48,921,226
Deferred tax assets, non-current 375,311,594 418,407,590 62,887,227
Total assets 144,413,901,668 163,227,455,707 24,533,307,637
LIABILITIES
Current liabilities:
Short-term debt 6,887,309,589 14,838,803,823 2,230,292,310
Accounts payable 7,278,791,082 8,314,060,992 1,249,614,626
Salary and welfare payable 2,508,430,757 2,975,629,445 447,241,135
Taxes payable 1,084,241,429 833,788,065 125,319,475
Advances from customers 8,190,840,057 8,771,501,445 1,318,368,546
Accrued liability for customer reward program 658,170,680 625,387,271 93,996,554
Other payables and accruals 3,687,242,592 5,613,309,434 843,688,008
Total current liabilities 30,295,026,186 41,972,480,475 6,308,520,654
Deferred tax liabilities, non-current 3,607,882,808 3,510,637,426 527,653,559
Long-term debt 34,650,673,553 33,597,170,400 5,049,700,209
Other long-term liabilities 339,566,619 481,780,815 72,412,309
Total liabilities 68,893,149,166 79,562,069,116 11,958,286,731
SHAREHOLDERS' EQUITY
Share capital 4,960,354 5,163,296 776,050
Additional paid-in capital 65,819,998,701 70,905,962,076 10,657,262,122
Statutory reserves 237,495,820 237,473,826 35,692,638
Accumulated other comprehensive income 1,010,373,732 4,354,529,115 654,491,623
Retained Earnings 6,699,580,613 8,338,018,450 1,253,215,465
Treasury stock (2,235,574,510) (2,110,820,623) (317,259,198)
Total Ctrip's shareholders' equity 71,536,834,710 81,730,326,140 12,284,178,700
Noncontrolling interests 3,983,917,792 1,935,060,451 290,842,206
Total shareholders' equity 75,520,752,502 83,665,386,591 12,575,020,906
Total liabilities and shareholders' equity 144,413,901,668 163,227,455,707 24,533,307,637
Ctrip.com International, Ltd.
Unaudited Condensed Consolidated Statements of Comprehensive Income
Quarter Ended Quarter Ended Quarter Ended Quarter Ended
Septemter 30, 2016 June 30, 2017 September 30, 2017 September 30, 2017
RMB RMB RMB USD
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue:
Accommodation reservation 2,071,608,431 2,311,142,987 2,820,384,460 423,907,604
Transportation ticketing 2,427,736,429 2,992,330,356 3,428,194,609 515,262,292
Packaged-tour 813,260,976 612,297,777 1,033,088,540 155,274,607
Corporate travel 166,337,791 199,352,936 202,879,041 30,492,995
Others 188,851,094 346,439,294 472,404,223 71,002,994
Total revenue 5,667,794,721 6,461,563,350 7,956,950,873 1,195,940,492
Less: Sales tax and surcharges (95,928,079) (45,794,149) (57,274,816) (8,608,482)
Net revenue 5,571,866,642 6,415,769,201 7,899,676,057 1,187,332,010
Cost of revenue (1,234,297,161) (1,124,094,146) (1,303,483,658) (195,915,359)
Gross profit 4,337,569,481 5,291,675,055 6,596,192,399 991,416,651
Operating expenses:
Product development * (1,844,406,031) (2,036,738,021) (2,185,439,369) (328,474,497)
Sales and marketing * (1,506,558,491) (2,001,471,557) (2,377,850,924) (357,394,214)
General and administrative * (539,181,215) (608,203,223) (673,903,837) (101,288,659)
Total operating expenses (3,890,145,737) (4,646,412,801) (5,237,194,130) (787,157,370)
Income from operations 447,423,744 645,262,254 1,358,998,269 204,259,281
Interest income 99,167,513 249,426,782 271,592,321 40,820,694
Interest expense (191,169,801) (383,446,788) (318,779,226) (47,912,949)
Other (expense)/income (27,905,573) 397,102,679 233,444,936 35,087,090
Income before income tax expense and equity in income 327,515,883 908,344,927 1,545,256,300 232,254,116
Income tax expense (221,246,469) (529,202,309) (313,405,180) (47,105,223)
Equity in (loss)/ income of affiliates (63,833,906) (26,696,373) 32,357,293 4,863,345
Net income 42,435,508 352,446,245 1,264,208,413 190,012,238
Less: net income attributable to noncontrolling interests (18,518,066) (25,574,176) (35,090,626) (5,274,169)
Net income attributable to Ctrip's shareholders 23,917,442 326,872,069 1,229,117,787 184,738,069
Comprehensive income attributable to Ctrip's shareholders 229,522,806 912,668,705 2,836,812,328 426,376,735
Earnings per ordinary share
- Basic 0.40 4.97 18.35 2.76
- Diluted 0.38 4.72 16.76 2.52
Earnings per ADS
- Basic 0.05 0.62 2.29 0.34
- Diluted 0.05 0.59 2.10 0.32
Weighted average ordinary shares outstanding
- Basic 59,120,188 65,743,078 66,988,804 66,988,804
- Diluted 63,410,273 69,361,680 78,630,110 78,630,110
* Share-based compensation charges included are as follows:
Product development 324,427,727 305,271,403 210,505,836 31,639,312
Sales and marketing 70,609,154 58,994,568 37,738,032 5,672,077
General and administrative 161,796,351 163,592,798 135,789,753 20,409,384
Ctrip.com International, Ltd.
Reconciliation of GAAP and Non-GAAP Results
(In RMB, except % and per share information)
Quarter Ended September 30, 2017
--------------------------------
GAAP Result % of Net Share-based % of Net Non-GAAP Result % of Net
revenue Compensation revenue revenue
------- --- -------
Product development (2,185,439,369) 28% 210,505,836 3% (1,974,933,533) 25%
Sales and marketing (2,377,850,924) 30% 37,738,032 0% (2,340,112,892) 30%
General and administrative (673,903,837) 9% 135,789,753 2% (538,114,084) 7%
------------ ----------- ------------
Total operating expenses (5,237,194,130) 66% 384,033,621 5% (4,853,160,509) 61%
Income from operations 1,358,998,269 17% 384,033,621 5% 1,743,031,890 22%
Net income attributable to Ctrip's shareholders 1,229,117,787 16% 384,033,621 5% 1,613,151,408 20%
Diluted earnings per ordinary share (RMB) 16.76 4.82 21.58
Diluted earnings per ADS (RMB) 2.10 0.60 2.70
Diluted earnings per ADS (USD) 0.32 0.09 0.41
Quarter Ended June 30, 2017
---------------------------
GAAP Result % of Net Share-based % of Net Non-GAAP Result % of Net
revenue Compensation revenue revenue
------- --- -------
Product development (2,036,738,021) 32% 305,271,403 5% (1,731,466,618) 27%
Sales and marketing (2,001,471,557) 31% 58,994,568 1% (1,942,476,989) 30%
General and administrative (608,203,223) 9% 163,592,798 3% (444,610,425) 7%
------------ ----------- ------------
Total operating expenses (4,646,412,801) 72% 527,858,769 8% (4,118,554,032) 64%
Income from operations 645,262,254 10% 527,858,769 8% 1,173,121,023 18%
Net income attributable to Ctrip's shareholders 326,872,069 5% 527,858,769 8% 854,730,838 13%
Diluted earnings per ordinary share (RMB) 4.72 7.24 11.96
Diluted earnings per ADS (RMB) 0.59 0.90 1.49
Diluted earnings per ADS (USD) 0.09 0.13 0.22
Quarter Ended September 30, 2016
--------------------------------
GAAP Result % of Net Share-based % of Net Non-GAAP Result % of Net
revenue Compensation revenue
revenue
--- ---
Product development (1,844,406,031) 33% 324,427,727 6% (1,519,978,304) 27%
Sales and marketing (1,506,558,491) 27% 70,609,154 1% (1,435,949,337) 26%
General and administrative (539,181,215) 10% 161,796,351 3% (377,384,864) 7%
------------ ----------- ------------
Total operating expenses (3,890,145,737) 70% 556,833,232 10% (3,333,312,505) 60%
Income from operations 447,423,744 8% 556,833,232 10% 1,004,256,976 18%
Net income attributable to Ctrip's shareholders 23,917,442 0% 556,833,232 10% 580,750,674 10%
Diluted earnings per ordinary share (RMB) 0.38 8.78 9.16
Diluted earnings per ADS (RMB) 0.05 1.10 1.15
Diluted earnings per ADS (USD) 0.01 0.16 0.17
Notes for all the condensed consolidated financial schedules presented:
Note 1: The conversion of Renminbi (RMB) into U.S. dollars (USD) is based on the certified exchange rate of USD1.00=RMB6.6533 on September 29 2017 published by the Federal Reserve Board.
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SOURCE Ctrip.com International, Ltd.
