58.com Reports Fourth Quarter And Fiscal Year 2017 Unaudited Financial Results
58.com Reports Fourth Quarter And Fiscal Year 2017 Unaudited Financial Results
BEIJING, March 7, 2018 /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 fourth quarter and fiscal year ended December 31, 2017.
Fourth Quarter 2017 Financial Highlights
-- Total revenues were RMB2,764.7 million (US$423.1 million[1]), a 32.0%
increase from the same quarter of 2016, exceeding the high end of the
Company's guidance of RMB2,725 million.
-- Gross margin was 90.5% compared with 89.9% in the same quarter of 2016.
-- Income from operations was RMB613.7 million (US$93.9 million), compared
with income from operations of RMB193.5 million in the same quarter of
2016.
-- Non-GAAP income from operations[2] was RMB762.5 million (US$116.7
million), compared with non-GAAP income from operations of RMB317.7
million in the same quarter of 2016.
-- Net income attributable to 58.com Inc. was RMB414.1 million (US$63.4
million), compared with net loss attributable to 58.com Inc. of RMB138.0
million in the same quarter of 2016.
-- Non-GAAP net income attributable to 58.com Inc.[3] was RMB549.0 million
(US$84.0 million), compared with non-GAAP net loss attributable to
58.com Inc. of RMB22.7 million in the same quarter of 2016.
-- Basic and diluted earnings per ADS attributable to ordinary shareholders
were RMB2.82 (US$0.43) and RMB2.78 (US$0.43), respectively. One ADS
represents two Class A ordinary shares.
-- Non-GAAP basic and diluted earnings per ADS[4] attributable to ordinary
shareholders were RMB3.74 (US$0.57) and RMB3.69 (US$0.56), respectively.
Fiscal Year 2017 Financial Highlights
-- Total revenues were RMB10,068.8 million (US$1,540.9 million), a 32.6%
increase from fiscal year 2016.
-- Gross margin was 90.8% compared with 90.7% in fiscal year 2016.
-- Income from operations was RMB1,796.5 million (US$274.9 million),
compared with income from operations of RMB233.7 million in fiscal year
2016.
-- Non-GAAP income from operations was RMB2,359.2 million (US$361.1
million), compared with non-GAAP income from operations of RMB730.0
million in fiscal year 2016.
-- Net income attributable to 58.com Inc. was RMB1,285.1 million (US$196.7
million), compared with net loss attributable to 58.com Inc. of RMB783.8
million in fiscal year 2016.
-- Non-GAAP net income attributable to 58.com Inc. was RMB1,795.0 million
(US$274.7 million), compared with non-GAAP net loss attributable to
58.com Inc. of RMB253.6 million in fiscal year 2016.
-- Basic and diluted earnings per ADS attributable to ordinary shareholders
were RMB8.82 (US$1.35) and RMB8.70 (US$1.33), respectively.
-- Non-GAAP basic and diluted earnings per ADS attributable to ordinary
shareholders were RMB12.32 (US$1.89) and RMB12.16 (US$1.86),
respectively.
Management Comments
"We finished the year with another quarter of strong financial and operational results," commented Mr. Michael Yao, Chairman and Chief Executive Officer of 58.com. "Traffic on our mobile applications continued to grow strongly, largely as a result of our continued focus on product innovation and user experience improvement. Our core categories, such as jobs, secondary housing and rentals, used automobiles, and used goods all continue to create significant opportunities for us driven by their respective industries' rapid growth trajectory. The growth in traffic and revenues is particularly strong in lower tier cities and towns. We will continue to reinvest our increasing cash flow generated from our core businesses into these high-growth and low-penetration businesses and products to maximize the long-term value of our platform."
Mr. Hao Zhou, Chief Financial Officer of 58.com added, "We continued to see strong growth in revenue, traffic and margins during the quarter. Our revenues exceeded guidance once again. Free cash flow for year 2017 was approximately US$400 million, up 63.3% from 2016. As revenues continue to grow and the margins of our core businesses expand further, we will invest more in technology and areas that will further strengthen our leadership position in our core categories."
Fourth Quarter 2017 Financial Results
Revenues
Total revenues were RMB2,764.7 million (US$423.1 million), representing an increase of 32.0% from RMB2,094.8 million in the same quarter of 2016.
Membership revenues were RMB1,038.8 million (US$159.0 million), an increase of 27.9% from RMB812.0 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 2,654,000 during the fourth quarter of 2017, a 28.2% increase from approximately 2,070,000 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 RMB1,644.5 million (US$251.7 million), an increase of 38.3% from RMB1,189.4 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 RMB262.9 million (US$40.2 million), an increase of 23.8% from RMB212.2 million in the same quarter of 2016. The year-over-year increase in the 58.com's cost of revenues was primarily driven by increases in salaries and benefits for customer service staff and costs of used goods sold.
Gross Profit and Gross Margin
Gross profit was RMB2,501.8 million (US$382.9 million), an increase of 32.9% from RMB1,882.5 million during the same quarter of 2016.
Gross margin was 90.5%, compared with 89.9% during the same quarter of 2016.
Operating Expenses
Operating expenses were RMB1,888.1 million (US$289.0 million), an increase of 11.8% from RMB1,689.0 million in the same quarter of 2016.
Sales and marketing expenses in the fourth quarter of 2017 were RMB1,338.6 million (US$204.9 million), an increase of 9.3% from RMB1,224.7 million in the same quarter in 2016.
Within sales and marketing expenses, advertising expenses accounted for RMB511.9 million (US$78.3 million) and RMB454.4 million in the fourth 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.
Other sales and marketing expenses in the fourth quarter of 2017 were RMB826.7 million (US$126.6 million), an increase of 7.3% from RMB770.3 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 fourth quarter of 2017 were RMB357.9 million (US$54.8 million), an increase of 14.2% from RMB313.4 million in the same quarter of 2016. The increase was primarily due to increased salaries and benefits as well as share-based compensation expenses for the research and development of new features and services.
General and administrative expenses in the fourth quarter of 2017 were RMB191.6 million (US$29.3 million), an increase of 27.0% from RMB150.9 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 RMB613.7 million (US$93.9 million) in the fourth quarter of 2017, compared with income from operations of RMB193.5 million in the same quarter of 2016. Operating margin, defined as income from operations divided by total revenues, was 22.2% in the fourth quarter of 2017, compared with 9.2% in the same quarter of 2016.
Non-GAAP income from operations was RMB762.5 million (US$116.7 million) in the fourth quarter of 2017, compared with non-GAAP income from operations of RMB317.7 million in the same quarter of 2016. Non-GAAP operating margin, defined as non-GAAP income from operations divided by total revenues, was 27.6% in the fourth quarter of 2017, compared with 15.1% in the same quarter of 2016.
Other Expenses
Other expenses in the fourth quarter of 2017 were RMB123.8 million (US$19.0 million), compared with other expenses of RMB365.5 million in the same quarter of 2016. Other expenses in the fourth quarter of 2017 mainly included a RMB198.3 million share of results of equity investees, which primarily consisted of a RMB186.4 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 RMB27.5 million and government subsidies of RMB25.7 million.
Net Income/(Loss) Attributable to 58.com Inc.
Net income attributable to 58.com Inc. was RMB414.1 million (US$63.4 million) in the fourth quarter of 2017, compared with net loss attributable to 58.com Inc. of RMB138.0 million in the same quarter of 2016. Net margin, defined as net income /(loss) attributable to 58.com Inc. divided by total revenues, was 15.0% in the fourth quarter of 2017, compared with negative 6.6% in the same quarter of 2016.
Non-GAAP net income attributable to 58.com Inc. was RMB549.0 million (US$84.0 million) in the fourth quarter of 2017, compared with non-GAAP net loss attributable to 58.com Inc. of RMB22.7 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 19.9% in the fourth quarter of 2017, compared with negative 1.1% in the same quarter of 2016.
Basic and Diluted Earnings per ADS
Basic and diluted earnings per ADS attributable to ordinary shareholders in the fourth quarter of 2017 were RMB2.82 (US$0.43) and RMB2.78 (US$0.43), compared with basic and diluted losses per ADS attributable to ordinary shareholders of RMB0.95, in the same quarter of 2016.
Non-GAAP basic and diluted earnings per ADS attributable to ordinary shareholders in the fourth quarter of 2017 were RMB3.74 (US$0.57) and RMB3.69 (US$0.56), respectively, compared with non-GAAP basic and diluted losses per ADS attributable to ordinary shareholders of RMB0.16 in the same quarter of 2016.
Cash Flow
Net cash provided by operating activities was RMB875.8 million (US$134.0 million) in the fourth quarter of 2017, compared with net cash provided by operating activities of RMB842.2 million in the same quarter of 2016.
Fiscal Year 2017 Financial Results
Revenues
Total revenues were RMB10,068.8 million (US$1,540.9 million), representing an increase of 32.6% from RMB7,592.1 million during fiscal year 2016.
Membership revenues were RMB3,789.5 million (US$580.0 million), an increase of 28.4% from RMB2,951.1 million during fiscal year 2016. The increase in membership revenues was primarily driven by an increase in the number of subscription-based paying membership accounts. The number of quarterly average paying membership accounts on the Company's platforms, which include 58.com, Ganji.com and Anjuke.com, was approximately 2,485,000 during fiscal year 2017.
Online marketing services revenues were RMB5,978.5 million (US$915.0 million), an increase of 37.0% from RMB4,363.8 million during fiscal year 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 RMB925.5 million (US$141.6 million), an increase of 30.9% from RMB707.2 million during fiscal year 2016. The year-over-year increase was primarily driven by increases in salaries and benefits for customer service staff, costs of used goods sold, and other types of website maintenance-related costs such as depreciation expenses.
Gross Profit and Gross Margin
Gross profit was RMB9,143.3 million (US$1,399.3 million), an increase of 32.8% from RMB6,884.9 million during fiscal year 2016.
Gross margin was 90.8%, compared with 90.7% during fiscal year 2016.
Operating Expenses
Operating expenses were RMB7,346.8 million (US$1,124.4 million), representing an increase of 10.5% from RMB6,651.2 million during fiscal year 2016.
Sales and marketing expenses in fiscal year 2017 were RMB5,212.4 million (US$797.7 million), an increase of 5.5% from RMB4,941.4 million during fiscal year 2016.
Within sales and marketing expenses, advertising expenses accounted for RMB2,087.1 million (US$319.4 million) and RMB2,040.0 million during fiscal year 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.
Other sales and marketing expenses in fiscal year 2017 were RMB3,125.3 million (US$478.3 million), an increase of 7.7% from RMB2,901.4 million during fiscal year 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 and share-based compensation expenses for the Company's sales, customer service and marketing teams.
Research and development expenses in fiscal year 2017 were RMB1,368.4 million (US$209.4 million), an increase of 23.5% from RMB1,107.9 million during fiscal year 2016. The increase was primarily due to increased salaries and benefits as well as share-based compensation expenses associated with the hiring of additional employees for research and development of new features and services.
General and administrative expenses in fiscal year 2017 were RMB766.0 million (US$117.2 million), an increase of 27.3% from RMB601.9 million during fiscal year 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 RMB1,796.5 million (US$274.9 million) in fiscal year 2017, compared with income from operations of RMB233.7 million during fiscal year 2016. Operating margin was 17.8% in fiscal year of 2017, compared with 3.1% during fiscal year 2016.
Non-GAAP income from operations was RMB2,359.2 million (US$361.1 million) in fiscal year 2017, compared with non-GAAP income from operations of RMB730.0 million during fiscal year 2016. Non-GAAP operating margin was 23.4% during fiscal year 2017, compared with 9.6% during fiscal year 2016.
Other Expenses
Other expenses in fiscal year 2017 were RMB260.5 million (US$39.9 million), compared with other expenses of RMB1,057.7 million during fiscal year 2016. Other expenses in fiscal year 2017 mainly included a RMB687.4 million share of results of equity investees, which primarily consisted of a RMB663.2 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 RMB342.2 million and government subsidies of RMB81.4 million.
Net Income/(Loss) Attributable to 58.com Inc.
Net income attributable to 58.com Inc. was RMB1,285.1 million (US$196.7 million) in fiscal year 2017, compared with net loss attributable to 58.com Inc. of RMB783.8 million during fiscal year 2016. Net margin was positive 12.8% in fiscal year of 2017, compared with negative 10.3% during fiscal year 2016.
Non-GAAP net income attributable to 58.com Inc. was RMB1,795.0 million (US$274.7 million) in fiscal year 2017, compared with non-GAAP net loss attributable to 58.com Inc. of RMB253.6 million during fiscal year 2016. Non-GAAP net margin was positive 17.9% in fiscal year 2017, compared with negative 3.4% during fiscal year 2016.
Basic and Diluted Earnings/(Loss) per ADS
Basic and diluted earnings per ADS attributable to ordinary shareholders in fiscal year 2017 were RMB8.82 (US$1.35) and RMB8.70 (US$1.33), compared with basic and diluted losses per ADS attributable to ordinary shareholders of RMB5.46, during fiscal year 2016.
Non-GAAP basic and diluted earnings per ADS attributable to ordinary shareholders in fiscal year 2017 were RMB12.32 (US$1.89) and RMB12.16 (US$1.86), respectively, compared with non-GAAP basic and diluted losses per ADS attributable to ordinary shareholders of RMB1.77 during fiscal year 2016.
Cash Flow
Net cash provided by operating activities was RMB2,697.3 million (US$412.8 million) in fiscal year 2017, compared with net cash provided by operating activities of RMB1,887.8 million during fiscal year 2016.
Cash and Cash Equivalents and Short-term Investments
As of December 31, 2017, the Company had cash and cash equivalents and short-term investments of RMB4,962.7 million (US$759.5 million).
Shares Outstanding
As of December 31, 2017, the Company had a total of 293,965,131 ordinary shares (including 245,924,871 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 first quarter of 2018 are expected to be between RMB2,290 million and RMB2,390 million. This represents a year-over-year increase of 15.2% to 20.2% 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 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 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 Thursday, March 8, 2018 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
Mainland 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, March 15, 2018. The dial-in details for the replay are as follows:
International: +1-412-317-0088
U.S. Toll Free: +1-877-344-7529
Passcode: 10117724
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://ir.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, December 31, December 31,
2016 2017 2017
---- ---- ----
RMB RMB US$
ASSETS
Current assets:
Cash and cash equivalents 1,200,457 1,524,982 233,385
Restricted cash-current 1,151,940 93,350 14,286
Term deposits 26,361 ? ?
Short-term investments 833,480 3,437,707 526,110
Accounts receivable, net 424,892 667,750 102,193
Prepayments and other current assets 426,056 657,272 100,590
------- ------- -------
Total current assets 4,063,186 6,381,061 976,564
--------- --------- -------
Non-current assets:
Restricted cash-non-current ? 792,000 121,208
Property and equipment, net 1,480,921 1,351,681 206,863
Intangible assets, net 1,532,228 1,309,566 200,417
Land use rights, net 3,766 3,688 564
Goodwill 15,903,677 15,864,655 2,427,941
Long-term investments 2,118,461 1,808,601 276,790
Long-term prepayments and other non-
current assets 223,767 755,260 115,586
------- ------- -------
Total non-current assets 21,262,820 21,885,451 3,349,369
---------- ---------- ---------
Total assets 25,326,006 28,266,512 4,325,933
========== ========== =========
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term loans 1,842,720 75,000 11,478
Accounts payable 611,947 624,300 95,543
Deferred revenues 1,845,846 2,123,755 325,021
Customer advances 1,236,076 1,365,437 208,968
Taxes payable 62,084 186,491 28,541
Salary and welfare payable 553,506 536,831 82,157
Accrued expenses and other current
liabilities 727,904 689,134 105,466
------- ------- -------
Total current liabilities 6,880,083 5,600,948 857,174
--------- --------- -------
Non-current liabilities:
Long-term loans 150,000 777,427 118,978
Deferred tax liabilities 373,810 319,219 48,854
Other non-current liabilities 69,937 17,376 2,659
------ ------ -----
Total non-current liabilities 593,747 1,114,022 170,491
------- --------- -------
Total liabilities 7,473,830 6,714,970 1,027,665
--------- --------- ---------
Mezzanine equity:
Mezzanine classified noncontrolling
interests 86,457 1,736,405 265,741
------ --------- -------
Total mezzanine equity 86,457 1,736,405 265,741
------ --------- -------
Shareholders' equity:
58.com Inc. shareholders' equity:
Ordinary shares (US$0.00001 par
value, 4,800,000,000 Class A and
200,000,000 Class B shares
authorized, 240,930,737 Class A and
48,740,260 Class B shares issued and
outstanding as of December 31, 2016
and 245,924,871 Class A and
48,040,260 Class B shares issued and
outstanding as of December 31, 2017,
respectively) 18
18 3
Additional paid-in capital 20,907,599 21,488,376 3,288,600
Accumulated deficit (3,070,735) (1,689,683) (258,590)
Accumulated other comprehensive loss (138,597) (55,671) (8,520)
-------- ------- ------
Total 58.com Inc. shareholders'
equity 17,698,285 19,743,040 3,021,493
---------- ---------- ---------
Noncontrolling interests 67,434 72,097 11,034
------ ------ ------
Total shareholders' equity 17,765,719 19,815,137 3,032,527
---------- ---------- ---------
Total liabilities, mezzanine equity
and shareholders' equity 25,326,006 28,266,512 4,325,933
========== ========== =========
58.com Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share, per share and per ADS data, unless otherwise noted)
For the Three Months Ended For the Fiscal Year Ended
-------------------------- -------------------------
December 31, December 31, December 31, December 31, December 31, December 31,
2016 2017 2017 2016 2017 2017
---- ---- ---- ---- ---- ----
RMB RMB US$ RMB RMB US$
Revenues:
Membership 812,021 1,038,812 158,981 2,951,135 3,789,524 579,952
Online marketing services 1,189,380 1,644,486 251,674 4,363,777 5,978,491 914,954
E-commerce services 44,520 17,450 2,671 166,753 73,941 11,316
Other services 48,852 63,934 9,785 110,462 226,824 34,713
------
Total revenues 2,094,773 2,764,682 423,111 7,592,127 10,068,780 1,540,935
Cost of revenues(1) (212,238) (262,853) (40,227) (707,237) (925,497) (141,639)
-------- -------- ------- -------- -------- --------
Gross profit 1,882,535 2,501,829 382,884 6,884,890 9,143,283 1,399,296
--------- --------- ------- --------- --------- ---------
Operating expenses(1):
Sales and marketing expenses (1,224,702) (1,338,587) (204,859) (4,941,380) (5,212,360) (797,704)
Research and development expenses (313,389) (357,898) (54,773) (1,107,897) (1,368,441) (209,427)
General and administrative expenses (150,915) (191,631) (29,327) (601,906) (766,017) (117,232)
---------
Total operating expenses (1,689,006) (1,888,116) (288,959) (6,651,183) (7,346,818) (1,124,363)
---------- ---------- -------- ---------- ---------- ----------
Income from operations 193,529 613,713 93,925 233,707 1,796,465 274,933
------- ------- ------ ------- --------- -------
Other income/(expenses):
Interest income/(expenses), net (9,401) 7,515 1,150 (48,640) (1,623) (248)
Investment income/(loss), net (131,994) 27,538 4,214 (145,411) 342,241 52,377
Share of results of equity investees (225,178) (198,333) (30,353) (926,740) (687,400) (105,200)
Gain on deconsolidation and disposal of businesses ? ? ? 79,581 ? ?
Foreign currency exchange gain/(loss), net 229 296 45 (3,727) 793 121
Others, net 849 39,157 5,993 (12,713) 85,455 13,078
---
Income/(loss) before tax (171,966) 489,886 74,974 (823,943) 1,535,931 235,061
Income tax benefits/(expenses) 37,639 (42,144) (6,450) 50,980 (146,689) (22,449)
------
Net income/(loss) (134,327) 447,742 68,524 (772,963) 1,389,242 212,612
-------- ------- ------ -------- --------- -------
Add: Net loss/(income) attributable to noncontrolling interests 958 (763) (117) 4,916 (4,667) (714)
Less: Deemed dividend to mezzanine classified noncontrolling interests (4,604) (32,922) (5,038) (15,717) (99,507) (15,228)
-------
Net income/(loss) attributable to 58.com Inc. (137,973) 414,057 63,369 (783,764) 1,285,068 196,670
======== ======= ====== ======== ========= =======
Net earnings/(loss) per ordinary share attributable to ordinary shareholders ? basic (0.48) 1.41 0.22 (2.73) 4.41 0.67
Net earnings/(loss) per ordinary share attributable to ordinary shareholders ? diluted (0.48) 1.39 0.21 (2.73) 4.35 0.67
Net earnings/(loss) per ADS attributable to ordinary shareholders - basic (1 ADS represents 2 Class A ordinary shares) (0.95) 2.82 0.43 (5.46) 8.82 1.35
Net earnings/(loss) per ADS attributable to ordinary shareholders - diluted (1 ADS represents 2 Class A ordinary shares) (0.95) 2.78 0.43 (5.46) 8.70 1.33
Weighted average number of ordinary shares used in computing basic earnings/(loss) per share 289,523,186 293,323,477 293,323,477 286,975,068 291,475,725 291,475,725
Weighted average number of ordinary shares used in computing diluted earnings/(loss) per share 289,523,186 297,680,844 297,680,844 286,975,068 295,304,995 295,304,995
Note:
Share?based compensation expenses were allocated in cost of revenues and operating expenses as follows:
Cost of revenues 387 1,139 174 490 3,278 502
Sales and marketing expenses 17,773 17,940 2,746 59,017 69,926 10,702
Research and development expenses 29,439 34,856 5,334 98,515 126,116 19,301
General and administrative expenses 19,152 44,808 6,857 108,553 151,249 23,147
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 Fiscal Year Ended
-------------------------- -------------------------
December 31, December 31, December 31, December 31, December 31, December 31,
2016 2017 2017 2016 2017 2017
---- ---- ---- ---- ---- ----
RMB RMB US$ RMB RMB US$
GAAP income from operations 193,529 613,713 93,925 233,707 1,796,465 274,933
Share-based compensation expenses[5] 66,751 93,463 14,303 266,575 339,837 52,010
Amortization of intangible assets resulting from business acquisitions 57,432 55,348 8,471 229,728 222,865 34,107
------
Non-GAAP income from operations 317,712 762,524 116,699 730,010 2,359,167 361,050
======= ======= ======= ======= ========= =======
GAAP net income/(loss) attributable to 58.com Inc. (137,973) 414,057 63,369 (783,764) 1,285,068 196,670
Share-based compensation expenses 66,751 93,463 14,303 266,575 339,837 52,010
Share-based compensation attributable to noncontrolling interests ? ? ? (151) ? ?
Amortization of intangible assets resulting from business acquisitions 57,432 55,348 8,471 229,728 222,865 34,107
Share-based compensation expenses included in share of results of equity investees 5,455 (292) (45) 78,826 2,094 320
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 items[6] (14,358) (13,555) (2,074) (49,444) (54,872) (8,398)
--------
Non-GAAP net income/(loss) attributable to 58.com Inc. (22,693) 549,021 84,024 (253,634) 1,794,992 274,709
======= ======= ====== ======== ========= =======
GAAP operating margin 9.2% 22.2% 22.2% 3.1% 17.8% 17.8%
Share-based compensation expenses 3.2% 3.4% 3.4% 3.5% 3.4% 3.4%
Amortization of intangible assets resulting from business acquisitions 2.7% 2.0% 2.0% 3.0% 2.2% 2.2%
----
Non-GAAP operating margin 15.1% 27.6% 27.6% 9.6% 23.4% 23.4%
==== ==== ==== === ==== ====
GAAP net margin (6.6)% 15.0% 15.0% (10.3)% 12.8% 12.8%
Share-based compensation expenses 3.2% 3.4% 3.4% 3.5% 3.4% 3.4%
Share-based compensation attributable to noncontrolling interests ? ? ? 0.0% ? ?
Amortization of intangible assets resulting from business acquisitions 2.7% 2.0% 2.0% 3.0% 2.2% 2.2%
Share-based compensation expenses included in share of results of equity investees 0.3% 0.0% 0.0% 1.0% 0.0% 0.0%
Loss on conversion of Guazi Convertible Note ? ? ? 1.1% ? ?
Gain on deconsolidation and disposal of business ? ? ? (1.0)% ? ?
Income tax effects of GAAP to non-GAAP reconciling items (0.7)% (0.5)% (0.5)% (0.7)% (0.5)% (0.5)%
------
Non-GAAP net margin (1.1)% 19.9% 19.9% (3.4)% 17.9% 17.9%
===== ==== ==== ===== ==== ====
Weighted average number of ordinary shares used in computing non-GAAP basic earnings/(loss) per share.. 289,523,186 293,323,477 293,323,477 286,975,068 291,475,725 291,475,725
Weighted average number of ordinary shares used in computing non-GAAP diluted earnings/(loss) per share 289,523,186 297,680,844 297,680,844 286,975,068 295,304,995 295,304,995
Weighted average number of ADS used in computing non-GAAP basic earnings/(loss) per ADS 144,761,593 146,661,739 146,661,739 143,487,534 145,737,863 145,737,863
Weighted average number of ADS used in computing non-GAAP diluted earnings/(loss) per ADS 144,761,593 148,840,422 148,840,422 143,487,534 147,652,498 147,652,498
Non-GAAP net earnings/(loss) per ordinary share attributable to ordinary shareholders ? basic (0.08) 1.87 0.29 (0.88) 6.16 0.94
Non-GAAP net earnings /(loss) per ordinary share attributable to ordinary shareholders ? diluted (0.08) 1.84 0.28 (0.88) 6.08 0.93
Non-GAAP net earnings /(loss) per ADS attributable to ordinary shareholders ? basic (0.16) 3.74 0.57 (1.77) 12.32 1.89
Non-GAAP net earnings /(loss) per ADS attributable to ordinary shareholders ? diluted (0.16) 3.69 0.56 (1.77) 12.16 1.86
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[1] This press release contains translations of certain Renminbi (RMB) amounts into U.S. dollars (US$) solely for the convenience of the reader. Unless otherwise specified, all translations of Renminbi amounts into U.S. dollars amounts in this press release are made at RMB6.5342 to US$1.00, which was the U.S. dollars middle rate announced by the State Administration of Foreign Exchange of the People's Republic of China (PRC) on December 29, 2017. On March 6, 2018, such exchange rate was RMB6.3386 to US$1.00. The percentages stated in this press release are calculated based on the Renminbi amounts.
[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.
[5] In 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 RMB5.3 million in the fourth quarter of 2017 and RMB10.7 million in fiscal year 2017 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
