Leju Reports Fourth Quarter and Full Year 2017 Results
Leju Reports Fourth Quarter and Full Year 2017 Results
BEIJING, March 19, 2018 /PRNewswire/ -- Leju Holdings Limited ("Leju" or the "Company") (NYSE: LEJU), a leading online-to-offline ("O2O") real estate services provider in China, today announced its unaudited financial results for the fiscal quarter and full year ended December 31, 2017.
Fourth Quarter 2017 Financial Highlights
-- Total revenues increased by 1% year-on-year to $106.4 million.
- Revenues from e-commerce services was $71.2 million, a slight increase from $70.9 million for the same quarter of 2016.
- Revenues from online advertising services increased by 16% year-on-year to $32.7 million.
- Revenues from listing services decreased by 58% year-on-year to $2.4 million.
-- Loss from operations was $25.4 million, a 34% decrease from $38.2
million for the same quarter of 2016. Non-GAAP([1]) loss from operations
was $21.7 million, a 35% decrease from $33.7 million for the same
quarter of 2016.
-- Net loss attributable to Leju shareholders was $22.3 million, or $0.16
per diluted American depositary share ("ADS"), a decrease of 12% from
$25.5 million, or $0.19 per diluted ADS, for the same quarter of 2016.
Non-GAAP net loss attributable to Leju shareholders was $19.2 million,
or $0.14 per diluted ADS, a decrease of 16% from $22.9 million, or $0.17
per diluted ADS, for the same quarter of 2016.
[1] Leju uses in this press release
the following non-GAAP financial
measures: (1) income (loss) from
operations, (2) net income (loss),
(3) net income (loss) attributable
to Leju shareholders, (4) net
income (loss) attributable to Leju
shareholders per basic ADS, and (5)
net income (loss) attributable to
Leju shareholders per diluted ADS,
each of which excludes share-based
compensation expense, amortization
of intangible assets resulting from
business acquisitions and goodwill
impairment . See "About Non-GAAP
Financial Measures" and "Unaudited
Reconciliation of GAAP and Non-
GAAP Results" below for more
information about the non-GAAP
financial measures included in this
press release.
Full Year 2017 Financial Highlights
-- Total revenues decreased by 35% year-on-year to $362.5 million.
- Revenues from e-commerce services decreased by 44% year-on-year to $234.8 million.
- Revenues from online advertising services decreased by 4% year-on-year to $113.2 million.
- Revenues from listing services decreased by 36% year-on-year to $14.5 million.
-- Loss from operations was $183.9 million, including goodwill impairment
charge of $41.2 million, compared to $15.2 million for 2016. Non-GAAP
loss from operations was $125.9 million, compared to non-GAAP income
from operations of $9.0 million for 2016.
-- Net loss attributable to Leju shareholders was $160.9 million, including
goodwill impairment charge of $41.2 million, or $1.19 per diluted
American depositary share ("ADS"), compared to $9.8 million, or $0.07
per diluted ADS for 2016. Non-GAAP net loss attributable to Leju
shareholders was $105.0 million, or $0.77 per diluted ADS, compared to
non-GAAP net income attributable to Leju shareholders of $10.1 million,
or $0.07 per diluted ADS for 2016.
"In the fourth quarter, the overall operating environment did not improve under the continued tightening policies imposed by the government," said Mr. Geoffrey He, Leju's Chief Executive Officer. "Throughout 2017, a series of real estate regulatory measures such as price ceilings and restrictive policies on home purchases and mortgages were carried out in major cities where we operate. Marketing demand from developers was significantly reduced, and our e-commerce business, which is based on discount coupons, was severely and negatively impacted. Our online advertising sector, however, benefited from the development of our targeted advertising products and achieved a stable performance."
"Looking forward to 2018, we believe that the restrictive measures will persist. Against this backdrop, we have formulated our new strategy of 'New Media, New Ecosystem, and New E-commerce', aiming to further enhance our media influence and content productivity, and provide accurate and targeted advertising services by leveraging our big data capability. Meanwhile, we have extended our existing e-commerce model by offering coupon services related to a developer's brand rather than a single project, thus expanding the scope of our e-commerce services. In addition, we will continue streamlining our cost structure to improve our bottom line."
Fourth Quarter 2017 Results
Total revenues were $106.4 million, an increase of 1% from $104.9 million for the same quarter of 2016.
Revenues from e-commerce services were $71.2 million, a slight increase from $70.9 million for the same quarter of 2016.
Revenues from online advertising services were $32.7 million, an increase of 16% from $28.2 million for the same quarter of 2016, primarily due to an increase in property developers' demand for online advertising.
Revenues from listing services were $2.4 million, a decrease of 58% from $5.8 million for the same quarter of 2016, primarily due to a decrease in secondary real estate brokers' demand.
Cost of revenues was $19.6 million, an increase of 40% from $14.0 million for the same quarter of 2016, primarily due to increased cost of advertising resources purchased, partially offset by decreased staffing cost as a result of headcount change.
Selling, general and administrative expenses were $112.3 million, a decrease of 15% from $131.4 million for the same quarter of 2016, primarily due to decreased marketing expenses related to the Company's e-commerce business, and decreased salary as a result of headcount change.
Loss from operations was $25.4 million, compared to $38.2 million for the same quarter of 2016. Non-GAAP loss from operations was $21.7 million, compared to $33.7 million for the same quarter of 2016.
Net loss was $22.5 million, compared to 26.4 million for the same quarter of 2016. Non-GAAP net loss was $19.4 million, compared to $23.8 million for the same quarter of 2016.
Net loss attributable to Leju shareholders was $22.3 million, or $0.16 per diluted ADS, compared to $25.5 million, or $0.19 per diluted ADS, for the same quarter of 2016. Non-GAAP net loss attributable to Leju shareholders was $19.2 million, or $0.14 per diluted ADS, compared to $22.9 million, or $0.17 per diluted ADS, for the same quarter of 2016.
Full Year 2017 Results
Total revenues were $362.5 million, a decrease of 35% from $559.5 million for 2016 as a result of restrictions implemented by local governments.
Revenues from e-commerce services were $234.8 million, a decrease of 44% from $419.0 million for 2016, primarily due to decreases in both the number of discount coupons redeemed and in the average price per discount coupon.
Revenues from online advertising services were $113.2 million, a decrease of 4% from $118.0 million for 2016, primarily due to a decrease in property developers' demand for online advertising.
Revenues from listing services were $14.5 million, a decrease of 36% from $22.5 million for 2016, primarily due to a decrease in secondary real estate brokers' demand.
Cost of revenues was $74.1 million, an increase of 29% from $57.5 million for 2016, primarily due to increased cost of advertising resources purchased, partially offset by decreased staffing cost as a result of headcount change.
Selling, general and administrative expenses were $434.3 million, a decrease of 17% from $521.8 million for 2016, primarily due to decreased marketing expenses related to the Company's e-commerce business, decreased commission expenses in line with the decrease of revenues and decreased salary as a result of headcount change.
Goodwill impairment charge was $41.2 million. Since changes in market environment continued to have a negative impact on the Company's operating conditions and business outlook, an impairment loss of goodwill of $41.2 million was recognized based on the impairment assessment review.
Loss from operations was $183.9 million, compared to $15.2 million for 2016. Non-GAAP loss from operations was $125.9 million, compared to non-GAAP income from operations of $9.0 million for 2016.
Net loss was $162.0 million, compared to 11.6 million for 2016. Non-GAAP net loss was $106.1 million, compared to non-GAAP net income of $8.4 million for 2016.
Net loss attributable to Leju shareholders was $160.9 million, or $1.19 per diluted ADS, compared to $9.8 million, or $0.07 per diluted ADS for 2016. Non-GAAP net loss attributable to Leju shareholders was $105.0 million, or $0.77 per diluted ADS, compared to non-GAAP net income attributable to Leju shareholders of $10.1 million, or $0.07 per diluted ADS for 2016.
Cash Flow
As of December 31, 2017, the Company's cash and cash equivalents balance was $151.0 million.
Fourth quarter 2017 net cash used in operating activities was $57.6 million, mainly attributable to non-GAAP net loss of $19.4 million, an increase of $7.4 million in accounts receivable, a decrease in other current liabilities of $24.9 million, and a decrease in advance from customers and deferred revenue of $4.7 million.
Business Outlook
The Company estimates that its total revenues for the first quarter of 2018 will be approximately $75 million to $77 million, which would represent an increase of approximately 10% to 13% from $68.3 million for the same quarter in 2017. This forecast reflects the Company's current and preliminary view, which is subject to change.
Management Changes
The Company also announced that Ms. Qiong Zuo has been appointed as Chief Operating Officer of the Company while Mr. Keyi Chen, former Chief Operating Officer of the Company, has been appointed as Leju's Chief Strategy Officer. Before joining Leju, Ms. Zuo was chief executive officer of the Innovation and Research Center of E-House (China) Holdings Limited, Leju's major shareholder. Prior to that, she was a vice president of human resources of Rastar Group (A share symbol: 300043), a leading culture and entertainment company in China, and deputy general manager of southern China branch in SINA.com, a leading Internet portal in China.
"Ms. Zuo brings us rich experiences in online technology, operations and cost control," said Mr. Geoffrey He. "We are pleased that she has agreed to take on these responsibilities at Leju and I expect to work closely with her to further optimize our operations and management across all business lines."
Conference Call Information
Leju's management will host an earnings conference call on March 19, 2018 at 7 a.m. U.S. Eastern Time (7 p.m. Beijing/Hong Kong time).
Dial-in details for the earnings conference call are as follows:
U.S./International: +1-845-675-0437
Hong Kong: +852-3018-6771
Mainland China: +400-620-8038
Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call. The passcode is "Leju earnings call."
A replay of the conference call may be accessed by phone at the following number until March 27, 2018:
U.S./International: +1-855-452-5696
Hong Kong: +800-963-117
Mainland China: +400-632-2162
Passcode: 4688545
Additionally, a live and archived webcast will be available at http://ir.leju.com.
About Leju
Leju Holdings Limited ("Leju") (NYSE: LEJU) is a leading online-to-offline, or O2O, real estate services provider in China, offering real estate e-commerce, online advertising and online listing services. Leju's integrated online platform comprises various mobile applications along with local websites covering more than 370 cities, enhanced by complementary offline services to facilitate residential property transactions. In addition to the Company's own websites, Leju operates the real estate and home furnishing websites of SINA Corporation, and maintains a strategic partnership with Tencent Holdings Limited. For more information about Leju, please visit http://ir.leju.com.
Safe Harbor: Forward-Looking Statements
This announcement contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in 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," "target," "going forward," "outlook" and similar statements. Leju may also make written or oral forward-looking statements in its reports filed or furnished with 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. Statements that are not historical facts, including statements about Leju's beliefs and expectations, are forward-looking statements that involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained, either expressly or impliedly, in any of the forward-looking statements. Such factors include, but are not limited to, fluctuations in China's real estate market; the highly regulated nature of, and government measures affecting, the real estate and internet industries in China; Leju's ability to compete successfully against current and future competitors; its ability to continue to develop and expand its content, service offerings and features, and to develop or incorporate the technologies that support them; its limited operating history and lack of experience as a stand-alone public company, given its carve-out from E-House and prior reliance on E-House for various corporate services; its reliance on SINA and others with which it has developed, or may develop in the future, strategic partnerships; substantial revenue contribution from a limited number of real estate markets; complexities resulting from its ongoing relationships with E-House, due to E-House's principal shareholding interest in Leju; and relevant government policies and regulations relating to the corporate structure, business and industry of Leju. 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 the Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
About Non-GAAP Financial Measures
To supplement Leju's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Leju uses in this press release the following non-GAAP financial measures: (1) income (loss) from operations, (2) net income (loss), (3) net income (loss) attributable to Leju shareholders, (4) net income (loss) attributable to Leju shareholders per basic ADS, and (5) net income (loss) attributable to Leju shareholders per diluted ADS, each of which excludes share-based compensation expense, amortization of intangible assets resulting from business acquisitions and goodwill impairment. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.
Leju believes that these non-GAAP financial measures provide meaningful supplemental information to investors regarding its operating performance by excluding share-based compensation expense, amortization of intangible assets resulting from business acquisitions, and goodwill impairment which may not be indicative of Leju's operating performance. These non-GAAP financial measures also facilitate management's internal comparisons to Leju's historical performance and assist its financial and operational decision making. A limitation of using these non-GAAP financial measures is that share-based compensation expense and amortization of intangible assets resulting from business acquisitions may continue to exist in Leju's business for the foreseeable future. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables provide more details on the reconciliation between non-GAAP financial measures and their most comparable GAAP financial measures.
For investor and media inquiries please contact:
Ms. Christina Wu
Leju Holdings Limited
Phone: +86 (10) 5895-1062
E-mail: ir@leju.com
Philip Lisio
Foote Group
Phone: +86 135-0116-6560
E-mail: phil@thefootegroup.com
LEJU HOLDINGS LIMITED
UNAUDITED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars)
December 31, December 31,
2016 2017
---- ----
ASSETS
Current assets
Cash and cash equivalents 274,338 150,968
Restricted cash - 337
Accounts receivable, net 71,390 80,606
Marketable securities 2,181 3,077
Prepaid expenses and other current assets 12,756 9,945
Customer deposits 39,702 35,823
Amounts due from related parties 6,019 4,077
----- -----
Total current assets 406,386 284,833
Property and equipment, net 7,923 14,240
Intangible assets, net 78,374 70,631
Investment in affiliates 409 146
Goodwill 39,018 -
Deferred tax assets 41,698 67,084
Other non-current assets 2,059 2,010
----- -----
Total assets 575,867 438,944
======= =======
LIABILITIES AND EQUITY
Current liabilities
Accounts payable 1,574 2,950
Accrued payroll and welfare expenses 41,728 37,082
Income tax payable 66,148 63,380
Other tax payable 16,678 11,654
Amounts due to related parties 1,581 3,093
Advance from customers and deferred revenue 5,058 10,565
Accrued marketing and advertising expenses 9,355 18,852
Other current liabilities 8,516 16,315
----- ------
Total current liabilities 150,638 163,891
Deferred tax liabilities 18,869 18,016
Total liabilities 169,507 181,907
------- -------
Equity
Ordinary shares ($0.001 par value): 1,000,000,000 shares 136 136
authorized, 135,503,958 and 135,763,962 shares issued
and outstanding, as of December 31, 2016 and
December 31, 2017, respectively
Additional paid-in capital 785,019 788,589
Accumulated deficit (354,365)) (515,344)
Accumulated other comprehensive income (22,321) (13,078)
Total Leju equity 408,469 260,303
Non-controlling interests (2,109) (3,266)
------ ------
Total equity 406,360 257,037
------- -------
TOTAL LIABILITIES AND EQUITY 575,867 438,944
======= =======
LEJU HOLDINGS LIMITED
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except share data and per share data)
Three months ended Year ended
December 31, December 31,
2016 2017 2016 2017
---- ---- ---- ----
Revenues
E-commerce 70,872 71,217 419,024 234,836
Online advertising services 28,180 32,719 117,949 113,235
Listing services 5,846 2,432 22,538 14,461
Total revenues 104,898 106,368 559,511 362,532
Cost of revenues (14,027) (19,617) (57,492) (74,054)
Selling, general and administrative expenses (131,418) (112,293) (521,797) (434,276)
Goodwill impairment charge - - - (41,223)
Other operating income 2,313 171 4,587 3,072
Loss from operations (38,234) (25,371) (15,191) (183,949)
Investment income (loss) 3 - (186) -
Interest income 388 326 1,313 1,314
Other income, net 57 1,103 620 480
--- ----- --- ---
Loss before taxes and equity in affiliates (37,786) (23,942) (13,444) (182,155)
Income tax benefits 11,410 1,510 2,068 20,328
------ ----- ----- ------
Loss before equity in affiliates (26,376) (22,432) (11,376) (161,827)
Loss from equity in affiliates (9) (28) (225) (216)
Net loss (26,385) (22,460) (11,601) (162,043)
Less: net loss attributable to non-controlling (933) (158) (1,812) (1,142)
interests
Net loss attributable to Leju shareholders (25,452) (22,302) (9,789) (160,901)
======= ======= ====== ========
Loss per share:
Basic (0.19) (0.16) (0.07) (1.19)
Diluted (0.19) (0.16) (0.07) (1.19)
Shares used in computation:
Basic 135,367,001 135,763,962 135,220,210 135,708,350
Diluted 135,367,001 135,763,962 135,220,210 135,708,350
Note 1 The conversion of Renminbi ("RMB") amounts into USD amounts is based on the rate
of USD1 = RMB6.5342 on December 31, 2017 and USD1 = RMB6.7296 for the year ended
December 31, 2017
LEJU HOLDINGS LIMITED
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(In thousands of U.S. dollars)
Three months ended Year ended
December 31, December 31,
2016 2017 2016 2017
---- ---- ---- ----
Net loss (26,385) (22,460) (11,601) (162,043)
Other comprehensive income (loss), net of tax
of nil
Foreign currency translation adjustment (11,234) 3,516 (16,761) 9,137
Comprehensive loss (37,619) (18,944) (28,362) (152,906)
Less: Comprehensive loss attributable to (896) (187) (1,771) (1,249)
non-controlling interest
Comprehensive loss attributable to (36,723) (18,757) (26,591) (151,657)
Leju shareholders
LEJU HOLDINGS LIMITED
Unaudited Reconciliation of GAAP and Non-GAAP Results
(In thousands of U.S. dollars, except share data and per ADS data)
Three months ended Year ended
December 31, December 31,
2016 2017 2016 2017
---- ---- ---- ----
GAAP loss from operations (38,234) (25,371) (15,191) (183,949)
Share-based compensation expense 1,483 151 11,910 3,525
Amortization of intangible assets resulting from business 3,079 3,485 12,329 13,333
acquisitions
Goodwill impairment - - - 41,223
--- ------
Non-GAAP income (loss) from operations (33,672) (21,735) 9,048 (125,868)
======= ======= ===== ========
GAAP net loss (26,385) (22,460) (11,601) (162,043)
Share-based compensation expense (net of tax) 1,483 151 11,910 3,525
Amortization of intangible assets resulting from 1,120 2,911 8,057 11,189
business acquisitions (net of tax)
Goodwill impairment (net of tax) - - - 41,223
--- ------
Non-GAAP net income (loss) (23,782) (19,398) 8,366 (106,106)
======= ======= ===== ========
Net loss attributable to Leju Shareholder (25,452) (22,302) (9,789) (160,901)
Share-based compensation expense 1,475 142 11,877 3,491
(net of tax and non-controlling interests)
Amortization of intangible assets resulting from business 1,120 2,911 8,057 11,189
acquisitions (net of tax and non-controlling interests)
Goodwill impairment (net of tax and non-controlling interests) - - - 41,223
--- ------
Non-GAAP net income (loss) attributable to Leju (22,857) (19,249) 10,145 (104,998)
shareholders
GAAP net loss per ADS - basic/diluted (0.19) (0.16) (0.07) (1.19)
===== ===== ===== =====
Non-GAAP net income (loss) per ADS - basic (0.17) (0.14) 0.08 (0.77)
===== ===== ==== =====
Non-GAAP net income (loss) per ADS - diluted (0.17) (0.14) 0.07 (0.77)
===== ===== ==== =====
Shares used in calculating basic GAAP/non-GAAP net 135,367,001 135,763,962 135,220,210 135,708,350
income (loss) attributable to shareholders per ADS
Shares used in calculating diluted GAAP net loss 135,367,001 135,763,962 135,220,210 135,708,350
attributable to shareholders per ADS
Shares used in calculating diluted non-GAAP net income 135,367,001 135,763,962 135,349,212 135,708,350
(loss) attributable to shareholders per ADS
LEJU HOLDINGS LIMITED
SELECTED OPERATING DATA
Three months ended Year ended
December 31, December 31,
2016 2017 2016 2017
---- ---- ---- ----
Operating data for e-commerce services
Number of discount coupons issued to 59,047 47,419 326,874 246,318
prospective purchasers (number of
transactions)
Number of discount coupons redeemed 37,678 31,046 175,505 113,420
(number of transactions)
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SOURCE Leju Holdings Limited
