Cheetah Mobile Announces First Quarter 2018 Unaudited Consolidated Financial Results
Cheetah Mobile Announces First Quarter 2018 Unaudited Consolidated Financial Results
BEIJING, May 21, 2018 /PRNewswire/ -- Cheetah Mobile Inc. (NYSE: CMCM) ("Cheetah Mobile" or the "Company"), a leading mobile internet company with strong global vision, today announced its unaudited consolidated financial results for the first quarter ended March 31, 2018.
First Quarter 2018 Financial Highlights
-- Total revenues([1]) were RMB1,145.1 million (US$182.6 million),
exceeding the Company's previous guidance range of RMB1,100 million to
RMB1,140 million.
-- Gross profit increased by 2.9% year over year to RMB753.9 million
(US$120.2 million). Gross margin was 65.8% in the first quarter of 2018
compared to 61.5% in the same period last year.
-- Operating profit increased to RMB136.4 million (US$21.7 million) from
RMB26.3 million in the same period last year. Operating margin expanded
to 11.9% from 2.2% in the same period last year.
-- Operating profit for utility products and related services increased by
47.8% year over year to RMB264.7 million (US$42.2 million) in the first
quarter of 2018. Operating margin for utility products and related
services expanded to 35.5% in the first quarter of 2018 from 21.7% in
the same period last year.
First Quarter 2018 Operating Metrics
-- The average number of global mobile monthly active users ("Mobile MAUs")
was 574 million in the first quarter of 2018. The number of Mobile MAUs
from markets outside of China, or overseas markets, accounted for 75.4%
of the total number of Mobile MAUs in the first quarter of 2018.
Artificial Intelligence Technology
-- In March 2018, Beijing OrionStar Technology, an investee of Cheetah
Mobile, achieved a record-setting 98.355% recognition rate in the
MegaFace challenge (Challenge1/FaceScrub identification), an
internationally recognized facial recognition test managed by the Paul
G. Allen School of Computer Science & Engineering at the University of
Washington. Cheetah Mobile holds approximately 30% equity interest in
Beijing OrionStar Technology and has a two-year warrant to subscribe for
additional equity interest to achieve a controlling position.
Mr. Sheng Fu, Cheetah Mobile's Chairman and Chief Executive Officer, stated, "We began 2018 on a solid note with total revenues exceeding the high-end of our guidance. In the first quarter of 2018, our utility product business continued to generate strong profits and cash flow. We also solidified our leading position in the mobile casual game market by further enriching our game pipeline. Our artificial intelligence ("AI") powered businesses made steady progress as well. In March, Cheetah Mobile and Beijing OrionStar jointly launched five practical and easy-to-use robotics products, which are powered by Orion OS, an open platform for robotics, which has been developed by Beijing OrionStar. Going forward, we aim to drive steady and healthy profit from our core businesses while simultaneously leveraging our extensive technology and product experience to expand our robotic product offerings."
Mr. Vincent Jiang, Cheetah Mobile's Chief Financial Officer, commented, "We continued to expand our profits and margins in the first quarter of 2018 as a result of our strategic efforts to optimize the cost and expense structure for our utility products business and our initiative to dispose of News Republic. Looking ahead, we will continue to drive higher operational efficiency for our core businesses, which in turn will fund our investment in AI-powered business and build long-term growth for Cheetah Mobile and its shareholders."
[1] Starting from January 1, 2018, Cheetah Mobile adopted a new revenue accounting standard (ASC 606), which reclassifies value added tax from the cost of
revenues to net against revenues. To increase comparability of operating results and help investors better understand our business performance and operating
trends, 2017 net revenues have been used to calculate all percentage changes in revenues. 2017 net revenues are defined as gross revenues under legacy GAAP
after the deduction of value added taxes, which is presented on the same basis as 2018 and going forward.
First Quarter 2018 Consolidated Financial Results
REVENUES
Total revenues were RMB1,145.1 million (US$182.6 million) in the first quarter of 2018.
-- Revenues from utility products and related services decreased by 7.7%
year over year to RMB744.8 million (US$118.7 million) in the first
quarter of 2018. The year-over-year change was primarily due to (i) a
decline in revenues from mobile utility products and related services
business in the overseas markets as certain ad formats, i.e., ads on
mobile phone lock screens, have been discontinued by our overseas
third-party advertising partners, and (ii) a decline in PC revenues.
This decrease was largely offset by an increase in mobile utility
products and related services business in China.
-- Revenues from the mobile entertainment business increased by 8.0% year
over year to RMB392.5 million (US$62.6 million). The year-over-year
increase was driven by the Company's mobile game business, which grew by
25.3% year over year to RMB174.7 million (US$27.9 million) in the
quarter. The increase in the mobile game operation was a result of the
Company's continued efforts to expand its mobile game portfolio by
introducing some new mobile games in early 2017. In the first quarter of
2018, revenues from content-driven product decreased by 2.7% year over
year to RMB217.7 million (US$34.7 million). The decrease was a result of
a year-over-year growth in revenues from Live.me, which was offset by a
decline in revenues from the News Republic application as the Company
disposed of this operation in the fourth quarter of 2017.
By platform, revenues generated from the mobile business were 88.9% of total revenues in the first quarter of 2018, up from 85.3% in the same period last year.
By region, revenues generated from the Chinese market constituted 39.1% of total revenues in the first quarter of 2018, up from 27.6% in the same period last year. The growth of the Company's revenues in the Chinese market was attributable to a ramp-up of mobile utility products and related services businesses in China and increased mobile game revenues in the Chinese market, where the Company's mobile games continue to gain popularity.
Revenues generated from the overseas market constituted 60.9% of total revenues in the first quarter of 2018, a 17.6% decrease year over year to RMB697.5 million (US$111.2 million), mainly due to the impact of lock screen ads. Excluding the foreign exchange impact, revenues from the overseas market decreased by 11.4% year over year.
COST OF REVENUES AND GROSS PROFIT
Cost of revenues decreased by 14.6% year over year to RMB391.2 million (US$62.4 million) in the first quarter of 2018. The year-over-year decrease resulted from reduced bandwidth and IDC costs associated with the Company's mobile utility applications in the overseas markets as well as lower amortization of acquired intangible assets. Non-GAAP cost of revenues decreased by 14.4% year over year to RMB391.3 million (US$62.4 million) in the first quarter of 2018.
Gross profit increased by 2.9% year over year to RMB753.9 million (US$120.2 million) in the first quarter of 2018. Non-GAAP gross profit increased by 2.7% year over year to RMB753.8 million (US$120.2 million) in the first quarter of 2018.
OPERATING INCOME AND EXPENSES
Total operating expenses decreased by 12.6% year over year to RMB617.6 million (US$98.5 million) in the first quarter of 2018. Total non-GAAP operating expenses decreased by 10.9% year over year to RMB608.5 million (US$97.0 million) in the first quarter of 2018.
-- Research and development (R&D) expense decreased by 23.0% year over year
to RMB147.3 million (US$23.5 million) in the first quarter of 2018. The
decreases were due to lower share-based compensation expenses and
reduced R&D headcount resulting from the Company's mobile utility
application business in the overseas markets, and the disposal of News
Republic. Non-GAAP R&D expenses, which exclude share-based compensation
expenses, decreased by 15.6% year over year to RMB153.4 million (US$24.5
million) in the first quarter of 2018.
-- Selling and marketing expenses decreased by 5.5% year over year to
RMB391.4 million (US$62.4 million) in the first quarter of 2018. The
decreases were mainly due to decreased promotional activities for the
Company's mobile products in the overseas markets. Non-GAAP selling and
marketing expenses, which exclude share-based compensation expenses,
decreased by 5.6% year over year to RMB391.1 million (US$62.3 million)
in the first quarter of 2018.
-- General and administrative expenses decreased by 12.5% year over year to
RMB90.6 million (US$14.4 million) in the first quarter of 2018. The
year-over-year decrease was primarily due to lower professional service
fees and employee benefits. Non-GAAP general and administrative
expenses, which exclude share-based compensation expenses, decreased by
15.4% year over year to RMB75.8 million (US$12.1 million) in the first
quarter of 2018.
Operating profit increased to RMB136.4 million (US$21.7 million) in the first quarter of 2018 from RMB26.3 million in the same period last year. Non-GAAP operating profit increased to RMB145.3 million (US$23.2 million) in the first quarter of 2018 from RMB50.7 million in the same period last year.
The Company has reported its operating profit along the following segments since the second quarter of 2017:
-- Operating profit for utility products and related services increased by
47.8% year over year to RMB264.7 million (US$42.2 million) in the first
quarter of 2018 due to the optimization of the cost and expense
structure for this segment.
-- Operating loss for the mobile entertainment business was RMB75.0 million
(US$12.0 million) in the first quarter of 2018, compared to operating
loss of RMB128.5 million in the same period last year. The reduced loss
was mainly a result of increased revenues generated from the Company's
mobile game businesses and reduced costs and expenses from the News
Republic business, partially offset by the Company's increased
investments in the Live.me operation.
Share-based compensation expenses decreased by 63.4% year over year to RMB8.9 million (US$1.4 million) in the first quarter of 2018. The decrease resulted from a combination of several factors. The Company employed an accelerated method to recognize share-based compensation expenses. In addition, a significant number of share-based awards that were granted by the Company during its IPO in 2014 approached the end of their vesting periods in 2017. Furthermore, fewer share-based awards were granted in the first quarter of 2018 than in the same period last year.
IMPAIRMENT OF INVESTMENTS
Impairment of investments were RMB58.0 million (US$9.2 million) in the first quarter of 2018 primarily due to a one-time non-cash write-down of certain convertible loans to a third-party. The loss was recorded as a non-operating item since the loans were provided for investment purposes, which is outside of the Company's main business activity.
NET INCOME ATTRIBUTABLE TO CHEETAH MOBILE SHAREHOLDERS
Net income attributable to Cheetah Mobile shareholders was RMB70.0 million (US$11.2 million) in the first quarter of 2018. Non-GAAP net income attributable to Cheetah Mobile shareholders was RMB78.9 million (US$12.6 million) in the first quarter of 2018.
NET INCOME PER ADS
Diluted income per ADS was RMB0.42 (US$0.07) in the first quarter of 2018. Non-GAAP diluted income per ADS was RMB0.48 (US$0.08) in the first quarter of 2018.
ADJUSTED EBITDA
Adjusted EBITDA (Non-GAAP) increased by 93.3% year over year to RMB168.8 million (US$26.9 million) in the first quarter of 2018.
CASH AND CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM INVESTMENTS BALANCE
As of March 31, 2018, the Company had cash and cash equivalents, restricted cash, and short-term investments of RMB3,355.8 million (US$535.0 million).
SHARES ISSUED AND OUTSTANDING
As of March 31, 2018, the Company had a total of 1,421,649,639 Class A and Class B ordinary shares issued and outstanding. One ADS represents 10 Class A ordinary shares.
Business Outlook
For the second quarter of 2018, the Company expects its total revenues to be between RMB1,020 million (US$163 million) and RMB1,080 million (US$172 million). This estimate represents management's preliminary view as of the date of this release, which is subject to change.
Conference Call Information
The Company will hold a conference call on Monday, May 21, 2018 at 8:00 a.m. Eastern Time or 8:00 p.m. Beijing Time to discuss the financial results. Listeners may access the call by dialing the following numbers:
International: +1-412-902-4272
United States Toll Free: +1-888-346-8982
China Toll Free: 4001-201-203
Hong Kong Toll Free: 800-905-945
Conference ID: Cheetah Mobile
A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.cmcm.com/.
A presentation for the Company's earnings call is available at the Company's investor relations website.
Exchange Rate
This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars in this press release were made at a rate of RMB6.2726 to US$1.00, the exchange rate in effect as of March 31, 2018, as set forth in the H.10 statistical release of the Federal Reserve Board. Such translations should not be construed as representations that RMB amounts could be converted into U.S. dollars at that rate or any other rate, or to be the amounts that would have been reported under accounting principles generally accepted in the United States of America ("U.S. GAAP").
About Cheetah Mobile Inc.
Cheetah Mobile is a leading mobile Internet company with strong global vision. It has attracted hundreds of millions of monthly active users through its mobile utility products such as Clean Master and Cheetah Keyboard, casual games such as Piano Tiles 2, and live streaming product Live.me. The Company provides its advertising customers, which include direct advertisers and mobile advertising networks through which advertisers place their advertisements, with direct access to highly targeted mobile users and global promotional channels. The Company also provides value-added services to its mobile application users through the sale of in-app virtual items on selected mobile products and games. Cheetah Mobile is committed to leveraging its cutting-edge artificial intelligence technologies to power its products and make the world smarter. It has been listed on the New York Stock Exchange since May 2014.
Safe Harbor Statement
This press release contains forward-looking statements. These statements, including management quotes and business outlook, constitute forward-looking statements under the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Such statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in the forward-looking statements, including but are not limited to the following: Cheetah Mobile's growth strategies; Cheetah Mobile's ability to retain and increase its user base and expand its product and service offerings; Cheetah Mobile's ability to monetize its platform; Cheetah Mobile's future business development, financial condition and results of operations; competition with companies in a number of industries including internet companies that provide online marketing services and internet value-added services; expected changes in Cheetah Mobile's revenues and certain cost or expense items; and general economic and business condition globally and in China. Further information regarding these and other risks is included in Cheetah Mobile's filings with the U.S. Securities and Exchange Commission. Cheetah Mobile does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
Use of Non-GAAP Financial Measures
To supplement Cheetah Mobile's consolidated financial information presented in accordance with U.S. GAAP, Cheetah Mobile uses the following non-GAAP financial measures:
-- Non-GAAP cost of revenues reflects cost of revenues excluding the
portion of share-based compensation expenses allocated to cost of
revenues.
-- Non-GAAP gross profit reflects gross profit excluding the portion of
share-based compensation expenses allocated to gross profit.
-- Non-GAAP operating income and expenses reflect operating income and
expenses excluding the portion of share-based compensation expenses
allocated to operating expenses.
-- Non-GAAP operating profit reflects operating profit excluding
share-based compensation expenses.
-- Non-GAAP net income attributable to Cheetah Mobile shareholders is net
income attributable to Cheetah Mobile shareholders excluding share-based
compensation expenses.
-- Non-GAAP diluted earnings per ADS is non-GAAP net income attributable to
Cheetah Mobile shareholders excluding net income attributable to
redeemable noncontrolling interests, divided by weighted average number
of diluted ADSs.
-- Adjusted EBITDA is earnings before interest, taxes, depreciation,
amortization, other non-operating income and share-based compensation
expenses.
The Company believes that separate analysis and exclusion of share-based compensation expenses and the use of Adjusted EBITDA add clarity to the constituent parts of its performance from the cash perspective. The Company reviews these non-GAAP financial measures together with GAAP financial measures to obtain a better understanding of its operating performance. It uses the non-GAAP financial measures for planning, forecasting and measuring results against the forecast. The Company believes that non-GAAP financial measures are useful supplemental information for investors and analysts to assess its operating performance without the effect of share-based compensation expenses, which have been and will continue to be significant recurring expenses in its business. However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact the Company's net income for the period. In addition, because non-GAAP financial measures are not measured in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measure in isolation from or as an alternative to the financial measure prepared in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Cheetah Mobile Inc. Reconciliations of GAAP and Non-GAAP Results" and "Cheetah Mobile Inc. Reconciliation of Net Income Attributable to Cheetah Mobile Shareholders to Adjusted EBITDA (Non-GAAP)" at the end of this release.
Investor Relations Contact
Cheetah Mobile Inc.
Helen Jing Zhu
Tel: +86 10 6292 7779 ext. 1600
Email: helenjingzhu@cmcm.com
ICR, Inc.
Jack Wang
Tel: +1 (646) 417-5395
Email: IR@cmcm.com
CHEETAH MOBILE INC.
Condensed Consolidated Balance Sheets
(Unaudited, amounts in thousands of Renminbi ("RMB") and US dollars ("US$")
As of
-----
December 31, 2017 March 31, 2018 March 31, 2018
RMB RMB USD
ASSETS
Current assets:
Cash and cash equivalents 2,317,488 1,580,591 251,983
Restricted cash 90,149 9,494 1,514
Short-term investments 1,395,694 1,765,758 281,503
Accounts receivable 621,272 585,810 93,392
Prepayments and other current assets 918,243 881,568 140,544
Due from related parities 54,052 47,049 7,501
Total current assets 5,396,898 4,870,270 776,437
--------- --------- -------
Non-current assets:
Property and equipment, net 89,137 81,468 12,988
Intangible assets, net 70,225 67,548 10,769
Goodwill 634,157 615,947 98,196
Investment in equity investees 149,969 147,833 23,568
Other long term investments 1,002,721 982,797 156,681
Due from related parities 5,216 8,148 1,299
Deferred tax assets 57,642 65,267 10,405
Other non-current assets 42,966 42,020 6,699
Total non-current assets 2,052,033 2,011,028 320,605
--------- --------- -------
Total assets 7,448,931 6,881,298 1,097,042
========= ========= =========
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY
Current liabilities:
Bank loans 336,304 - -
Accounts payable 164,537 174,520 27,823
Accrued expenses and other current liabilities 1,532,489 1,356,612 216,276
Due to related parties 81,810 45,535 7,259
Income tax payable 50,614 55,980 8,925
Total current liabilities 2,165,754 1,632,647 260,283
--------- --------- -------
Non-current liabilities:
Deferred tax liabilities 73,393 74,427 11,865
Other non-current liabilities 54,574 52,806 8,419
------ ------ -----
Total non-current liabilities 127,967 127,233 20,284
------- ------- ------
Total liabilities 2,293,721 1,759,880 280,567
--------- --------- -------
Mezzanine equity:
Redeemable noncontrolling interests 649,246 658,247 104,940
------- ------- -------
Shareholders' equity:
Ordinary shares 229 230 37
Additional paid-in capital 2,644,043 2,656,818 423,559
Retained earnings 1,564,883 1,637,837 261,110
Accumulated other comprehensive income (loss) 84,206 (48,983) (7,809)
------ ------- ------
Total Cheetah Mobile shareholders' equity 4,293,361 4,245,902 676,897
Noncontrolling interests 212,603 217,269 34,638
------- ------- ------
Total equity 4,505,964 4,463,171 711,535
--------- --------- -------
Total liabilities, mezzanine equity and equity 7,448,931 6,881,298 1,097,042
========= ========= =========
CHEETAH MOBILE INC.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited, amounts in thousands of Renminbi ("RMB") and US dollars ("US$"), except for number of shares and per share (or ADS) data)
For The Three Months Ended
--------------------------
March 31, 2017 December 31, 2017 March 31, 2018 March 31, 2018
RMB RMB RMB USD
Revenues (a) 1,190,703 1,387,806 1,145,097 182,555
Utility products and
related services 827,225 967,232 744,763 118,732
Mobile entertainment 363,468 399,493 392,452 62,566
Others 10 21,081 7,882 1,257
Cost of revenues (b) (457,953) (461,383) (391,182) (62,364)
-------- -------- -------- -------
Gross profit 732,750 926,423 753,915 120,191
Operating income and expenses:
Research and
development (b) (191,367) (151,867) (147,278) (23,480)
Selling and marketing
(b) (414,264) (420,080) (391,355) (62,391)
General and
administrative (b) (103,588) (115,089) (90,600) (14,444)
Impairment of goodwill
and intangible assets - (38,690) - -
Other operating income 2,784 21,307 11,679 1,862
----- ------ ------ -----
Total operating income
and expenses (706,435) (704,419) (617,554) (98,453)
Operating profit 26,315 222,004 136,361 21,738
Other income (expense):
Interest income, net 1,616 10,227 16,652 2,655
Foreign exchange gain
(loss), net 1,213 (5,943) (12,829) (2,045)
Impairment of
investments - (209,565) (58,000) (9,247)
(Losses) Gain from
equity method
investments, net (367) 1,921 (2,739) (437)
Other income, net 66,685 1,088,965 500 80
------ --------- --- ---
Income before taxes 95,462 1,107,609 79,945 12,744
Income tax expenses (4,912) (40,259) (5,042) (804)
------ ------- ------ ----
Net income 90,550 1,067,350 74,903 11,940
------ --------- ------ ------
Less: net (loss) income
attributable to
noncontrolling
interests (679) 20,264 4,906 782
---- ------ ----- ---
Net income attributable
to Cheetah Mobile
shareholders 91,229 1,047,086 69,997 11,158
====== ========= ====== ======
Earnings per share
Basic 0.07 0.74 0.04 0.01
Diluted 0.06 0.73 0.04 0.01
Earnings per ADS
Basic 0.66 7.43 0.43 0.07
Diluted 0.64 7.27 0.42 0.07
Weighted average number of shares outstanding
Basic 1,387,446,596 1,400,420,814 1,403,597,719 1,403,597,719
Diluted 1,422,443,105 1,432,849,633 1,452,802,118 1,452,802,118
Weighted average number of ADSs outstanding
Basic 138,744,660 140,042,081 140,359,772 140,359,772
Diluted 142,244,310 143,284,963 145,280,212 145,280,212
Other comprehensive loss, net of tax of nil
Foreign currency
translation
adjustments (8,517) (52,267) (134,774) (21,486)
Unrealized losses on
available-for-sale
securities, net - (433) - -
Other comprehensive
loss (8,517) (52,700) (134,774) (21,486)
------ ------- -------- -------
Total comprehensive
income (loss) 82,033 1,014,650 (59,871) (9,546)
Less: Total
comprehensive income
attributable to
noncontrolling
interests 119 18,568 3,321 529
--- ------ ----- ---
Total comprehensive
income (loss)
attributable to
Cheetah Mobile
shareholders 81,914 996,082 (63,192) (10,075)
====== ======= ======= =======
CHEETAH MOBILE INC.
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited, amounts in thousands of Renminbi ("RMB") and US dollars ("US$"), except for number of shares and per share
(or ADS) data)
(a) On January 1, 2018, The Group adopted ASC 606, applying the modified retrospective method to contracts that were not completed as of January 1, 2018. Adoption did not have a material impact as of January 1, 2018. Results for reporting periods beginning
on or after January 1, 2018 are presented under ASC 606, while prior period amounts are not adjusted and continue to be reported in accordance with historic accounting under ASC 605. As ASC 605 has been superseded by ASC 606 on this subject, value added
tax was reclassified from the cost of revenues to net against revenues. Advertising-for-advertising barter transactions should be recorded at the fair value of the advertising received by reference to the fair value of advertising services provided to
other customers. Revenues are recognized in the same amount with costs and expenses. Previously, such transactions were recorded at cost which was nil as no consideration was exchanged. The following table illustrates the effect of the adoption of ASC
606 by presenting a comparison of revenues for the three months ended March 31, 2018, as actually reported and as they would have been reported under ASC 605, without the adoption of ASC 606:
For The Three Months Ended
--------------------------
March 31, 2018 March 31, 2018
RMB USD
As reported 1,145,097 182,555
Add: value added taxes 28,314 4,514
Less: barter transactions 3,801 606
Without adoption of ASC 606 1,169,610 186,463
========= =======
For The Three Months Ended
--------------------------
March 31, 2017 December 31, 2017 March 31, 2018 March 31, 2018
(b) Share-based compensation expenses RMB RMB RMB USD
Cost of revenues 934 (981) (90) (14)
Research and development 9,571 4,471 (6,143) (979)
Selling and marketing (188) (3,049) 302 48
General and administrative 14,051 2,933 14,850 2,367
------ ----- ------ -----
Total 24,368 3,374 8,919 1,422
====== ===== ===== =====
CHEETAH MOBILE INC.
Information about Segment
(Unaudited, in'000, except for percentage)
For The Three Months Ended March 31, 2018
-----------------------------------------
Utility Products and Mobile Entertainment Others Unallocated* Consolidated
Related Services
----------------
RMB RMB RMB RMB RMB USD
Revenue 744,763 392,452 7,882 - 1,145,097 182,555
Operating profit (loss) 264,706 (75,046) (44,380) (8,919) 136,361 21,738
Operating margin 35.5% (19.1)% (563.1)% 11.9% 11.9%
For The Three Months Ended December 31, 2017
--------------------------------------------
Utility Products and Mobile Entertainment Others Unallocated* Consolidated
Related Services
----------------
RMB RMB RMB RMB RMB
Revenue 967,232 399,493 21,081 - 1,387,806
Operating profit (loss) 326,950 (61,846) (39,726) (3,374) 222,004
Operating margin 33.8% (15.5)% (188.4)% 16.0%
For The Three Months Ended March 31, 2017
-----------------------------------------
Utility Products and Mobile Entertainment Others Unallocated* Consolidated
Related Services
----------------
RMB RMB RMB RMB RMB
Revenue 827,225 363,468 10 - 1,190,703
Operating profit (loss) 179,158 (128,478) 3 (24,368) 26,315
Operating margin 21.7% (35.3)% 30.0% 2.2%
* Unallocated expenses refer to SBC expenses that are not allocated to individual segments.
CHEETAH MOBILE INC.
Reconciliation of GAAP and Non-GAAP Results
(Unaudited, in'000, except for per share data and percentage)
For The Three Months Ended March 31, 2018
-----------------------------------------
GAAP % of Net Share-based % of Net Non-GAAP % of Net Non-GAAP
Result Revenues Compensation Revenues Result Revenues Result ($)
------ -------- ------------ -------- ------ -------- ---------
Revenues 1,145,097 1,145,097 182,555
Cost of revenues (391,182) 34.2% (90) 0.0% (391,272) 34.2% (62,378)
Gross profit 753,915 65.8% (90) 0.0% 753,825 65.8% 120,177
Research and development (147,278) 12.9% (6,143) 0.5% (153,421) 13.4% (24,459)
Selling and marketing (391,355) 34.2% 302 0.0% (391,053) 34.2% (62,343)
General and administrative (90,600) 7.9% 14,850 1.3% (75,750) 6.6% (12,077)
Other operating income 11,679 1.0% - 0.0% 11,679 1.0% 1,862
Total operating income and expenses (617,554) 53.9% 9,009 0.8% (608,545) 53.1% (97,017)
Operating profit 136,361 11.9% 8,919 0.8% 145,280 12.7% 23,160
Net income attributable to 69,997 6.1% 8,919 0.8% 78,916 6.9% 12,581
Cheetah Mobile shareholders
Diluted earnings per ordinary share (RMB) 0.04 0.01 0.05
Diluted earnings per ADS (RMB) 0.42 0.06 0.48
Diluted earnings per ADS (USD) 0.07 0.01 0.08
For The Three Months Ended December 31, 2017
--------------------------------------------
GAAP % of Net Share-based % of Net Non-GAAP % of Net
Result Revenues Compensation Revenues Result Revenues
------ -------- ------------ -------- ------ --------
Revenues 1,387,806 1,387,806
Cost of revenues (461,383) 33.2% (981) 0.1% (462,364) 33.3%
Gross profit 926,423 66.8% (981) 0.1% 925,442 66.7%
Research and development (151,867) 10.9% 4,471 0.3% (147,396) 10.6%
Selling and marketing (420,080) 30.3% (3,049) 0.2% (423,129) 30.5%
General and administrative (115,089) 8.3% 2,933 0.2% (112,156) 8.1%
Impairment of goodwill and intangible assets (38,690) 2.8% - 0.0% (38,690) 2.8%
Other operating income 21,307 1.5% - 0.0% 21,307 1.5%
Total operating income and expenses (704,419) 50.8% 4,355 0.3% (700,064) 50.4%
Operating profit 222,004 16.0% 3,374 0.2% 225,378 16.2%
Net income attributable to Cheetah Mobile shareholders 1,047,086 75.4% 3,374 0.2% 1,050,460 75.7%
Diluted earnings per ordinary share (RMB) 0.73 0.00 0.73
Diluted earnings per ADS (RMB) 7.27 0.02 7.29
For The Three Months Ended March 31, 2017
-----------------------------------------
GAAP % of Net Share-based % of Net Non-GAAP % of Net
Result Revenues Compensation Revenues Result Revenues
------ -------- ------------ -------- ------ --------
Revenues 1,190,703 1,190,703
Cost of revenues (457,953) 38.5% 934 0.1% (457,019) 38.4%
-------- ---- --- --- -------- ----
Gross profit 732,750 61.5% 934 0.1% 733,684 61.6%
Research and development (191,367) 16.1% 9,571 0.8% (181,796) 15.3%
Selling and marketing (414,264) 34.8% (188) 0.0% (414,452) 34.8%
General and administrative (103,588) 8.7% 14,051 1.2% (89,537) 7.5%
Other operating income 2,784 0.2% - 0.0% 2,784 0.2%
----- --- --- --- ----- ---
Total operating income and expenses (706,435) 59.3% 23,434 2.0% (683,001) 57.4%
Operating profit 26,315 2.2% 24,368 2.0% 50,683 4.3%
Net income attributable to 91,229 7.7% 24,368 2.0% 115,597 9.7%
Cheetah Mobile Shareholders
Diluted earnings per ordinary share (RMB) 0.06 0.02 0.08
Diluted earnings per ADS (RMB) 0.64 0.17 0.81
CHEETAH MOBILE INC.
Reconciliation from Net Income Attributable to Cheetah Mobile Shareholders to Adjusted EBITDA (Non-GAAP)
(Unaudited, in '000)
For The Three Months Ended
--------------------------
March 31, 2017 December 31, 2017 March 31, 2018 March 31, 2018
RMB RMB RMB USD
Net income attributable to
Cheetah Mobile shareholders 91,229 1,047,086 69,997 11,158
Add:
Income tax expenses 4,912 40,259 5,042 804
Interest income, net (1,616) (10,227) (16,652) (2,655)
Depreciation and
amortization 36,595 30,377 23,472 3,742
Net (loss) income
attributable to
noncontrolling interests (679) 20,264 4,906 782
Other non-operating
(income) expense, net (67,531) (875,378) 73,068 11,649
Share-based compensation 24,368 3,374 8,919 1,422
Adjusted EBITDA 87,278 255,755 168,752 26,902
=============== ====== ======= ======= ======
CHEETAH MOBILE INC.
Revenues Generated from PC-based and Mobile-based Applications and Services
(Unaudited, in '000)
For The Three Months Ended
--------------------------
March 31, 2017 December 31, 2017 March 31, 2018 March 31, 2018
RMB RMB RMB USD
PC 182,337 170,259 127,094 20,262
Mobile 1,008,366 1,217,547 1,018,003 162,293
------ --------- --------- --------- -------
Total 1,190,703 1,387,806 1,145,097 182,555
===== ========= ========= ========= =======
CHEETAH MOBILE INC.
Revenues Generated from Domestic and Overseas Markets
(Unaudited, in '000)
For The Three Months Ended
--------------------------
March 31, 2017 December 31, 2017 March 31, 2018 March 31, 2018
RMB RMB RMB USD
Domestic 342,383 543,974 447,620 71,361
Overseas 848,320 843,832 697,477 111,194
-------- ------- ------- ------- -------
Total 1,190,703 1,387,806 1,145,097 182,555
===== ========= ========= ========= =======
View original content:http://www.prnewswire.com/news-releases/cheetah-mobile-announces-first-quarter-2018-unaudited-consolidated-financial-results-300651707.html
SOURCE Cheetah Mobile
