Autohome Inc. Announces Unaudited Third Quarter Ended September 30, 2018 Financial Results
Third Quarter Net Revenues were RMB1.89 Billion Exceeding the High End of the Guidance
Net income attributable to Autohome Inc. increased 59.9% Year-over-Year to RMB681.3 Million
BEIJING, Nov. 12, 2018 /PRNewswire/ -- Autohome Inc. (NYSE: ATHM) ("Autohome" or the "Company"), the leading online destination for automobile consumers in China, today announced its unaudited financial results for the third quarter ended September 30, 2018.
Third Quarter 2018 Financial Highlights([1] )
-- Net Revenues in the third quarter of 2018 were RMB1,888.4 million
($275.0 million), exceeding the high end of the Company's original
guidance of RMB1,870.0 million ($272.3 million).
-- Net Income attributable to Autohome Inc. in the third quarter of 2018
was RMB681.3 million ($99.2 million), compared to RMB426.1 million in
the corresponding period of 2017.
-- Adjusted net income attributable to Autohome Inc.in the third quarter of
2018 was RMB737.4 million ($107.4 million), compared to RMB475.8 million
in the corresponding period of 2017.
[1] The reporting currency of the Company is Renminbi ("RMB"). For the convenience of readers, certain amounts
throughout the release are presented in US dollars ("$"). Unless otherwise noted, all conversions from RMB to
US$ are translated at the noon buying rate of US$1.00 to RMB 6.8680 on September 28, 2018 in the City of New
York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No
representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate.
Adoption of ASC 606, Revenue from Contracts with Customers
In May 2014, the FASB issued a new standard related to revenue recognition and further issued several amendments and updates to the new revenue guidance. The Company has finalized its analysis and the most significant impact is the change of the presentation of value-added tax from gross basis to net basis. The Company adopted this guidance effective January 1, 2018 using the modified retrospective method. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods.
To provide investors with meaningful year-over-year comparison, the Company has provided a reconciliation table for the impact of adopting this new revenue guidance for the third quarter of 2018 and corresponding period in 2017, as adjusted, which was related to the change in presentation of value-added tax from gross basis to net basis.
For the three months ended September 30, 2018
Under ASC 605
Adjustments Under ASC
related to new 606
revenue guidance
Net revenues
Media services 955,379 (54,078) 901,301
Leads generation services 842,889 (103,619) 739,270
Online marketplace and others 266,434 (18,573) 247,861
Total net revenues 2,064,702 (176,270) 1,888,432
Cost of revenues (317,890) 102,533 (215,357)
Gross profit 1,746,812 (73,737) 1,673,075
Operating profit 698,201 698,201
Net income attributable to 681,321 681,321
Autohome Inc.
For the three months ended September 30, 2017
Under ASC
Adjustments Under ASC
605 related to new 606
revenue guidance
Net revenues
Media services 792,252 (41,998) 750,254
Leads generation services 700,811 (86,941) 613,870
Online marketplace and others 55,349 (4,810) 50,539
Total net revenues 1,548,412 (133,749) 1,414,663
Cost of revenues (304,028) 81,682 (222,346)
Gross profit 1,244,384 (52,067) 1,192,317
Operating profit 530,012 530,012
Net income attributable to 426,080 426,080
Autohome Inc.
For the ease of readers, the operational results are discussed and analyzed under the new revenue guidance, including those for the comparative period in 2017.
Third Quarter 2018 Operational Highlights
-- Mobile Traffic Leadership Continues: In September 2018, the number of
average daily unique visitors who accessed the Company's mobile websites
and primary application combined reached 27.9 million, representing an
increase of 48% compared with September 2017, further solidifying the
Company's dominant position in the auto vertical sector in China.
-- Data-driven Professionally Generated Content (PGC) Aggregates Audience
Focus: The Company's automobile content platform continued to be the
best-in-class with the number of professional content contributors
increasing 28% sequentially. In addition, attributable to popular
demand, Autohome has further diversified its content production by
expanding to 13 columns, now including automobile culture,
automobile-in-use, automobile comparative evaluation, in addition to the
original 9 columns existing in the previous quarter of 2018.
-- Augmented Reality Automobile Show in Chengdu Enhances O2O Convergence:
The Company again successfully implemented the use of its Augmented
Reality Automobile Show (the "AR Auto Show"), for the recent Chengdu
21(st) International Automobile Exhibition during the period from August
31, 2018 to September 9, 2018. The AR Auto Show attracted 26 branded
automakers with over 130 automobile styles on display. This resulted in
close to 46 million unique visitors with approximately 90% originating
from tier 2 and lower-tier cities. The AR Auto Show generated further
traffic of potential consumers with strong demand in lower tier Chinese
cities, by surpassing the limitations set by traditional offline shows
in terms of physical location and timing. Leveraging this satisfactory
experience, Autohome plans to further expand the AR auto shows in other
Chinese cities.
Mr. Min Lu, Chairman of the Board of directors and Chief Executive Officer of Autohome, stated, "We had another great quarter with revenue again exceeding our original guidance. With the successful implementation of our "4+1" strategy driving all of our business pillars, we have initiated strategic upgrade in building next generation auto ecosystem with AI, big data and cloud. We plan to continue to deepen our user engagement across our media platform, offer innovative intelligent marketing solutions driven by data technology, expand auto-financing options and partnerships, and accelerate our transaction platform. Given our consistent and repeated success in the past, as well as our leading position in the automotive industry, we remain committed to further strengthen our leadership, enrich our ecosystem, advance our cutting-edge technology, and enhance our competitiveness."
Mr. Jun Zou, Chief Financial Officer, added, "We are pleased with our progress so far in 2018 as we delivered resilient revenue growth and an even greater increase in net profit despite the softening macro environment for automobile sales in China. This performance was primarily driven by our core business share gains, continued focus on cost control, while ensuring the success of our new initiatives. We look forward to the opportunities ahead for Autohome as we further solidify our position as the automotive industry's most trusted marketing and technology partner."
Overview of Key Financial Results for Third Quarter 2018
---
Key Financial Results
(In RMB Millions except for per share 3Q2017 3Q2018 % Change
data)
--- ---
Net Revenues 1,414.7 1,888.4 33.5%
Net Income attributable to Autohome Inc. 426.1 681.3 59.9%
Adjusted Net Income attributable to 475.8 737.4 55.0%
Autohome Inc.[2]
Diluted Earnings Per Share[3] 3.59 5.71 59.1%
[2] Adjusted net income attributable to Autohome Inc. is defined as net income attributable to Autohome Inc. excluding share-based
compensation expenses and amortization expenses of intangible assets related to acquisitions. For more information on this and other
non-GAAP financial measures, please see the section captioned "Use of Non-GAAP Financial Measures" and the tables captioned
"Reconciliations of Non-GAAP and GAAP Results" set forth at the end of this release.
[3] Each ordinary share equals one ADS.
Unaudited Third Quarter 2018 Financial Results
Net Revenues
Net revenues in the third quarter of 2018 were RMB1,888.4 million ($275.0 million) compared to RMB1,414.7 million in the corresponding period of 2017.
-- Media services revenues increased 20.1% to RMB901.3 million ($131.2
million) from RMB750.3 million in the corresponding period of 2017. The
increase was mainly attributable to an increase in average revenue per
automaker advertiser as automakers continued allocating a greater
portion of their advertising budgets to Autohome, which provides an
increasingly diversified and optimized portfolio of products.
-- Leads generation services revenues increased 20.4% to RMB739.3 million
($107.6 million) from RMB613.9 million in the corresponding period of
2017. The increase was primarily attributable to a 15.9% year-over-year
increase in average revenue per paying dealer as dealers continue to
allocate a greater portion of their budgets to the Company's services,
as well as an expanded dealer client base.
-- Online marketplace and others revenues increased 390.4% to RMB247.9
million ($36.1 million) from RMB50.5 million in the corresponding period
of 2017. Excluding direct vehicle sales, it would have increased 620.5%
compared to the corresponding period of 2017. This increase was
primarily attributable to the increased contribution from auto-financing
business and data products. Online marketplace and others revenues in
the third quarter of 2018 consisted of revenues related to new car and
used car marketplace, auto-financing business, data products and others.
Cost of Revenues
Cost of revenues decreased by 3.1% to RMB215.4 million ($31.4 million) from RMB222.3 million in the corresponding period of 2017. Excluding the cost of direct vehicle sales, cost of revenues would have increased 4.1% compared to the corresponding period of 2017. In addition, cost of revenues included share-based compensation expenses of RMB4.3 million ($0.6 million) during the third quarter of 2018, compared to RMB3.9 million for the corresponding period of 2017.
Operating Expenses
Operating expenses were RMB1, 074.0 million ($156.4 million) in the third quarter of 2018, compared to RMB717.2 million in the corresponding period of 2017. The increase was mainly due to increases in sales and marketing expenses and product development expenses as the Company continues to reinvest in future growth opportunities.
-- Sales and marketing expenses were RMB676.5 million ($98.5 million) in
the third quarter of 2018, compared to RMB422.3 million in the
corresponding period of 2017. The increase was primarily attributable to
an increase in offline execution and branding expenses. Sales and
marketing expenses for the third quarter of 2018 included share-based
compensation expenses of RMB18.0 million ($2.6 million), compared to
RMB11.6 million in the corresponding period of 2017.
-- General and administrative expenses were RMB100.3 million ($14.6
million) in the third quarter of 2018, compared to RMB87.4 million in
the corresponding period of 2017. The increase was primarily
attributable to an increase in salaries and benefits. General and
administrative expenses for the third quarter of 2018 included
share-based compensation expenses of RMB12.8 million ($1.9 million),
compared to RMB25.1 million in the corresponding period of 2017.
-- Product development expenses were RMB297.3 million ($43.3 million) in
the third quarter of 2018, compared to RMB207.5 million in the
corresponding period of 2017. The increase was primarily attributable to
an increase in salaries and benefits and increased investment in
research and development activities. Product development expenses for
the third quarter of 2018 included share-based compensation expenses of
RMB19.9 million ($2.9 million), compared to RMB8.0 million in the
corresponding period of 2017.
Operating Profit
Operating profit increased 31.7% to RMB698.2 million ($101.7 million) from RMB530.0 million in the corresponding period of 2017.
Income tax expense
Income tax expense decreased 9.2% to RMB150.7 million ($21.9 million) in the third quarter of 2018, from RMB166.0 million in the corresponding period of 2017, primarily attributable to withholding tax liability associated with special cash dividend in the corresponding period of 2017, partially offset by an increase in taxable income.
Net Income attributable to Autohome Inc. and EPS
Net income attributable to Autohome Inc. increased 59.9% to RMB681.3 million ($99.2 million) from RMB426.1 million in the corresponding period of 2017. Basic and diluted earnings per share/per ADS ("EPS") were RMB5.78 ($0.84) and RMB5.71 ($0.83), respectively, compared to basic and diluted EPS of RMB3.65 and RMB3.59, respectively, in the corresponding period of 2017.
Adjusted Net Income attributable to Autohome Inc. and Non-GAAP EPS
Adjusted net income attributable to Autohome Inc. (Non-GAAP), defined as net income attributable to Autohome Inc. excluding share-based compensation expenses and amortization expenses of intangible assets related to acquisitions, increased 55.0% to RMB737.4 million ($107.4 million) from RMB475.8 million in the corresponding period of 2017. Non-GAAP basic and diluted EPS were RMB6.26 ($0.91) and RMB6.18 ($0.90), respectively, compared to non-GAAP basic and diluted EPS of RMB4.07 and RMB4.01, respectively, in the corresponding period of 2017.
Balance Sheet and Cash Flow
As of September 30, 2018, the Company had cash and cash equivalents and short-term investments of RMB8,345.9 million ($1,215.2 million). Net cash provided by operating activities in the third quarter of 2018 was RMB641.3 million ($93.4 million), compared to RMB548.3 million in the corresponding period of 2017.
Employees
The Company had 4,179 employees as of September 30, 2018.
Business Outlook
Autohome currently expects to generate net revenues in the range of RMB2,110 million ($307.2 million) to RMB2,130 million ($310.1 million) in the fourth quarter of fiscal year 2018, representing a 31.6% to 32.8% year-over-year increase. If excluding direct vehicle sales, this represents a 32.0% to 33.3% year-over-year increase. This forecast reflects the Company's current and preliminary view on the market and its operating conditions, which are subject to change.
Starting on January 1, 2018, Autohome adopted a new revenue recognition accounting standard ASC 606. Under ASC 606, the most significant impact on Autohome will be the change of presentation of value-added tax from gross basis to net basis. The above guidance reflects revenues net of value-added tax under the new revenue recognition standard. If presented on gross basis including value-added tax, the same basis as that for the year 2017, net revenues are expected to be between RMB2,310 million ($336.3 million) to RMB2,330 million ($339.3 million) in the fourth quarter of fiscal year 2018.
Conference Call Information
The Company will host an earnings conference call at 7:00 AM U.S. Eastern Time on Monday, November 12, 2018 (8:00 PM Beijing Time on the same day).
Dial-in details for the earnings conference call are as follows:
United States:
+1-855-824-5644
Hong Kong:
+852-3027-6500
China Domestic:
8009-880-563
United Kingdom:
0800-026-1542
International:
+1 646-722-4977
Passcode:
18906071#
Please dial in ten minutes before the call is scheduled to begin and provide the passcode to join the call.
A replay of the conference call may be accessed by phone at the following numbers until November 18, 2018:
United States:
+1-646-982-0473
International:
+61-2-8325-2405
Passcode:
319303147#
Additionally, a live and archived webcast of the conference call will be available at http://ir.autohome.com.cn.
About Autohome Inc.
Autohome Inc. (NYSE: ATHM) is the leading online destination for automobile consumers in China. Its mission is to enhance the car-buying and ownership experience for auto consumers in China. Autohome provides professionally produced and user-generated content, a comprehensive automobile library, and extensive automobile listing information to automobile consumers, covering the entire car purchase and ownership cycle. The ability to reach a large and engaged user base of automobile consumers has made Autohome a preferred platform for automakers and dealers to conduct their advertising campaigns. Further, the Company's dealer subscription and advertising services allow dealers to market their inventory and services through Autohome's platform, extending the reach of their physical showrooms to potentially millions of internet users in China and generating sales leads for them. The Company offers sales leads, data analysis, and marketing services to assist automakers and dealers with improving their efficiency and facilitating transactions. As a transaction-centric company, Autohome operates its "Autohome Mall," a full-service online transaction platform, to facilitate transactions for automakers and dealers. Further, through its websites and mobile applications, it also provides other value-added services, including auto financing, auto insurance, used car transactions, and aftermarket services. For further information, please visit www.autohome.com.cn.
Safe Harbor Statement
This press release contains statements that may constitute "forward-looking" statements pursuant to 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" and similar statements. Among other things, Autohome's business outlook, Autohome's strategic and operational plans and quotations from management in this announcement contain forward-looking statements. Autohome may also make written or oral forward-looking statements in its periodic reports to the Securities and Exchange Commission ("SEC"), 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 Autohome's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Autohome's goals and strategies; Autohome's future business development, results of operations and financial condition; the expected growth of the online automobile advertising market in China; Autohome's ability to attract and retain users and advertisers and further enhance its brand recognition; Autohome's expectations regarding demand for and market acceptance of its products and services; competition in the online automobile advertising industry; fluctuations in general economic and business conditions in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Autohome's filings with the SEC. All information provided in this press release is as of the date of this press release, and Autohome does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
Use of Non-GAAP Financial Measures
To supplement net income presented in accordance with U.S. GAAP, we use Adjusted Net Income attributable to Autohome Inc., Non-GAAP basic and diluted EPS and Adjusted EBITDA as non-GAAP financial measures. We define Adjusted Net Income attributable to Autohome Inc. as net income attributable to Autohome Inc. excluding share-based compensation expenses and amortization expenses of intangible assets related to acquisitions. We define Non-GAAP basic and diluted EPS as Adjusted Net Income attributable to Autohome Inc. divided by the basic and diluted weighted average number of ordinary shares. We define Adjusted EBITDA as net income attributable to Autohome Inc. before income tax expense/(benefit), depreciation expenses of property and equipment and amortization expenses of intangible assets and share-based compensation expenses. We present these non-GAAP financial measures because they are used by our management to evaluate our operating performance, in addition to net income prepared in accordance with U.S. GAAP. We believe these non-GAAP financial measures are important to help investors understand our operating and financial performance, compare business trends among different reporting periods on a consistent basis and assess our 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 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 our results. 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. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliation of non-GAAP and GAAP Results" set forth at the end of this press release.
For investor and media inquiries, please contact:
In China:
Autohome Inc.
Investor Relations
Joyce Tang
Tel: +86-10-5985-7483
Email: ir@autohome.com.cn
The Piacente Group, Inc.
Xi Zhang
Tel: +86-10-5730-6200
E-mail: autohome@tpg-ir.com
In the United States:
The Piacente Group, Inc.
Brandi Piacente
Tel: +1-212-481-2050
E-mail: autohome@tpg-ir.com
AUTOHOME INC.
CONSOLIDATED STATEMENTS OF OPERATIONS[4]
(Amount in thousands, except per share data)
For three months ended September 30,
2017 2018
RMB
RMB
US$
(Unaudited)
(Unaudited)
(Unaudited)
Net revenues:
Media services 792,252 901,301 131,232
Leads generation services 700,811 739,270 107,640
Online marketplace 55,349 247,861 36,089
Total net revenues 1,548,412 1,888,432 274,961
Cost of revenues (304,028) (215,357) (31,357)
Gross profit 1,244,384 1,673,075 243,604
Operating expenses:
Sales and marketing expenses (422,334) (676,509) (98,502)
General and administrative expenses (87,438) (100,269) (14,599)
Product development expenses (207,450) (297,259) (43,282)
Total operating expenses (717,222) (1,074,037) (156,383)
Other income, net 2,850 99,163 14,438
Operating profit 530,012 698,201 101,659
Interest income 61,512 102,132 14,871
Income/(loss) from equity method investments (481) 30,419 4,429
Income before income taxes 591,043 830,752 120,959
Income tax expense (165,974) (150,702) (21,943)
Net income 425,069 680,050 99,016
Net loss attributable to noncontrolling interests 1,011 1,271 185
Net income attributable to Autohome Inc. 426,080 681,321 99,201
Earnings per share for ordinary shares
Basic 3.65 5.78 0.84
Diluted 3.59 5.71 0.83
Weighted average shares used to compute
earnings per share attributable to Class A
and Class B common stockholders:
Basic 116,784,140 117,835,866 117,835,866
Diluted 118,668,278 119,245,283 119,245,283
[4] The operating results for the three months ended September 30, 2017 have not been restated and were presented on a gross
basis with the net revenues and cost of revenues including value-added tax, while those for the three months ended September
30, 2018 were presented on net basis, with the net revenues and cost of revenues excluding value-added tax.
AUTOHOME INC.
RECONCILIATION OF NON-GAAP AND GAAP RESULTS
(Amount in thousands, except per share data)
For three months ended September 30,
2017 2018
RMB
RMB
US$
(Unaudited) (Unaudited) (Unaudited)
Net income attributable to Autohome Inc. 426,080 681,321 99,201
Plus: income tax expense 165,974 150,702 21,943
Plus: depreciation of property and 20,707 22,538 3,282
equipment
Plus: amortization of intangible assets 1,730 2,904 423
EBITDA 614,491 857,465 124,849
Plus: share-based compensation 48,602 54,956 8,002
expenses
Adjusted EBITDA 663,093 912,421 132,851
Net income attributable to Autohome Inc. 426,080 681,321 99,201
Plus: amortization of acquired intangible 1,139 1,139 166
assets of Cheerbright,
China Topside and Norstar
Plus: share-based compensation 48,602 54,956 8,002
expenses
Adjusted Net Income attributable to 475,821 737,416 107,369
Autohome Inc.
Non-GAAP Earnings per share for
ordinary shares
Basic 4.07 6.26 0.91
Diluted 4.01 6.18 0.90
Weighted average shares used to
compute earnings per share
attributable to Class A and Class B
common stockholders:
Basic 116,784,140 117,835,866 117,835,866
Diluted 118,668,278 119,245,283 119,245,283
AUTOHOME INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amount in thousands, except as noted)
As of December 31, As of
September 30,
2017 2018
RMB RMB US$
(Audited) (Unaudited) (Unaudited)
ASSETS
Current assets
Cash and cash equivalents 911,588 483,106 70,342
Short-term investments 7,242,636 7,862,744 1,144,838
Accounts and notes receivable, net 1,893,737 2,330,751 339,364
Amounts due from related parties, 24,502 16,987 2,473
current
Prepaid expenses and other current 186,123 366,408 53,350
assets
Total current assets 10,258,586 11,059,996 1,610,367
Non-current assets
Restricted cash, non-current 5,000 728
Property and equipment, net 130,322 156,024 22,718
Goodwill and intangible assets, net 1,555,201 1,546,490 225,173
Long-term investments 147,929 72,492 10,555
Deferred tax assets 174,620 139,562 20,321
Other non-current assets 28,317 736,213 107,193
Total non-current assets 2,036,389 2,655,781 386,688
Total assets 12,294,975 13,715,777 1,997,055
LIABILITIES AND EQUITY
Current liabilities
Accrued expenses and other payables 1,658,934 2,061,263 300,126
Advance from customers 70,454 65,146 9,485
Deferred revenue 1,409,485 722,413 105,185
Income tax payable 144,379 292,179 42,542
Amounts due to related parties 10,285 66,073 9,620
Dividends payable 595,779 - -
Total current liabilities 3,889,316 3,207,074 466,958
Non-current liabilities
Other liabilities 32,122 32,122 4,677
Deferred tax liabilities 438,251 450,785 65,636
Total non-current liabilities 470,373 482,907 70,313
Total liabilities 4,359,689 3,689,981 537,271
Equity
Total Autohome Inc. Shareholders' equity 7,951,637 10,047,023 1,462,875
Noncontrolling interests (16,351) (21,227) (3,091)
Total equity 7,935,286 10,025,796 1,459,784
Total liabilities and equity 12,294,975 13,715,777 1,997,055
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SOURCE Autohome Inc.
