Leju Reports Second Quarter and Half Year 2019 Results
BEIJING, Aug. 19, 2019 /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 half year ended June 30, 2019.
Second Quarter 2019 Financial Highlights
-- Total revenues increased by 39% year-on-year to $170.0 million.
-- Revenues from e-commerce services increased by 51% year-on-year to
$132.4 million.
-- Revenues from online advertising services increased by 8%
year-on-year to $37.2 million.
-- Income from operations was $12.0 million, an increase of 20% from $10.0
million for the same quarter of 2018.
-- Non-GAAP[1] income from operations was $15.7 million, an increase of 10%
from $14.3 million for the same quarter of 2018.
-- Net income attributable to Leju Holdings Limited shareholders was $9.4
million, or $0.07 per diluted American depositary share ("ADS"),
compared to net loss attributable to Leju Holdings Limited shareholders
of $0.9 million, or $0.01 loss per diluted ADS, for the same quarter of
2018.
-- Non-GAAP net income attributable to Leju Holdings Limited shareholders
was $12.3 million, or $0.09 per diluted ADS, an increase of 388% from
$2.5 million, or $0.02 per diluted ADS, for the same quarter of 2018.
First Half 2019 Financial Highlights
-- Total revenues increased by 37% year-on-year to $280.4 million.
-- Revenues from e-commerce services increased by 48% year-on-year to
$209.2 million.
-- Revenues from online advertising services increased by 14%
year-on-year to $70.3 million.
-- Loss from operations was $7.1 million, a decrease of 67% from loss from
operations of $21.5 million for the same period of 2018.
-- Non-GAAP income from operations was $0.4 million, compared to non-GAAP
loss from operations of $12.8 million for the same period of 2018.
-- Net loss attributable to Leju Holdings Limited shareholders was $4.1
million, or $0.03 loss per diluted ADS, a decrease of 81% from net loss
attributable to Leju Holdings Limited shareholders of $21.7 million, or
$0.16 loss per diluted ADS for the same period of 2018.
-- Non-GAAP net income attributable to Leju Holdings Limited shareholders
was $1.8 million, or $0.01 per diluted ADS, compared to non-GAAP net
loss attributable to Leju Holdings Limited shareholders of $14.7
million, or $0.11 loss per diluted ADS for the same period of 2018.
[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 income
tax impact on the share-based
compensation expense, amortization
of intangible assets resulting from
business combinations. 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.
"We are pleased that Leju achieved solid growth in both revenue and profit in the second quarter," said Mr. Geoffrey He, Leju's chief executive officer. "Our e-commerce revenue was close to our all-time high this quarter benefiting from the implementation of our top-down strategy, and we have accumulated a strong project pipeline for the second half of 2019. Leju's new media business also made great progress this quarter as our stronger content production systems and multi-channel networking operation model helped to improve our media influence and keep our competitive advantage in the market. In addition, we further optimized our operations and management, which helped us generate positive cash inflow from operations in the second quarter. Looking ahead, market uncertainty may increase. We will continue our efforts to improve operational efficiency and profitability while maintaining healthy top-line growth."
Second Quarter 2019 Results
Total revenues were $170.0 million, an increase of 39% from $122.7 million for the same quarter of 2018, mainly due to an increase in revenues from e-commerce services and online advertising services.
Revenues from e-commerce services were $132.4 million, an increase of 51% from $87.6 million for the same quarter of 2018, primarily due to an increase in the number of discount coupons redeemed, partially offset by a decrease in the average price per discount coupon redeemed.
Revenues from online advertising services were $37.2 million, an increase of 8% from $34.4 million for the same quarter of 2018, primarily due to an increase in property developers' demand for online advertising.
Revenues from listing services were $0.4 million, a decrease of 40% from $0.7 million for the same quarter of 2018, primarily due to a decrease in secondary real estate brokers' demand.
Cost of revenues was $18.3 million, relatively flat compared to $18.4 million for the same quarter of 2018.
Selling, general and administrative expenses were $140.0 million, an increase of 48% from $94.7 million for the same quarter of 2018, primarily due to increased marketing expenses related to the Company's e-commerce business.
Income from operations was $12.0 million, an increase of 20% from $10.0 million for the same quarter of 2018. Non-GAAP income from operations was $15.7 million, an increase of 10% from $14.3 million for the same quarter of 2018.
Net income was $9.6 million, compared to net loss of $1.0 million for the same quarter of 2018. Non-GAAP net income was $12.6 million, an increase of 420% from $2.4 million for the same quarter of 2018.
Net income attributable to Leju Holdings Limited shareholders was $9.4 million, or $0.07 per diluted ADS, compared to net loss attributable to Leju Holdings Limited shareholders of $0.9 million, or $0.01 loss per diluted ADS, for the same quarter of 2018. Non-GAAP net income attributable to Leju Holdings Limited shareholders was $12.3 million, or $0.09 per diluted ADS, an increase of 388% from $2.5 million, or $0.02 per diluted ADS, for the same quarter of 2018.
First Half 2019 Results
Total revenues were $280.4 million, an increase of 37% from $204.2 million for the same period of 2018, mainly due to an increase in revenues from e-commerce services and online advertising services.
Revenues from e-commerce services were $209.2 million, an increase of 48% from $141.0 million for the same period of 2018, primarily due to an increase in the number of discount coupons redeemed, partially offset by a decrease in the average price per discount coupon redeemed.
Revenues from online advertising services were $70.3 million, an increase of 14% from $61.5 million for the same period of 2018, primarily due to an increase in property developers' demand for online advertising.
Revenues from listing services were $0.9 million, a decrease of 49% from $1.7 million for the same period of 2018, primarily due to a decrease in secondary real estate brokers' demand.
Cost of revenues was $41.8 million, an increase of 13% from $37.1 million for the same period of 2018, primarily due to increased cost of advertising resources purchased from media platforms.
Selling, general and administrative expenses were $246.0 million, an increase of 30% from $189.9 million for the same period of 2018, primarily due to increased marketing expenses related to the Company's e-commerce business.
Loss from operations was $7.1 million, a decrease of 67% from loss from operations of $21.5 million for the same period of 2018. Non-GAAP income from operations was $0.4 million, compared to non-GAAP loss from operations of $12.8 million for the same period of 2018.
Net loss was $3.9 million, a decrease of 82% from net loss of $22.3 million for the same period of 2018. Non-GAAP net income was $2.0 million, compared to non-GAAP net loss of $15.2 million for the same period of 2018.
Net loss attributable to Leju Holdings Limited shareholders was $4.1 million, or $0.03 loss per diluted ADS, a decrease of 81% from net loss attributable to Leju Holdings Limited shareholders of $21.7 million, or $0.16 loss per diluted ADS for the same period of 2018. Non-GAAP net income attributable to Leju Holdings Limited shareholders was $1.8 million, or $0.01 per diluted ADS, compared to non-GAAP net loss attributable to Leju Holdings Limited shareholders of $14.7 million, or $0.11 loss per diluted ADS for the same period of 2018.
Cash Flow
As of June 30, 2019, the Company's cash and cash equivalents balance was $166.6 million.
Second quarter 2019 net cash provided by operating activities was $32.5 million, primarily comprised of non-GAAP net income of $12.6 million, a decrease in customer deposits of $7.1 million, an increase in accrued marketing and advertising expenses and other current liabilities of $9.7 million, an increase in amounts due to related parties of $5.9 million, an increase in advance from customer of $5.6 million, and an increase in income tax payable and other tax payable of 3.3 million, partially offset by an increase in accounts receivable and contract assets of $13.5 million.
Business Outlook
The Company estimates that its total revenues for the third quarter of 2019 will be approximately $170 million to $180 million, which would represent an increase of approximately 27% to 35% from $133.6 million in the same quarter in 2018. This forecast reflects the Company's current and preliminary view, which is subject to change.
Conference Call Information
Leju's management will host an earnings conference call on August 19, 2019 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 August 27, 2019:
U.S./International: +1-855-452-5696
Hong Kong:
800-963-117
Mainland China:
400-632-2162
Passcode: 4069729
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 status as a principal shareholder of 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 income tax impact on the share-based compensation expense and amortization of intangible assets resulting from business combinations. 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 and amortization of intangible assets resulting from business acquisitions, 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 CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars)
December 31, June 30,
ASSETS 2018 2019
Current assets
Cash and cash equivalents 147,263 166,613
Accounts receivable, net 102,697 122,804
Contract assets 2,137 1,303
Marketable securities 2,467 3,327
Prepaid expenses and other current assets 8,621 8,871
Customer deposits 10,672 2,195
Amounts due from related parties 6,695 7,573
Total current assets 280,552 312,686
Property and equipment, net 14,058 17,865
Intangible assets, net 57,401 51,177
Right-of-use assets[2] 33,795
Investment in affiliates 63 37
Deferred tax assets 62,356 62,252
Other non-current assets 2,297 1,390
Total assets 416,727 479,202
LIABILITIES AND EQUITY
Current liabilities
Accounts payable 803 2,062
Accrued payroll and welfare expenses 30,628 30,637
Income tax payable 58,030 56,230
Other tax payable 12,675 15,422
Amounts due to related parties 3,477 14,626
Advance from customers 26,873 34,899
Lease liabilities, current[2] 6,478
Accrued marketing and advertising expenses 14,896 18,149
Other current liabilities 12,999 20,030
Total current liabilities 160,381 198,533
Lease liabilities, non-current[2] 27,570
Deferred tax liabilities 14,780 14,755
Total liabilities 175,161 240,858
Shareholders' Equity
Ordinary shares ($0.001 par value): 1,000,000,000 shares 136 136
authorized, 135,763,962 and 135,763,962 shares issued
and outstanding, as of December 31, 2018 and June 30, 2019,
respectively
Additional paid-in capital 792,626 793,798
Accumulated deficit (528,825)) (532,964)
Accumulated other comprehensive loss (19,848) (20,319)
Total Leju Holdings Limited shareholders' equity 244,089 240,651
Non-controlling interests (2,523) (2,307)
Total equity 241,566 238,344
TOTAL LIABILITIES AND EQUITY 416,727 479,202
[2] In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right-of-use asset and lease liability on their balance sheet for all leases with a term of more than 12 months. The Group
adopted this ASU on January 1, 2019 using the modified retrospective approach and the financial statements for the comparative period has not been restated.
LEJU HOLDINGS LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except share data and per share data)
Three months ended
Six months ended
June 30,
June 30,
2018 2019 2018 2019
Revenues
E-commerce 87,571 132,365 141,041 209,214
Online advertising services 34,361 37,153 61,491 70,332
Listing services 744 447 1,667 852
Total revenues 122,676 169,965 204,199 280,398
Cost of revenues (18,405) (18,293) (37,080) (41,831)
Selling, general and administrative expenses (94,749) (140,040) (189,927) (246,017)
Other operating income 478 346 1,308 368
Income (loss) from operations 10,000 11,978 (21,500) (7,082)
Interest income 272 202 559 585
Other income (loss), net (5,209) 696 (2,372) 1,293
Income (loss) before taxes and loss from equity 5,063 12,876 (23,313) (5,204)
in affiliates
Income tax benefits/(expenses) (6,024) (3,232) 1,093 1,307
Income (loss) before loss from equity in affiliates (961) 9,644 (22,220) (3,897)
Loss from equity in affiliates (32) (14) (51) (26)
Net income (loss) (993 (993)) 9,630 (22,271) (3,923)
Less: net income (loss) attributable to non-controlling interests (109) 278 (525) 216
Income (loss) attributable to Leju Holdings (884) 9,352 (21,746) (4,139)
Limited shareholders
Earnings (loss) per ADS:
Basic (0.01) 0.07 (0.16) (0.03)
Diluted (0.01) 0.07 (0.16) (0.03)
Shares used in computation of earnings (loss) per ADS:
Basic 135,763,962 135,763,962 135,763,962 135,763,962
Diluted 135,763,962 135,769,776 135,763,962 135,763,962
The conversion of functional currency Renminbi ("RMB") amounts into reporting currency USD amounts is based on the rate of USD1 = RMB6.8747 on June 30, 2019 and USD1 = RMB6.8005 for the six months ended June 30, 2019.
LEJU HOLDINGS LIMITED
UNAUDITED
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS)
(In thousands of U.S. dollars)
Three months ended Six months ended
June 30,
June 30,
2018 2019 2018 2019
Net income (loss) (993) 9,630 (22,271) (3,923)
Other comprehensive loss, net of tax of nil
Foreign currency translation adjustment (2,982) (3,805) (773) (471)
Comprehensive income (loss) (3,975) 5,825) (23,044) (4,394)
Less: Comprehensive income (loss) attributable to 38 311 (480) 216
non-controlling interest
Comprehensive income (loss) attributable to Leju (4,013) 5,514 (22,564) (4,610)
Holdings Limited 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 Six months ended
June 30,
June 30,
2018 2019 2018 2019
GAAP income (loss) from operations 10,000 11,978 (21,500) (7,082)
Share-based compensation expense 1,056 596 2,035 1,171
Amortization of intangible assets resulting from business 3,205 3,153 6,655 6,306
acquisitions
Non-GAAP income (loss) from operations 14,261 15,727 (12,810) 395
GAAP net income (loss) (993) 9,630 (22,271) (3,923)
Share-based compensation expense 1,056 596 2,035 1,171
Amortization of intangible assets resulting from 3,205 3,153 6,655 6,306
business acquisitions
Income tax benefit:
Current
Deferred[3] (847) (788) (1,664) (1,576)
Non-GAAP net income (loss) 2,421 12,591 (15,245) 1,978
Net income (loss) attributable to Leju Holdings Limited (884) 9,352 (21,746) (4,139)
shareholder
Share-based compensation expense 1,048 596 2,019 1,171
(net of non-controlling interests)
Amortization of intangible assets resulting from business 3,205 3,153 6,655 6,306
acquisitions (net of non-controlling interests)
Income tax benefit:
Current
Deferred (847) (788) (1,664) (1,576)
Non-GAAP net income (loss) attributable to Leju 2,522 12,313 (14,736) 1,762
Holdings Limited shareholders
GAAP net income (loss) per ADS - basic (0.01) 0.07 (0.16) (0.03)
GAAP net income (loss) per ADS - diluted (0.01) 0.07 (0.16) (0.03)
Non-GAAP net income (loss) per ADS - basic 0.02 0.09 (0.11) 0.01
Non-GAAP net income (loss) per ADS - diluted 0.02 0.09 (0.11) 0.01
Shares used in calculating basic GAAP / non-GAAP net 135,763,962 135,763,962 135,763,962 135,763,962
income (loss) attributable to shareholders per ADS
Shares used in calculating diluted GAAP net income (loss) 135,769,776 135,763,962 135,763,962
attributable to shareholders per ADS 135,763,962
Shares used in calculating diluted non-GAAP net income 135,769,776 135,763,962 135,766,869
(loss) attributable to shareholders per ADS
135,763,962
[3] Amount represents the realization of deferred tax liabilities recognized for the temporary difference between the tax basis of intangible assets recognized from acquisitions and their reported amounts in the financial statements. The income tax impact on the share-based compensation expense is nil.
LEJU HOLDINGS LIMITED
SELECTED OPERATING DATA
Three months ended Six months ended
June 30,
June 30,
2018 2019 2018 2019
Operating data for e-commerce services
Number of discount coupons issued to 58,252 64,820 77,930 94,369
prospective purchasers (number of
transactions)
Number of discount coupons redeemed (number 20,888 36,235 34,687 55,794
of transactions)
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SOURCE Leju Holdings Limited
