58.com Reports First Quarter 2020 Unaudited Financial Results
BEIJING, June 26, 2020 /PRNewswire/ -- 58.com Inc. (NYSE: WUBA) ("58.com" or the "Company"), China's largest online classifieds marketplace, today reported its unaudited financial results for the first quarter ended March 31, 2020.
First Quarter 2020 Highlights
-- Total revenues were RMB2,560.3 million (US$361.4 million[1]), a 15.5%
decrease from RMB3,028.3 million in the same quarter of 2019.
-- Total number of paying business users[2] was approximately 2.7 million
in the first quarter of 2020, a 20.7% decrease from the same quarter of
2019.
-- Gross margin was 87.9% compared with 90.2% in the same quarter of 2019.
-- Loss from operations was RMB55.8 million (US$7.9 million), compared with
income from operations of RMB281.3 million in the same quarter of 2019.
-- Non-GAAP income from operations[3] was RMB144.0 million (US$20.3
million), a 69.0% decrease from RMB465.1 million in the same quarter of
2019.
-- Net income attributable to 58.com Inc. ordinary shareholders was
RMB1,638.6 million (US$231.3 million), a 134.7% increase from RMB698.2
million in the same quarter of 2019. This includes a net gain picked up
from 58 Home of RMB2,683.2 million.
-- Non-GAAP net income attributable to 58.com Inc. ordinary shareholders
[4] was RMB2,243.6 million (US$316.7 million), a 414.7% increase from
RMB435.9 million in the same quarter of 2019. This includes a net gain
picked up from 58 Home of RMB2,683.2 million.
-- Basic and diluted earnings per ADS attributable to ordinary shareholders
were RMB10.95 (US$1.54) and RMB10.82 (US$1.53), respectively,
representing 132.6% and 132.6% increases from RMB4.71 and RMB4.65,
respectively, in the same quarter of 2019. One ADS represents two Class
A ordinary shares.
-- Non-GAAP basic and diluted earnings per ADS[5] attributable to ordinary
shareholders were RMB14.99 (US$2.12) and RMB14.81 (US$2.09),
respectively, representing 410.0% and 410.1% increases from RMB2.94 and
RMB2.90, respectively, in the same quarter of 2019.
First Quarter 2020 Financial Results
Revenues
Total revenues were RMB2,560.3 million (US$361.4 million), representing a decrease of 15.5% from RMB3,028.3 million in the same quarter of 2019.
Membership revenues were RMB815.6 million (US$115.1 million), a decrease of 16.9% from RMB982.0 million in the same quarter of 2019.
Online marketing services revenues were RMB1,595.4 million (US$225.2 million), a decrease of 17.8% from RMB1,940.9 million in the same quarter of 2019.
The decreases were mainly due to the adverse impact from the outbreak of COVID-19. To control the spread of COVID-19, the PRC government implemented a series of strict measures, including travel restrictions, quarantines, and a temporary shutdown of businesses which resulted in a decrease in activity level among paying business users. In particular, paying business users that require in-person meetings to conduct their business, including those in the secondary housing and rental real estate sector, used auto dealers, local service providers, and recruiters, have been adversely and materially affected by these interruptions and delayed business resumption. The Company's revenues are generated primarily from these paying business users, most of whom are small and medium-sized local businesses, and the outbreak of COVID-19 and subsequent prevention and control measures have adversely affected their business operations and financial conditions in the first quarter of 2020. As a result, the Company's revenues during the first quarter of 2020 declined significantly when compared with the same period in 2019.
Cost of Revenues
Cost of revenues was RMB309.3 million (US$43.7 million), an increase of 4.2% from RMB296.9 million in the same quarter of 2019.
The year-over-year increase was primarily driven by increases in the costs associated with "Premium Home Services" (????), enhanced services that focus on partnering with high quality providers to further standardize their service quality and integrate service protection plans while establishing closed-loop transactions through the Company's platforms, and an increase in the costs of goods sold and services provided on the Zhuan Zhuan platform which were partially offset by a decrease in traffic acquisition cost paid to advertising union partners.
Gross Profit and Gross Margin
Gross profit was RMB2,251.0 million (US$317.7 million), a decrease of 17.6% from RMB2,731.4 million during the same quarter of 2019.
Gross margin was 87.9% in the first quarter of 2020, compared with 90.2% during the same quarter of 2019.
Operating Expenses
Operating expenses were RMB2,306.8 million (US$325.6 million), a decrease of 5.8% from RMB2,450.1 million in the same quarter of 2019.
Sales and marketing expenses in the first quarter of 2020 were RMB1,577.5 million (US$222.7 million), a decrease of 12.0% from RMB1,793.0 million in the same quarter of 2019.
Within sales and marketing expenses, advertising expenses in the first quarter of 2020 were RMB712.2 million (US$100.5 million), a decrease of 19.7% from RMB886.5 million in the same quarter of 2019 as a result of the spread of COVID-19 which caused a decrease in advertising activities.
Non-advertising sales and marketing expenses in the first quarter of 2020 were RMB865.3 million (US$122.1 million), a decrease of 4.5% from RMB906.5 million in the same quarter of 2019.
Non-advertising sales and marketing expenses include salaries and benefits, commissions and share-based compensation expenses for the Company's sales, sales support, customer service, marketing dealer management personnel, online and offline promotional expenses, and other operating expenses that are associated with sales and marketing activities.
Research and development expenses in the first quarter of 2020 were RMB497.0 million (US$70.1 million), essentially flat with RMB495.0 million in the same quarter of 2019.
General and administrative expenses in the first quarter of 2020 were RMB232.4 million (US$32.8 million), an increase of 43.3% from RMB162.2 million in the same quarter of 2019. The increase was mainly due to the adoption of the current expected credit losses methodology in estimating allowances for credit losses in the first quarter of 2020.
Income/(Loss) from Operations
Loss from operations was RMB55.8 million (US$7.9 million) in the first quarter of 2020, compared with income from operations of RMB281.3 million in the same quarter of 2019.
Operating margin, defined as income/(loss) from operations divided by total revenues, was negative 2.2% in the first quarter of 2020, compared with 9.3% in the same quarter of 2019.
Non-GAAP income from operations was RMB144.0 million (US$20.3 million) in the first quarter of 2020, a decrease of 69.0% from RMB465.1 million in the same quarter of 2019.
Non-GAAP operating margin, defined as non-GAAP income from operations divided by total revenues, was 5.6% in the first quarter of 2020, compared with 15.4% in the same quarter of 2019.
Other Income/(Expenses), net
Net other income in the first quarter of 2020 was RMB1,680.7 million (US$237.2 million), compared with net other income of RMB554.3 million in the same quarter of 2019.
Net other income in the first quarter of 2020 was primarily comprised of a RMB2,654.8 million gain in share of results of equity investees and RMB30.9 million in tax refunds and other government subsidies, offset by RMB1,054.3 million in a net investment loss.
Share of results of equity investees in the first quarter of 2020 was mainly attributed to RMB2,683.2 million net gain pick-up from 58 Home, which was mainly due to the Company's proportionate share of one-time non-cash gain recognized by 58 Home for its deconsolidation of 58 Daojia Limited, a majority owned subsidiary of 58 Home, which was partially offset by the Company's proportionate share of net loss attributable to 58 Home's ordinary shareholders. 58 Home lost its control over 58 Daojia Limited and started to deconsolidate its financial statements when 58 Daojia Limited completed its Series B round of equity financing in February 2020, as certain Series B investors have substantive participating rights in the operational decision making of 58 Daojia Limited.
Net investment loss mainly included RMB683.3 million in impairment losses in long-term investments and RMB446.1 million losses in change in fair value of long-term investments and investments in convertible notes as the market value of certain fair value measured investments suffered downward adjustments in the first quarter of 2020.
There would have been net other expenses of RMB1,002.5 million (US$141.5 million) in the first quarter of 2020 if the RMB2,683.2 million net gain picked up from 58 Home was excluded.
Net Income Attributable to 58.com Inc. Ordinary Shareholders
Net income attributable to 58.com Inc. ordinary shareholders was RMB1,638.6 million (US$231.3 million) in the first quarter of 2020, an increase of 134.7% from RMB698.2 million in the same quarter of 2019. Excluding the RMB2,683.2 million net gain picked up from 58 Home, net loss attributable to 58.com Inc. ordinary shareholders in the first quarter of 2020 was RMB1,044.5 million (US$147.4 million).
Net margin, defined as net income attributable to 58.com Inc. ordinary shareholders divided by total revenues, was 64.0% in the first quarter of 2020, compared with 23.1% in the same quarter of 2019. Excluding the net gain picked up from 58 Home, net margin in the first quarter of 2020 was negative 40.8%.
Non-GAAP net income attributable to 58.com Inc. ordinary shareholders was RMB2,243.6 million (US$316.7 million) in the first quarter of 2020, an increase of 414.7% from RMB435.9 million in the same quarter of 2019. Excluding the net gain picked up from 58 Home, non-GAAP net loss attributable to 58.com Inc. ordinary shareholders in the first quarter of 2020 was RMB439.6 million (US$62.0 million).
Non-GAAP net margin, defined as non-GAAP net income attributable to 58.com Inc. ordinary shareholders divided by total revenues, was 87.6% in the first quarter of 2020, compared with 14.4% in the same quarter of 2019. Excluding the net gain picked up from 58 Home, non-GAAP net margin in the first quarter of 2020 was negative 17.2%.
Basic and Diluted Earnings per ADS
Basic and diluted earnings per ADS attributable to ordinary shareholders in the first quarter of 2020 were RMB10.95 (US$1.54) and RMB10.82 (US$1.53), respectively, representing 132.6% and 132.6% increases from RMB4.71 and RMB4.65, respectively, in the same quarter of 2019.
Non-GAAP basic and diluted earnings per ADS attributable to ordinary shareholders in the first quarter of 2020 were RMB14.99 (US$2.12) and RMB14.81 (US$2.09), respectively, representing 410.0% and 410.1% increases from RMB2.94 and RMB2.90, respectively, in the same quarter of 2019.
Cash Flow
Net cash used in operating activities was RMB379.4 million (US$53.6 million) in the first quarter of 2020, compared to net cash provided by operating activities of RMB564.9 million in the same quarter of 2019.
Cash and Cash Equivalents, Term Deposits, Restricted Cash and Short-term Investments
As of March 31, 2020, the Company had cash and cash equivalents, term deposits, restricted cash and short-term investments of RMB12,547.3 million (US$1,770.9 million).
Shares Outstanding
As of March 31, 2020, the Company had a total of 299,728,769 ordinary shares (including 254,496,649 Class A and 45,232,120 Class B ordinary shares) issued and outstanding.
Non-GAAP Financial Measures
To supplement the financial measures prepared in accordance with generally accepted accounting principles in the United States, or GAAP, this press release presents non-GAAP income/(loss) from operations, non-GAAP operating margin, non-GAAP net income/(loss) attributable to 58.com Inc. ordinary shareholders, non-GAAP net margin and non-GAAP basic and diluted earnings/(loss) per share and per ADS by excluding share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, change in fair value of long-term investments and investments in convertible notes, share-based compensation expenses included in share of results of equity investees, income tax effects of above GAAP to non-GAAP reconciling items. The Company believes these non-GAAP financial measures are important to help investors understand the Company's operating and financial performance, compare business trends among different reporting periods on a consistent basis and assess the Company's core operating results, as they exclude certain expenses/gains that are not expected to result in cash payments/receipts. The use of the above non-GAAP financial measures has certain limitations. Share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, non-cash gain or loss and income tax effects resulting from GAAP to non-GAAP reconciling items have been and will continue to be incurred in the future and are not reflected in the presentation of the non-GAAP financial measures, but should be considered in the overall evaluation of the Company's results. The Company compensates for these limitations by providing the relevant disclosure of its share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, change in fair value of long-term investments and investments in convertible notes, share-based compensation expenses included in share of results of equity investees, income tax effects of above GAAP to non-GAAP reconciling items, all of which should be considered when evaluating the Company's performance. These non-GAAP financial measures should be considered in addition to financial measures prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP. Reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP financial measure is set forth at the end of this release.
[1] This press release contains
translations of certain Renminbi
(RMB) amounts into U.S. dollars
(US$) solely for the convenience of
the readers. Unless otherwise
specified, all translations of
Renminbi amounts into US$ amounts
in this press release are made at
RMB7.0851 to US$1.00, which was the
U.S. dollars middle rate announced
by the PRC State Administration of
Foreign Exchange on March 31, 2020.
The percentages stated in this
press release are calculated based
on the Renminbi amounts. On June
24, 2020, such exchange rate was
RMB7.0555 to US$1.00.
[2] Paying business users refer to
users who are identified as
business users with unique identity
information such as business
licenses or personal identification
information and who used the
Company's subscription-based
membership services or purchased at
least one type of online marketing
services in a given period. One
paying business user can open up
several paying user accounts on one
or multiple online platforms. The
number and the percentage
calculation does not include paying
business users on Ganji as the
Company stopped selling stand-
alone Ganji subscription-based
membership services in 2018 or
earlier in all of its content
categories.
[3] Non-GAAP income from operations
is defined as income from
operations excluding share-based
compensation expenses and
amortization of intangible assets
resulting from business
acquisitions. See "Reconciliation
of GAAP and Non-GAAP Results" at
the end of this press release.
[4] Non-GAAP net income
attributable to 58.com Inc.
ordinary shareholders is defined as
net income attributable to 58.com
Inc. ordinary shareholders
excluding share-based compensation
expenses, amortization of
intangible assets resulting from
business acquisitions, change in
fair value of long-term
investments and investments in
convertible notes, share-based
compensation expenses included in
share of results of equity
investees, and income tax effects
of GAAP to non-GAAP reconciling
items. See "Reconciliation of GAAP
and Non-GAAP Results" at the end
of this press release.
[5] Non-GAAP basic and diluted
earnings per ADS is defined as non-
GAAP net income attributable to
58.com Inc. ordinary shareholders
divided by weighted average number
of basic and diluted ADSs.
About 58.com Inc.
58.com Inc. (NYSE: WUBA) operates China's largest online classifieds marketplace, as measured by monthly unique visitors on both its www.58.com website and mobile applications. The Company's online marketplace enables local business users and consumer users to connect, share information and conduct business. 58.com's broad, in-depth and high quality local information, combined with its easy-to-use website and mobile applications, has made it a trusted marketplace for consumers. 58.com's strong brand recognition, large and growing user base, merchant network and massive database of local information create a powerful network effect. For more information on 58.com, please visit http://www.58.com.
Safe Harbor Statements
This press release contains forward-looking statements made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. 58.com may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about 58.com's beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: 58.com's goals and strategies; its future business development, financial condition and results of operations; its ability to retain and grow its user base and network of local merchants for its online marketplace; the growth of, and trends in, the markets for its services in China; the outbreak of COVID-19 or other health epidemics in China or globally; the demand for and market acceptance of its brand and services; competition in its industry in China; its ability to maintain the network infrastructure necessary to operate its website and mobile applications; relevant government policies and regulations relating to the corporate structure, business and industry; and its ability to protect its users' information and adequately address privacy concerns. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and 58.com does not undertake any obligation to update such information, except as required under applicable law.
For more information, please contact:
58.com Inc.
ir@58.com
Christensen
In China
Mr. Christian Arnell
Phone: +86-10-5900-1548
E-mail: carnell@christensenir.com
In US
Ms. Linda Bergkamp
Phone: +1-480-614-3004
Email: lbergkamp@ChristensenIR.com
58.com Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data, unless otherwise)
As of
December 31, 2019
March 31, 2020
March 31, 2020
---
RMB
RMB
US$
ASSETS
Current assets:
Cash and cash equivalents..................................................................................................................................................... 5,293,206 4,876,057 688,213
Restricted cash-current.......................................................................................................................................................... 477,099 538,724 76,036
Term deposits........................................................................................................................................................................ 70,000 70,000 9,880
Short-term investments.......................................................................................................................................................... 8,414,348 7,062,554 996,818
Accounts receivable, net........................................................................................................................................................ 1,209,251 1,105,326 156,007
Prepayments and other current assets.................................................................................................................................... 2,326,920 2,830,994 399,570
Total current assets............................................................................................................................................................. 17,790,824 16,483,655 2,326,524
Non-current assets:
Property and equipment, net.................................................................................................................................................. 1,305,793 1,285,024 181,369
Intangible assets, net.............................................................................................................................................................. 886,565 840,901 118,686
Right-of-use assets, net......................................................................................................................................................... 275,459 253,408 35,766
Land use rights, net............................................................................................................................................................... 3,532 3,512 496
Goodwill............................................................................................................................................................................... 15,874,220 15,874,220 2,240,508
Long-term investments.......................................................................................................................................................... 6,086,511 8,249,490 1,164,343
Investments in convertible notes............................................................................................................................................ 669,715 817,270 115,351
Long-term prepayments and other non-current assets........................................................................................................... 469,592 803,450 113,400
Total non-current assets..................................................................................................................................................... 25,571,387 28,127,275 3,969,919
Total assets.......................................................................................................................................................................... 43,362,211 44,610,930 6,296,443
LIABILITIES, MEZZANINE EQUITY AND
SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable.................................................................................................................................................................. 1,042,697 1,387,244 195,797
Deferred revenues................................................................................................................................................................. 2,154,920 1,691,080 238,681
Customer advances................................................................................................................................................................ 1,986,108 1,970,655 278,141
Taxes payable........................................................................................................................................................................ 698,104 362,025 51,097
Salary and welfare payable.................................................................................................................................................... 753,267 560,843 79,158
Operating lease liabilities, current.......................................................................................................................................... 137,310 114,304 16,133
Accrued expenses and other current liabilities....................................................................................................................... 1,053,007 1,082,811 152,829
Total current liabilities........................................................................................................................................................ 7,825,413 7,168,962 1,011,836
Non-current liabilities:
Deferred tax liabilities............................................................................................................................................................ 389,719 324,514 45,802
Operating lease liabilities, non-current................................................................................................................................... 138,554 157,195 22,187
Total non-current liabilities................................................................................................................................................ 528,273 481,709 67,989
Total liabilities..................................................................................................................................................................... 8,353,686 7,650,671 1,079,825
Mezzanine equity:
Mezzanine classified noncontrolling interests.................................................................. 3,668,876 3,815,512 538,526
Total mezzanine equity....................................................................................................................................................... 3,668,876 3,815,512 538,526
Shareholders' equity:
58.com Inc. shareholders' equity:
Ordinary shares (US$0.00001 par value, 4,800,000,000 Class A and
200,000,000 Class B shares authorized, 254,045,293 Class A and
45,232,120 Class B shares issued and outstanding as of December 31,
2019 and 254,496,649 Class A and 45,232,120 Class B shares issued
and outstanding as of March 31, 2020, respectively)
19 19 3
Additional paid-in capital....................................................................................................................................................... 21,942,829 22,026,581 3,108,860
Retained earnings.................................................................................................................................................................. 8,892,773 10,529,706 1,486,176
Accumulated other comprehensive income............................................................................................................................ 95,903 178,710 25,223
Total 58.com Inc. shareholders' equity............................................................................................................................. 30,931,524 32,735,016 4,620,262
Noncontrolling interests..................................................................................................................................................... 408,125 409,731 57,830
Total shareholders' equity................................................................................................................................................. 31,339,649 33,144,747 4,678,092
Total liabilities, mezzanine equity and shareholders' equity 43,362,211 44,610,930 6,296,443
58.com Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share, per share and per ADS data, unless otherwise noted)
For the Three Months Ended
March 31,
December 31,
March 31,
March 31,
2019 2019 2020 2020
---
RMB
RMB
RMB
US$
Revenues:
Membership......................................................................................... 982,028 1,112,362 815,624 115,118
Online marketing services.................................................................. 1,940,900 2,713,807 1,595,421 225,180
E-commerce services.......................................................................... 28,023 53,722 8,744 1,234
Other revenues..................................................................................... 77,302 275,643 140,553 19,838
Total revenues......................................................................................... 3,028,253 4,155,534 2,560,342 361,370
Cost of revenues(1)................................................................................... (296,851) (565,985) (309,344) (43,661)
Gross profit.............................................................................................. 2,731,402 3,589,549 2,250,998 317,709
Operating expenses(1):
Sales and marketing expenses(2)....................................................... (1,792,950) (2,023,502) (1,577,510) (222,652)
Research and development expenses.............................................. (494,977) (560,746) (496,970) (70,143)
General and administrative expenses.............................................. (162,168) (264,172) (232,361) (32,796)
Total operating expenses...................................................................... (2,450,095) (2,848,420) (2,306,841) (325,591)
Income/(loss) from operations............................................................ 281,307 741,129 (55,843) (7,882)
Other income/(expenses):
Interest income, net............................................................................. 8,462 27,841 31,783 4,486
Investment income/(loss), net........................................................... 544,570 1,924,195 (1,054,274) (148,802)
Share of results of equity investees.................................................. (10,571) 9,806 2,654,755 374,695
Foreign currency exchange gain/(loss), net..................................... 2,949 (8,601) 9,900 1,397
Others, net............................................................................................. 8,928 134,871 38,488 5,432
Income before tax................................................................................... 835,645 2,829,241 1,624,809 229,326
Income tax benefit/(expenses)......................................................... (106,109) (158,122) 75,700 10,684
Net income................................................................................................ 729,536 2,671,119 1,700,509 240,010
Net loss attributable to noncontrolling interests............................. 2,314 4,075 4,069 574
Net income attributable to 58.com Inc.............................................. 731,850 2,675,194 1,704,578 240,584
Deemed dividend to mezzanine classified (33,700) (65,955) (9,309)
noncontrolling interests..................................................................................................
(65,428)
Net income attributable to 58.com Inc. ordinary 698,150 2,609,766 1,638,623 231,275
shareholders..
Net earnings per ordinary share attributable to 2.35 8.72 5.47 0.77
ordinary shareholders - basic..................................................................................
Net earnings per ordinary share attributable to 2.33 8.64 5.41 0.76
ordinary shareholders - diluted...............................................................................
Net earnings per ADS attributable to ordinary 4.71 17.45 10.95 1.54
shareholders - basic (1 ADS represents 2 Class A
ordinary shares).....................................
Net earnings per ADS attributable to ordinary 4.65 17.28 10.82 1.53
shareholders - diluted (1 ADS represents 2 Class A
ordinary shares).....................................
Weighted average number of ordinary shares used in 296,690,552 299,427,404 299,427,404
computing basic earnings per share..........................................................................
299,155,358
Weighted average number of ordinary shares used in 300,250,567 302,932,654 302,932,654
computing diluted earnings per share.......................................................................
302,001,274
Note:
(1) Share-based compensation expenses were allocated in cost of revenues and operating expenses as follows:
Cost of revenues.................................................................................. 1,833 2,895 3,322 469
Sales and marketing expenses.............................................................. 28,520 31,612 29,909 4,221
Research and development expenses................................................... 51,220 62,520 65,681 9,270
General and administrative expenses................................................... 51,732 61,935 59,567 8,407
(2) Amortization of intangible assets resulting from business acquisitions were allocated in operating expenses as follows:
Sales and marketing expenses........................................................ 42,954 43,087 42,954 6,063
Research and development expenses.............................................. 11,997 12,015 2,433 343
(3) Breakdown of sales and marketing expenses was as follows:
Advertising expenses..................................................................... 886,470 865,144 712,239 100,526
Non-advertising sales and marketing expenses.............................. 906,480 1,158,358 865,271 122,126
58.com Inc.
Reconciliation of GAAP and Non-GAAP Results
(in thousands, except share, ADS, per share and per ADS data, unless otherwise noted)
For the Three Months Ended
March 31,
December 31,
March 31,
March 31,
2019 2019 2020 2020
---
RMB
RMB
RMB
US$
GAAP income/(loss) from operations................................................ 281,307 741,129 (55,843) (7,882)
Share-based compensation expenses[6]............................................. 128,875 154,244 154,451 21,799
Amortization of intangible assets resulting from
business acquisitions............................................................................................
54,951 55,102 45,387 6,406
---
Non-GAAP income from operations.................................................. 465,133 950,475 143,995 20,323
GAAP net income attributable to 58.com Inc................................... 698,150 2,609,766 1,638,623 231,275
Share-based compensation expenses............................................... 128,875 154,244 154,451 21,799
Amortization of intangible assets resulting from
business acquisitions............................................................................................
54,951 55,102 45,387 6,406
Change in fair value of long-term investments and (508,950) 2,258,544 446,081 62,960
investments in convertible notes[7].............................................................................
Share-based compensation expenses included in share
of results of equity investees...............................................................................
9
Income tax effects of GAAP to non-GAAP reconciling
items[8].....
62,878 (200,057) (40,949) (5,780)
---
Non-GAAP net income attributable to 58.com Inc.......................... 435,913 4,877,599 2,243,593 316,660
GAAP operating margin....................................................................... 9.3% 17.8% (2.2)% (2.2)%
Share-based compensation expenses............................................... 4.3% 3.7% 6.0% 6.0%
Amortization of intangible assets resulting from
business acquisitions............................................................................................
1.8% 1.4% 1.8% 1.8%
---
Non-GAAP operating margin.............................................................. 15.4% 22.9% 5.6% 5.6%
GAAP net margin.................................................................................... 23.1% 62.8% 64.0% 64.0%
Share-based compensation expenses............................................... 4.3% 3.7% 6.0% 6.0%
Amortization of intangible assets resulting from 1.8% 1.4% 1.8% 1.8%
business acquisitions............................................................................................
Change in fair value of long-term investments and (16.8)% 54.4% 17.4% 17.4%
investments in convertible notes..............................................................................
Share-based compensation expenses included in share 0.0% 0.0% 0.0% 0.0%
of results of equity investees...............................................................................
Income tax effects of GAAP to non-GAAP reconciling 2.0% (4.9)% (1.6)% (1.6)%
items......
Non-GAAP net margin........................................................................... 14.4% 117.4% 87.6% 87.6%
Weighted average number of ordinary shares used in 296,690,552 299,427,404 299,427,404
computing non-GAAP basic earnings per share.............................
299,155,358
Weighted average number of ordinary shares used in 300,250,567 302,932,654 302,932,654
computing non-GAAP diluted earnings per share..........................
302,001,274
Weighted average number of ADS used in computing 148,345,276 149,577,679 149,713,702 149,713,702
non-GAAP basic earnings per ADS...........................................................
Weighted average number of ADS used in computing 150,125,284 151,000,637 151,466,327 151,466,327
non-GAAP diluted earnings per ADS........................................................
Non-GAAP net earnings per ordinary share 1.47 16.30 7.49 1.06
attributable to ordinary shareholders - basic.............................................................
Non-GAAP net earnings per ordinary share 1.45 16.15 7.41 1.05
attributable to ordinary shareholders - diluted..........................................................
Non-GAAP net earnings per ADS attributable to 2.94 32.61 14.99 2.12
ordinary shareholders - basic..............................................................................
Non-GAAP net earnings per ADS attributable to 2.90 32.30 14.81 2.09
ordinary shareholders - diluted...........................................................................
[6] Since the third quarter of
2017, certain share-based awards
with redemption features granted
to the Company's employees were
expected to be settled in cash and
were classified as liabilities.
The share-based compensation
expenses recognized for this type
of awards amounted to RMB4.4
million, RMB4.7 million and RMB4.0
million for the first and fourth
quarter of 2019 and the first
quarter of 2020, respectively,
which were excluded from the GAAP
to non-GAAP reconciliation
accordingly.
[7] The purpose of this
reconciliation is to exclude the
unrealized gain or loss relating
to changes in fair value of long-
term investments and investments
in convertible notes. The amount
of realization of any previously
recognized unrealized gain or loss
in a given period is also included
in this line item so that the non-
GAAP net income would only include
cumulative realized gain or loss.
[8] This is to exclude the income
tax effects related to
amortization of intangible assets
resulting from business
acquisitions and change in fair
value of long-term investments
and investments in convertible
notes. Other GAAP to non-GAAP
reconciling items have no income
tax effect.
View original content:http://www.prnewswire.com/news-releases/58com-reports-first-quarter-2020-unaudited-financial-results-301084281.html
SOURCE 58.com Inc
