BEIJING, Aug. 19, 2016 /PRNewswire/ -- Cheetah Mobile Inc.
(NYSE: CMCM) ("Cheetah Mobile" or the "Company"), a leading mobile
internet company that provides mission critical applications to
help make the internet and mobile experience speedier, simpler, and
safer for users worldwide, today announced its unaudited
consolidated financial results for the second quarter of 2016.
Second Quarter 2016 Highlights
- Total revenues increased by 18.1% year-over-year
to RMB1,046.7 million (US$157.5
million), exceeding the Company's previous guidance of
RMB975 million to RMB1,000 million.
The better-than-expected results in total revenues was primarily
driven by the Company's strategies to rejuvenate revenue growth in
2016, including refreshing its app products and ad layouts as well
as improving its direct sales programs.
- Mobile revenues increased by 36.7% year-over-year to
RMB772.3 million (US$116.2 million). Mobile revenues accounted for
73.8% of total revenues.
- Overseas revenues[1] increased by 25.3%
year-over-year to RMB560.7 million
(US$84.4 million). Overseas revenues
accounted for 53.6% of total revenues and 72.6% of mobile
revenues.
- Content-driven products made solid progress in the
second quarter of 2016, particularly in the U.S. market. According
to App Annie's July 2016 data, News Republic, a global mobile
news service operator recently acquired by the Company, was ranked
as one of the top three news & magazine apps in the U.S. on
Google Play. Live.me, the Company's recently launched live
streaming app, was ranked as one of the top five social apps in the
U.S. on Google Play. In early August, Live.me was also ranked as
one of the top ten social networking apps in the U.S. on Apple App
Store.
Second Quarter 2016 Key Operating Metrics
- The number of mobile monthly active users ("Mobile MAUs") was
623 million in June 2016. The number
of mobile MAUs from overseas markets accounted for 79.4% of total
mobile MAUs in June 2016.
- Total global mobile user installations was 3,099 million as of
June 30, 2016.
Mr. Sheng Fu, Cheetah Mobile's
Chief Executive Officer, stated, "We are pleased that the
initiatives we have implemented to rejuvenate sustainable growth
for our company are starting to bear fruit. In the second quarter
of 2016, we achieved better-than-expected total revenue growth. We
expect revenues to resume its sequential growth trends in the
second half of 2016, primarily driven by steady and sustained
revenue growth generated by our existing utility apps.
Additionally, we further expanded our content-driven product
portfolio to include news service, short video, live streaming and
casual gaming. Most notably, two of our content-driven products,
News Republic and Live.me, demonstrated strong performance over the
past quarter, particularly in the U.S. market. According to
App Annie's July data, News
Republic, our newly acquired global mobile news service operator
with thousands of high-profile media partners worldwide, was ranked
as one of the top 3 news & magazine apps in the U.S. on Google
Play. Live.me, a live streaming app, was ranked as one of the top 5
social apps in the U.S. on Google Play in July and was ranked as
one of the top 10 social networking apps in the U.S. on Apple App
Store in early August. While we don't want to downplay the
challenges we face in our transformation from a utility app based
mobile company to a content-driven mobile company, our initial
success proves that we are on the right track and is progressing
according to plans. Going forward, we will continue to leverage our
over 600 million mobile MAUs to support our content strategy,
deliver more personalized and relevant content to our users, and
build Cheetah into one of the world's leading mobile Internet
companies."
Mr. Andy Yeung, Cheetah Mobile's
Chief Financial Officer, commented, "Our total revenues this
quarter increased to RMB1,047
million, which well exceeded our guidance and was primarily
driven by the success of our strategies to rejuvenate revenue
growth in 2016, including plans to refresh our app products and ad
layouts as well as improve our direct sales programs. On the cost
side, we have also implemented stricter controls and more efficient
management of our product promotion strategies. We expect these
initiatives to continue to help sustain our growth and improve our
financial recovery in the coming quarters. Looking ahead, we remain
focused on aggressively executing on our content strategy to
establish a sustainable and profitable growth model for the long
term. We are confident that by doing so, we will be well positioned
to grow our business and deliver additional value to all of our
shareholders."
Second Quarter 2016 Consolidated Financial Results
REVENUES
Total revenues increased by 18.1% to RMB1,046.7 million (US$157.5 million) in the second quarter of 2016
from RMB886.2 million in the prior
year period. This increase was primarily driven by the Company's
organic business growth, which was attributable to the Company's
larger global mobile user base compared to the prior year period
and its continued improvements in mobile monetization.
- Revenues from online marketing services increased by
24.0% to RMB939.1 million
(US$141.3 million) in the second
quarter of 2016 from RMB757.2 million
in the prior year period. Mobile advertising revenues represented
approximately 77.9% of online marketing revenues in the quarter, as
compared with approximately 66.7% in the prior year period. The
increase in mobile advertising revenues was driven by the Company's
larger global mobile user base compared to the prior year period,
and higher demand from advertisers, including third-party
advertising platforms, for the Company's mobile advertising
services worldwide, as well as the improved monetization of light
causal games through in-game advertising.
- Revenues from internet value added services ("IVAS")
were RMB79.6 million (US$12.0 million) in the second quarter of 2016,
as compared with RMB109.3 million in
the prior year period. The year-over-year decrease was due to the
decline of mobile game publishing revenues in China, which was offset by the Company's
growth in overseas markets.
- Revenues from internet security services and others
increased by 41.5% to RMB27.9 million
(US$4.2 million) in the second
quarter of 2016 from RMB19.7 million
in the prior year period. The year-over-year increase was primarily
driven by higher internet software licensing revenues from Kingsoft
Japan.
By platform, revenues generated from mobile business
increased by 36.7% to RMB772.3
million (US$116.2 million)
from RMB565.1 million in the prior
year period. This increase was primarily driven by the Company's
larger global mobile user base, and the higher popularity of the
Company's mobile marketing services worldwide.
By region, revenues generated from overseas markets
increased by 25.3% to RMB560.7
million (US$84.4 million) from
RMB447.5 million in the prior year
period. This increase was primarily driven by the Company's larger
overseas mobile user base and improvements in overseas monetization
compared with the prior year period.
COST OF REVENUES AND GROSS PROFIT
Cost of revenues increased by 58.4% to RMB354.7 million (US$53.4
million) in the second quarter of 2016 from RMB223.9 million in the prior year period. This
increase was primarily driven by increased investments in content
for the Company's content-driven products, higher traffic
acquisition costs associated with the Company's third-party
advertising publishing business on the Cheetah Ad Platform, and
higher bandwidth and internet data center costs associated with
increased user traffic worldwide and data analytics.
Gross profit increased by 4.5% to RMB692.0 million (US$104.1
million) in the second quarter of 2016 from RMB662.3 million in the prior year period.
OPERATING INCOME/LOSS AND EXPENSES
Total operating expenses increased by 19.5% to RMB755.0 million (US$113.6
million) in the second quarter of 2016 from RMB632.0 million in the prior year period. Total
non-GAAP operating expenses increased by 15.6% to RMB666.6 million (US$100.3
million) from RMB576.6 million
in the prior year period.
- Research and development expenses increased by 54.9% to
RMB227.5 million (US$34.2 million) from RMB146.9 million in the prior year period,
primarily driven by an increase in personnel-related costs and
share-based compensation expenses. The increase in personnel costs
associated with research and development was primarily driven by
the Company's increased investments in big data analytics and new
product development, particularly the development of new
content-driven mobile applications and services. Non-GAAP research
and development expenses, which exclude share-based compensation
expenses, increased by 37.5% to RMB178.1
million (US$26.8 million) from
RMB129.5 million in the prior year
period.
- Selling and marketing expenses increased by 16.2% to
RMB407.2 million (US$61.3 million) from RMB350.3 million in the prior year period,
primarily driven by higher expenses on promotional activities for
the Company's content-driven products, as well as on sales and
marketing personnel as a result of the Company's strategy to expand
direct sales operations. Non-GAAP selling and marketing expenses,
which exclude share-based compensation expenses, increased by 16.9%
to RMB405.9 million (US$61.1 million) from RMB347.2 million in the prior year period.
- General and administrative expenses increased by 33.0% to
RMB160.7 million (US$24.2 million) from RMB120.9 million in the prior year period. The
year-over-year growth was primarily driven by an increase in
expenses associated with higher headcount, share-based compensation
expenses and staff benefits. Non-GAAP general and administrative
expenses, which exclude share-based compensation expenses,
increased by 43.0% to RMB123.0
million (US$18.5 million) from
RMB86.0 million in the prior year
period.
- Other operating income was RMB40.4
million (US$6.1 million) for
the second quarter 2016, which primarily consisted of government
grants, subsidies and financial incentives that the Company
received for its operations that were not subsidies for research
and development projects.
Operating loss was RMB63.0 million
(US$9.5 million), as compared with an
operating profit of RMB30.3 million
in the prior year period.
Non-GAAP operating profit was RMB25.5
million (US$3.8 million), as
compared with RMB86.4 million in the
prior year period.
Share-based compensation expenses increased by 57.8% to
RMB88.6 million (US$13.3 million) from RMB56.1 million in the prior year period.
OTHER EXPENSES
The Company recognized impairment losses of long-term
investments of RMB95.2 million
(US$14.3 million) for the second
quarter of 2016, primarily driven by one-time non-cash write downs
in certain investment assets, which the Company considered
other-than-temporary, to their fair value. These write-downs were a
result of lower-than-expected performance and financial position of
the Company's investees, including a web game developer as well as
a global social and mobile advertising software provider.
NET LOSS ATTRIBUTABLE TO CHEETAH MOBILE
SHAREHOLDERS
Net loss attributable to Cheetah Mobile shareholders was
RMB150.5 million (US$22.6 million) in the second quarter of 2016,
as compared with net income attributable to Cheetah Mobile
shareholders of RMB60.1 million in
the prior year period. The decline in net income was partly
attributable to increased investments in content-driven products
and an RMB95.2 million net impairment
loss of investments.
Non-GAAP net loss attributable to Cheetah Mobile shareholders
was RMB61.9 million (US$9.3 million), as compared with Non-GAAP net
income attributable to Cheetah Mobile shareholders of RMB116.2 million in the prior year period.
NET LOSSES PER ADS
Diluted losses per ADS in the second quarter of 2016 was
RMB1.08 (US$0.16), as compared with diluted earnings per
ADS of RMB0.42 in the prior year
period.
Non-GAAP dilute losses per ADS in the second quarter of 2016 was
RMB0.44 (US$0.07), as compared with Non-GAAP diluted
earnings per ADS of RMB0.81 in the
prior year period.
ADJUSTED EBITDA
Adjusted EBITDA (Non-GAAP) decreased by 46.0% to RMB67.6 million (US$10.2
million) from RMB125.3 million
in the prior year period.
CASH AND CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM
INVESTMENTS BALANCE
As of June 30, 2016, the Company
had cash and cash equivalents, restricted cash and short-term
investments of RMB1,421.1 million
(US$213.8 million).
SHARES ISSUED AND OUTSTANDING
As of June 30, 2016, the Company
had a total of 1,425,162,680 Class A and Class B ordinary shares
issued and outstanding. One ADS represents 10 Class A ordinary
shares.
Recent Developments
Acquisition on News Republic
During the second quarter of 2016, Cheetah Mobile acquired News
Republic, a global mobile news service operator, for a total
consideration of up to US$57 million.
Headquartered in Bordeaux and
San Francisco, News Republic
leverages editorial, algorithmic and community intelligence to
offer a sharp and wide perspective on the world by enhancing
relevance and discoverability in custom news flows. Readers can
gain access to articles, videos and photos from thousands of
high-profile media partners around the world. News Republic is
available in 37 languages and 40 editions. Users can download the
app from both the Google Play Store and the Apple App Store, and
the app is also preloaded on certain popular smartphones brands.
News Republic has received multiple Best News App awards globally,
including the Best Media and Publishing App at MWC 2015, as well as
the Editors Choice and Super Developer on Google Play and
recognition of "Great Apps" and "Best of AppStore" on iOS. News
Republic is now a wholly owned subsidiary of Cheetah Mobile, and
the News Republic app will continue to operate independently while
receiving development assistance and improvements from the global
Cheetah Mobile team.
Disposal of Suzhou Jiangduoduo
During the second quarter of 2016, Cheetah Mobile disposed of
its 65% interest in Suzhou Jiangduoduo ("JDD") and realized a gain
on disposal of RMB13.6 million
(US$2.0 million). JDD is engaged in
online lottery sales business in China, which has been suspended since
March 2015 in response to the PRC
government's regulatory measures.
Departure of Chief Marketing Officer
Mr. Xinhua Liu, Chief Marketing
Officer of Cheetah Mobile, resigned from his position for personal
reasons, effective July 11, 2016.
Update on Share Repurchase Program
On March 16, 2016, the Company's
Board of Directors authorized a share repurchase plan, pursuant to
which the Company may repurchase its own issued and outstanding
ADSs with an aggregate value of up to US$100
million from the open market, in negotiated transactions off
the market, or through other legally permissible means in
accordance with applicable securities laws from time to time within
one year after March 16, 2016. The
share repurchase plan does not require the Company to acquire a
specific number of ADSs. As of August 18,
2016, the Company had repurchased a total of 2,536,808 ADSs,
representing 25,368,080 Class A ordinary shares, at an average
price of $10.7483 per ADS.
Business Outlook
For the third quarter of 2016, the Company expects its total
revenues to be between RMB1,100
million (US$166 million) and
RMB1,150 million (US$173 million), representing an estimated
year-over-year growth of 7% to 12%, and quarter-over-quarter growth
of 5% to 10%. This estimate represents management's preliminary
view as of the date of this release, which is subject to change and
any change could be material.
Conference Call Information
Company will hold a conference call on Friday, August 19, 2016 at 8:00 am Eastern Time or 8:00 pm 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:
|
4001-201203
|
Hong Kong Toll
Free:
|
800-905945
|
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/.
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 RMB6.6459 to US$1.00, the exchange rate in effect as of
June 30, 2016 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. It aims to
provide the best apps for mobile users worldwide, while building a
leading global mobile ad platform for advertisers.
Cheetah Mobile had approximately 623 million global mobile
monthly active users in June 2016.
Its mission critical applications, including Clean Master, CM
Security, Battery Doctor and Duba Anti-virus, help make the
internet and mobile experience speedier, simpler, and safer for
users worldwide. The Company also provides multiple user traffic
entry points and global content promotional channels capable of
delivering targeted content to hundreds of millions of users. Its
customers include direct advertisers and mobile advertising
networks through which advertisers place their advertisements.
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 operating expenses reflect operating expenses
excluding share-based compensation expenses.
- Non-GAAP operating profit reflects operating profit
excluding share-based compensation expenses.
- Non-GAAP net income (losses) attributable to Cheetah Mobile
shareholders is net income attributable to Cheetah Mobile
shareholders excluding share-based compensation expenses.
- Non-GAAP diluted earnings (losses) per ADS is non-GAAP
net income (loss) attributable to Cheetah Mobile shareholders
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
(Loss) Attributable to Cheetah Mobile Shareholders to Adjusted
EBITDA (Non-GAAP)" at the end of this release.
[1] Overseas revenues refers to revenues generated by the
Company's operating legal entities incorporated outside
the People's Republic of China
(excluding Hong Kong, Macau and Taiwan for the purposes of this press
release), or the PRC. Such revenues are primarily attributable to
customers located outside the PRC.
Cheetah Mobile
Inc.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited, in
'000)
|
|
As
of
|
|
December
31, 2015
|
|
June 30,
2016
|
|
June 30,
2016
|
|
RMB
|
|
RMB
|
|
USD
|
|
(As
adjusted, unaudited) (a)
|
|
(Unaudited)
|
|
(Unaudited)
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
1,843,233
|
|
883,721
|
|
132,972
|
Restricted
cash
|
156,161
|
|
156,822
|
|
23,597
|
Short-term
investments
|
29,234
|
|
380,597
|
|
57,268
|
Accounts
receivable
|
633,440
|
|
581,952
|
|
87,566
|
Prepayments and other
current assets
|
360,004
|
|
440,042
|
|
66,213
|
Due from related
parties
|
60,794
|
|
80,756
|
|
12,151
|
Deferred tax
assets
|
5,101
|
|
8,874
|
|
1,335
|
Total current
assets
|
3,087,967
|
|
2,532,764
|
|
381,102
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
Property and
equipment, net
|
121,241
|
|
131,990
|
|
19,860
|
Intangible assets,
net
|
233,092
|
|
266,723
|
|
40,133
|
Goodwill
|
617,863
|
|
953,572
|
|
143,483
|
Investment in equity investees
|
124,708
|
|
103,775
|
|
15,615
|
Other long-term investments
|
700,113
|
|
920,427
|
|
138,495
|
Deferred tax
assets
|
12,843
|
|
19,732
|
|
2,969
|
Other non-current
assets
|
28,724
|
|
24,652
|
|
3,709
|
Total non-current
assets
|
1,838,584
|
|
2,420,871
|
|
364,264
|
|
|
|
|
|
|
Total
assets
|
4,926,551
|
|
4,953,635
|
|
745,366
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Bank loans
|
130,273
|
|
344,450
|
|
51,829
|
Accounts
payable
|
137,883
|
|
186,819
|
|
28,110
|
Accrued expenses and
other current liabilities
|
1,308,717
|
|
1,107,800
|
|
166,689
|
Redemption right
liabilities
|
474
|
|
866
|
|
130
|
Deferred
revenue
|
56,070
|
|
56,933
|
|
8,567
|
Due to related
parties
|
56,932
|
|
69,180
|
|
10,409
|
Income tax
payable
|
29,822
|
|
47,119
|
|
7,090
|
Deferred tax
liabilities
|
414
|
|
-
|
|
-
|
Total current
liabilities
|
1,720,585
|
|
1,813,167
|
|
272,824
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
Bank loans
|
10,523
|
|
69,209
|
|
10,414
|
Deferred
revenue
|
8,166
|
|
8,062
|
|
1,213
|
Deferred tax
liabilities
|
99,006
|
|
102,478
|
|
15,420
|
Other non-current
liabilities
|
73,826
|
|
33,123
|
|
4,984
|
Total non-current
liabilities
|
191,521
|
|
212,872
|
|
32,031
|
|
|
|
|
|
|
Total
liabilities
|
1,912,106
|
|
2,026,039
|
|
304,855
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
Ordinary
shares
|
226
|
|
229
|
|
34
|
Treasury
stock
|
-
|
|
(178,991)
|
|
(26,933)
|
Additional paid-in
capital
|
2,414,706
|
|
2,589,594
|
|
389,653
|
Retained
earnings
|
317,818
|
|
178,073
|
|
26,794
|
Accumulated other
comprehensive income
|
121,317
|
|
165,332
|
|
24,878
|
Total Cheetah
Mobile shareholders' equity
|
2,854,067
|
|
2,754,237
|
|
414,426
|
Noncontrolling
interests
|
160,378
|
|
173,359
|
|
26,085
|
Total
equity
|
3,014,445
|
|
2,927,596
|
|
440,511
|
|
|
|
|
|
|
Total liabilities,
noncontrolling interests and shareholders' equity
|
4,926,551
|
|
4,953,635
|
|
745,366
|
|
|
|
|
|
|
Note:
|
|
|
|
|
|
(a) The above
condensed consolidated balance sheets have been prepared as if the
Kingsoft Japan had been owned and operated by the Cheetah Mobile
throughout the periods presented in accordance with ASC 805-50.
Kingsoft Japan became a subsidiary of the Company on January 29,
2016.
|
Cheetah Mobile
Inc.
|
Condensed
Consolidated Statements of Comprehensive Income
(Loss)
|
(Unaudited, in '000,
except for per share data and number of shares and ADSs)
|
|
For The Three
Months Ended
|
|
June 30,
2015
|
|
March 31,
2016
|
|
June 30,
2016
|
|
June 30,
2016
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD
|
|
(As
adjusted, unaudited)
(b)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Revenues
|
886,222
|
|
1,114,988
|
|
1,046,664
|
|
157,490
|
Online marketing
services
|
757,170
|
|
992,279
|
|
939,125
|
|
141,309
|
Internet value-added
services
|
109,308
|
|
102,268
|
|
79,601
|
|
11,977
|
Internet security
services and others
|
19,744
|
|
20,441
|
|
27,938
|
|
4,204
|
|
|
|
|
|
|
|
|
Cost of revenues
(a)
|
(223,929)
|
|
(321,010)
|
|
(354,710)
|
|
(53,373)
|
Gross
profit
|
662,293
|
|
793,978
|
|
691,954
|
|
104,117
|
|
|
|
|
|
|
|
|
Operating income
and expenses:
|
|
|
|
|
|
|
|
Research and
development (a)
|
(146,875)
|
|
(207,462)
|
|
(227,496)
|
|
(34,231)
|
Selling and marketing
(a)
|
(350,323)
|
|
(443,782)
|
|
(407,206)
|
|
(61,272)
|
General and
administrative (a)
|
(120,878)
|
|
(133,085)
|
|
(160,735)
|
|
(24,186)
|
Impairment of
goodwill and intangible assets
|
(20,216)
|
|
(2,350)
|
|
-
|
|
-
|
Other operating
income
|
6,340
|
|
14,948
|
|
40,446
|
|
6,086
|
Total operating
income and expenses
|
(631,952)
|
|
(771,731)
|
|
(754,991)
|
|
(113,603)
|
|
|
|
|
|
|
|
|
Operating profit
(loss)
|
30,341
|
|
22,247
|
|
(63,037)
|
|
(9,486)
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest income,
net
|
4,028
|
|
3,387
|
|
2,715
|
|
409
|
Changes in fair value
of redemption right and put options granted
|
167
|
|
20
|
|
(308)
|
|
(46)
|
Settlement and
changes in fair value of contingent consideration
|
2,677
|
|
(683)
|
|
(664)
|
|
(100)
|
Foreign exchange
(loss) gain, net
|
(188)
|
|
(1,362)
|
|
486
|
|
73
|
Impairment of
investments
|
-
|
|
-
|
|
(95,206)
|
|
(14,326)
|
Losses from equity
method investments
|
(6,846)
|
|
(7,731)
|
|
(6,070)
|
|
(913)
|
Other income,
net
|
35,777
|
|
651
|
|
17,620
|
|
2,651
|
|
|
|
|
|
|
|
|
Income (Loss)
before taxes
|
65,956
|
|
16,529
|
|
(144,464)
|
|
(21,738)
|
Income tax
expenses
|
(9,646)
|
|
(2,998)
|
|
(1,964)
|
|
(296)
|
Net income
(loss)
|
56,310
|
|
13,531
|
|
(146,428)
|
|
(22,034)
|
Less: net (loss)
income attributable to noncontrolling interests
|
(3,786)
|
|
2,826
|
|
4,022
|
|
605
|
Net income (loss)
attributable to Cheetah Mobile shareholders
|
60,096
|
|
10,705
|
|
(150,450)
|
|
(22,639)
|
|
|
|
|
|
|
|
|
Earnings (Losses)
per share
|
|
|
|
|
|
|
|
Basic
|
0.04
|
|
0.01
|
|
(0.11)
|
|
(0.02)
|
Diluted
|
0.04
|
|
0.01
|
|
(0.11)
|
|
(0.02)
|
|
|
|
|
|
|
|
|
Earnings (Losses)
per ADS
|
|
|
|
|
|
|
|
Basic
|
0.44
|
|
0.08
|
|
(1.08)
|
|
(0.16)
|
Diluted
|
0.42
|
|
0.07
|
|
(1.08)
|
|
(0.16)
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding
|
|
|
|
|
|
|
|
Basic
|
1,374,275,098
|
|
1,392,324,511
|
|
1,391,355,172
|
|
1,391,355,172
|
Diluted
|
1,438,132,050
|
|
1,441,882,966
|
|
1,391,355,172
|
|
1,391,355,172
|
Weighted average
number of ADSs used in computation
|
|
|
|
|
|
|
|
Basic
|
137,427,510
|
|
139,232,451
|
|
139,135,517
|
|
139,135,517
|
Diluted
|
143,813,205
|
|
144,188,297
|
|
139,135,517
|
|
139,135,517
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss), net of tax of nil
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
(7,352)
|
|
(6,473)
|
|
54,165
|
|
8,150
|
Unrealized gains
(losses) on available-for-sale
securities, net
|
7,161
|
|
1,215
|
|
(389)
|
|
(59)
|
Other
comprehensive (loss) income
|
(191)
|
|
(5,258)
|
|
53,776
|
|
8,091
|
Total
comprehensive income (loss)
|
56,119
|
|
8,273
|
|
(92,652)
|
|
(13,943)
|
Less: Total
comprehensive (loss) income attributable to noncontrolling
interests
|
(3,323)
|
|
4,234
|
|
7,117
|
|
1,071
|
Total
comprehensive income (loss) attributable to Cheetah Mobile
shareholders
|
59,442
|
|
4,039
|
|
(99,769)
|
|
(15,014)
|
|
|
|
|
|
|
|
|
(a) Share-based
compensation expenses
|
(In
'000)
|
For The Three
Months Ended
|
|
June 30,
2015
|
|
March 31,
2016
|
|
June 30,
2016
|
|
June 30,
2016
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD
|
|
(As
adjusted, unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Cost of
revenues
|
744
|
|
339
|
|
140
|
|
21
|
Research and
development
|
17,387
|
|
40,129
|
|
49,410
|
|
7,435
|
Selling and
marketing
|
3,117
|
|
6,144
|
|
1,300
|
|
196
|
General and
administrative
|
34,858
|
|
44,835
|
|
37,707
|
|
5,674
|
Total
|
56,106
|
|
91,447
|
|
88,557
|
|
13,326
|
|
|
|
|
|
|
|
|
Notes:
|
|
|
|
|
|
|
|
(b) The above
condensed consolidated statements of comprehensive income have been
prepared as if the Kingsoft Japan had been owned and operated by
the Cheetah Mobile throughout the periods presented in accordance
with ASC 805-50. Kingsoft Japan became a subsidiary of the Company
on January 29, 2016.
|
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 June 2016
|
|
|
|
GAAP
|
|
% of
Net
|
|
Share-based
|
|
% of
Net
|
|
Non-GAAP
|
|
% of
Net
|
|
Non-GAAP
|
|
Result
|
|
Revenues
|
|
Compensation
|
|
Revenues
|
|
Result
|
|
Revenues
|
|
Result
($)
|
Revenues
|
1,046,664
|
|
|
|
|
|
|
|
1,046,664
|
|
|
|
157,490
|
Cost of
revenues
|
(354,710)
|
|
33.9%
|
|
140
|
|
0.0%
|
|
(354,570)
|
|
33.9%
|
|
(53,352)
|
Gross
profit
|
691,954
|
|
66.1%
|
|
140
|
|
0.0%
|
|
692,094
|
|
66.1%
|
|
104,138
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
(227,496)
|
|
21.7%
|
|
49,410
|
|
4.7%
|
|
(178,086)
|
|
17.0%
|
|
(26,796)
|
Selling and
marketing
|
(407,206)
|
|
38.9%
|
|
1,300
|
|
0.1%
|
|
(405,906)
|
|
38.8%
|
|
(61,076)
|
General and
administrative
|
(160,735)
|
|
15.4%
|
|
37,707
|
|
3.6%
|
|
(123,028)
|
|
11.8%
|
|
(18,512)
|
Other operating
income
|
40,446
|
|
3.9%
|
|
-
|
|
-
|
|
40,446
|
|
3.9%
|
|
6,086
|
Total operating
income and expenses
|
(754,991)
|
|
72.1%
|
|
88,417
|
|
8.4%
|
|
(666,574)
|
|
63.7%
|
|
(100,298)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)
profit
|
(63,037)
|
|
6.0%
|
|
88,557
|
|
8.5%
|
|
25,520
|
|
2.4%
|
|
3,840
|
Net loss attributable
to Cheetah Mobile shareholders
|
(150,450)
|
|
14.4%
|
|
88,557
|
|
8.5%
|
|
(61,893)
|
|
5.9%
|
|
(9,313)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted losses per
ordinary share (RMB)
|
(0.11)
|
|
|
|
0.07
|
|
|
|
(0.04)
|
|
|
|
|
Diluted losses per
ADS (RMB)
|
(1.08)
|
|
|
|
0.64
|
|
|
|
(0.44)
|
|
|
|
|
Diluted losses per
ADS (USD)
|
(0.16)
|
|
|
|
0.09
|
|
|
|
(0.07)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended March 2016
|
|
|
|
GAAP
|
|
% of
Net
|
|
Share-based
|
|
% of
Net
|
|
Non-GAAP
|
|
% of
Net
|
|
|
|
Result
|
|
Revenues
|
|
Compensation
|
|
Revenues
|
|
Result
|
|
Revenues
|
|
|
Revenues
|
1,114,988
|
|
|
|
|
|
|
|
1,114,988
|
|
|
|
|
Cost of
revenues
|
(321,010)
|
|
28.8%
|
|
339
|
|
0.0%
|
|
(320,671)
|
|
28.8%
|
|
|
Gross
profit
|
793,978
|
|
71.2%
|
|
339
|
|
0.0%
|
|
794,317
|
|
71.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
(207,462)
|
|
18.6%
|
|
40,129
|
|
3.6%
|
|
(167,333)
|
|
15.0%
|
|
|
Selling and
marketing
|
(443,782)
|
|
39.8%
|
|
6,144
|
|
0.6%
|
|
(437,638)
|
|
39.3%
|
|
|
General and
administrative
|
(133,085)
|
|
11.9%
|
|
44,835
|
|
4.0%
|
|
(88,250)
|
|
7.9%
|
|
|
Impairment of
goodwill and intangible assets
|
(2,350)
|
|
0.2%
|
|
-
|
|
-
|
|
(2,350)
|
|
0.2%
|
|
|
Other operating
income
|
14,948
|
|
1.3%
|
|
-
|
|
-
|
|
14,948
|
|
1.3%
|
|
|
Total operating
income and expenses
|
(771,731)
|
|
69.2%
|
|
91,108
|
|
8.2%
|
|
(680,623)
|
|
61.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
22,247
|
|
2.0%
|
|
91,447
|
|
8.2%
|
|
113,694
|
|
10.2%
|
|
|
Net income
attributable to Cheetah Mobile shareholders
|
10,705
|
|
1.0%
|
|
91,447
|
|
8.2%
|
|
102,152
|
|
9.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
ordinary share (RMB)
|
0.01
|
|
|
|
0.06
|
|
|
|
0.07
|
|
|
|
|
Diluted earnings per
ADS (RMB)
|
0.07
|
|
|
|
0.64
|
|
|
|
0.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended June 2015
|
|
|
|
GAAP
|
|
% of
Net
|
|
Share-based
|
|
% of
Net
|
|
Non-GAAP
|
|
% of
Net
|
|
|
|
Result
|
|
Revenues
|
|
Compensation
|
|
Revenues
|
|
Result
|
|
Revenues
|
|
|
Revenues
|
886,222
|
|
|
|
|
|
|
|
886,222
|
|
|
|
|
Cost of
revenues
|
(223,929)
|
|
25.3%
|
|
744
|
|
0.1%
|
|
(223,185)
|
|
25.2%
|
|
|
Gross
profit
|
662,293
|
|
74.7%
|
|
744
|
|
0.1%
|
|
663,037
|
|
74.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
(146,875)
|
|
16.6%
|
|
17,387
|
|
2.0%
|
|
(129,488)
|
|
14.6%
|
|
|
Selling and
marketing
|
(350,323)
|
|
39.5%
|
|
3,117
|
|
0.4%
|
|
(347,206)
|
|
39.2%
|
|
|
General and
administrative
|
(120,878)
|
|
13.6%
|
|
34,858
|
|
3.9%
|
|
(86,020)
|
|
9.7%
|
|
|
Impairment of
goodwill and intangible assets
|
(20,216)
|
|
2.3%
|
|
-
|
|
-
|
|
(20,216)
|
|
2.3%
|
|
|
Other operating
income
|
6,340
|
|
0.7%
|
|
-
|
|
-
|
|
6,340
|
|
0.7%
|
|
|
Total operating
income and expenses
|
(631,952)
|
|
71.3%
|
|
55,362
|
|
6.2%
|
|
(576,590)
|
|
65.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
30,341
|
|
3.4%
|
|
56,106
|
|
6.3%
|
|
86,447
|
|
9.8%
|
|
|
Net income
attributable to Cheetah Mobile Shareholders
|
60,096
|
|
6.8%
|
|
56,106
|
|
6.3%
|
|
116,202
|
|
13.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
ordinary share (RMB)
|
0.04
|
|
|
|
0.04
|
|
|
|
0.08
|
|
|
|
|
Diluted earnings per
ADS (RMB)
|
0.42
|
|
|
|
0.39
|
|
|
|
0.81
|
|
|
|
|
Cheetah Mobile
Inc.
|
Reconciliation
from Net Income (Loss) Attributable to Cheetah Mobile Shareholders
to Adjusted EBITDA (Non-GAAP)
|
(Unaudited, in
'000)
|
|
|
|
|
|
For The Three
Months Ended
|
|
June 30,
2015
|
March 31,
2016
|
June 30,
2016
|
June 30,
2016
|
|
RMB
|
RMB
|
RMB
|
USD
|
Net income (loss)
attributable to Cheetah Mobile shareholders
|
60,096
|
10,705
|
(150,450)
|
(22,639)
|
Add:
|
|
|
|
|
Income tax expense
|
9,646
|
2,998
|
1,964
|
296
|
Interest
income,net
|
(4,028)
|
(3,387)
|
(2,715)
|
(409)
|
Depreciation and amortization
|
38,867
|
37,076
|
42,126
|
6,339
|
Net (loss)
income attributable to noncontrolling interests
|
(3,786)
|
2,826
|
4,022
|
605
|
Other
non-operating (income) expense, net
|
(31,587)
|
9,105
|
84,142
|
12,661
|
Share-based compensation
|
56,106
|
91,447
|
88,557
|
13,326
|
Adjusted
EBITDA
|
125,314
|
150,770
|
67,646
|
10,179
|
|
|
|
|
|
Cheetah Mobile
Inc.
|
Revenues Generated
from PC-based and Mobile-based Applications and
Services
|
(Unaudited, in
'000)
|
|
|
|
|
|
|
For The Three
Months Ended
|
|
June 30,
2015
|
March 31,
2016
|
June 30,
2016
|
June 30,
2016
|
|
RMB
|
RMB
|
RMB
|
USD
|
PC
|
321,107
|
288,398
|
274,329
|
41,278
|
Mobile
|
565,115
|
826,590
|
772,335
|
116,212
|
Total
|
886,222
|
1,114,988
|
1,046,664
|
157,490
|
|
|
|
|
|
Cheetah Mobile
Inc.
|
Revenues Generated
from Domestic and Overseas Markets
|
(Unaudited, in
'000)
|
|
|
|
|
|
|
For The Three
Months Ended
|
|
June 30,
2015
|
March 31,
2016
|
June 30,
2016
|
June 30,
2016
|
|
RMB
|
RMB
|
RMB
|
USD
|
Domestic
revenues
|
438,697
|
481,373
|
485,972
|
73,123
|
Overseas
revenues
|
447,525
|
633,615
|
560,692
|
84,367
|
Total
|
886,222
|
1,114,988
|
1,046,664
|
157,490
|
|
|
|
|
|
Investor Relations Contact
Cheetah Mobile Inc.
Helen Jing Zhu
Tel: +86 10 6292 7779 ext. 1600
Email: IR@cmcm.com
ICR, Inc.
Jessie Fan
Tel: +1 (646) 417-5395
Email: IR@cmcm.com
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cheetah-mobile-announces-second-quarter-2016-unaudited-consolidated-financial-results-300315819.html
SOURCE Cheetah Mobile