Youku Tudou Announces Fourth Quarter and Fiscal Year 2013 Unaudited Financial Results
Achieved Quarterly Non-GAAP Profitability; Mobile Monetization Reached 10%
BEIJING, Feb. 27, 2014 /PRNewswire/ -- Youku Tudou Inc. (NYSE: YOKU, and formerly Youku Inc. or "Youku"), China's leading Internet television company ("Youku Tudou" or the "Company"), today announced its unaudited financial results for fourth quarter and fiscal year 2013.
Basis of Presentation
On August 23, 2012, the Company and Tudou Holdings Limited ("Tudou") announced the completion of the merger between Youku and Tudou. Following the completion of the merger, Tudou's financial results were consolidated into the Company. Based on Youku's review with Tudou management of Tudou's publicly disclosed summary of significant accounting policies prior to the merger, certain adjustments to the historical statement of operations have been made to conform its accounting policies to those of Youku's. Due to the fact that Tudou's historical statements of operations for certain period of 2012 consist of stand-alone historical financial information without these adjustments, we do not believe that comparison of the Company's fiscal year 2013 financial results with that of the fiscal year 2012 can be provided on a consistent basis.
Fourth Quarter 2013 Highlights[1]
- Net revenues were RMB901.3 million (US$148.9 million),a 42% increase from the corresponding period in 2012.
- Gross profit was RMB254.3 million (US$42.0 million), a 119% increase from the corresponding period in 2012. Non-GAAP gross profit is herein defined as gross profit excluding share-based compensation expenses and amortization of intangible assets from business combination in relation to user generated content. Non-GAAP gross profit was RMB268.3 million (US$44.3 million) in the fourth quarter of 2013, an increase of 108% from the corresponding period in 2012.
- Net loss was RMB24.6 million (US$4.1 million), a 78% decrease from the corresponding period in 2012. Non-GAAP net profit or loss is herein defined as net loss excluding share-based compensation expenses, amortization of intangible assets from business combination and business combination related expenses. Non-GAAP net profit was RMB44.2 million (US$7.3 million) in the fourth quarter of 2013, as compared to a non-GAAP net loss of RMB62.3 million (US$10.3 million) for the corresponding period in 2012.
- Basic and diluted loss per ADS, each representing 18 Class A ordinary shares, for the fourth quarter of 2013 amounted to RMB0.15 (US$0.02) and RMB0.15 (US$0.02), respectively.
- Cash, cash equivalents, restricted cash and short-term investments totaled RMB3.2 billion (US$524.7 million) as of December 31, 2013.
- Acquisition of property and equipment for the fourth quarter of 2013 was RMB15.0 million (US$2.5 million).
- Acquisition of intangible assets for the fourth quarter of 2013 was RMB227.5 million (US$37.6 million).
Fiscal Year 2013 Highlights
- Net revenues were RMB3.0 billion (US$500.3 million).
- Gross profit was RMB541.1 million (US$89.4 million). Non-GAAP gross profit was RMB601.3 million (US$99.3 million).
- Net loss was RMB580.7 million (US$95.9 million). Non-GAAP net loss was RMB342.1million (US$56.5million).
- Basic and diluted loss per ADS, each representing 18 Class A ordinary shares, for 2013 amounted to RMB3.50 (US$0.58) and RMB3.50 (US$0.58), respectively.
- Acquisition of property and equipment in 2013 was RMB144.1 million (US$23.8 million).
- Acquisition of intangible assets in 2013 was RMB740.6 million (US$122.3 million).
"The strong operational and financial performance recorded in the fourth quarter enabled Youku Tudou to achieve profitability on a combined basis for the first time in the company's history. This milestone was achieved on the back of scale economics, strong operating leverage and solid execution," stated Victor Koo, Chairman and Chief Executive Officer of Youku Tudou. "With dynamic rise in mobile traffic throughout 2013, our existing comprehensive content library and the two most recognized online video brands set Youku Tudou apart as China's no. 1 multi-screen video company."
Dele Liu, President of Youku Tudou, added, "As viewing content from multiple Internet-enabled devices increasingly becomes a social phenomenon in China, a diverse and comprehensive content mix is critical to elevating our media value and further expanding our leadership across China. We believe our most comprehensive content offering provides enlightening entertainment to hundreds of millions of users in China."
Fourth Quarter 2013 Results
Net revenues were RMB901.3 million (US$148.9 million) in the fourth quarter of 2013, a 42% increase from the corresponding period in 2012 and exceeding the high end of the net revenues guidance previously announced by the Company. Advertising net revenues were RMB801.0 million (US$132.3 million), meeting the advertising net revenues guidance previously announced by the Company. The growth was primarily attributable to the increased use by brand advertisers of our advertising services as evidenced by the rising average spend per advertiser.
Bandwidth costs as a component of cost of revenues were RMB178.8 million (US$29.5 million)in the fourth quarter of 2013, representing 20% of net revenues, as compared to 26% of net revenues for the corresponding period in 2012.
Content costs as a component of cost of revenues were RMB353.7 million (US$58.4 million) in the fourth quarter of 2013, representing 39% of net revenues. Non-GAAP content costs, which is herein defined as content costs excluding share-based compensation expenses and amortization of intangible assets from business combination in relation to user generated content, were RMB339.7million (US$56.1 million) in the fourth quarter of 2013, representing 38% of net revenues, as compared to 41% of net revenues for the corresponding period in 2012.
Gross profit was RMB254.3 million (US$42.0 million)in the fourth quarter of 2013, an increase of 119% from the corresponding period in 2012. Non-GAAP gross profit was RMB268.3 million (US$44.3 million) in the fourth quarter of 2013, an increase of 108% from the corresponding period in 2012 due to strong operating leverage.
Operating expenses were RMB333.4 million (US$55.1 million) in the fourth quarter of 2013, as compared to RMB245.0 million (US$40.5 million) of the corresponding period in 2012. Non-GAAP operating expenses, which is herein defined as operating expenses excluding share-based compensation expenses, business combination related expenses and amortization of intangible assets from business combination in relation to customer relationship, technology and non-compete provisions, were RMB278.5 million (US$46.0 million) in the fourth quarter of 2013, an increase of 35% from the corresponding period in 2012. Detailed discussion of each component of operating expenses is as follows:
Sales and marketing expenses were RMB216.4 million (US$35.8 million) in the fourth quarter of 2013, as compared to RMB107.8 million (US$17.8 million) of the corresponding period in 2012. Non-GAAP sales and marketing expenses, which is herein defined as sales and marketing expenses excluding share-based compensation expenses and amortization of intangible assets from business combination in relation to customer relationship, were RMB195.8 million (US$32.3 million) in the fourth quarter of 2013, an increase of 106% from the corresponding period in 2012. This increase was primarily due to year-end advertising related promotion expenses and marketing expenditures on our mobile products.
Product development expenses were RMB76.5 million (US$12.6 million) in the fourth quarter of 2013, as compared to RMB64.1 million (US$10.6 million) for the corresponding period in 2012. Non-GAAP product development expenses, which is herein defined as product development expenses excluding share-based compensation expenses and amortization of intangible assets from business combination in relation to technology, were RMB61.3 million (US$10.1 million) in the fourth quarter of 2013, an increase of 13% from the corresponding period in 2012. This increase was primarily due to an increase in personnel related expenses for our product development in mobile, search, social and paid-services.
General and administrative expenses were RMB40.4 million (US$6.7 million) in the fourth quarter of 2013, as compared to RMB73.1 million (US$12.1 million) for the corresponding period in 2012. Non-GAAP general and administrative expenses, which is herein defined as general and administrative expenses excluding share-based compensation expenses, business combination related expenses and amortization of intangible assets from business combination in relation to non-compete provisions, were RMB21.4 million (US$3.5 million) in the fourth quarter of 2013, a decrease of 62% from the corresponding period in 2012.
Net loss was RMB24.6 million (US$4.1 million)in the fourth quarter of 2013, a decrease of 78% compared to RMB113.6 million (US$18.8 million) for the corresponding period in 2012. Non-GAAP net profit was RMB44.2 million (US$7.3 million) in the fourth quarter of 2013, as compared to a non-GAAP net loss of RMB62.3 million (US$10.3 million) for the corresponding period in 2012.
Non-GAAP adjusted EBITDA Profit, which is herein defined as net loss before income taxes, interest expenses, interest income, depreciation and amortization (excluding amortization of acquired content), further adjusted for share-based compensation expenses, amortization of intangible assets from business combination related expenses and other non-operating items, was RMB36.8 million (US$6.1 million) in the fourth quarter of 2013, as compared to a non-GAAP adjusted EBITDA loss of RMB46.1 million (US$7.6 million) for the corresponding period in 2012.
Fiscal Year 2013 Results
Net revenues were RMB3.0 billion (US$500.3 million).
Bandwidth costs as a component of cost of revenues were RMB685.7 million (US$113.3 million), representing 23% of net revenues.
Content costs as a component of cost of revenues were RMB1.4 billion (US$235.0 million), representing 47% of net revenues.
Gross profit was RMB541.1 million (US$89.4 million). Non-GAAP gross profit was RMB601.3 million (US$99.3 million).
Operating expenses were RMB1.2 billion (US$201.7 million). Non-GAAP operating expenses were RMB1.0 billion (US$172.2 million). Detailed discussion of each component of operating expenses is as follows:
Sales and marketing expenses were RMB681.0 million (US$112.5 million). Non-GAAP sales and marketing expenses were RMB619.0 million (US$102.3 million).
Product development expenses were RMB278.0 million (US$45.9 million). Non-GAAP product development expenses were RMB232.0 million (US$38.3 million).
General and administrative expenses were RMB261.8 million (US$43.2 million). Non-GAAP general and administrative expenses were RMB191.5 million (US$31.6 million).
Net loss was RMB580.7 million (US$95.9 million). Non-GAAP net loss was RMB342.1 million (US$56.5 million).
Non-GAAP adjusted EBITDA loss was RMB309.5 million (US$51.1 million).
Business Outlook
For the first quarter of 2014, the Companyexpects net revenues will be between RMB680 million and RMB720 million, with advertising net revenues contributing between RMB600 million and RMB640 million. This forecast reflects the Company's current and preliminary view, which is subject to change.
Conference Call Information
Youku Tudou's management will host an earnings conference call at 8:00 p.m. U.S. Eastern Time on February 27, 2014 (9:00 a.m. Beijing/Hong Kong Time on February 28, 2014).
Interested parties may participate in the conference call by dialing one of the following numbers below and entering passcode Youku# (i.e., 96858#) starting 10-15 minutes prior to the beginning of the call.
US Toll Free Dial In: 1-866-519-4004
International Dial In: 1-718-354-1231
Mainland China Toll Free Dial In: 86-4006208038 / 86-8008190121
Hong Kong Dial In: 852-2475-0994
A replay of the call will be available by dialing +61 2 8199 0299 and entering passcode 1592223#. The replay will be available through March 8, 2014.
This call will be webcast live and the replay will be available for 12 months. Both will be available on the Investor Relations section of Youku Tudou's corporate website at http://ir.youku.com.
About Youku Tudou Inc.
Youku Tudou Inc. (NYSE: YOKU) is China's leading Internet television company. Its Youku and Tudou Internet television platforms enable users to search, view and share high-quality video content quickly and easily across multiple devices. Its Youku brand and Tudou brand are among the most recognized online video brands in China. Youku Tudou's American depositary shares, each representing 18 of Youku Tudou's Class A ordinary shares, are traded on the NYSE under the symbol "YOKU."
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are 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" and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as Youku Tudou's strategic and operational plans, contain forward-looking statements. Youku Tudou may also make written or oral forward-looking statements in its filings with the U.S. Securities and Exchange Commission ("SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Youku Tudou's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: our goals and strategies; our future business development, financial condition and results of operations; the expected growth of the online video market in China; our expectations regarding demand for and market acceptance of our services; our expectations regarding the retention and strengthening of our relationships with key advertisers and customers; our plans to enhance user experience, infrastructure and service offerings; competition in our industry in China; and relevant government policies and regulations relating to our industry. Further information regarding these and other risks is included in our annual report on Form 20-F and other documents filed with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Youku Tudou does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
About Non-GAAP Financial Measures
To supplement Youku Tudou's financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Youku Tudou uses the following measures defined as non-GAAP financial measures by the SEC in evaluating its business: non-GAAP content costs, non-GAAP gross profit, non-GAAP operating expenses, non-GAAP sales and marketing expenses, non-GAAP product development expenses, non-GAAP general and administrative expenses, non-GAAP profit or loss from operations, non-GAAP net profit or loss and non-GAAP EBITDA profit or loss. We define non-GAAP content costs as content costs excluding share-based compensation expenses and amortization of intangible assets from business combination in relation to user generated content. We define non-GAAP gross profit or loss as the respective nearest comparable GAAP financial measure to exclude share-based compensation expenses and amortization of intangible assets from business combination in relation to user generated content. We define non-GAAP operating expenses as operating expenses excluding share-based compensation expenses, business combination related expenses and amortization of intangible assets from business combination in relation to customer relationship, technology and non-compete provisions. We define non-GAAP sales and marketing expenses as sales and marketing expenses excluding share-based compensation expenses and amortization of intangible assets from business combination in relation to customer relationship. We define non-GAAP product development expense as product development expenses excluding share-based compensation expenses and amortization of intangible assets from business combination in relation to technology. We define non-GAAP general and administrative expenses as general and administrative expenses excluding share-based compensation expenses, business combination related expenses and amortization of intangible assets from business combination in relation to non-compete provisions. We define non-GAAP profit or loss from operations as profit or loss from operations excluding share-based compensation expenses, amortization of intangible assets from business combination and business combination related expenses. We define non-GAAP net profit or loss as net loss excluding share-based compensation expenses, amortization of intangible assets from business combination and business combination related expenses. We define non-GAAP EBITDA profit or loss as net profit or loss before income taxes, interest expenses, interest income, depreciation and amortization (excluding amortization of acquired content), further adjusted for share-based compensation expenses, amortization of intangible assets from business combination, business combination related expenses and other non-operating items.
We present non-GAAP financial measures because they are used by our management to evaluate our operating performance. We also believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our results of operations in the same manner as our management and in comparing financial results across accounting periods and to those of our peer companies. A limitation of using non-GAAP financial measures is that non-GAAP measures exclude share-based compensation charges that have been and will continue to be significant recurring expenses in Youku Tudou's business for the foreseeable future.
The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, 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 "Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP financial measures" at the end of this release.
For more information, please contact:
Ryan Cheung
Corporate Finance Director
Youku Tudou Inc.
Tel: (+8610) 5885-1881 x6090
Email: [email protected]
[1] |
The reporting currency of the Company is Renminbi ("RMB"), but for the convenience of the reader, the amounts presented |
YOUKU TUDOU INC. |
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(Amounts in thousands, except for number of shares) |
As of December 31, |
|||||||
2012 |
2013 |
2013 |
||||||
RMB |
RMB |
US$ |
||||||
ASSETS |
(Unaudited) |
(Unaudited) |
||||||
Current assets: |
||||||||
Cash and cash equivalents |
1,655,857 |
1,764,221 |
291,429 |
|||||
Restricted cash |
9,003 |
2,679 |
443 |
|||||
Short-term investments |
2,110,073 |
1,409,439 |
232,823 |
|||||
Accounts receivable, net |
932,796 |
1,370,031 |
226,313 |
|||||
Intangible assets, net |
19,607 |
51,942 |
8,580 |
|||||
Deferred tax assets |
10,470 |
7,843 |
1,296 |
|||||
Prepayments and other assets |
64,909 |
82,300 |
13,595 |
|||||
Total current assets |
4,802,715 |
4,688,455 |
774,479 |
|||||
Non-current assets: |
||||||||
Property and equipment, net |
200,681 |
222,229 |
36,710 |
|||||
Intangible assets, net |
1,304,923 |
1,197,671 |
197,841 |
|||||
Capitalized content production costs |
- |
1,176 |
194 |
|||||
Prepayments and other assets |
229,185 |
197,856 |
32,683 |
|||||
Goodwill |
4,255,570 |
4,262,569 |
704,126 |
|||||
Total non-current assets |
5,990,359 |
5,881,501 |
971,554 |
|||||
TOTAL ASSETS |
10,793,074 |
10,569,956 |
1,746,033 |
|||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
181,878 |
213,825 |
35,321 |
|||||
Advances from customers |
21,603 |
25,081 |
4,143 |
|||||
Accrued expenses and other liabilities |
981,353 |
1,124,342 |
185,729 |
|||||
Current portion of long-term debt |
7,441 |
- |
- |
|||||
Total current liabilities |
1,192,275 |
1,363,248 |
225,193 |
|||||
Non-current liabilities: |
||||||||
Deferred tax liability |
224,374 |
219,519 |
36,262 |
|||||
Other liabilities |
19,552 |
4,070 |
672 |
|||||
Total non-current liabilities |
243,926 |
223,589 |
36,934 |
|||||
Total liabilities |
1,436,201 |
1,586,837 |
262,127 |
|||||
Commitments and contingencies |
||||||||
Shareholders' equity: |
||||||||
Class A Ordinary Shares (US$0.00001 par value, 9,340,238,793 authorized, 2,286,643,502 and 2,356,529,401 issued and outstanding as of December 31, 2012 and 2013, respectively) |
149 |
154 |
25 |
|||||
Class B Ordinary Shares (US$0.00001 par value, 659,761,207 authorized, 659,561,893 and 659,561,893 issued and outstanding as of December 31, 2012 and 2013, respectively) |
49 |
49 |
8 |
|||||
Additional paid-in capital |
10,768,204 |
11,058,360 |
1,826,711 |
|||||
Statutory reserves |
1,500 |
2,063 |
341 |
|||||
Accumulated deficit |
(1,297,147) |
(1,878,454) |
(310,298) |
|||||
Accumulated other comprehensive loss |
(115,882) |
(199,053) |
(32,881) |
|||||
Total shareholders' equity |
9,356,873 |
8,983,119 |
1,483,906 |
|||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
10,793,074 |
10,569,956 |
1,746,033 |
YOUKU TUDOU INC. |
|||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS |
|||||||||||||||
For the Three Months Ended |
For the Twelve Months Ended |
||||||||||||||
(Amounts in thousands, except for number of shares and ADS and per share and per ADS data) |
|||||||||||||||
December 31, 2012 |
September 30, 2013 |
December 31, 2013 |
December 31, 2013 |
December 31, 2012 |
December 31, 2013 |
December 31, 2013 |
|||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
||||||||||
Net revenues |
635,831 |
857,743 |
901,287 |
148,882 |
1,795,575 |
3,028,484 |
500,271 |
||||||||
Cost of revenues (Note 1) |
(519,544) |
(775,436) |
(646,938) |
(106,867) |
(1,499,536) |
(2,487,421) |
(410,893) |
||||||||
Gross profit |
116,287 |
82,307 |
254,349 |
42,015 |
296,039 |
541,063 |
89,378 |
||||||||
Operating expenses: |
|||||||||||||||
Product development |
(64,099) |
(78,622) |
(76,514) |
(12,639) |
(172,885) |
(278,015) |
(45,925) |
||||||||
Sales and marketing |
(107,787) |
(171,763) |
(216,444) |
(35,754) |
(363,707) |
(681,008) |
(112,494) |
||||||||
General and administrative |
(73,084) |
(62,458) |
(40,393) |
(6,672) |
(238,112) |
(261,770) |
(43,241) |
||||||||
Total operating expenses |
(244,970) |
(312,843) |
(333,351) |
(55,065) |
(774,704) |
(1,220,793) |
(201,660) |
||||||||
Loss from operations |
(128,683) |
(230,536) |
(79,002) |
(13,050) |
(478,665) |
(679,730) |
(112,282) |
||||||||
Interest income |
9,988 |
7,284 |
8,419 |
1,391 |
45,478 |
29,972 |
4,950 |
||||||||
Interest expenses |
(830) |
- |
- |
- |
(3,989) |
(545) |
(90) |
||||||||
Other, net |
1,043 |
4,694 |
46,878 |
7,744 |
9,757 |
70,573 |
11,658 |
||||||||
Total other income, net |
10,201 |
11,978 |
55,297 |
9,135 |
51,246 |
100,000 |
16,518 |
||||||||
Loss before income taxes |
(118,482) |
(218,558) |
(23,705) |
(3,915) |
(427,419) |
(579,730) |
(95,764) |
||||||||
Income taxes |
4,912 |
(80) |
(876) |
(145) |
3,416 |
(1,014) |
(168) |
||||||||
Net loss |
(113,570) |
(218,638) |
(24,581) |
(4,060) |
(424,003) |
(580,744) |
(95,932) |
||||||||
Other comprehensive loss, before tax |
|||||||||||||||
Foreign currency translation adjustments |
(20,647) |
(10,547) |
(33,201) |
(5,484) |
(7,304) |
(83,171) |
(13,739) |
||||||||
Other comprehensive loss, before tax |
(20,647) |
(10,547) |
(33,201) |
(5,484) |
(7,304) |
(83,171) |
(13,739) |
||||||||
Income tax expense related to components of other comprehensive loss |
- |
- |
- |
- |
- |
- |
- |
||||||||
Other comprehensive loss, net of tax |
(20,647) |
(10,547) |
(33,201) |
(5,484) |
(7,304) |
(83,171) |
(13,739) |
||||||||
0 |
0 |
||||||||||||||
Net loss per share, basic and diluted |
(0.04) |
(0.07) |
(0.01) |
(0.00) |
(0.18) |
(0.19) |
(0.03) |
||||||||
Net loss per ADS (each ADS represents 18 class A ordinary shares), |
(0.69) |
(1.31) |
(0.15) |
(0.02) |
(3.20) |
(3.50) |
(0.58) |
||||||||
Shares used in computation, basic and diluted |
2,944,902,156 |
2,995,701,280 |
3,010,627,513 |
3,010,627,513 |
2,386,474,188 |
2,986,223,088 |
2,986,223,088 |
||||||||
ADSs used in computation, basic and diluted |
163,605,675 |
166,427,848 |
167,257,084 |
167,257,084 |
132,581,899 |
165,901,282 |
165,901,282 |
The accompanying notes are an integral part of the press release. |
|||||||||||||||
Note 1. Cost of Revenues |
For the Three Months Ended |
For the Twelve Months Ended |
|||||||||||||
December 31, 2012 |
September 30, 2013 |
December 31, 2013 |
December 31, 2013 |
December 31, 2012 |
December 31, 2013 |
December 31, 2013 |
|||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||
(Amounts in thousands) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||||||||
Cost of revenues: |
|||||||||||||||
Value added, business taxes and surcharges |
59,337 |
75,480 |
77,758 |
12,845 |
169,283 |
276,497 |
45,674 |
||||||||
Bandwidth costs |
162,959 |
181,670 |
178,824 |
29,540 |
524,623 |
685,650 |
113,261 |
||||||||
Depreciation of servers and other equipment |
26,303 |
21,827 |
36,686 |
6,060 |
68,569 |
102,367 |
16,910 |
||||||||
Content costs |
270,945 |
496,459 |
353,670 |
58,422 |
737,061 |
1,422,907 |
235,048 |
||||||||
Total Cost of Revenues |
519,544 |
775,436 |
646,938 |
106,867 |
1,499,536 |
2,487,421 |
410,893 |
YOUKU TUDOU INC. |
|||||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||||||||||||
For the Three Months Ended |
For the Twelve Months Ended |
||||||||||||||||
(Amounts in thousands) |
|||||||||||||||||
December 31, 2012 |
September 30, 2013 |
December 31, 2013 |
December 31, 2013 |
December 31, 2012 |
December 31, 2013 |
December 31, 2013 |
|||||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||||
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
||||||||||||
Cash flows from operating activities: |
|||||||||||||||||
Net loss |
(113,570) |
(218,638) |
(24,581) |
(4,060) |
(424,003) |
(580,744) |
(95,932) |
||||||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|||||||||||||||||
Depreciation and impairment of fixed assets |
31,249 |
30,342 |
46,972 |
7,759 |
81,609 |
131,611 |
21,741 |
||||||||||
Bad debt expense |
(1,828) |
19,945 |
25,547 |
4,220 |
9,887 |
62,603 |
10,341 |
||||||||||
Amortisation and impairment of intangible assets and capitalized content production costs |
135,508 |
327,334 |
225,109 |
37,185 |
416,396 |
867,957 |
143,376 |
||||||||||
Amortization of long-term debt discounts |
336 |
- |
- |
- |
1,928 |
313 |
52 |
||||||||||
Gain on disposal of property and equipment |
- |
788 |
(353) |
(58) |
52 |
485 |
80 |
||||||||||
Foreign exchange loss (gain) |
826 |
2,540 |
(15,336) |
(2,533) |
469 |
(13,318) |
(2,200) |
||||||||||
Share-based compensation |
38,779 |
48,918 |
53,061 |
8,764 |
118,218 |
188,358 |
31,114 |
||||||||||
Gain form remeasurement of previously held investment in acquired subsidiary |
- |
- |
- |
- |
(3,344) |
- |
- |
||||||||||
Deferred income tax benefits |
(7,675) |
- |
(4,414) |
(729) |
(9,953) |
(4,414) |
(729) |
||||||||||
Write-off of prepayment |
8,510 |
- |
- |
- |
- |
- |
- |
||||||||||
Gain from de-recognition of off-market liabilities |
- |
- |
(16,540) |
(2,732) |
- |
(16,540) |
(2,732) |
||||||||||
Changes in operating assets and liabilities: |
|||||||||||||||||
Restricted cash |
- |
6,759 |
(1,129) |
(186) |
(9,003) |
6,324 |
1,045 |
||||||||||
Accounts receivable |
73,149 |
(161,184) |
(10,312) |
(1,703) |
(223,772) |
(499,838) |
(82,567) |
||||||||||
Prepayments and other assets |
(20,831) |
37,051 |
(58,751) |
(9,705) |
20,182 |
1,441 |
238 |
||||||||||
Capitalized content production costs |
5,761 |
(3,004) |
22,687 |
3,748 |
(9,891) |
(6,738) |
(1,113) |
||||||||||
Accounts payable |
(22,506) |
702 |
(15,572) |
(2,572) |
(39,023) |
(13,555) |
(2,239) |
||||||||||
Advances from customers |
(23,022) |
9,918 |
(40,717) |
(6,726) |
(7,244) |
3,478 |
576 |
||||||||||
Accrued expenses and other liabilities |
53,987 |
20,027 |
21,519 |
3,553 |
214,912 |
142,060 |
23,464 |
||||||||||
Net cash provided by operating activities |
158,673 |
121,498 |
207,190 |
34,225 |
137,420 |
269,483 |
44,515 |
||||||||||
Cash flows from investing activities: |
|||||||||||||||||
Acquisition of property and equipment |
(24,364) |
(67,252) |
(14,955) |
(2,470) |
(90,204) |
(144,120) |
(23,807) |
||||||||||
Proceeds received from maturity of short-term investments |
1,170,519 |
1,358,761 |
1,018,628 |
168,265 |
2,826,023 |
2,989,628 |
493,851 |
||||||||||
Short-term investments placed with financial institutions |
(2,113,464) |
(1,405,173) |
- |
- |
(3,536,711) |
(2,283,410) |
(377,192) |
||||||||||
Proceeds from disposal of property and equipment |
1 |
- |
(824) |
(136) |
9 |
458 |
76 |
||||||||||
Cash acquired, net of cash paid for acquired subsidiaries |
- |
- |
(6,999) |
(1,156) |
378,666 |
(6,999) |
(1,156) |
||||||||||
Acquisition of intangible assets from related party |
7,200 |
- |
- |
- |
- |
- |
- |
||||||||||
Acquisition of intangible assets |
(118,256) |
(171,620) |
(227,540) |
(37,587) |
(361,976) |
(740,581) |
(122,335) |
||||||||||
Net cash (used in) provided by investing activities |
(1,078,364) |
(285,284) |
768,310 |
126,916 |
(784,193) |
(185,024) |
(30,563) |
||||||||||
Cash flows from financing activities: |
|||||||||||||||||
Exercise of employee stock options |
3,561 |
27,676 |
9,084 |
1,501 |
22,485 |
101,435 |
16,756 |
||||||||||
Proceeds from restricted cash |
25,364 |
- |
- |
- |
38,069 |
- |
- |
||||||||||
Principal repayments on long-term debt |
(23,685) |
(1,111) |
- |
- |
(11,145) |
(7,677) |
(1,268) |
||||||||||
Principal repayments on short-term loan |
- |
- |
- |
- |
(31,544) |
- |
- |
||||||||||
Net cash provided by financing activities |
5,240 |
26,565 |
9,084 |
1,501 |
17,865 |
93,758 |
15,488 |
||||||||||
Effect of exchange rate changes on cash and cash equivalents |
(21,474) |
(13,087) |
(17,865) |
(2,951) |
(7,773) |
(69,853) |
(11,539) |
||||||||||
Net (decrease) increase in cash and cash equivalents |
(935,925) |
(150,308) |
966,719 |
159,691 |
(636,681) |
108,364 |
17,901 |
||||||||||
Cash and cash equivalents at the beginning of the period |
2,591,782 |
947,810 |
797,502 |
131,738 |
2,292,538 |
1,655,857 |
273,528 |
||||||||||
Cash and cash equivalents at the end of the period |
1,655,857 |
797,502 |
1,764,221 |
291,429 |
1,655,857 |
1,764,221 |
291,429 |
Reconciliations of Non-GAAP results of operations measures to the nearest comparable GAAP financial measures (1)(Amounts in thousands of Renminbi ("RMB") and U.S. dollars ("US$"), unaudited) |
|||||||||||||||
1. Non-GAAP Content Costs |
For the Three Months Ended |
For the Twelve Months Ended |
|||||||||||||
December 31, 2012 |
September 30, 2013 |
December 31, 2013 |
December 31, 2013 |
December 31, 2012 |
December 31, 2013 |
December 31, 2013 |
|||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||
Content costs |
270,945 |
496,459 |
353,670 |
58,422 |
737,061 |
1,422,907 |
235,048 |
||||||||
Deduct: share-based compensation |
4,536 |
12,136 |
7,846 |
1,296 |
12,751 |
32,110 |
5,304 |
||||||||
Deduct: amortization of intangible assets from business combination |
8,235 |
5,984 |
6,100 |
1,008 |
26,472 |
28,156 |
4,651 |
||||||||
Non-GAAP content costs |
258,174 |
478,339 |
339,724 |
56,118 |
697,838 |
1,362,641 |
225,093 |
||||||||
2. Non-GAAP Gross Profit |
For the Three Months Ended |
For the Twelve Months Ended |
|||||||||||||
December 31, 2012 |
September 30, 2013 |
December 31, 2013 |
December 31, 2013 |
December 31, 2012 |
December 31, 2013 |
December 31, 2013 |
|||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||
Gross profit |
116,287 |
82,307 |
254,349 |
42,015 |
296,039 |
541,063 |
89,378 |
||||||||
Add back: share-based compensation |
4,536 |
12,136 |
7,846 |
1,296 |
12,751 |
32,110 |
5,304 |
||||||||
Add back: amortization of intangible assets from business combination |
8,235 |
5,984 |
6,100 |
1,008 |
26,472 |
28,156 |
4,651 |
||||||||
Non-GAAP gross profit |
129,058 |
100,427 |
268,295 |
44,319 |
335,262 |
601,329 |
99,333 |
||||||||
3. Non-GAAP Operating Expenses |
For the Three Months Ended |
For the Twelve Months Ended |
|||||||||||||
December 31, 2012 |
September 30, 2013 |
December 31, 2013 |
December 31, 2013 |
December 31, 2012 |
December 31, 2013 |
December 31, 2013 |
|||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||
Operating expenses |
244,970 |
312,843 |
333,351 |
55,065 |
774,704 |
1,220,793 |
201,660 |
||||||||
Deduct: share-based compensation |
34,243 |
36,782 |
45,215 |
7,468 |
105,467 |
156,248 |
25,810 |
||||||||
Deduct: business combination related expenses |
127 |
- |
- |
- |
28,754 |
- |
- |
||||||||
Deduct: amortization of intangible assets from business combination |
4,176 |
4,155 |
9,623 |
1,589 |
5,885 |
22,088 |
3,648 |
||||||||
Non-GAAP operating expenses |
206,424 |
271,906 |
278,513 |
46,008 |
634,598 |
1,042,457 |
172,202 |
||||||||
4. Non-GAAP Sales and Marketing Expenses |
For the Three Months Ended |
For the Twelve Months Ended |
|||||||||||||
December 31, 2012 |
September 30, 2013 |
December 31, 2013 |
December 31, 2013 |
December 31, 2012 |
December 31, 2013 |
December 31, 2013 |
|||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||
Sales and marketing expenses |
107,787 |
171,763 |
216,444 |
35,754 |
363,707 |
681,008 |
112,494 |
||||||||
Deduct: share-based compensation |
10,606 |
12,366 |
15,577 |
2,573 |
28,741 |
50,712 |
8,377 |
||||||||
Deduct: amortization of intangible assets from business combination |
2,087 |
2,077 |
5,077 |
839 |
2,941 |
11,308 |
1,867 |
||||||||
Non-GAAP sales and marketing expenses |
95,094 |
157,320 |
195,790 |
32,342 |
332,025 |
618,988 |
102,250 |
||||||||
5. Non-GAAP Product Development Expenses |
For the Three Months Ended |
For the Twelve Months Ended |
|||||||||||||
December 31, 2012 |
September 30, 2013 |
December 31, 2013 |
December 31, 2013 |
December 31, 2012 |
December 31, 2013 |
December 31, 2013 |
|||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||
Product development expenses |
64,099 |
78,622 |
76,514 |
12,639 |
172,885 |
278,015 |
45,925 |
||||||||
Deduct: share-based compensation |
8,408 |
9,748 |
11,795 |
1,948 |
26,157 |
38,400 |
6,343 |
||||||||
Deduct: amortization of intangible assets from business combination |
1,402 |
1,395 |
3,411 |
563 |
1,976 |
7,596 |
1,255 |
||||||||
Non-GAAP product development expenses |
54,289 |
67,479 |
61,308 |
10,128 |
144,752 |
232,019 |
38,327 |
||||||||
6. Non-GAAP General and Administrative Expenses |
For the Three Months Ended |
For the Twelve Months Ended |
|||||||||||||
December 31, 2012 |
September 30, 2013 |
December 31, 2013 |
December 31, 2013 |
December 31, 2012 |
December 31, 2013 |
December 31, 2013 |
|||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||
General and administrative expenses |
73,084 |
62,458 |
40,393 |
6,672 |
238,112 |
261,770 |
43,241 |
||||||||
Deduct: share-based compensation |
15,229 |
14,668 |
17,843 |
2,947 |
50,569 |
67,136 |
11,090 |
||||||||
Deduct: business combination related expenses |
127 |
- |
- |
- |
28,754 |
- |
- |
||||||||
Deduct: amortization of intangible assets from business combination |
687 |
683 |
1,135 |
187 |
968 |
3,184 |
526 |
||||||||
Non-GAAP general and administrative expenses |
57,041 |
47,107 |
21,415 |
3,538 |
157,821 |
191,450 |
31,625 |
||||||||
7. Non-GAAP Loss from Operations |
For the Three Months Ended |
For the Twelve Months Ended |
|||||||||||||
December 31, 2012 |
September 30, 2013 |
December 31, 2013 |
December 31, 2013 |
December 31, 2012 |
December 31, 2013 |
December 31, 2013 |
|||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||
Loss from operations |
(128,683) |
(230,536) |
(79,002) |
(13,050) |
(478,665) |
(679,730) |
(112,282) |
||||||||
Add back: share-based compensation |
38,779 |
48,918 |
53,061 |
8,764 |
118,218 |
188,358 |
31,114 |
||||||||
Add back: business combination related expenses |
127 |
- |
- |
- |
28,754 |
- |
- |
||||||||
Add back: amortization of intangible assets from business combination |
12,411 |
10,139 |
15,723 |
- |
2,597 |
32,357 |
50,244 |
8,299 |
|||||||
Non-GAAP loss from operations |
(77,366) |
(171,479) |
(10,218) |
(1,689) |
(299,336) |
(441,128) |
(72,869) |
||||||||
8. Non-GAAP Net (Loss) Profit |
For the Three Months Ended |
For the Twelve Months Ended |
|||||||||||||
December 31, 2012 |
September 30, 2013 |
December 31, 2013 |
December 31, 2013 |
December 31, 2012 |
December 31, 2013 |
December 31, 2013 |
|||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||
Net loss |
(113,570) |
(218,638) |
(24,581) |
(4,060) |
(424,003) |
(580,744) |
(95,932) |
||||||||
Add back: share-based compensation |
38,779 |
48,918 |
53,061 |
8,764 |
118,218 |
188,358 |
31,114 |
||||||||
Add back: business combination related expenses |
127 |
- |
- |
- |
28,754 |
- |
- |
||||||||
Add back: amortization of intangible assets from business combination |
12,411 |
10,139 |
15,723 |
2,597 |
32,357 |
50,244 |
8,299 |
||||||||
Non-GAAP net (loss) profit |
(62,253) |
(159,581) |
44,203 |
7,301 |
(244,674) |
(342,142) |
(56,519) |
||||||||
9. Non-GAAP EBITDA (Loss) Profit |
For the Three Months Ended |
For the Twelve Months Ended |
|||||||||||||
December 31, 2012 |
September 30, 2013 |
December 31, 2013 |
December 31, 2013 |
December 31, 2012 |
December 31, 2013 |
December 31, 2013 |
|||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||
Net loss |
(113,570) |
(218,638) |
(24,581) |
(4,060) |
(424,003) |
(580,744) |
(95,932) |
||||||||
Add back: |
|||||||||||||||
Depreciation and amortization (excluding amortization |
|||||||||||||||
of acquired content )(2) |
31,263 |
30,356 |
46,986 |
7,762 |
81,667 |
131,668 |
21,750 |
||||||||
Interest income |
(9,988) |
(7,284) |
(8,419) |
(1,391) |
(45,478) |
(29,972) |
(4,950) |
||||||||
Interest expenses |
830 |
- |
- |
- |
3,989 |
545 |
90 |
||||||||
Income taxes |
(4,912) |
80 |
876 |
145 |
(3,416) |
1,014 |
168 |
||||||||
EBITDA (loss) profit |
(96,377) |
(195,486) |
14,862 |
2,456 |
(387,241) |
(477,489) |
(78,874) |
||||||||
Adjustments: |
|||||||||||||||
Share-based compensation |
38,779 |
48,918 |
53,061 |
8,764 |
118,218 |
188,358 |
31,114 |
||||||||
Business combination related expenses |
127 |
- |
- |
- |
28,754 |
- |
- |
||||||||
Amortization of intangible assets from business combination |
12,411 |
10,139 |
15,723 |
2,597 |
32,357 |
50,244 |
8,299 |
||||||||
Others, net |
(1,043) |
(4,694) |
(46,878) |
(7,744) |
(9,757) |
(70,573) |
(11,658) |
||||||||
Non-GAAP EBITDA (loss) profit |
(46,103) |
(141,123) |
36,768 |
6,073 |
(217,669) |
(309,460) |
(51,119) |
||||||||
(1) For more information on the Non-GAAP financial measures, please see the section captioned "About Non-GAAP Financial Measures" in this earnings |
|||||||||||||||
(2) The amortization expense was related to an advertising license acquired in April 2010. The amortization of acquired content was not treated as a Non-GAAP adjustment. |
SOURCE Youku Tudou Inc.
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