Youku Tudou Announces Third Quarter 2015 Unaudited Financial Results
BEIJING, Nov. 19, 2015 /PRNewswire/ -- Youku Tudou Inc. (NYSE: YOKU), a leading multi-screen entertainment and media company in China ("Youku Tudou" or the "Company"), today announced its unaudited financial results for the third quarter 2015.
Third Quarter 2015 Highlights1
- Net revenues were RMB1.85 billion (US$291.8 million), a 62% increase from the corresponding period in 20142. Non-GAAP3 net revenues were RMB1.70 billion (US$267.6 million) in the third quarter of 2015, a 54% increase from the corresponding period in 2014.
- Gross profit was RMB311.5 million (US$49.0 million), a 36% increase from the corresponding period in 2014. Non-GAAP gross profit was RMB299.1 million (US$47.1 million) in the third quarter of 2015, a 19% increase from the corresponding period in 2014.
- Net loss was RMB435.6 million (US$68.5 million), as compared to RMB197.6 million (US$31.1 million) from the corresponding period in 2014. Non-GAAP net loss was RMB316.5 million (US$49.8 million) in the third quarter of 2015, as compared to RMB111.2 million (US$17.5 million) from the corresponding period in 2014.
- Basic and diluted loss per ADS, each representing 18 Class A ordinary shares of the Company, for the third quarter of 2015 amounted to RMB2.23 (US$0.35) and RMB2.23 (US$0.35), respectively. Non-GAAP basic and diluted loss per ADS for the third quarter of 2015 amounted to RMB1.62 (US$0.25) and RMB1.62 (US$0.25), respectively.
- Cash, cash equivalents, restricted cash and short-term investments totaled RMB7.48 billion (US$1.18 billion) as of September 30, 2015.
- Acquisition of property and equipment for the third quarter of 2015 was RMB93.9 million (US$14.8 million).
- Acquisition of licensed copyright for the third quarter of 2015 was RMB516.0 million (US$81.2 million).
Third Quarter 2015 Results
Net revenues were RMB1.85 billion (US$291.8 million) in the third quarter of 2015, a 62% increase from the corresponding period in 2014. Non-GAAP net revenues were RMB1.70 billion (US$267.6 million) in the third quarter of 2015, a 54% increase from the corresponding period in 2014, meeting the non-GAAP net revenues guidance previously announced by the Company.
Advertising net revenues were RMB1.35 billion (US$212.2 million) in the third quarter of 2015, a 37% increase from the corresponding period in 2014, 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 an increase in the number of advertisers and the rising average spend per advertiser.
Consumer revenues, which are derived from our subscription-based service, interactive live entertainment and mobile game joint operation, were RMB256.2 million (US$40.3 million) in the third quarter of 2015, a 514% increase from the corresponding period in 2014. The growth was primarily attributable to the increasing user adoption of our consumer services as evidenced by expansion of subscriber base of our subscription-based service, and growing number of paying users and average spend per user of our interactive live entertainment service.
| 1 The reporting currency of the Company is Renminbi ("RMB"), but for the convenience of the reader, the amounts presented throughout the release are in US dollars ("US$"). Unless otherwise noted, all conversions from RMB to US$ are made at a rate of RMB6.3556 to US$1.00, the effective noon buying rate as of September 30, 2015 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate. |
| 2 As noted in the Company's annual report for fiscal year 2014 on Form 20-F (the "2014 Annual Report"), certain adjustments were made to the Company's historical consolidated financial statements reflecting certain revisions to its accounting treatment for (i) licensed copyrights and (ii) nonmonetary exchanges of licensed copyrights, as further described in the 2014 Annual Report. Accordingly, unaudited financial information in this release in relation to the third quarter of 2014 has been amended, where applicable, principally as a result of, and to reflect the adjustment caused by, such revisions of the Company's accounting treatment. |
| 3 All non-GAAP measures exclude, as applicable, barter sublicensing revenues, amortization of licensed copyrights from nonmonetary content exchanges, share-based compensation expenses and amortization of intangible assets from business combination. For further details on non-GAAP measures, please refer to the reconciliation table and a detailed discussion of the Company's use of non-GAAP information set forth elsewhere in this press release. |
Bandwidth costs as a component of cost of revenues were RMB331.4 million (US$52.1 million) in the third quarter of 2015, representing 18% of net revenues, as compared to 20% of net revenues for the corresponding period in 2014.
Content costs as a component of cost of revenues were RMB896.1 million (US$141.0 million) in the third quarter of 2015, representing 48% of net revenues as compared to 48% of net revenues for the corresponding period in 2014. Non-GAAP content costs were RMB754.6 million (US$118.7 million) in the third quarter of 2015, representing 44% of non-GAAP net revenues, as compared to 44% of non-GAAP net revenues for the corresponding period in 2014. This increase was primarily due to expansion of our video content portfolio to support our new business growth initiatives.
Gross profit was RMB311.5 million (US$49.0 million)in the third quarter of 2015, a 36% increase from the corresponding period in 2014. Non-GAAP gross profit was RMB299.1 million (US$47.1 million) in the third quarter of 2015, a 19% increase from the corresponding period in 2014.
Operating expenses were RMB766.5 million (US$120.6 million) in the third quarter of 2015, as compared to RMB450.3 million (US$70.9 million) for the corresponding period in 2014. Non-GAAP operating expenses were RMB635.0 million (US$99.9 million) in the third quarter of 2015, as compared to RMB386.3 million (US$60.8 million) for the corresponding period in 2014. Detailed discussion of each component of operating expenses is as follows:
Sales and marketing expenses were RMB438.5 million (US$69.0 million) in the third quarter of 2015, as compared to RMB286.2 million (US$45.0 million) for the corresponding period in 2014. Non-GAAP sales and marketing expenses were RMB388.1 million (US$61.1 million) in the third quarter of 2015, as compared to RMB262.6 million (US$41.3 million) for the corresponding period in 2014. This increase was primarily due to increases in marketing expenses and commission paid to our sales force in line with our revenue growth.
Product development expenses were RMB205.4 million (US$32.3 million) in the third quarter of 2015, as compared to RMB111.9 million (US$17.6 million) for the corresponding period in 2014. Non-GAAP product development expenses were RMB163.3 million (US$25.7 million) in the third quarter of 2015, as compared to RMB93.3 million (US$14.7 million) for the corresponding period in 2014. This increase was primarily due to an increase in personnel related expenses for our product development in mobile, search, social, subscription and interactive live entertainment services.
General and administrative expenses were RMB122.6 million (US$19.3 million) in the third quarter of 2015, as compared to RMB52.2 million (US$8.2 million) from the corresponding period in 2014. Non-GAAP general and administrative expenses were RMB83.6 million (US$13.2 million) in the third quarter of 2015, as compared to RMB30.3 million (US$4.8 million) from the corresponding period in 2014.
Net loss was RMB435.6 million (US$68.5 million)in the third quarter of 2015, as compared to RMB197.6 million (US$31.1 million) for the corresponding period in 2014. Non-GAAP net loss was RMB316.5 million (US$49.8 million) in the third quarter of 2015, as compared to RMB111.2 million (US$17.5 million) from the corresponding period in 2014.
About Youku Tudou Inc.
Youku Tudou Inc. (NYSE: YOKU) is a leading multi-screen entertainment and media company in China. Youku Tudou is China's leading Internet television platform, enabling 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 net revenues, 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 and non-GAAP net profit or loss and non-GAAP adjusted EBITDA profit or loss. We define non-GAAP net revenues as net revenues excluding barter sublicensing revenues. We define non-GAAP content costs as content costs excluding amortization of licensed copyrights from nonmonetary content exchanges, 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 barter sublicensing revenues, amortization of licensed copyrights from nonmonetary content exchanges, 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 barter sublicensing revenues, amortization of licensed copyrights from nonmonetary content exchanges , 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 barter sublicensing revenues, amortization of licensed copyrights from nonmonetary content exchanges , share-based compensation expenses, amortization of intangible assets from business combination and business combination related expenses. We define non-GAAP adjusted 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 barter sublicensing revenues, amortization of licensed copyrights from nonmonetary content exchanges, 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:
Chang You
Youku Tudou Inc.
Tel: (+8610) 5890-6883 x 8056
Email: [email protected]
| YOUKU TUDOU INC. |
||||||||
| CONSOLIDATED BALANCE SHEETS |
||||||||
| (Amounts in thousands, except for number of shares) |
As of |
|||||||
| December 31, 2014 |
September 30, 2015 |
September 30, 2015 |
||||||
| RMB |
RMB |
US$ |
||||||
| ASSETS |
(Audited) |
(Unaudited) |
(Unaudited) |
|||||
| Current assets: |
||||||||
| Cash and cash equivalents |
3,820,742 |
2,523,301 |
397,020 |
|||||
| Restricted cash |
617,586 |
829,691 |
130,545 |
|||||
| Short-term investments |
4,021,199 |
4,130,942 |
649,969 |
|||||
| Accounts receivable |
1,719,760 |
2,315,902 |
364,387 |
|||||
| Licensed copyrights, net |
220,152 |
292,582 |
46,035 |
|||||
| Amounts due from related parties |
125,204 |
45,441 |
7,150 |
|||||
| Deferred tax assets, net |
2,283 |
2,283 |
359 |
|||||
| Prepayments and other assets |
117,716 |
362,933 |
57,104 |
|||||
| Total current assets |
10,644,642 |
10,503,075 |
1,652,569 |
|||||
| Non-current assets: |
||||||||
| Property and equipment, net |
293,027 |
365,442 |
57,499 |
|||||
| Long-term investments |
67,293 |
203,939 |
32,088 |
|||||
| Available-for-sale financial assets |
- |
21,233 |
3,341 |
|||||
| Licensed copyrights, net |
505,173 |
671,033 |
105,581 |
|||||
| Intangible assets, net |
875,502 |
866,600 |
136,352 |
|||||
| Capitalized content production costs |
1,678 |
10,456 |
1,645 |
|||||
| Film assets |
- |
91,843 |
14,451 |
|||||
| Prepayments and other assets |
431,377 |
453,054 |
71,284 |
|||||
| Goodwill |
4,262,569 |
4,262,569 |
670,679 |
|||||
| Total non-current assets |
6,436,619 |
6,946,169 |
1,092,920 |
|||||
| TOTAL ASSETS |
17,081,261 |
17,449,244 |
2,745,489 |
|||||
| LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
563,009 |
638,734 |
100,499 |
|||||
| Advances from customers and deferred revenue |
36,232 |
154,645 |
24,332 |
|||||
| Amounts due to related parties |
4 |
2,345 |
369 |
|||||
| Accrued expenses and other liabilities |
1,668,122 |
2,126,698 |
334,618 |
|||||
| Short-term bank loans |
500,000 |
819,637 |
128,963 |
|||||
| Total current liabilities |
2,767,367 |
3,742,059 |
588,781 |
|||||
| Non-current liabilities： |
||||||||
| Deferred tax liabilities |
213,608 |
213,608 |
33,609 |
|||||
| Other liabilities |
6,570 |
43,403 |
6,829 |
|||||
| Total non-current liabilities |
220,178 |
257,011 |
40,438 |
|||||
| Total liabilities |
2,987,545 |
3,999,070 |
629,219 |
|||||
| Commitments and contingencies |
||||||||
| Shareholders' equity: |
||||||||
| Class A Ordinary Shares (US$0.00001 par value, |
201 |
204 |
32 |
|||||
| Class B Ordinary Shares (US$0.00001 par value, |
48 |
48 |
8 |
|||||
| Additional paid-in capital |
18,878,497 |
19,293,943 |
3,035,739 |
|||||
| Treasury stock (at cost, 289,472,400 and |
(1,845,892) |
(1,845,892) |
(290,436) |
|||||
| Statutory reserves |
13,146 |
13,146 |
2,068 |
|||||
| Accumulated deficit |
(2,681,658) |
(3,976,699) |
(625,700) |
|||||
| Accumulated other comprehensive loss |
(270,626) |
(35,532) |
(5,591) |
|||||
| Total shareholders' equity |
14,093,716 |
13,449,218 |
2,116,120 |
|||||
| Non-controlling interest |
- |
956 |
150 |
|||||
| Total equity |
14,093,716 |
13,450,174 |
2,116,270 |
|||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
17,081,261 |
17,449,244 |
2,745,489 |
|||||
| YOUKU TUDOU INC. |
||||||||||||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) |
||||||||||||||||
| For the Three Months Ended |
For the Nine Months Ended |
|||||||||||||||
| (Amounts in thousands, except for number of shares and |
||||||||||||||||
| September 30, 2014 |
June 30, 2015 |
September 30, 2015 |
September 30, 2015 |
September 30, 2014 |
September 30, 2015 |
September 30, 2015 |
||||||||||
| RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||
| (Unaudited-As revised) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited-As revised) |
(Unaudited) |
(Unaudited) |
||||||||||
| Net revenues (including advertising net revenues |
1,143,000 |
1,609,687 |
1,854,841 |
291,844 |
2,941,025 |
4,603,986 |
724,398 |
|||||||||
| Cost of revenues (Note 1) |
(914,630) |
(1,355,570) |
(1,543,339) |
(242,831) |
(2,351,961) |
(4,036,896) |
(635,172) |
|||||||||
| Gross profit |
228,370 |
254,117 |
311,502 |
49,013 |
589,064 |
567,090 |
89,226 |
|||||||||
| Operating expenses: |
||||||||||||||||
| Product development |
(111,862) |
(181,856) |
(205,446) |
(32,325) |
(290,551) |
(526,875) |
(82,899) |
|||||||||
| Sales and marketing |
(286,186) |
(354,259) |
(438,475) |
(68,990) |
(683,861) |
(1,113,167) |
(175,147) |
|||||||||
| General and administrative |
(52,206) |
(109,830) |
(122,626) |
(19,294) |
(172,005) |
(316,514) |
(49,801) |
|||||||||
| Total operating expenses |
(450,254) |
(645,945) |
(766,547) |
(120,609) |
(1,146,417) |
(1,956,556) |
(307,847) |
|||||||||
| Government grant income |
1,110 |
11,075 |
379 |
60 |
1,990 |
11,577 |
1,822 |
|||||||||
| Loss from operations |
(220,774) |
(380,753) |
(454,666) |
(71,536) |
(555,363) |
(1,377,889) |
(216,799) |
|||||||||
| Interest income |
22,694 |
34,265 |
28,678 |
4,512 |
38,670 |
92,754 |
14,594 |
|||||||||
| Interest expenses |
- |
(17,126) |
(14,580) |
(2,294) |
- |
(42,449) |
(6,679) |
|||||||||
| Share of net loss of equity investee |
- |
(1,459) |
(1,978) |
(311) |
- |
(4,684) |
(737) |
|||||||||
| Other income, net |
431 |
1,781 |
27,281 |
4,292 |
734 |
36,414 |
5,730 |
|||||||||
| Loss before income taxes |
(197,649) |
(363,292) |
(415,265) |
(65,337) |
(515,959) |
(1,295,854) |
(203,891) |
|||||||||
| Income tax expense |
- |
21,273 |
(20,316) |
(3,197) |
(12) |
813 |
128 |
|||||||||
| Net loss |
(197,649) |
(342,019) |
(435,581) |
(68,534) |
(515,971) |
(1,295,041) |
(203,763) |
|||||||||
| Net loss attributable to non-controlling interest |
- |
- |
- |
- |
- |
- |
- |
|||||||||
| Net loss attributable to ordinary shareholders |
(197,649) |
(342,019) |
(435,581) |
(68,534) |
(515,971) |
(1,295,041) |
(203,763) |
|||||||||
| Other comprehensive income (loss), before tax |
||||||||||||||||
| Foreign currency translation adjustments |
214 |
(27,165) |
225,672 |
35,508 |
7,528 |
235,094 |
36,990 |
|||||||||
| Other comprehensive income (loss), net of tax |
214 |
(27,165) |
225,672 |
35,508 |
7,528 |
235,094 |
36,990 |
|||||||||
| Comprehensive loss attributable to ordinary shareholders |
(197,435) |
(369,184) |
(209,909) |
(33,026) |
(508,443) |
(1,059,947) |
(166,773) |
|||||||||
| 0 |
0 |
|||||||||||||||
| Net loss per share, basic and diluted |
(0.05) |
(0.10) |
(0.12) |
(0.02) |
(0.15) |
(0.37) |
(0.06) |
|||||||||
| Net loss per ADS (each ADS represents 18 class A |
(0.96) |
(1.76) |
(2.23) |
(0.35) |
(2.76) |
(6.66) |
(1.05) |
|||||||||
| Shares used in computation, basic and diluted |
3,724,534,275 |
3,500,437,718 |
3,518,532,468 |
3,518,532,468 |
3,369,848,757 |
3,501,670,935 |
3,501,670,935 |
|||||||||
| ADSs used in computation, basic and diluted |
206,918,571 |
194,468,762 |
195,474,026 |
195,474,026 |
187,213,819 |
194,537,274 |
194,537,274 |
|||||||||
| Note 1. Cost of Revenues |
For the Three Months Ended |
For the Nine Months Ended |
|||||||||||
| September 30, 2014 |
June 30, 2015 |
September 30, 2015 |
September 30, 2015 |
September 30, 2014 |
September 30, 2015 |
September 30, 2015 |
|||||||
| RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||
| (Amounts in thousands) |
(Unaudited-As revised) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited-As revised) |
(Unaudited) |
(Unaudited) |
||||||
| Cost of revenues: |
|||||||||||||
| Value added, business taxes and surcharges |
97,760 |
138,329 |
143,998 |
22,657 |
250,268 |
380,715 |
59,903 |
||||||
| Bandwidth costs |
229,714 |
330,258 |
331,358 |
52,136 |
645,141 |
968,451 |
152,378 |
||||||
| Depreciation of servers and other equipment |
25,888 |
38,479 |
41,948 |
6,600 |
70,505 |
114,776 |
18,059 |
||||||
| Interactive live entertainment revenue sharing fees |
10,170 |
70,017 |
105,838 |
16,653 |
14,509 |
199,942 |
31,459 |
||||||
| Cost of goods sold |
- |
34,073 |
24,122 |
3,795 |
- |
63,532 |
9,997 |
||||||
| Content costs |
551,098 |
744,414 |
896,075 |
140,990 |
1,371,538 |
2,309,480 |
363,376 |
||||||
| Total Cost of Revenues |
914,630 |
1,355,570 |
1,543,339 |
242,831 |
2,351,961 |
4,036,896 |
635,172 |
||||||
| YOUKU TUDOU INC. |
|||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||||||||||||
| For the Three Months Ended |
For the Nine Months Ended |
||||||||||||||||
| (Amounts in thousands) |
|||||||||||||||||
| September 30, 2014 |
June 30, 2015 |
September 30, 2015 |
September 30, 2015 |
September 30, 2014 |
September 30, 2015 |
September 30, 2015 |
|||||||||||
| RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||||
| (Unaudited-As revised) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited-As revised) |
(Unaudited) |
(Unaudited) |
|||||||||||
| Cash flows from operating activities: |
|||||||||||||||||
| Net loss |
(197,649) |
(342,019) |
(435,581) |
(68,534) |
(515,971) |
(1,295,041) |
(203,763) |
||||||||||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities |
|||||||||||||||||
| Depreciation of fixed assets |
32,081 |
45,212 |
51,207 |
8,057 |
89,286 |
137,095 |
21,571 |
||||||||||
| Bad debt expense |
(12,546) |
1,862 |
22,133 |
3,482 |
(13,772) |
38,795 |
6,104 |
||||||||||
| Amortization of licensed copyrights |
334,857 |
478,480 |
575,590 |
90,564 |
812,048 |
1,504,935 |
236,789 |
||||||||||
| Amortization and impairment of intangible assets |
16,571 |
17,493 |
14,148 |
2,226 |
29,838 |
45,571 |
7,170 |
||||||||||
| Barter sublicensing revenues |
(36,359) |
(94,891) |
(153,921) |
(24,218) |
(175,291) |
(332,051) |
(52,245) |
||||||||||
| Loss (Gain) on disposal of property and |
10 |
135 |
830 |
131 |
228 |
918 |
144 |
||||||||||
| Foreign exchange loss (gain) |
(58) |
21,755 |
(25,715) |
(4,045) |
2,952 |
(24,030) |
(3,780) |
||||||||||
| Share-based compensation |
72,372 |
144,364 |
154,350 |
24,286 |
224,723 |
378,486 |
59,551 |
||||||||||
| Deferred government grant income |
- |
(167) |
(83) |
(13) |
- |
(250) |
(39) |
||||||||||
| Share of net loss of equity investee |
- |
1,459 |
1,979 |
311 |
- |
4,685 |
737 |
||||||||||
| Changes in operating assets and liabilities, net of |
|||||||||||||||||
| Restricted cash |
(555,636) |
6,044 |
(542) |
(85) |
(555,639) |
(5) |
(1) |
||||||||||
| Accounts receivable |
(171,241) |
(330,939) |
(202,671) |
(31,889) |
(236,144) |
(634,936) |
(99,902) |
||||||||||
| Amounts due from related parties |
(9,420) |
93,213 |
39,966 |
6,288 |
(72,040) |
79,762 |
12,550 |
||||||||||
| Prepayments and other assets |
21,958 |
(49,712) |
7,149 |
1,125 |
(9,777) |
(145,666) |
(22,919) |
||||||||||
| Capitalized content production costs |
(17,511) |
(51,805) |
(58,140) |
(9,148) |
(26,854) |
(131,919) |
(20,756) |
||||||||||
| Accounts payable |
17,079 |
(10,033) |
(679) |
(107) |
30,284 |
61,124 |
9,617 |
||||||||||
| Advances from customers and deferred |
1,783 |
(3,788) |
5,122 |
806 |
370 |
38,267 |
6,021 |
||||||||||
| Accrued expenses and other liabilities |
249,911 |
246,747 |
94,849 |
14,923 |
263,236 |
430,020 |
67,660 |
||||||||||
| Amount due to related parties |
48 |
(4) |
2,344 |
369 |
118 |
2,341 |
368 |
||||||||||
| Net cash provided (used in) by operating activities |
(253,750) |
173,406 |
92,335 |
14,529 |
(152,405) |
158,101 |
24,877 |
||||||||||
| Cash flows from investing activities: |
|||||||||||||||||
| Acquisition of property and equipment |
(41,295) |
(71,508) |
(93,883) |
(14,772) |
(154,454) |
(238,381) |
(37,507) |
||||||||||
| Purchase of available-for-sale financial assets |
- |
- |
- |
- |
- |
(21,267) |
(3,346) |
||||||||||
| Proceeds received from maturity of short-term |
1,363,276 |
20,000 |
3,143,969 |
494,677 |
2,561,772 |
3,163,969 |
497,824 |
||||||||||
| Short-term investments placed with financial |
(2,859,798) |
- |
(2,906,449) |
(457,305) |
(4,255,735) |
(3,186,757) |
(501,409) |
||||||||||
| Proceeds from disposal of property and equipment |
88 |
15 |
6 |
1 |
278 |
68 |
11 |
||||||||||
| Collection of loans to third parties |
- |
3,000 |
- |
- |
- |
3,000 |
472 |
||||||||||
| Loans to third parties |
- |
- |
- |
- |
- |
(3,000) |
(472) |
||||||||||
| Acquisition of shares of investees |
(50,000) |
(77,250) |
(19,697) |
(3,099) |
(50,000) |
(96,947) |
(15,254) |
||||||||||
| Acquisition of licensed copyrights |
(343,886) |
(366,228) |
(515,959) |
(81,182) |
(755,167) |
(1,377,434) |
(216,728) |
||||||||||
| Acquisition of intangible assets |
(256) |
- |
(188) |
(30) |
(1,186) |
(188) |
(30) |
||||||||||
| Net cash used in investing activities |
(1,931,871) |
(491,971) |
(392,201) |
(61,710) |
(2,654,492) |
(1,756,937) |
(276,439) |
||||||||||
| Cash flows from financing activities: |
|||||||||||||||||
| Exercise of employee stock options |
6,086 |
29,754 |
2,681 |
422 |
25,250 |
36,964 |
5,816 |
||||||||||
| Increase in restricted cash |
- |
(154,000) |
611,900 |
96,277 |
- |
(212,100) |
(33,372) |
||||||||||
| Proceeds from short-term bank loans |
(1,293,644) |
148,247 |
- |
- |
(1,293,644) |
818,500 |
128,784 |
||||||||||
| Principal repayments on short-term loan |
- |
- |
(500,000) |
(78,671) |
- |
(500,000) |
(78,671) |
||||||||||
| Proceeds from non-controlling interests |
- |
- |
956 |
150 |
- |
956 |
150 |
||||||||||
| Proceeds from Ali investment, net of issuance costs |
(7,504) |
- |
- |
- |
7,380,016 |
- |
- |
||||||||||
| Net cash provided by financing activities |
(1,295,062) |
24,001 |
115,537 |
18,178 |
6,111,622 |
144,320 |
22,707 |
||||||||||
| Effect of exchange rate changes on cash and cash equivalents |
272 |
(30,473) |
145,855 |
22,949 |
4,576 |
157,075 |
24,714 |
||||||||||
| Net (decrease) increase in cash and cash equivalents |
(3,480,411) |
(325,037) |
(38,474) |
(6,054) |
3,309,301 |
(1,297,441) |
(204,141) |
||||||||||
| Cash and cash equivalents at the beginning of the period |
8,553,933 |
2,886,812 |
2,561,775 |
403,074 |
1,764,221 |
3,820,742 |
601,161 |
||||||||||
| Cash and cash equivalents at the end of the period |
5,073,522 |
2,561,775 |
2,523,301 |
397,020 |
5,073,522 |
2,523,301 |
397,020 |
||||||||||
| 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$"), unaudited) |
|||||||||||||||
| 1. Non-GAAP Net Revenues |
For the Three Months Ended |
For the Nine Months Ended |
|||||||||||||
| September 30, 2014 |
June 30, 2015 |
September 30, 2015 |
September 30, 2015 |
September 30, 2014 |
September 30, 2015 |
September 30, 2015 |
|||||||||
| RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||
| Net Revenues |
1,143,000 |
1,609,687 |
1,854,841 |
291,844 |
2,941,025 |
4,603,986 |
724,398 |
||||||||
| Deduct: barter sublicensing revenues |
36,359 |
94,891 |
153,921 |
24,218 |
175,291 |
332,051 |
52,245 |
||||||||
| Non-GAAP Net Revenues |
1,106,641 |
1,514,796 |
1,700,920 |
267,626 |
2,765,734 |
4,271,935 |
672,153 |
||||||||
| 2. Non-GAAP Content Costs |
For the Three Months Ended |
For the Nine Months Ended |
|||||||||||||
| September 30, 2014 |
June 30, 2015 |
September 30, 2015 |
September 30, 2015 |
September 30, 2014 |
September 30, 2015 |
September 30, 2015 |
|||||||||
| RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||
| Content costs |
551,098 |
744,414 |
896,075 |
140,990 |
1,371,538 |
2,309,480 |
363,376 |
||||||||
| Deduct: amortization of licensed copyrights from nonmonetary content exchanges |
45,815 |
69,121 |
116,175 |
18,279 |
107,514 |
221,741 |
34,889 |
||||||||
| Deduct: share-based compensation |
11,077 |
25,473 |
25,314 |
3,983 |
35,994 |
63,194 |
9,943 |
||||||||
| Deduct: amortization of intangible assets from business combination |
1,898 |
- |
- |
- |
5,728 |
- |
- |
||||||||
| Non-GAAP content costs |
492,308 |
649,820 |
754,586 |
118,728 |
1,222,302 |
2,024,545 |
318,544 |
||||||||
| 3. Non-GAAP Gross Profit |
For the Three Months Ended |
For the Nine Months Ended |
|||||||||||||
| September 30, 2014 |
June 30, 2015 |
September 30, 2015 |
September 30, 2015 |
September 30, 2014 |
September 30, 2015 |
September 30, 2015 |
|||||||||
| RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||
| Gross profit |
228,370 |
254,117 |
311,502 |
49,013 |
589,064 |
567,090 |
89,226 |
||||||||
| Deduct: barter sublicensing revenues |
36,359 |
94,891 |
153,921 |
24,218 |
175,291 |
332,051 |
52,245 |
||||||||
| Add back: amortization of licensed copyrights from nonmonetary content exchanges |
45,815 |
69,121 |
116,175 |
18,279 |
107,514 |
221,741 |
34,889 |
||||||||
| Add back: share-based compensation |
11,077 |
25,473 |
25,314 |
3,983 |
35,994 |
63,194 |
9,943 |
||||||||
| Add back: amortization of intangible assets from business combination |
1,898 |
- |
- |
- |
5,728 |
- |
- |
||||||||
| Non-GAAP gross profit (loss) |
250,801 |
253,820 |
299,070 |
47,057 |
563,009 |
519,974 |
81,813 |
||||||||
| 4. Non-GAAP Operating Expenses |
For the Three Months Ended |
For the Nine Months Ended |
|||||||||||||
| September 30, 2014 |
June 30, 2015 |
September 30, 2015 |
September 30, 2015 |
September 30, 2014 |
September 30, 2015 |
September 30, 2015 |
|||||||||
| RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||
| Operating expenses |
450,254 |
645,945 |
766,547 |
120,609 |
1,146,417 |
1,956,556 |
307,847 |
||||||||
| Deduct: share-based compensation |
61,295 |
118,891 |
129,036 |
20,303 |
188,729 |
315,292 |
49,608 |
||||||||
| Deduct: amortization of intangible assets from business combination |
2,691 |
2,689 |
2,505 |
394 |
8,073 |
7,885 |
1,241 |
||||||||
| Non-GAAP operating expenses |
386,268 |
524,365 |
635,006 |
99,912 |
949,615 |
1,633,379 |
256,998 |
||||||||
| 5. Non-GAAP Sales and Marketing Expenses |
For the Three Months Ended |
For the Nine Months Ended |
|||||||||||||
| September 30, 2014 |
June 30, 2015 |
September 30, 2015 |
September 30, 2015 |
September 30, 2014 |
September 30, 2015 |
September 30, 2015 |
|||||||||
| RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||
| Sales and marketing expenses |
286,186 |
354,259 |
438,475 |
68,990 |
683,861 |
1,113,167 |
175,147 |
||||||||
| Deduct: share-based compensation |
22,256 |
47,305 |
49,054 |
7,718 |
68,252 |
128,710 |
20,251 |
||||||||
| Deduct: amortization of intangible assets from business combination |
1,344 |
1,344 |
1,344 |
211 |
4,032 |
4,032 |
634 |
||||||||
| Non-GAAP sales and marketing expenses |
262,586 |
305,610 |
388,077 |
61,061 |
611,577 |
980,425 |
154,262 |
||||||||
| 6. Non-GAAP Product Development Expenses |
For the Three Months Ended |
For the Nine Months Ended |
|||||||||||||
| September 30, 2014 |
June 30, 2015 |
September 30, 2015 |
September 30, 2015 |
September 30, 2014 |
September 30, 2015 |
September 30, 2015 |
|||||||||
| RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|||||||||
| Product development expenses |
111,862 |
181,856 |
205,446 |
32,325 |
290,551 |
526,875 |
82,899 |
||||||||
| Deduct: share-based compensation |
17,624 |
39,159 |
41,207 |
6,484 |
53,836 |
99,074 |
15,588 |
||||||||
| Deduct: amortization of intangible assets from business combination |
905 |
903 |
903 |
142 |
2,715 |
2,711 |
427 |
||||||||
| Non-GAAP product development expenses |
93,333 |
141,794 |
163,336 |
25,699 |
234,000 |
425,090 |
66,884 |
||||||||
| 7. Non-GAAP General and Administrative Expenses |
For the Three Months Ended |
For the Nine Months Ended |
||||||||||||||
| September 30, 2014 |
June 30, 2015 |
September 30, 2015 |
September 30, 2015 |
September 30, 2014 |
September 30, 2015 |
September 30, 2015 |
||||||||||
| RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||
| General and administrative expenses |
52,206 |
109,830 |
122,626 |
19,294 |
172,005 |
316,514 |
49,801 |
|||||||||
| Deduct: share-based compensation |
21,415 |
32,427 |
38,775 |
6,101 |
66,641 |
87,508 |
13,769 |
|||||||||
| Deduct: amortization of intangible assets from business combination |
442 |
442 |
258 |
41 |
1,326 |
1,142 |
180 |
|||||||||
| Non-GAAP general and administrative expenses |
30,349 |
76,961 |
83,593 |
13,152 |
104,038 |
227,864 |
35,852 |
|||||||||
| 8. Non-GAAP Loss from Operations |
For the Three Months Ended |
For the Nine Months Ended |
||||||||||||||
| September 30, 2014 |
June 30, 2015 |
September 30, 2015 |
September 30, 2015 |
September 30, 2014 |
September 30, 2015 |
September 30, 2015 |
||||||||||
| RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||
| Loss from operations |
(220,774) |
(380,753) |
(454,666) |
(71,536) |
(555,363) |
(1,377,889) |
(216,799) |
|||||||||
| Deduct: barter sublicensing revenues |
36,359 |
94,891 |
153,921 |
24,218 |
175,291 |
332,051 |
52,245 |
|||||||||
| Add back: amortization of licensed copyrights from nonmonetary content exchanges |
45,815 |
69,121 |
116,175 |
18,279 |
107,514 |
221,741 |
34,889 |
|||||||||
| Add back: share-based compensation |
72,372 |
144,364 |
154,350 |
24,286 |
224,723 |
378,486 |
59,551 |
|||||||||
| Add back: amortization of intangible assets from business combination |
4,589 |
2,689 |
2,505 |
394 |
13,801 |
7,885 |
1,241 |
|||||||||
| Non-GAAP loss from operations |
(134,357) |
(259,470) |
(335,557) |
(52,795) |
(384,616) |
(1,101,828) |
(173,363) |
|||||||||
| 9. Non-GAAP Net Loss |
For the Three Months Ended |
For the Nine Months Ended |
||||||||||||||
| September 30, 2014 |
June 30, 2015 |
September 30, 2015 |
September 30, 2015 |
September 30, 2014 |
September 30, 2015 |
September 30, 2015 |
||||||||||
| RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||
| Net loss |
(197,649) |
(342,019) |
(435,581) |
(68,534) |
(515,971) |
(1,295,041) |
(203,763) |
|||||||||
| Deduct: barter sublicensing revenues |
36,359 |
94,891 |
153,921 |
24,218 |
175,291 |
332,051 |
52,245 |
|||||||||
| Add back: amortization of licensed copyrights from nonmonetary content exchanges |
45,815 |
69,121 |
116,175 |
18,279 |
107,514 |
221,741 |
34,889 |
|||||||||
| Add back: share-based compensation |
72,372 |
144,364 |
154,350 |
24,286 |
224,723 |
378,486 |
59,551 |
|||||||||
| Add back: amortization of intangible assets from business combination |
4,589 |
2,689 |
2,505 |
394 |
13,801 |
7,885 |
1,241 |
|||||||||
| Non-GAAP net loss |
(111,232) |
(220,736) |
(316,472) |
(49,793) |
(345,224) |
(1,018,980) |
(160,327) |
|||||||||
| 10. Non-GAAP adjusted EBITDA Loss |
For the Three Months Ended |
For the Nine Months Ended |
||||||||||||||
| September 30, 2014 |
June 30, 2015 |
September 30, 2015 |
September 30, 2015 |
September 30, 2014 |
September 30, 2015 |
September 30, 2015 |
||||||||||
| RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||
| Net loss |
(197,649) |
(342,019) |
(435,581) |
(68,534) |
(515,971) |
(1,295,041) |
(203,763) |
|||||||||
| Add back: |
||||||||||||||||
| Depreciation and amortization (excluding amortization of acquired content) (2) |
32,091 |
45,223 |
51,217 |
8,059 |
89,316 |
137,126 |
21,576 |
|||||||||
| Interest income |
(22,694) |
(34,265) |
(28,678) |
(4,512) |
(38,670) |
(92,754) |
(14,594) |
|||||||||
| Interest expenses |
- |
17,126 |
14,580 |
2,294 |
- |
42,449 |
6,679 |
|||||||||
| Income taxes |
- |
(21,273) |
20,316 |
3,197 |
12 |
(813) |
(128) |
|||||||||
| EBITDA loss |
(188,252) |
(335,208) |
(378,146) |
(59,496) |
(465,313) |
(1,209,033) |
(190,230) |
|||||||||
| Adjustments: |
||||||||||||||||
| Barter sublicensing revenues |
(36,359) |
(94,891) |
(153,921) |
(24,218) |
(175,291) |
(332,051) |
(52,245) |
|||||||||
| Amortization of licensed copyrights from nonmonetary content exchanges |
45,815 |
69,121 |
116,175 |
18,279 |
107,514 |
221,741 |
34,889 |
|||||||||
| Share-based compensation |
72,372 |
144,364 |
154,350 |
24,286 |
224,723 |
378,486 |
59,551 |
|||||||||
| Amortization of intangible assets from business combination |
4,589 |
2,689 |
2,505 |
394 |
13,801 |
7,885 |
1,241 |
|||||||||
| Others, net |
(431) |
(1,781) |
(27,281) |
(4,292) |
(734) |
(36,414) |
(5,730) |
|||||||||
| Non-GAAP adjusted EBITDA loss |
(102,266) |
(215,706) |
(286,318) |
(45,047) |
(295,300) |
(969,386) |
(152,524) |
|||||||||
| (1) For more information on the Non-GAAP financial measures, please see the section captioned "About Non-GAAP Financial Measures" in this earnings release. |
||||||||||||||||
| (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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