Youku Tudou Announces Second Quarter 2015 Unaudited Financial Results
Consumer Revenues Grew 596% Year-on-Year; Multi-Screen Monthly User Time Spent Grew 50% Year-on-Year
BEIJING, Aug. 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 second quarter 2015.
Second Quarter 2015 Highlights[1]
- Net revenues were RMB1.61 billion (US$259.6 million), a 57% increase from the corresponding period in 2014[2]. Non-GAAP[3] net revenues were RMB1.51 billion (US$244.3 million) in the second quarter of 2015, a 58% increase from the corresponding period in 2014.
- Gross profit was RMB254.1 million (US$41.0 million), an 11% increase from the corresponding period in 2014. Non-GAAP gross profit was RMB253.8 million (US$40.9 million) in the second quarter of 2015, a 14% increase from the corresponding period in 2014.
- Net loss was RMB342.0 million (US$55.2 million), as compared to RMB142.3 million (US$23.0 million) from the corresponding period in 2014. Non-GAAP net loss was RMB220.7 million (US$35.6 million) in the second quarter of 2015, as compared to RMB76.9 million (US$12.4 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 second quarter of 2015 amounted to RMB1.76 (US$0.28) and RMB1.76 (US$0.28), respectively. Non-GAAP basic and diluted loss per ADS for the second quarter of 2015 amounted to RMB1.13 (US$0.18) and RMB1.13 (US$0.18), respectively.
- Cash, cash equivalents, restricted cash and short-term investments totaled RMB8.33 billion (US$1.34 billion) as of June 30, 2015.
- Acquisition of property and equipment for the second quarter of 2015 was RMB71.5 million (US$11.5 million).
- Acquisition of licensed copyright for the second quarter of 2015 was RMB366.2 million (US$59.1 million).
"I am very pleased that once more we delivered accelerated and increasingly diversified topline growth in the second quarter, driven by robust consumer business development and supported by healthy advertising revenues. Our revenue diversification through consumer business is successful and based on progress driven by our business unit reorganizations and management team additions. Meanwhile, with nearly half of advertising revenues coming from mobile, we have achieved broad adoption of mobile advertising by domestic and international advertisers alike," said Victor Koo, Chairman and Chief Executive Officer of Youku Tudou. "We expect these positive trends, reinforced by our clear growth strategy and improving business economics, to continue during the second half of this year."
Dele Liu, President of Youku Tudou, added, "We continued to significantly increase web-native content, which is one of the key growth pillars driving our business development this year, in addition to accelerated topline growth and revenue diversification. More specifically, we are creating cross-domain synergy for high quality IPs taking the forms of web series, online game, and movies, leveraging our large and growing user base and high quality traffic as measured by user time spent and user engagement."
Second Quarter 2015 Results
Net revenues were RMB1.61 billion (US$259.6 million) in the second quarter of 2015, a 57% increase from the corresponding period in 2014. Non-GAAP net revenues were RMB1.51 billion (US$244.3 million) in the second quarter of 2015, a 58% increase from the corresponding period in 2014, meeting the non-GAAP net revenues guidance previously announced by the Company.
Advertising net revenues were RMB1.28 billion (US$206.1 million) in the second quarter of 2015, a 40% 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 RMB174.5 million (US$28.1 million) in the second quarter of 2015, a 596% 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.
Bandwidth costs as a component of cost of revenues were RMB330.3 million (US$53.3 million)in the second quarter of 2015, representing 21% of net revenues, as compared to 21% of net revenues for the corresponding period in 2014.
Content costs as a component of cost of revenues were RMB744.4 million (US$120.1 million) in the second quarter of 2015, representing 46% of net revenues as compared to 45% of net revenues for the corresponding period in 2014. Non-GAAP content costs were RMB649.8 million (US$104.8 million) in the second quarter of 2015, representing 43% of non-GAAP net revenues, as compared to 42% 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 RMB254.1 million (US$41.0 million) in the second quarter of 2015, an 11% increase from the corresponding period in 2014. Non-GAAP gross profit was RMB253.8 million (US$40.9 million) in the second quarter of 2015, a 14% increase from the corresponding period in 2014.
Operating expenses were RMB645.9 million (US$104.2 million) in the second quarter of 2015, as compared to RMB384.2 million (US$62.0 million) for the corresponding period in 2014. Non-GAAP operating expenses were RMB524.4 million (US$84.6 million) in the second quarter of 2015, as compared to RMB312.1 million (US$50.3 million) for the corresponding period in 2014. Detailed discussion of each component of operating expenses is as follows:
Sales and marketing expenses were RMB354.3 million (US$57.1 million) in the second quarter of 2015, as compared to RMB212.0 million (US$34.2 million) for the corresponding period in 2014. Non-GAAP sales and marketing expenses were RMB305.6 million (US$49.3 million) in the second quarter of 2015, as compared to RMB185.8 million (US$30.0 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 RMB181.9 million (US$29.3 million) in the second quarter of 2015, as compared to RMB98.6 million (US$15.9 million) for the corresponding period in 2014. Non-GAAP product development expenses were RMB141.8 million (US$22.9 million) in the second quarter of 2015, as compared to RMB78.6 million (US$12.7 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 RMB109.8 million (US$17.7 million) in the second quarter of 2015, as compared to RMB73.7 million (US$11.9 million) from the corresponding period in 2014. Non-GAAP general and administrative expenses were RMB77.0 million (US$12.4 million) in the second quarter of 2015, as compared to RMB47.6 million (US$7.7 million) from the corresponding period in 2014.
Net loss was RMB342.0 million (US$55.2 million) in the second quarter of 2015, as compared to RMB142.3 million (US$23.0 million) for the corresponding period in 2014. Non-GAAP net loss was RMB220.7 million (US$35.6 million) in the second quarter of 2015, as compared to RMB76.9 million (US$12.4 million) from the corresponding period in 2014.
Business Outlook
For the third quarter of 2015, the Company expects non-GAAP net revenues will be between RMB1.69 billion and RMB1.78 billion, with advertising net revenues contributing between RMB1.34 billion and RMB1.40 billion. 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 9:00 p.m. U.S. Eastern Time on August 19, 2015 (9:00 a.m. Beijing/Hong Kong Time on August 20, 2015).
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: |
+65-6713-5090 |
Mainland China Dial In: |
+86-800-819-0121 / +86-400-620-8038 |
Hong Kong Dial In: |
+852-3018-6771 |
A replay of the call will be available by dialing +61 2 8199 0299 and entering passcode 12334563. The replay will be available through August 26, 2015.
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 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]
[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 RMB6.2000 to US$1.00, the effective noon buying rate as of June 30, 2015 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ 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 second 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. |
YOUKU TUDOU INC. |
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(Amounts in thousands, except for number of shares) |
As of |
|||||||
December 31, 2014 |
June 30, 2015 |
June 30, 2015 |
||||||
RMB |
RMB |
US$ |
||||||
ASSETS |
(Audited) |
(Unaudited) |
(Unaudited) |
|||||
Current assets: |
||||||||
Cash and cash equivalents |
3,820,742 |
2,561,775 |
413,190 |
|||||
Restricted cash |
617,586 |
1,441,049 |
232,427 |
|||||
Short-term investments |
4,021,199 |
4,323,246 |
697,298 |
|||||
Accounts receivable |
1,719,760 |
2,135,363 |
344,413 |
|||||
Licensed copyrights, net |
220,152 |
259,052 |
41,783 |
|||||
Amounts due from related parties |
125,204 |
85,408 |
13,775 |
|||||
Deferred tax assets, net |
2,283 |
2,283 |
368 |
|||||
Prepayments and other assets |
117,716 |
315,511 |
50,890 |
|||||
Total current assets |
10,644,642 |
11,123,687 |
1,794,144 |
|||||
Non-current assets: |
||||||||
Property and equipment, net |
293,027 |
365,002 |
58,871 |
|||||
Long-term investments |
67,293 |
176,951 |
28,540 |
|||||
Available-for-sale financial assets |
- |
21,267 |
3,430 |
|||||
Licensed copyrights, net |
505,173 |
657,606 |
106,065 |
|||||
Intangible assets, net |
875,502 |
869,467 |
140,237 |
|||||
Capitalized content production costs |
1,678 |
3,562 |
575 |
|||||
Film assets |
- |
64,885 |
10,465 |
|||||
Prepayments and other assets |
431,377 |
389,162 |
62,768 |
|||||
Goodwill |
4,262,569 |
4,262,569 |
687,511 |
|||||
Total non-current assets |
6,436,619 |
6,810,471 |
1,098,462 |
|||||
TOTAL ASSETS |
17,081,261 |
17,934,158 |
2,892,606 |
|||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
563,009 |
690,668 |
111,399 |
|||||
Advances from customers and deferred revenue |
36,232 |
156,660 |
25,268 |
|||||
Amounts due to related parties |
4 |
1 |
- |
|||||
Accrued expenses and other liabilities |
1,668,122 |
2,017,281 |
325,368 |
|||||
Short-term bank loans |
500,000 |
1,320,386 |
212,965 |
|||||
Total current liabilities |
2,767,367 |
4,184,996 |
675,000 |
|||||
Non-current liabilities: |
||||||||
Deferred tax liabilities |
213,608 |
213,608 |
34,453 |
|||||
Other liabilities |
6,570 |
33,458 |
5,396 |
|||||
Total non-current liabilities |
220,178 |
247,066 |
39,849 |
|||||
Total liabilities |
2,987,545 |
4,432,062 |
714,849 |
|||||
Commitments and contingencies |
||||||||
Shareholders' equity: |
||||||||
Class A Ordinary Shares (US$0.00001 par value, 9,340,238,793 |
201 |
203 |
33 |
|||||
Class B Ordinary Shares (US$0.00001 par value, 659,761,207 authorized, 645,691,903 and 645,691,903 issued and outstanding as of December 31, 2014 and June 30, 2015, respectively) |
48 |
48 |
8 |
|||||
Additional paid-in capital |
18,878,497 |
19,136,913 |
3,086,599 |
|||||
Treasury stock (at cost, 289,472,400 and 289,472,400 |
(1,845,892) |
(1,845,892) |
(297,725) |
|||||
Statutory reserves |
13,146 |
13,146 |
2,120 |
|||||
Accumulated deficit |
(2,681,658) |
(3,541,118) |
(571,148) |
|||||
Accumulated other comprehensive loss |
(270,626) |
(261,204) |
(42,130) |
|||||
Total shareholders' equity |
14,093,716 |
13,502,096 |
2,177,757 |
|||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
17,081,261 |
17,934,158 |
2,892,606 |
|||||
YOUKU TUDOU INC. |
||||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) |
||||||||||||||||
For the Three Months Ended |
For the Six Months Ended |
|||||||||||||||
(Amounts in thousands, except for number of shares and ADS and per |
||||||||||||||||
June 30, 2014 |
March 31, 2015 |
June 30, 2015 |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2015 |
||||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||
(Unaudited-As revised) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited-As revised) |
(Unaudited) |
(Unaudited) |
||||||||||
Net revenues(including advertising net revenues from related |
1,023,340 |
1,139,458 |
1,609,687 |
259,627 |
1,798,025 |
2,749,145 |
443,410 |
|||||||||
Cost of revenues (Note 1) |
(794,771) |
(1,137,987) |
(1,355,570) |
(218,640) |
(1,437,331) |
(2,493,557) |
(402,187) |
|||||||||
Gross profit |
228,569 |
1,471 |
254,117 |
40,987 |
360,694 |
255,588 |
41,223 |
|||||||||
Operating expenses: |
||||||||||||||||
Product development |
(98,551) |
(139,573) |
(181,856) |
(29,332) |
(178,689) |
(321,429) |
(51,843) |
|||||||||
Sales and marketing |
(211,979) |
(320,433) |
(354,259) |
(57,139) |
(397,675) |
(674,692) |
(108,821) |
|||||||||
General and administrative |
(73,670) |
(84,058) |
(109,830) |
(17,715) |
(119,799) |
(193,888) |
(31,272) |
|||||||||
Total operating expenses |
(384,200) |
(544,064) |
(645,945) |
(104,186) |
(696,163) |
(1,190,009) |
(191,936) |
|||||||||
Government grant income |
880 |
123 |
11,075 |
1,786 |
880 |
11,198 |
1,806 |
|||||||||
Loss from operations |
(154,751) |
(542,470) |
(380,753) |
(61,413) |
(334,589) |
(923,223) |
(148,907) |
|||||||||
Interest income |
9,923 |
29,811 |
34,265 |
5,527 |
15,976 |
64,076 |
10,335 |
|||||||||
Interest expenses |
- |
(10,743) |
(17,126) |
(2,762) |
- |
(27,869) |
(4,495) |
|||||||||
Share of net loss of equity investee |
- |
(1,247) |
(1,459) |
(235) |
- |
(2,706) |
(436) |
|||||||||
Other income, net |
2,562 |
7,352 |
1,781 |
287 |
303 |
9,133 |
1,473 |
|||||||||
Loss before income taxes |
(142,266) |
(517,297) |
(363,292) |
(58,596) |
(318,310) |
(880,589) |
(142,030) |
|||||||||
Income tax expense |
(12) |
(144) |
21,273 |
3,431 |
(12) |
21,129 |
3,408 |
|||||||||
Net loss |
(142,278) |
(517,441) |
(342,019) |
(55,165) |
(318,322) |
(859,460) |
(138,622) |
|||||||||
Other comprehensive income (loss), before tax |
||||||||||||||||
Foreign currency translation adjustments |
(13,645) |
36,587 |
(27,165) |
(4,381) |
7,314 |
9,422 |
1,520 |
|||||||||
Other comprehensive income (loss), net of tax |
(13,645) |
36,587 |
(27,165) |
(4,381) |
7,314 |
9,422 |
1,520 |
|||||||||
Comprehensive loss attributable to ordinary shareholders |
(155,923) |
(480,854) |
(369,184) |
(59,546) |
(311,008) |
(850,038) |
(137,102) |
|||||||||
Net loss per share, basic and diluted |
(0.04) |
(0.15) |
(0.10) |
(0.02) |
(0.10) |
(0.25) |
(0.04) |
|||||||||
Net loss per ADS (each ADS represents 18 class A ordinary shares), basic and diluted |
(0.76) |
(2.67) |
(1.76) |
(0.28) |
(1.80) |
(4.43) |
(0.71) |
|||||||||
Shares used in computation, basic and diluted |
3,355,310,411 |
3,485,681,620 |
3,500,437,718 |
3,500,437,718 |
3,189,566,616 |
3,493,100,432 |
3,493,100,432 |
|||||||||
ADSs used in computation, basic and diluted |
186,406,133 |
193,648,978 |
194,468,762 |
194,468,762 |
177,198,145 |
194,061,135 |
194,061,135 |
|||||||||
The accompanying notes are an integral part of the press release. |
||||||||||||||||
Note 1. Cost of Revenues |
For the Three Months Ended |
For the Six Months Ended |
||||||||||||||
June 30, 2014 |
March 31, 2015 |
June 30, 2015 |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 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 |
89,550 |
98,388 |
138,329 |
22,311 |
152,508 |
236,717 |
38,180 |
|||||||||
Bandwidth costs |
213,538 |
306,835 |
330,258 |
53,267 |
415,427 |
637,093 |
102,757 |
|||||||||
Depreciation of servers and other equipment |
24,452 |
34,349 |
38,479 |
6,206 |
44,617 |
72,828 |
11,746 |
|||||||||
Interactive live entertainment revenue sharing fees |
3,351 |
24,087 |
70,017 |
11,293 |
4,339 |
94,104 |
15,178 |
|||||||||
Cost of goods sold |
- |
5,337 |
34,073 |
5,496 |
- |
39,410 |
6,356 |
|||||||||
Content costs |
463,880 |
668,991 |
744,414 |
120,067 |
820,440 |
1,413,405 |
227,970 |
|||||||||
Total Cost of Revenues |
794,771 |
1,137,987 |
1,355,570 |
218,640 |
1,437,331 |
2,493,557 |
402,187 |
|||||||||
YOUKU TUDOU INC. |
|||||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||||||||||||
For the Three Months Ended |
For the Six Months Ended |
||||||||||||||||
(Amounts in thousands) |
|||||||||||||||||
June 30, 2014 |
March 31, 2015 |
June 30, 2015 |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 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 |
(142,278) |
(517,441) |
(342,019) |
(55,165) |
(318,322) |
(859,460) |
(138,622) |
||||||||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities |
|||||||||||||||||
Depreciation of fixed assets |
30,688 |
40,676 |
45,212 |
7,292 |
57,205 |
85,888 |
13,853 |
||||||||||
Bad debt expense |
5,247 |
14,800 |
1,862 |
300 |
(1,226) |
16,662 |
2,687 |
||||||||||
Amortization of licensed copyrights |
270,328 |
450,865 |
478,480 |
77,174 |
477,191 |
929,345 |
149,894 |
||||||||||
Amortization and impairment of intangible assets and |
7,337 |
13,930 |
17,493 |
2,821 |
13,267 |
31,423 |
5,068 |
||||||||||
Barter sublicensing revenues |
(64,621) |
(83,239) |
(94,891) |
(15,305) |
(138,932) |
(178,130) |
(28,731) |
||||||||||
Loss (Gain) on disposal of property and equipment |
128 |
(47) |
135 |
22 |
218 |
88 |
14 |
||||||||||
Foreign exchange loss (gain) |
846 |
(20,070) |
21,755 |
3,509 |
3,010 |
1,685 |
272 |
||||||||||
Share-based compensation |
82,131 |
79,772 |
144,364 |
23,285 |
152,351 |
224,136 |
36,151 |
||||||||||
Deferred government grant income |
- |
- |
(167) |
(27) |
- |
(167) |
(27) |
||||||||||
Share of net loss of equity investee |
- |
1,247 |
1,459 |
235 |
- |
2,706 |
436 |
||||||||||
Changes in operating assets and liabilities, net of acquisition: |
|||||||||||||||||
Restricted cash |
(1) |
(5,507) |
6,044 |
975 |
(3) |
537 |
87 |
||||||||||
Accounts receivable |
(244,056) |
(101,326) |
(330,939) |
(53,377) |
(64,903) |
(432,265) |
(69,720) |
||||||||||
Amounts due from related parties |
(62,620) |
(53,417) |
93,213 |
15,034 |
(62,620) |
39,796 |
6,419 |
||||||||||
Prepayments and other assets |
(21,120) |
(103,103) |
(49,712) |
(8,017) |
(31,735) |
(152,815) |
(24,648) |
||||||||||
Capitalized content production costs |
(6,371) |
(21,974) |
(51,805) |
(8,356) |
(9,343) |
(73,779) |
(11,900) |
||||||||||
Accounts payable |
8,631 |
71,836 |
(10,033) |
(1,618) |
13,205 |
61,803 |
9,968 |
||||||||||
Advances from customers and deferred revenue |
(3,229) |
36,933 |
(3,788) |
(611) |
(1,413) |
33,145 |
5,346 |
||||||||||
Accrued expenses and other liabilities |
(16,266) |
88,424 |
246,747 |
39,800 |
13,325 |
335,171 |
54,060 |
||||||||||
Amount due to related parties |
70 |
1 |
(4) |
(1) |
70 |
(3) |
- |
||||||||||
Net cash provided (used in) by operating activities |
(155,156) |
(107,640) |
173,406 |
27,970 |
101,345 |
65,766 |
10,607 |
||||||||||
Cash flows from investing activities: |
|||||||||||||||||
Acquisition of property and equipment |
(84,968) |
(72,990) |
(71,508) |
(11,534) |
(113,159) |
(144,498) |
(23,306) |
||||||||||
Purchase of available-for-sale financial assets |
- |
(21,267) |
- |
- |
- |
(21,267) |
(3,430) |
||||||||||
Proceeds received from maturity of short-term investments |
66,037 |
- |
20,000 |
3,226 |
1,198,496 |
20,000 |
3,226 |
||||||||||
Short-term investments placed with financial institutions |
(4,698) |
(280,308) |
- |
- |
(1,395,937) |
(280,308) |
(45,211) |
||||||||||
Proceeds from disposal of property and equipment |
10 |
47 |
15 |
2 |
190 |
62 |
10 |
||||||||||
Collection of loans to third parties |
- |
- |
3,000 |
484 |
- |
3,000 |
484 |
||||||||||
Loans to third parties |
- |
(3,000) |
- |
- |
- |
(3,000) |
(484) |
||||||||||
Acquisition of shares of investees |
- |
- |
(77,250) |
(12,460) |
- |
(77,250) |
(12,460) |
||||||||||
Acquisition of licensed copyrights |
(245,390) |
(495,247) |
(366,228) |
(59,069) |
(411,281) |
(861,475) |
(138,948) |
||||||||||
Acquisition of intangible assets |
(930) |
- |
- |
- |
(930) |
- |
- |
||||||||||
Net cash used in investing activities |
(269,939) |
(872,765) |
(491,971) |
(79,351) |
(722,621) |
(1,364,736) |
(220,119) |
||||||||||
Cash flows from financing activities: |
|||||||||||||||||
Exercise of employee stock options |
7,355 |
4,529 |
29,754 |
4,799 |
19,164 |
34,283 |
5,530 |
||||||||||
Increase in restricted cash |
- |
(670,000) |
(154,000) |
(24,839) |
- |
(824,000) |
(132,903) |
||||||||||
Proceeds from short-term bank loans |
- |
670,253 |
148,247 |
23,911 |
- |
818,500 |
132,016 |
||||||||||
Proceeds from Ali investment, net of issuance costs |
7,387,520 |
- |
- |
- |
7,387,520 |
- |
- |
||||||||||
Net cash provided by financing activities |
7,394,875 |
4,782 |
24,001 |
3,871 |
7,406,684 |
28,783 |
4,643 |
||||||||||
Effect of exchange rate changes on cash and cash equivalents |
(14,491) |
41,693 |
(30,473) |
(4,915) |
4,304 |
11,220 |
1,810 |
||||||||||
Net (decrease) increase in cash and cash equivalents |
6,955,289 |
(933,930) |
(325,037) |
(52,425) |
6,789,712 |
(1,258,967) |
(203,059) |
||||||||||
Cash and cash equivalents at the beginning of the period |
1,598,644 |
3,820,742 |
2,886,812 |
465,615 |
1,764,221 |
3,820,742 |
616,249 |
||||||||||
Cash and cash equivalents at the end of the period |
8,553,933 |
2,886,812 |
2,561,775 |
413,190 |
8,553,933 |
2,561,775 |
413,190 |
||||||||||
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$"), unaudited) |
||||||||||||||||
1. Non-GAAP Net Revenues |
For the Three Months Ended |
For the Six Months Ended |
||||||||||||||
June 30, 2014 |
March 31, 2015 |
June 30, 2015 |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2015 |
||||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||
Net Revenues |
1,023,340 |
1,139,458 |
1,609,687 |
259,627 |
1,798,025 |
2,749,145 |
443,410 |
|||||||||
Deduct: barter sublicensing revenues |
64,621 |
83,239 |
94,891 |
15,305 |
138,932 |
178,130 |
28,731 |
|||||||||
Non-GAAP Net Revenues |
958,719 |
1,056,219 |
1,514,796 |
244,322 |
1,659,093 |
2,571,015 |
414,679 |
|||||||||
2. Non-GAAP Content Costs |
For the Three Months Ended |
For the Six Months Ended |
||||||||||||||
June 30, 2014 |
March 31, 2015 |
June 30, 2015 |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2015 |
||||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||
Content costs |
463,880 |
668,991 |
744,414 |
120,067 |
820,440 |
1,413,405 |
227,970 |
|||||||||
Deduct: amortization of licensed copyrights from nonmonetary content exchanges |
43,187 |
36,445 |
69,121 |
11,149 |
61,699 |
105,566 |
17,027 |
|||||||||
Deduct: share-based compensation |
12,694 |
12,407 |
25,473 |
4,109 |
24,917 |
37,880 |
6,110 |
|||||||||
Deduct: amortization of intangible assets from business combination |
1,970 |
- |
- |
- |
3,830 |
- |
- |
|||||||||
Non-GAAP content costs |
406,029 |
620,139 |
649,820 |
104,809 |
729,994 |
1,269,959 |
204,833 |
|||||||||
3. Non-GAAP Gross Profit |
For the Three Months Ended |
For the Six Months Ended |
||||||||||||||
June 30, 2014 |
March 31, 2015 |
June 30, 2015 |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2015 |
||||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||
Gross profit |
228,569 |
1,471 |
254,117 |
40,987 |
360,694 |
255,588 |
41,223 |
|||||||||
Deduct: barter sublicensing revenues |
64,621 |
83,239 |
94,891 |
15,305 |
138,932 |
178,130 |
28,731 |
|||||||||
Add back: amortization of licensed copyrights from nonmonetary content exchanges |
43,187 |
36,445 |
69,121 |
11,149 |
61,699 |
105,566 |
17,027 |
|||||||||
Add back: share-based compensation |
12,694 |
12,407 |
25,473 |
4,109 |
24,917 |
37,880 |
6,110 |
|||||||||
Add back: amortization of intangible assets from business combination |
1,970 |
- |
- |
- |
3,830 |
- |
- |
|||||||||
Non-GAAP gross profit (loss) |
221,799 |
(32,916) |
253,820 |
40,940 |
312,208 |
220,904 |
35,629 |
|||||||||
4. Non-GAAP Operating Expenses |
For the Three Months Ended |
For the Six Months Ended |
||||||||||||||
June 30, 2014 |
March 31, 2015 |
June 30, 2015 |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2015 |
||||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||
Operating expenses |
384,200 |
544,064 |
645,945 |
104,186 |
696,163 |
1,190,009 |
191,936 |
|||||||||
Deduct: share-based compensation |
69,437 |
67,365 |
118,891 |
19,176 |
127,434 |
186,256 |
30,041 |
|||||||||
Deduct: amortization of intangible assets from business combination |
2,691 |
2,691 |
2,689 |
434 |
5,382 |
5,380 |
869 |
|||||||||
Non-GAAP operating expenses |
312,072 |
474,008 |
524,365 |
84,576 |
563,347 |
998,373 |
161,026 |
|||||||||
5. Non-GAAP Sales and Marketing Expenses |
For the Three Months Ended |
For the Six Months Ended |
||||||||||||||
June 30, 2014 |
March 31, 2015 |
June 30, 2015 |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2015 |
||||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||
Sales and marketing expenses |
211,979 |
320,433 |
354,259 |
57,139 |
397,675 |
674,692 |
108,821 |
|||||||||
Deduct: share-based compensation |
24,824 |
32,351 |
47,305 |
7,630 |
45,996 |
79,656 |
12,848 |
|||||||||
Deduct: amortization of intangible assets from business combination |
1,344 |
1,344 |
1,344 |
217 |
2,688 |
2,688 |
434 |
|||||||||
Non-GAAP sales and marketing expenses |
185,811 |
286,738 |
305,610 |
49,292 |
348,991 |
592,348 |
95,539 |
|||||||||
6. Non-GAAP Product Development Expenses |
For the Three Months Ended |
For the Six Months Ended |
||||||||||||||
June 30, 2014 |
March 31, 2015 |
June 30, 2015 |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2015 |
||||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||
Product development expenses |
98,551 |
139,573 |
181,856 |
29,332 |
178,689 |
321,429 |
51,843 |
|||||||||
Deduct: share-based compensation |
19,006 |
18,708 |
39,159 |
6,316 |
36,212 |
57,867 |
9,333 |
|||||||||
Deduct: amortization of intangible assets from business combination |
905 |
905 |
903 |
146 |
1,810 |
1,808 |
292 |
|||||||||
Non-GAAP product development expenses |
78,640 |
119,960 |
141,794 |
22,870 |
140,667 |
261,754 |
42,218 |
|||||||||
7. Non-GAAP General and Administrative Expenses |
For the Three Months Ended |
For the Six Months Ended |
||||||||||||||
June 30, 2014 |
March 31, 2015 |
June 30, 2015 |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2015 |
||||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||
General and administrative expenses |
73,670 |
84,058 |
109,830 |
17,715 |
119,799 |
193,888 |
31,272 |
|||||||||
Deduct: share-based compensation |
25,607 |
16,306 |
32,427 |
5,230 |
45,226 |
48,733 |
7,860 |
|||||||||
Deduct: amortization of intangible assets from business combination |
442 |
442 |
442 |
71 |
884 |
884 |
143 |
|||||||||
Non-GAAP general and administrative expenses |
47,621 |
67,310 |
76,961 |
12,414 |
73,689 |
144,271 |
23,269 |
|||||||||
8. Non-GAAP Loss from Operations |
For the Three Months Ended |
For the Six Months Ended |
||||||||||||||
June 30, 2014 |
March 31, 2015 |
June 30, 2015 |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2015 |
||||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||
Loss from operations |
(154,751) |
(542,470) |
(380,753) |
(61,413) |
(334,589) |
(923,223) |
(148,907) |
|||||||||
Deduct: barter sublicensing revenues |
64,621 |
83,239 |
94,891 |
15,305 |
138,932 |
178,130 |
28,731 |
|||||||||
Add back: amortization of licensed copyrights from nonmonetary content exchanges |
43,187 |
36,445 |
69,121 |
11,149 |
61,699 |
105,566 |
17,027 |
|||||||||
Add back: share-based compensation |
82,131 |
79,772 |
144,364 |
23,285 |
152,351 |
224,136 |
36,151 |
|||||||||
Add back: amortization of intangible assets from business combination |
4,661 |
2,691 |
2,689 |
434 |
9,212 |
5,380 |
869 |
|||||||||
Non-GAAP loss from operations |
(89,393) |
(506,801) |
(259,470) |
(41,850) |
(250,259) |
(766,271) |
(123,591) |
|||||||||
9. Non-GAAP Net Loss |
For the Three Months Ended |
For the Six Months Ended |
||||||||||||||
June 30, 2014 |
March 31, 2015 |
June 30, 2015 |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2015 |
||||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||
Net loss |
(142,278) |
(517,441) |
(342,019) |
(55,165) |
(318,322) |
(859,460) |
(138,622) |
|||||||||
Deduct: barter sublicensing revenues |
64,621 |
83,239 |
94,891 |
15,305 |
138,932 |
178,130 |
28,731 |
|||||||||
Add back: amortization of licensed copyrights from nonmonetary content exchanges |
43,187 |
36,445 |
69,121 |
11,149 |
61,699 |
105,566 |
17,027 |
|||||||||
Add back: share-based compensation |
82,131 |
79,772 |
144,364 |
23,285 |
152,351 |
224,136 |
36,151 |
|||||||||
Add back: amortization of intangible assets from business combination |
4,661 |
2,691 |
2,689 |
434 |
9,212 |
5,380 |
869 |
|||||||||
Non-GAAP net loss |
(76,920) |
(481,772) |
(220,736) |
(35,602) |
(233,992) |
(702,508) |
(113,306) |
|||||||||
10. Non-GAAP adjusted EBITDA Loss |
For the Three Months Ended |
For the Six Months Ended |
||||||||||||||
June 30, 2014 |
March 31, 2015 |
June 30, 2015 |
June 30, 2015 |
June 30, 2014 |
June 30, 2015 |
June 30, 2015 |
||||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
||||||||||
Net loss |
(142,278) |
(517,441) |
(342,019) |
(55,165) |
(318,322) |
(859,460) |
(138,622) |
|||||||||
Add back: |
||||||||||||||||
Depreciation and amortization (excluding amortization of acquired content) (2) |
30,698 |
40,686 |
45,223 |
7,294 |
57,225 |
85,909 |
13,856 |
|||||||||
Interest income |
(9,923) |
(29,811) |
(34,265) |
(5,527) |
(15,976) |
(64,076) |
(10,335) |
|||||||||
Interest expenses |
- |
10,743 |
17,126 |
2,762 |
- |
27,869 |
4,495 |
|||||||||
Income taxes |
12 |
144 |
(21,273) |
(3,431) |
12 |
(21,129) |
(3,408) |
|||||||||
EBITDA loss |
(121,491) |
(495,679) |
(335,208) |
(54,067) |
(277,061) |
(830,887) |
(134,014) |
|||||||||
Adjustments: |
||||||||||||||||
Barter sublicensing revenues |
(64,621) |
(83,239) |
(94,891) |
(15,305) |
(138,932) |
(178,130) |
(28,731) |
|||||||||
Amortization of licensed copyrights from nonmonetary content exchanges |
43,187 |
36,445 |
69,121 |
11,149 |
61,699 |
105,566 |
17,027 |
|||||||||
Share-based compensation |
82,131 |
79,772 |
144,364 |
23,285 |
152,351 |
224,136 |
36,151 |
|||||||||
Amortization of intangible assets from business combination |
4,661 |
2,691 |
2,689 |
434 |
9,212 |
5,380 |
869 |
|||||||||
Others, net |
(2,562) |
(7,352) |
(1,781) |
(287) |
(303) |
(9,133) |
(1,473) |
|||||||||
Non-GAAP adjusted EBITDA loss |
(58,695) |
(467,362) |
(215,706) |
(34,791) |
(193,034) |
(683,068) |
(110,171) |
|||||||||
(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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