Also details of a US$20 Million Share Repurchase Program
iDreamSky Technology Limited (Nasdaq:DSKY), a Chinese mobile game publishing platform, today announced updates to its previous revenue guidance for the fourth quarter of 20141 and a share repurchase program approved by the board of directors of the Company.
The Company estimates its revenue guidance for the fourth quarter of 2014 to be between RMB327.0 million (US$52.7 million) and RMB329.0 million (US$53.0 million), as compared to the previously announced revenue guidance of between RMB390.0 million (US$62.9 million) and RMB410.0 million (US$66.1 million). This revised guidance represents an increase of between 189% and 191% on a year-over-year basis. The Company has revised its guidance mainly because, in the fourth quarter of 2014, the launch of a popular casual game was delayed on one of the Company distribution platforms, and the monetization of another popular casual game was less than expected due to the simultaneous launch of other hit games on the same distribution platform.
In addition, for the fourth quarter of 2014, the Company currently estimates that net income will be between RMB28.0 million (US$4.5 million) and RMB30.0 million (US$4.8 million), representing an increase of between 70% and 82% on a year-over-year basis. Non-GAAP adjusted net income2 will be between RMB49.0 million (US$7.9 million) to RMB51.0 million (US$8.2 million), representing an increase of between 195% and 207% on a year-over-year basis.
As these selected estimated results are subject to the finalization of the Company’s financial closing procedures, the Company’s actual results may differ from its current estimates.
In the fourth quarter of 2014, revenues generated from mid- and hard-core games significantly increased, contributing to an increased average revenue per paying user, or ARPPU.
For the first quarter of 2015, the Company expects revenue of RMB340.0 million (US$54.8 million). This forecast is based on the Company’s current view on its recent operational results, estimated performance of its games and general market conditions, which may fluctuate and are subject to change.
The board of directors of the Company has approved a share repurchase program whereby the Company is authorized to repurchase its outstanding American depositary shares representing its ordinary shares with an aggregate value of up to US$20 million over the next 12 months. The share repurchases may be effected on the open market at prevailing market prices and/or in negotiated transactions off the market from time to time as market conditions warrant and will be implemented in accordance with the Company’s securities trading policy and applicable requirements of Rule 10b5-1 and Rule 10b-18 under the U.S. Securities Exchange Act of 1934, as amended, or other legally permissible ways in accordance with applicable rules and regulations. The Company expects to fund the share repurchase out of its existing cash balance. As of December 31, 2014, the Company had cash and cash equivalents of approximately RMB929.8 million (US$149.9 million).
“We remain confident in China’s mobile game industry for the year 2015. We believe we will continue to maintain our leading position in the market based on the strength of our game portfolio and monetization strategy,” commented Mr. Michael Chen, Chief Executive Officer of iDreamSky.