BEIJING, May 17, 2012 /PRNewswire-Asia/ -- Youku Inc.
(NYSE: YOKU), China's leading
Internet television company ("Youku" or the "Company"), today
announced its unaudited financial results for the first quarter
2012.
First Quarter Highlights(1)
- Net revenues were RMB270.2
million (US$42.9 million), a
111% increase from the corresponding period in 2011.
- Gross loss was RMB22.6 million
(US$3.6 million), as compared to a
gross profit of RMB14.0 million
(US$2.2 million) for the same period
in 2011. Non-GAAP gross loss, which is herein defined as gross loss
excluding share-based compensation expenses, was RMB20.6 million (US$3.3
million) in the first quarter of 2012, compared to the
non-GAAP gross profit of RMB14.5
million (US$2.3 million) in
the corresponding period in 2011. The quarterly loss position was
primarily due to content price increase during 2011, which we
amortize using accelerated method, and broadening of our content
portfolio.
- Net loss was RMB156.1 million
(US$24.8 million), as compared to a
net loss of RMB46.9 million
(US$7.4 million) for the same period
in 2011. Non-GAAP net loss, which is herein defined as net loss
excluding share-based compensation expenses and business
combination related expenses, was RMB115.4
million (US$18.3 million) in
the first quarter of 2012, as compared to the non-GAAP net loss of
RMB41.5 million (US$6.6 million) in the corresponding period in
2011. This increase was primarily due to content price increase
during 2011, which we amortize using accelerated method, broadening
of our content portfolio, increase of number of employees as a
result to rapid growth of our business and our continuous and
expanded investment in product development in wireless, search,
social and paid services.
- Basic and diluted loss per ADS, each representing 18 Class A
ordinary shares, for the first quarter of 2012 amounted to
RMB1.36 (US$0.22) and RMB1.36 (US$0.22),
respectively.
- Cash, cash equivalents and short-term investments totaled
RMB3.6 billion (US$576.0 million) as of March 31, 2012.
- Cash flow from operating activities for the first quarter of
2012 turned positive and reached RMB17.7
million (US$2.8 million), as
compared to negative operating cash flow of RMB11.3 million (US$1.8
million) for the same period in 2011.
- Acquisition of property and equipment for the first quarter of
2012 was RMB10.1 million
(US$1.6 million), as compared to
RMB13.5 million (US$2.1 million) for the same period in 2011.
- Acquisition of intangible assets for the first quarter of 2012
was RMB50.4 million (US$8.0 million), as compared to RMB41.7 million (US$6.6
million) for the same period in 2011.
(1) The reporting
currency of the Company is Renminbi ("RMB"), but for the
convenience of the reader, the amounts presented throughout the
release are in US dollars ("US$"). Unless otherwise noted, all
conversions from RMB to US$ are made at a rate of RMB6.2975 to
US$1.00, the effective noon buying rate as of March 30, 2012 in the
City of New York for cable transfers of RMB as certified for
customs purposes by the Federal Reserve Bank of New York. No
representation is made that the RMB amounts could have been, or
could be, converted into US$ at such rate.
|
"We are happy to have another quarter of solid triple-digit top
line growth," said Victor Koo,
Chairman and Chief Executive Officer of Youku. "The pending merger
with Tudou and the smooth transition to date will position us to
offer the most comprehensive video service to the Chinese
population and to build a world class Internet company in
China."
Dele Liu, Senior Vice President and Chief Financial Officer of
Youku, commented, "Internet video advertising is becoming a
mainstream marketing service for Chinese advertisers as evidenced
by our strong growth in number of advertisers and average spending
per advertiser. As a result of the consolidation in the online
video industry, we are seeing significant decline in content price
and expect an inflection of our content economics, which will help
us to achieve profitable growth over time."
First Quarter 2012 Results
Net revenues were RMB270.2
million (US$42.9 million) in
the first quarter of 2012, representing a 111% increase from the
corresponding period in 2011 and exceeding the high end of the
revenue guidance previously announced by the Company by 3%. The
growth was primarily attributable to the increased average spending
per advertiser from RMB0.7 million to
RMB1.2 million and increased number
of advertisers from 216 to 250, representing an increase of 71% and
16%, respectively, from the corresponding period in 2011.
Bandwidth costs as a component of cost of revenues were
RMB113.2 million (US$18.0 million) in the first quarter of 2012,
representing 42% of net revenues, compared to 44% in the
corresponding period in 2011.
Content costs as a component of cost of revenues were
RMB140.0 million (US$22.2 million) in the first quarter of
2012, representing 52% of net revenues, compared to 28% in the
corresponding period in 2011. The increase was primarily due to
content price increase during 2011, which we amortize using
accelerated method, and broadening of our content portfolio.
Gross loss was RMB22.6
million (US$3.6 million), as
compared to a gross profit of RMB14.0
million (US$2.2 million) for
the same period in 2011. Non-GAAP gross loss was
RMB20.6 million (US$3.3 million) in the first quarter of 2012,
compared to the non-GAAP gross profit of RMB14.5 million (US$2.3
million) in the corresponding period in 2011. The quarterly
loss position was primarily due to content price increase during
2011, which we amortize using accelerated method, and broadening of
our content portfolio.
Operating expenses were RMB143.8
million (US$22.8 million) in
the first quarter of 2012, an increase of 140% compared to
operating expenses of RMB59.8 million
(US$9.5 million) in the corresponding
period in 2011. Non-GAAP operating expenses, which is herein
defined as net loss excluding share-based compensation expenses and
business combination related expenses, were RMB105.1 million (US$16.7
million) in the first quarter of 2012, compared to the
non-GAAP operating expenses of RMB54.9
million (US$8.7 million) in
the corresponding period in 2011. The increase was primarily due to
increases in sales and marketing expenses, product development
expenses and general and administrative expenses as a result of the
substantial growth of our business. Detailed discussion of each
component of operating expenses is as follows:
Sales and marketing expenses were RMB66.4 million (US$10.5
million) in the first quarter of 2012, an increase of 81%
compared to sales and marketing expenses of RMB36.6 million (US$5.8
million) in the corresponding period in 2011. Non-GAAP
sales and marketing expenses, which is herein defined as sales
and marketing expenses excluding share-based compensation expenses,
were RMB61.5 million (US$9.8 million) in the first quarter of 2012, an
increase of 81% compared to the non-GAAP sales and marketing
expenses of RMB34.0 million
(US$5.4 million) in the corresponding
period in 2011. This increase was primarily due to increases in
marketing expenses and commission expenses paid to our sales force
in line with our revenue growth.
Product development expenses were RMB28.8 million (US$4.6
million) in the first quarter of 2012, an increase of 172%
compared to product development expenses of RMB10.6 million (US$1.7
million) in the corresponding period in 2011. Non-GAAP
product development expenses, which is herein defined as
product development expenses excluding share-based compensation
expenses, were RMB23.8 million
(US$3.8 million) in the first quarter
of 2012, an increase of 150% compared to the non-GAAP product
development expenses of RMB9.5
million (US$1.5 million) in
the corresponding period in 2011. This increase was primarily due
to an increase in salaries and benefits for our product development
personnel in wireless, search, social and paid-services.
General and administrative expenses were RMB48.6 million (US$7.7
million) in the first quarter of 2012, an increase of 286%
compared to general and administrative expenses of RMB12.6 million (US$2.0
million) in the corresponding period in 2011. Non-GAAP
general and administrative expenses, which is herein defined as
general and administrative expenses excluding share-based
compensation expenses and business combination related expenses,
were RMB19.9 million (US$3.2 million) in the first quarter of 2012,
representing an increase of 74% compared to the non-GAAP general
and administrative expenses of RMB11.4
million (US$1.8 million) in
the corresponding period in 2011. This increase was primarily due
to an increase in personnel-related expenses during 2011 in our
back office function teams.
Net loss was RMB156.1
million (US$24.8 million), as
compared to a net loss of RMB46.9
million (US$7.4 million) for
the same period in 2011. Non-GAAP net loss was RMB115.4 million (US$18.3
million) in the first quarter of 2012, as compared to the
non-GAAP net loss of RMB41.5 million
(US$6.6 million) in the corresponding
period in 2011. This increase was primarily due to content price
increase during 2011, which we amortize using accelerated method,
broadening of our content portfolio, increase of number of
employees as a result to rapid growth of our business and our
continuous and expanded investment in product development in
wireless, search, social and paid services.
Non-GAAP EBITDA loss, 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,
business combination related expenses and other non-operating
items, was RMB111.7 million
(US$17.7 million) in the first
quarter of 2012, as compared to the non-GAAP EBITDA loss of
RMB29.9 million (US$4.7 million) in the corresponding period in
2011. This increase was primarily due to gross loss and an increase
in operating expenses.
Business Outlook
For the second quarter of 2012, the Company expects year-on-year
growth of 90% to 100% in net revenues. This forecast reflects
the Company's current and preliminary view, which is subject to
change.
Recent Business Developments
Youku Completes Acquisition of Trade Lead
On January 6, 2012, the Company completed the acquisition
of the remaining 95% equity interest in Trade Lead Investment Ltd.
("Trade Lead"), a content provider and distributor, for a total
purchase price of RMB112.9 million
(US$17.9 million), including cash
consideration of RMB78.9 million
(US$12.5 million) and 6,202,179
Class A ordinary shares of the Company. The acquisition-date
fair value of the 5% equity interest in Trade Lead held by the
Company was RMB5.1 million
(US$0.8 million). In connection with
the acquisition, the Company entered into a series of contractual
arrangements to obtain control of Zhejiang Dongyang Tianshi Media
Ltd. ("Tianshi"), a PRC domestic company owned by principal owners
of Trade Lead. Tianshi primarily engages in the business of
advertising agency, television production and cultural information
consultation.
Youku Signed Definitive Agreement to combine with
Tudou
On March 11, 2012, the Company has
signed a definitive agreement with Tudou Holdings Limited (NASDAQ:
TUDO) ("Tudou"), for Tudou to combine with Youku in a 100%
stock-for-stock transaction. Under the terms of the agreement, each
Class A ordinary share and Class B ordinary share of Tudou issued
and outstanding immediately prior to the effective time of the
merger will be cancelled in exchange for the right to receive 7.177
Class A ordinary shares of Youku, and each American depositary
share of Tudou ("Tudou ADSs"), each of which represents four Tudou
Class B ordinary shares, will be cancelled in exchange for the
right to receive 1.595 American depositary shares of Youku ("Youku
ADSs"), each of which represents 18 Youku Class A ordinary shares
resulting in Youku and Tudou shareholders and ADS holders owning
approximately 71.5% and 28.5% of the combined entity,
respectively, immediately upon completion of the transaction. Upon
completion, the combined entity will be named Youku Tudou Inc.
Youku's ADSs will continue to be listed on the NYSE under the
symbol "YOKU".
Conference Call Information
Youku's management will host an earnings conference call at
9:00 p.m. U.S. Eastern Time on
May 17, 2012 (9:00 a.m. Beijing/Hong Kong Time on May 18, 2012).
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 1-866-214-5335
(international 1-718-354-1232), and entering passcode 81217378#.
The replay will be available through March
25, 2012.
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's corporate website at http://ir.youku.com.
About Youku
Youku Inc. is China's leading
Internet television company. Our Internet television platform
enables users to search, view and share high-quality video content
quickly and easily across multiple devices. Youku, which stands for
"what's best and what's cool" in Chinese, is the most recognized
online video brand in China. Youku's American depositary
shares, each representing 18 of our Class A ordinary shares, are
traded on 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's strategic and operational plans,
contain forward-looking statements. Youku 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'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 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's consolidated financial results presented
in accordance with United States Generally Accepted Accounting
Principles ("GAAP"), Youku uses the following measures defined as
non-GAAP financial measures by the SEC in evaluating its business:
non-GAAP gross profit or loss, non-GAAP operating expenses,
non-GAAP sales and marketing expense, non-GAAP product development
expenses, non-GAAP general and administrative expenses, non-GAAP
loss from operations, non-GAAP net loss and non-GAAP EBITDA
loss. We define non-GAAP gross profit or loss, non-GAAP sales
and marketing expense and non-GAAP product development expenses as
the respective nearest comparable GAAP financial measure to exclude
share-based compensation expenses. We define non-GAAP operating
expenses as operating expenses excluding share-based
compensation expenses and business combination related expenses. We
define non-GAAP general and administrative expenses as general and
administrative expenses excluding share-based compensation expenses
and business combination related expenses. We define non-GAAP loss
from operations as loss from operations excluding share-based
compensation expenses and business combination related expenses. We
define non-GAAP net loss as net loss excluding share-based
compensation expenses and business combination related expenses. We
define non-GAAP EBITDA loss 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, 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 consolidated 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'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:
Investor Relations:
Ryan Cheung
Corporate Finance Director
Youku Inc.
Tel: (+8610) 5885-1881 x6090
Email: ryan.cheung@youku.com
YOUKU
INC.
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands,
except for number of shares)
|
|
December 31,
|
|
March 31,
|
|
March 31,
|
|
2011
|
|
2012
|
|
2012
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
ASSETS
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
2,292,538
|
|
2,219,535
|
|
352,447
|
|
Short-term
investments
|
|
1,400,858
|
|
1,407,835
|
|
223,555
|
|
Accounts
receivable, net
|
|
420,706
|
|
445,889
|
|
70,804
|
|
Intangible assets,
net
|
|
16,078
|
|
28,024
|
|
4,450
|
|
Amounts due from
related party
|
|
768
|
|
-
|
|
-
|
|
Prepayments and
other assets
|
|
16,832
|
|
23,526
|
|
3,736
|
Total current
assets
|
|
4,147,780
|
|
4,124,809
|
|
654,992
|
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
96,567
|
|
97,975
|
|
15,558
|
|
Long-term
investment in related party
|
|
1,707
|
|
-
|
|
-
|
|
Intangible assets,
net
|
|
211,978
|
|
200,439
|
|
31,828
|
|
Capitalized
content production costs
|
|
7,782
|
|
4,892
|
|
777
|
|
Amounts due from
related party
|
|
65,352
|
|
-
|
|
-
|
|
Prepayments and
other assets
|
|
144,392
|
|
254,205
|
|
40,365
|
|
Goodwill
|
|
-
|
|
61,824
|
|
9,817
|
Total
non-current assets
|
|
527,778
|
|
619,335
|
|
98,345
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
4,675,558
|
|
4,744,144
|
|
753,337
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
57,276
|
|
94,207
|
|
14,959
|
|
Advances from
customers
|
|
3,140
|
|
57,833
|
|
9,183
|
|
Amounts due to
related party
|
|
2,794
|
|
-
|
|
-
|
|
Accrued expenses
and other liabilities
|
|
390,607
|
|
466,556
|
|
74,087
|
|
Current portion of
long-term debt
|
|
9,182
|
|
10,995
|
|
1,746
|
Total current
liabilities
|
|
462,999
|
|
629,591
|
|
99,975
|
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
|
Long-term
debt
|
|
7,382
|
|
4,366
|
|
693
|
Total non-current
liabilities
|
|
7,382
|
|
4,366
|
|
693
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
470,381
|
|
633,957
|
|
100,668
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
Class A Ordinary Shares
(US$0.00001 par value, 9,340,238,793 authorized, 1,395,435,339 and
1,406,853,711 issued and outstanding as of December 31, 2011
and March 31, 2012, respectively)
|
|
93
|
|
94
|
|
15
|
|
Class B Ordinary Shares
(US$0.00001 par value, 659,761,207 authorized, 659,561,893 and
659,561,893 issued and outstanding as of December 31, 2011 and
March 31, 2012, respectively)
|
|
49
|
|
49
|
|
8
|
|
Additional paid-in
capital
|
|
5,185,257
|
|
5,248,679
|
|
833,454
|
|
Accumulated
deficit
|
|
(871,644)
|
|
(1,027,769)
|
|
(163,203)
|
|
Accumulated other
comprehensive loss
|
|
(108,578)
|
|
(110,866)
|
|
(17,605)
|
Total shareholders'
equity
|
|
4,205,177
|
|
4,110,187
|
|
652,669
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
4,675,558
|
|
4,744,144
|
|
753,337
|
YOUKU
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended,
|
(Amounts in thousands,
except for number of shares and ADS and per share and per ADS
data)
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
March 31,
|
|
2011
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
127,991
|
|
309,309
|
|
270,167
|
|
42,901
|
|
|
|
|
|
|
|
|
|
Cost of revenues
(Note 1)
|
|
(113,971)
|
|
(243,735)
|
|
(292,736)
|
|
(46,484)
|
|
|
|
|
|
|
|
|
|
Gross profit
(loss)
|
|
14,020
|
|
65,574
|
|
(22,569)
|
|
(3,583)
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Product development
|
|
(10,594)
|
|
(23,734)
|
|
(28,833)
|
|
(4,578)
|
Sales and marketing
|
|
(36,669)
|
|
(66,869)
|
|
(66,406)
|
|
(10,545)
|
General and administrative
|
|
(12,574)
|
|
(32,351)
|
|
(48,586)
|
|
(7,715)
|
Total operating
expenses
|
|
(59,837)
|
|
(122,954)
|
|
(143,825)
|
|
(22,838)
|
|
|
|
|
|
|
|
|
|
(Loss) profit from
operations
|
|
(45,817)
|
|
(57,380)
|
|
(166,394)
|
|
(26,421)
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
1,056
|
|
10,770
|
|
11,603
|
|
1,842
|
Interest
expenses
|
|
(2,155)
|
|
(1,327)
|
|
(1,151)
|
|
(183)
|
Other, net
|
|
-
|
|
(1,677)
|
|
3,393
|
|
539
|
Total other income
(expenses), net
|
|
(1,099)
|
|
7,766
|
|
13,845
|
|
2,198
|
|
|
|
|
|
|
|
|
|
(Loss) profit before
income taxes
|
|
(46,916)
|
|
(49,614)
|
|
(152,549)
|
|
(24,223)
|
Income taxes
|
|
-
|
|
-
|
|
(3,576)
|
|
(568)
|
|
|
|
|
|
|
|
|
|
Net (loss)
profit
|
|
(46,916)
|
|
(49,614)
|
|
(156,125)
|
|
(24,791)
|
|
|
|
|
|
|
|
|
|
Net loss per share,
basic and diluted
|
|
(0.02)
|
|
(0.02)
|
|
(0.08)
|
|
(0.01)
|
Net loss per ADS (each
ADS represents 18 class A ordinary shares), basic and
diluted
|
|
(0.45)
|
|
(0.43)
|
|
(1.36)
|
|
(0.22)
|
Shares used in
computation, basic and diluted
|
|
1,896,366,500
|
|
2,054,298,858
|
|
2,066,687,393
|
|
2,066,687,393
|
ADSs used in
computation, basic and diluted
|
|
105,353,694
|
|
114,127,714
|
|
114,815,966
|
|
114,815,966
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of the press release
|
|
|
|
|
|
|
|
|
|
Note 1. Cost of
Revenues
|
|
For the Three
Months Ended,
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
March 31,
|
|
|
2011
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
(Amounts in
thousands)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
Business tax and
surcharges
|
|
12,392
|
|
32,162
|
|
27,842
|
|
4,421
|
Bandwidth
costs
|
|
56,325
|
|
109,718
|
|
113,169
|
|
17,970
|
Depreciation of
servers and other equipment
|
|
9,112
|
|
11,166
|
|
11,689
|
|
1,856
|
Content
costs
|
|
36,142
|
|
90,689
|
|
140,036
|
|
22,237
|
Total Cost of
Revenues
|
|
113,971
|
|
243,735
|
|
292,736
|
|
46,484
|
YOUKU
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended,
|
(Amounts in
thousands)
|
|
Mar 31,
|
|
Dec 31,
|
|
Mar 31,
|
|
Mar 31,
|
|
2011
|
|
2011
|
|
2012
|
|
2012
|
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(46,916)
|
|
(49,614)
|
|
(156,125)
|
|
(24,791)
|
Adjustments to reconcile
net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
10,525
|
|
13,230
|
|
14,001
|
|
2,223
|
|
Bad debt
expense
|
|
|
732
|
|
(10)
|
|
658
|
|
104
|
|
Amortization of
intangible assets and capitalized content production
costs
|
|
|
26,523
|
|
61,552
|
|
91,183
|
|
14,479
|
|
Amortization of
long-term debt discounts
|
|
|
1,017
|
|
717
|
|
616
|
|
98
|
|
Gain on disposal
of property and equipment
|
|
|
-
|
|
(11)
|
|
-
|
|
-
|
|
Foreign exchange
loss
|
|
|
-
|
|
2,009
|
|
189
|
|
30
|
|
Share-based
compensation
|
|
|
5,374
|
|
15,547
|
|
23,067
|
|
3,663
|
|
Capital gain from
step business combination
|
|
|
-
|
|
-
|
|
(3,344)
|
|
(531)
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
23,261
|
|
(9,809)
|
|
(2,048)
|
|
(325)
|
|
Amounts due from related party
|
|
|
-
|
|
1,232
|
|
-
|
|
-
|
|
Prepayments and other assets
|
|
|
(2,965)
|
|
(1,223)
|
|
11,165
|
|
1,773
|
|
Accounts payable
|
|
|
250
|
|
-
|
|
13
|
|
2
|
|
Advances from customers
|
|
|
875
|
|
(2,028)
|
|
28,986
|
|
4,603
|
|
Accrued expenses and other liabilities
|
|
|
(29,935)
|
|
54,122
|
|
9,349
|
|
1,485
|
Net cash (used in)
provided by operating activities
|
|
|
(11,259)
|
|
85,714
|
|
17,710
|
|
2,813
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
Acquisition of property
and equipment
|
|
|
(13,474)
|
|
(40,706)
|
|
(10,069)
|
|
(1,599)
|
|
Capitalized content
production costs
|
|
|
(123)
|
|
(4,163)
|
|
(5,025)
|
|
(798)
|
|
Proceeds from short-term
investments
|
|
|
-
|
|
1,134,162
|
|
253,673
|
|
40,282
|
|
Purchase of short-term
investments
|
|
|
(65,059)
|
|
(1,133,901)
|
|
(254,474)
|
|
(40,410)
|
|
Proceeds from disposal
of property and equipment
|
|
|
-
|
|
16
|
|
-
|
|
-
|
|
Cash paid for acquired
subsidiaries, net of cash received
|
|
|
-
|
|
-
|
|
(25,778)
|
|
(4,093)
|
|
Acquisition of
intangible assets from related party
|
|
|
-
|
|
(10,108)
|
|
-
|
|
-
|
|
Acquisition of
intangible assets
|
|
|
(41,678)
|
|
(104,941)
|
|
(50,420)
|
|
(8,006)
|
Net cash (used in)
provided by investing activities
|
|
|
(120,334)
|
|
(159,641)
|
|
(92,093)
|
|
(14,624)
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
Exercise of employee
stock options
|
|
|
-
|
|
1,232
|
|
5,844
|
|
928
|
|
Principal repayments on
long-term debt
|
|
|
(9,366)
|
|
(4,741)
|
|
(1,987)
|
|
(316)
|
|
Proceeds from IPO and
secondary offering, net of issuance costs
|
|
|
4,781
|
|
(247)
|
|
-
|
|
-
|
Net cash (used in)
provided by financing activities
|
|
|
(4,585)
|
|
(3,756)
|
|
3,857
|
|
612
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
|
(15,380)
|
|
(17,626)
|
|
(2,477)
|
|
(393)
|
Net (decrease) increase
in cash and cash equivalents
|
|
|
(151,558)
|
|
(95,309)
|
|
(73,003)
|
|
(11,592)
|
Cash and cash
equivalents at the beginning of the period
|
|
|
1,811,423
|
|
2,387,847
|
|
2,292,538
|
|
364,039
|
Cash and cash
equivalents at the end of the period
|
|
|
1,659,865
|
|
2,292,538
|
|
2,219,535
|
|
352,447
|
Reconciliations of
Non-GAAP results of operations measures to the nearest comparable
GAAP financial measures (*) (Amounts in thousands of Renminbi
("RMB") and U.S. dollars ("US$"), unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Non-GAAP
Gross Profit (Loss)
|
|
For the Three
Months Ended,
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
March 31,
|
|
|
2011
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Gross profit
(loss)
|
|
14,020
|
|
65,574
|
|
(22,569)
|
|
(3,583)
|
Add back:
share-based compensation
|
|
432
|
|
1,302
|
|
1,999
|
|
317
|
Non-GAAP gross profit
(loss)
|
|
14,452
|
|
66,876
|
|
(20,570)
|
|
(3,266)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2. Non-GAAP
Operating Expenses
|
|
For the Three
Months Ended,
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
March 31,
|
|
|
2011
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Operating
expenses
|
|
59,837
|
|
122,954
|
|
143,825
|
|
22,838
|
Deduct:
share-based compensation
|
|
4,942
|
|
14,245
|
|
21,068
|
|
3,346
|
Deduct: business
combination related expenses
|
|
-
|
|
-
|
|
17,634
|
|
2,800
|
Non-GAAP
operating expenses
|
|
54,895
|
|
108,709
|
|
105,123
|
|
16,692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. Non-GAAP
Sales and Marketing Expenses
|
|
For the Three
Months Ended,
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
March 31,
|
|
|
2011
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Sales and marketing
expenses
|
|
36,669
|
|
66,869
|
|
66,406
|
|
10,545
|
Deduct:
share-based compensation
|
|
2,664
|
|
2,440
|
|
4,911
|
|
780
|
Non-GAAP sales
and marketing expenses
|
|
34,005
|
|
64,429
|
|
61,495
|
|
9,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4. Non-GAAP
Product Development Expenses
|
|
For the Three
Months Ended,
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
March 31,
|
|
|
2011
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Product development
expenses
|
|
10,594
|
|
23,734
|
|
28,833
|
|
4,578
|
Deduct:
share-based compensation
|
|
1,090
|
|
3,872
|
|
5,070
|
|
805
|
Non-GAAP
product development expenses
|
|
9,504
|
|
19,862
|
|
23,763
|
|
3,773
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5. Non-GAAP
General and Administrative Expenses
|
|
For the Three
Months Ended,
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
March 31,
|
|
|
2011
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
General and
administrative expenses
|
|
12,574
|
|
32,351
|
|
48,586
|
|
7,715
|
Deduct:
share-based compensation
|
|
1,188
|
|
7,933
|
|
11,087
|
|
1,761
|
Deduct: business
combination related expenses
|
|
-
|
|
-
|
|
17,634
|
|
2,800
|
Non-GAAP
general and administrative expenses
|
|
11,386
|
|
24,418
|
|
19,865
|
|
3,154
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.
Non-GAAP (Loss) Profit from Operations
|
|
For the Three
Months Ended,
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
March 31,
|
|
|
2011
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
(Loss) profit from
operations
|
|
(45,817)
|
|
(57,380)
|
|
(166,394)
|
|
(26,421)
|
Add back:
share-based compensation
|
|
5,374
|
|
15,547
|
|
23,067
|
|
3,663
|
Add back:
amortization of intangible assets from business
acquisition
|
|
-
|
|
-
|
|
-
|
|
-
|
Add back: business
combination related expenses
|
|
-
|
|
-
|
|
17,634
|
|
2,800
|
Non-GAAP (loss)
profit from operations
|
|
(40,443)
|
|
(41,833)
|
|
(125,693)
|
|
(19,958)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.
Non-GAAP Net (Loss) Profit
|
|
For the Three
Months Ended,
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
March 31,
|
|
|
2011
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Net (loss)
profit
|
|
(46,916)
|
|
(49,614)
|
|
(156,125)
|
|
(24,791)
|
Add back:
share-based compensation
|
|
5,374
|
|
15,547
|
|
23,067
|
|
3,663
|
Add back:
amortization of intangible assets from business
acquisition
|
|
-
|
|
-
|
|
-
|
|
-
|
Add back: business
combination related expenses
|
|
-
|
|
-
|
|
17,634
|
|
2,800
|
Non-GAAP net
(loss) profit
|
|
(41,542)
|
|
(34,067)
|
|
(115,424)
|
|
(18,328)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.
Non-GAAP EBITDA (Loss) Profit
|
|
For the Three
Months Ended,
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
March 31,
|
|
|
2011
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Net (loss)
profit
|
|
(46,916)
|
|
(49,614)
|
|
(156,125)
|
|
(24,791)
|
Add
back:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization (excluding amortization
|
|
|
|
|
|
|
|
|
of acquired content )**
|
|
10,540
|
|
13,244
|
|
14,016
|
|
2,226
|
Interest
income
|
|
(1,056)
|
|
(10,770)
|
|
(11,603)
|
|
(1,842)
|
Interest
expenses
|
|
2,155
|
|
1,327
|
|
1,151
|
|
183
|
Income
taxes
|
|
-
|
|
-
|
|
3,576
|
|
568
|
EBITDA (Loss)
Profit
|
|
(35,277)
|
|
(45,813)
|
|
(148,985)
|
|
(23,656)
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
5,374
|
|
15,547
|
|
23,067
|
|
3,663
|
Amortization of
intangible assets from business acquisition
|
|
-
|
|
-
|
|
-
|
|
-
|
Business
combination related expenses
|
|
-
|
|
-
|
|
17,634
|
|
2,800
|
Others,
net
|
|
-
|
|
1,677
|
|
(3,393)
|
|
(539)
|
Non-GAAP EBITDA
(Loss) Profit
|
|
(29,903)
|
|
(28,589)
|
|
(111,677)
|
|
(17,732)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* For
more information on the Non-GAAP financial measures, please see the
section captioned "About Non-GAAP Financial Measures" in this
earnings
release.
|
** 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 Inc.