BEIJING, May 5, 2011 /PRNewswire-Asia/ -- Youku.com Inc.
(NYSE: YOKU), China's leading
Internet television company ("Youku" or the "Company"), today
announced its unaudited financial results for the first quarter
ended March 31, 2011.
First Quarter 2011
Highlights(1)
- Net revenues were RMB128.0
million (US$19.5 million), a
163% increase from the corresponding period in 2010(2).
- Gross profit was RMB14.0 million
(US$2.1 million), compared to a gross
loss of RMB18.3 million (US$2.8 million) for the corresponding period in
2010.
- Net loss was RMB46.9 million
(US$7.1 million), an 8% decrease
relative to the corresponding period in 2010.
- Adjusted EBITDA loss (non-GAAP financial measure) was
RMB29.9 million (US$4.6 million), compared to an adjusted EBITDA
loss of RMB37.0 million (US$5.6 million) for the corresponding period in
2010, or a 19% improvement relative to the corresponding period in
2010.
"Our monthly unique visitors from homes and offices reached 231
million in March 2011, an increase of
22 million from December 2010, while
our monthly unique visitors from Internet cafés exceeded 50 million
in February 2011, according to
iResearch. We continue to strengthen our leadership position in the
Internet television space in China," said Victor
Koo, Chairman and Chief Executive Officer.
"We are also excited to see growing user traffic coming from
tablet and mobile phones, which reinforces our commitment to be the
primary source of video content across all Internet-enabled
devices. Our significant and timely investments in tablets and 3G
applications continue to pay off. With respect to our content, we
have achieved record viewership of television series and continue
to increase the monetization of inventory associated with our
in-house productions." Mr. Koo added.
Dele Liu, Senior Vice President and Chief Financial Officer
commented, "I am pleased to report a solid quarter of top line
growth. We continue to experience ongoing revenue momentum in our
business as online video advertising becomes increasingly
mainstream. For the rest of 2011, we will remain focused on
improving our user experience and investing aggressively in
content, technology, product innovation and brand to capitalize on
the growing market opportunity in front of us."
(1) The reporting currency of the Company is Renminbi ("RMB"),
but for the convenience of the reader, the amounts presented
throughout the release are in US dollars ("US$"). Unless otherwise
noted, all conversions from RMB to US$ are made at a rate of
RMB6.5483 to US$1.00, the effective
noon buying rate as of March 31, 2011
in the City of New York for cable
transfers of RMB as certified for customs purposes by the Federal
Reserve Bank of New York. No
representation is made that the RMB amounts could have been, or
could be, converted into US$ at such rate.
(2) The Company's net revenues are presented net of commissions
earned by third-party advertising agencies, which amounted to
RMB24.7 million (US$3.8 million) in the first quarter of 2011 and
RMB9.8 million (US$1.5 million) in the corresponding period in
2010.
First Quarter 2011 Results
Net revenues were RMB128.0
million (US$19.5 million) in
the first quarter of 2011, representing a 163% increase from the
corresponding period in 2010 and exceeding the high end of the
Company's guidance by 22%. The significant increase in net revenues
was mainly due to the strong performance of brand advertising
revenues, which amounted to RMB119.8
million (US$18.3 million) in
the first quarter of 2011, representing a 165% increase from the
corresponding period in 2010. This growth was primarily
attributable to the increased number of advertisers and increased
average revenue per advertiser.
Bandwidth costs as a component of cost of revenues were
RMB56.3 million (US$8.6 million) in the first quarter of
2011, representing 44% of net revenues, down from 90% in the
corresponding period in 2010.
Content costs as a component of cost of revenues were
RMB36.1 million (US$5.5 million), representing 28% of net
revenues, compared to 17% in the corresponding period in 2010. We
have changed our accounting estimate regarding the pattern of the
benefits that we derive from our licensed content, resulting in
amortization of costs on an accelerated basis. Of the RMB36.1 million (US$5.5
million) content costs, RMB28.2 million (US$4.3 million), or 22% of net revenues, was
incurred in the first quarter of 2011 using the newly adopted
accelerated method and RMB7.9 million
(US$1.2 million), or 6% of net
revenues, relates to the adjustment to the accumulated amortization
of licensed content acquired prior to 2011 using the accelerated
method instead of straight-line method. If the Company had
continued using a straight-line amortization method for content
costs, RMB24.6 million (US$3.8 million), or 19% of net revenues, would
have been recorded in the first quarter of 2011. Prior
to 2011, our licensed content was amortized using a
straight-line method over the estimated useful life, which was
generally the license period. The change of estimate was effective
in the first quarter of 2011 and will be applied prospectively.
Gross profit was RMB14.0
million (US$2.1 million) in
the first quarter of 2011, compared to a gross loss of RMB18.3 million (US$2.8
million) for the corresponding period in 2010. The
significant increase in gross profit was mainly due to increased
revenues from brand advertising services and partially offset by an
increased cost of revenues as described in the preceding paragraphs
pertaining to bandwidth and content costs.
Operating expenses were RMB59.8
million (US$9.1 million) in
the first quarter of 2011, an increase of 93% compared to
RMB31.0 million (US$ 4.7 million) in the corresponding period in
2010. The increase was primarily due to increases in all of the
operating expense line items as a result of the substantial growth
of our business.
Operating loss was RMB45.8
million (US$7.0 million) in
the first quarter of 2011, representing a 7% decrease relative to
the corresponding period in 2010. The improvement was mainly due to
the significant increase in gross profit as noted above.
Net loss was RMB46.9
million (US$7.1 million) in
the first quarter of 2011, representing an 8% decrease relative to
the corresponding period in 2010. Basic and diluted loss per ADS,
each ADS representing 18 of our Class A ordinary shares, for the
first quarter of 2011 amounted to RMB0.45 (US$0.07)
and RMB0.45 (US$0.07), respectively.
Adjusted net loss (non-GAAP financial measure), which is
herein defined as net loss excluding share-based compensation
expenses and change in fair value of warrant liability, was
RMB41.5 million (US$6.3 million) in the first quarter of 2011, or
a decrease of 15% relative to corresponding period in 2010.
Adjusted EBITDA loss (non-GAAP financial measure), 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 change in
fair value of warrant liability, share-based compensation expenses
and other non-operating items, was RMB29.9
million (US$4.6 million) for
the first quarter of 2011, or a decrease of 19% relative to the
corresponding period in 2010.
Business Outlook
For the second quarter of 2011, the Company expects year-on-year
growth in net revenues of 125% to 135%. This forecast reflects
Youku's current and preliminary view, which is subject to
change.
Conference Call Information
Youku's management will host an earnings conference call at
9:00 p.m. U.S. Eastern Time on
May 5, 2011 (9:00 a.m. Beijing/Hong Kong Time on May 6, 2011).
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:
|
1-800-901-5217
|
|
US Toll / International Dial
In:
|
1-617-786-2964
|
|
China Toll:
|
86-400-881-1629/30
|
|
China (Telecom) Toll
Free:
|
10-800-130-0399/120-2655
|
|
Hong Kong Toll / International
Dial In:
|
852-3002-1672
|
|
|
|
A replay of the call will be available by dialing 1-888-286-8010
(international 1-617-801-6888), and entering passcode 35773540#.
The replay will be available through May 13,
2011.
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.com 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
registration statement on Form F-1, as amended, 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:
adjusted net loss and adjusted EBITDA loss. We define
adjusted net loss as net loss excluding share-based compensation
expenses and change in fair value of warrant liability. We define
adjusted EBITDA loss as net income or loss before income taxes,
interest expenses, interest income, depreciation and amortization
(excluding amortization of acquired content), further adjusted for
change in fair value of warrant liability, share-based compensation
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.
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.com Inc.
|
|
Tel: (+8610) 5885-1881
x6090
|
|
Email: ryan.cheung@youku.com
|
|
|
|
Caroline Straathof
|
|
IR Inside
|
|
Tel: (+31) 6-54624301
|
|
Email: caroline.straathof@irinside.com
|
|
|
|
Media
Relations:
|
|
Jean Shao
|
|
Director, International Public
Relations
|
|
Youku.com Inc.
|
|
Tel: (+8610) 5885-1881
x7128
|
|
Email: shaodan@youku.com
|
|
|
YOUKU.COM INC.
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands, except
for number of shares and ADS and per share and per ADS
data)
|
|
December 31,
|
|
March 31,
|
|
March 31,
|
|
|
|
|
2010
|
|
2011
|
|
2011
|
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
ASSETS
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
1,811,423
|
|
1,659,865
|
|
253,480
|
|
|
Short-term
investments
|
|
-
|
|
65,418
|
|
9,990
|
|
|
Accounts receivable,
net
|
|
216,245
|
|
192,252
|
|
29,359
|
|
|
Intangible assets
|
|
10,230
|
|
13,571
|
|
2,072
|
|
|
Prepayments and other
assets
|
|
25,187
|
|
16,972
|
|
2,592
|
|
Total current
assets
|
|
2,063,085
|
|
1,948,078
|
|
297,493
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
64,177
|
|
63,400
|
|
9,682
|
|
|
Intangible assets
|
|
57,550
|
|
70,691
|
|
10,795
|
|
|
Capitalized content production
costs
|
|
-
|
|
123
|
|
19
|
|
|
Prepayments and other
assets
|
|
5,356
|
|
5,833
|
|
891
|
|
Total non-current
assets
|
|
127,083
|
|
140,047
|
|
21,387
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
2,190,168
|
|
2,088,125
|
|
318,880
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
35,641
|
|
38,328
|
|
5,853
|
|
|
Advances from
customers
|
|
1,304
|
|
2,179
|
|
333
|
|
|
Accrued expenses and other
liabilities
|
|
201,100
|
|
160,861
|
|
24,565
|
|
|
Current portion of long-term
debt
|
|
22,180
|
|
16,366
|
|
2,499
|
|
Total current
liabilities
|
|
260,225
|
|
217,734
|
|
33,250
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
18,455
|
|
15,825
|
|
2,417
|
|
Total non-current
liabilities
|
|
18,455
|
|
15,825
|
|
2,417
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
278,680
|
|
233,559
|
|
35,667
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
Class A Ordinary Shares
(US$0.00001 par value, 9,340,238,793 authorized, 1,235,762,004 and
1,236,605,293 issued and outstanding as of December 31, 2010 and
March 31, 2011, respectively)
|
|
82
|
|
82
|
|
13
|
|
|
Class B Ordinary Shares
(US$0.00001 par value, 659,761,207 authorized, 659,761,207 issued
and outstanding as of December 31, 2010 and March 31,
2011)
|
|
49
|
|
49
|
|
7
|
|
|
Additional paid-in
capital
|
|
2,625,250
|
|
2,630,624
|
|
401,726
|
|
|
Accumulated deficit
|
|
(699,540)
|
|
(746,456)
|
|
(113,992)
|
|
|
Accumulated other comprehensive
loss
|
|
(14,353)
|
|
(29,733)
|
|
(4,541)
|
|
Total shareholders'
equity
|
|
1,911,488
|
|
1,854,566
|
|
283,213
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
2,190,168
|
|
2,088,125
|
|
318,880
|
|
|
|
|
|
|
|
|
|
YOUKU.COM INC.
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
Three Months Ended,
|
|
(Amounts in
thousands, except for number of shares and ADS and per share
and per ADS data)
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
March 31,
|
|
|
|
2010
|
|
2010
|
|
2011
|
|
2011
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
48,613
|
|
152,474
|
|
127,991
|
|
19,546
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues (Note
1)
|
|
(66,927)
|
|
(102,111)
|
|
(113,971)
|
|
(17,405)
|
|
|
|
|
|
|
|
|
|
|
|
Gross (loss)
profit
|
|
(18,314)
|
|
50,363
|
|
14,020
|
|
2,141
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Product development
|
|
(5,734)
|
|
(10,027)
|
|
(10,594)
|
|
(1,618)
|
|
Sales
and marketing
|
|
(20,202)
|
|
(38,711)
|
|
(36,669)
|
|
(5,600)
|
|
General and
administrative
|
|
(5,096)
|
|
(10,241)
|
|
(12,574)
|
|
(1,920)
|
|
Total operating
expenses
|
|
(31,032)
|
|
(58,979)
|
|
(59,837)
|
|
(9,138)
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(49,346)
|
|
(8,616)
|
|
(45,817)
|
|
(6,997)
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
219
|
|
102
|
|
1,056
|
|
161
|
|
Interest expenses
|
|
(1,403)
|
|
(2,477)
|
|
(2,155)
|
|
(329)
|
|
Change in fair value of warrant
liability
|
|
(748)
|
|
(26,736)
|
|
-
|
|
-
|
|
Other, net
|
|
77
|
|
4
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
(51,201)
|
|
(37,723)
|
|
(46,916)
|
|
(7,165)
|
|
Income taxes
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(51,201)
|
|
(37,723)
|
|
(46,916)
|
|
(7,165)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share, basic and
diluted
|
|
(0.14)
|
|
(0.05)
|
|
(0.02)
|
|
*
|
|
Net loss per ADS, basic and
diluted
|
|
(2.52)
|
|
(0.89)
|
|
(0.45)
|
|
(0.07)
|
|
Shares used in computation,
basic and diluted
|
|
365,632,081
|
|
765,083,372
|
|
1,896,366,500
|
|
1,896,366,500
|
|
ADS used in computation, basic
and diluted
|
|
20,312,893
|
|
42,504,632
|
|
105,353,694
|
|
105,353,694
|
|
* represents per share amount
which is less than (0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
|
|
|
|
2010
|
|
2010
|
|
2011
|
|
2011
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Cost of revenues:
|
|
(in Thousands)
|
|
(in Thousands)
|
|
(in Thousands)
|
|
(in Thousands)
|
|
Business tax and
surcharges
|
|
(5,066)
|
|
(15,231)
|
|
(12,392)
|
|
(1,892)
|
|
Bandwidth costs
|
|
(43,798)
|
|
(51,685)
|
|
(56,325)
|
|
(8,602)
|
|
Depreciation of servers and
other equipment
|
|
(9,742)
|
|
(8,950)
|
|
(9,112)
|
|
(1,392)
|
|
Content costs
|
|
(8,321)
|
|
(26,245)
|
|
(36,142)
|
|
(5,519)
|
|
Total Cost of
Revenues
|
|
(66,927)
|
|
(102,111)
|
|
(113,971)
|
|
(17,405)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations of Non-GAAP
results of operation measures to the nearest comparable GAAP
financial measures (*) (Amounts in thousands of Renminbi (“RMB”)
and U.S. dollars (“US$”), unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Adjusted Net
Loss
|
|
For the
Three Months Ended,
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
March 31,
|
|
|
|
2010
|
|
2010
|
|
2011
|
|
2011
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
Net loss
|
|
(51,201)
|
|
(37,723)
|
|
(46,916)
|
|
(7,165)
|
|
Add back: share-based
compensation
|
|
1,864
|
|
4,615
|
|
5,374
|
|
821
|
|
Add back: change in fair value
of warrant liability
|
|
748
|
|
26,736
|
|
-
|
|
-
|
|
Adjusted net loss
|
|
(48,589)
|
|
(6,372)
|
|
(41,542)
|
|
(6,344)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2. Adjusted EBITDA
Loss
|
|
For the
Three Months Ended,
|
|
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
March 31,
|
|
|
|
2010
|
|
2010
|
|
2011
|
|
2011
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
Net loss
|
|
(51,201)
|
|
(37,723)
|
|
(46,916)
|
|
(7,165)
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
(excluding amortization of licensed content)**
|
|
10,508
|
|
10,423
|
|
10,540
|
|
1,610
|
|
Interest income
|
|
(219)
|
|
(102)
|
|
(1,056)
|
|
(161)
|
|
Interest expenses
|
|
1,403
|
|
2,477
|
|
2,155
|
|
329
|
|
Income taxes
|
|
-
|
|
-
|
|
-
|
|
-
|
|
EBITDA Loss
|
|
(39,509)
|
|
(24,925)
|
|
(35,277)
|
|
(5,387)
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
1,864
|
|
4,615
|
|
5,374
|
|
821
|
|
Change in fair value of warrant
liability
|
|
748
|
|
26,736
|
|
-
|
|
-
|
|
Others, net
|
|
(77)
|
|
(4)
|
|
-
|
|
-
|
|
Adjusted EBITDA
Loss
|
|
(36,974)
|
|
6,422
|
|
(29,903)
|
|
(4,566)
|
|
|
|
|
|
|
|
|
|
|
|
*
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 the advertising license
acquired in April 2010. The amortization of licensed content was
not included in the Non-GAAP financial measures we disclosed in the
registration statement on Form F-1, as amended (333-170603), filed
with the SEC.
|
|
|
|
|
|
|
|
|
|
|
SOURCE Youku.com Inc.