BEIJING, Aug. 6, 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 second quarter 2012.
Second Quarter Highlights[1]
- Net revenues were RMB387.4
million (US$61.0 million), a
96% increase from the corresponding period in 2011.
- Gross profit was RMB76.9 million
(US$12.1 million), a 45% increase
from the corresponding period in 2011. Non-GAAP gross profit, which
is herein defined as gross profit excluding share-based
compensation expenses, was RMB79.5
million (US$12.5 million) in
the second quarter of 2012, a 48% increase from the corresponding
period in 2011.
- Net loss was RMB62.8 million
(US$9.9 million), as compared to a
net loss of RMB28.1 million
(US$4.4 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 RMB29.3
million (US$4.6 million) in
the second quarter of 2012, as compared to the non-GAAP net loss of
RMB20.8 million (US$3.3 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 mobile, search,
social and paid services.
- Basic and diluted loss per ADS, each representing 18 Class A
ordinary shares, for the second quarter of 2012 amounted to
RMB0.54 (US$0.09) and RMB0.54 (US$0.09),
respectively.
- Cash, cash equivalents and short-term investments totaled
RMB3.5 billion (US$546.6 million) as of June 30, 2012.
- Acquisition of property and equipment for the second quarter of
2012 was RMB22.6 million
(US$3.6 million), as compared to
RMB18.9 million (US$3.0 million) for the same period in 2011.
- Acquisition of intangible assets for the second quarter of 2012
was RMB51.6 million (US$8.1 million), as compared to RMB144.2 million (US$22.7
million) for the same period in 2011.
[1] The
reporting currency of the Company is Renminbi ("RMB"), but for the
convenience of the reader, the amounts presented throughout the
release are in US dollars ("US$"). Unless otherwise noted, all
conversions from RMB to US$ are made at a rate of RMB6.353 to
US$1.00, the effective noon buying rate as of June 29, 2012 in the
City of New York for cable transfers of RMB as certified for
customs purposes by the Federal Reserve Bank of New York. No
representation is made that the RMB amounts could have been, or
could be, converted into US$ at such rate.
|
"Despite challenging macroeconomic conditions, we recorded
another quarter of strong revenue growth." said Victor Koo, Chairman and Chief Executive Officer
of Youku. "We are pleased to see the continued rationalization of
the online video sector and improving content and bandwidth cost
structure. The planned integration with Tudou is proceeding
smoothly and we are on track to realize the potential of the
combination of No.1 and No.2 online video platforms in China."
Dele Liu, President of Youku, commented, "We are further
cementing our leadership positions in video and continue to benefit
in the structural budget shift from traditional media to online
video by offering high ROI marketing solutions. We will continue to
drive our edge in user experience, content management and
monetization to achieve sustainable and profitable growth."
Second Quarter 2012 Results
Net revenues were RMB387.4
million (US$61.0 million) in
the second quarter of 2012, representing a 96% increase from the
corresponding period in 2011 and meeting the revenue guidance
previously announced by the Company. The growth was primarily
attributable to the increased average spending per advertiser from
RMB0.9 million to RMB1.7 million and increased number of
advertisers from 260 to 283, representing an increase of 89% and
9%, respectively, from the corresponding period in 2011.
Bandwidth costs as a component of cost of revenues were
RMB111.9 million (US$17.6 million) in the second quarter of 2012,
representing 29% of net revenues, compared to 33% in the
corresponding period in 2011.
Content costs as a component of cost of revenues were
RMB144.0 million (US$22.7 million) in the second quarter of
2012, representing 37% of net revenues, compared to 25% 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 profit was RMB76.9
million (US$12.1 million), an
increase of 45% compared to RMB52.9
million (US$8.3 million) for
the same period in 2011. Non-GAAP gross profit was
RMB79.5 million (US$12.5 million) in the second quarter of 2012,
an increase of 48% compared to RMB53.6
million (US$8.4 million) in
the corresponding period in 2011 due to operating leverage.
Operating expenses were RMB158.3
million (US$24.9 million) in
the second quarter of 2012, as compared to RMB80.7 million (US$12.7
million) in the corresponding period in 2011. Non-GAAP
operating expenses, which is herein defined as operating
expenses excluding share-based compensation expenses and business
combination related expenses, were RMB127.4
million (US$20.1 million) in
the second quarter of 2012, an increase of 72% compared to
RMB74.1 million (US$11.7 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 RMB80.3 million (US$12.6
million) in the second quarter of 2012, as compared to
RMB52.7 million (US$8.3 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 RMB74.3 million (US$11.7
million) in the second quarter of 2012, an increase of 50%
compared to RMB49.7 million
(US$7.8 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 RMB35.0 million (US$5.5
million) in the second quarter of 2012, as compared to
RMB14.2 million (US$2.2 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 RMB28.6
million (US$4.5 million) in
the second quarter of 2012, an increase of 130% compared to
RMB12.5 million (US$2.0 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 mobile,
search, social and paid-services.
General and administrative expenses were RMB43.0 million (US$6.8
million) in the second quarter of 2012, as compared to
RMB13.8 million (US$2.2 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 RMB24.5 million
(US$3.9 million) in the second
quarter of 2012, representing an increase of 104% compared to
RMB12.0 million (US$1.9 million) in the corresponding period in
2011. This increase was primarily due to an increase in
professional fees, personnel-related expenses and tax charges.
Net loss was RMB62.8
million (US$9.9 million), as
compared to a net loss of RMB28.1
million (US$4.4 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 RMB29.3 million (US$4.6
million) in the second quarter of 2012, as compared to the
non-GAAP net loss of RMB20.8 million
(US$3.3 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
mobile, 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 RMB33.1 million
(US$5.2 million) in the second
quarter of 2012, as compared to RMB10.1
million (US$1.6 million) in
the corresponding period in 2011. This increase was primarily due
to increase in operating expenses.
Business Outlook
For the third quarter of 2012, the Company expects year-on-year
growth of 70% to 80% in net revenues. This forecast reflects the
Company's current and preliminary view, which is subject to
change.
Recent Business Developments
Youku to Hold 2012 Annual General Meeting on August 20, 2012
On July 18, the Company announced
that it will hold its 2012 annual general meeting of shareholders
at Suite 3206, The Centrium, 60 Wyndham Street, Central,
Hong Kong on Monday, August 20, 2012, beginning at
10:00 am (Hong Kong time). Only holders of Youku Class A
shares and Youku Class B shares of record on the close of business
on August 13, 2012 (Hong Kong time) (the "Youku share record
date") or their proxy holders are entitled to vote at the annual
general meeting or any adjournment or postponements thereof. Each
Youku Class A shareholder has one vote for each Youku Class A share
and each Youku Class B shareholder has three votes for each Youku
Class B share held as of the close of business on the Youku share
record date. Holders of record of the Company's American Depositary
Shares ("ADSs") at the close of business on July 20, 2012 (New York
City time) who wish to vote the Class A ordinary shares of
the Company represented by the ADSs must act through Citibank,
N.A., the depositary of the Company's ADS program.
Youku has filed a registration statement on Form F-4 (the "Form
F-4") with the Securities and Exchange Commission (the "SEC"),
which became effective at 4:30 p.m.,
July 17, 2012 (New York City Time).
The Form F-4 includes a joint proxy statement/prospectus and was
filed with the SEC in connection with the previously announced
merger agreement (the "Merger Agreement"), dated March 11, 2012, by and among the Company, Tudou
Holdings Limited ("Tudou") and Two Merger Sub Inc. ("Merger Sub")
and the merger contemplated thereunder (the "Merger").
Pursuant to the Merger Agreement and the plan of merger attached as
Annex A to the Merger Agreement, Tudou will merge with and into
Merger Sub, with Tudou continuing as the surviving entity and as a
wholly owned subsidiary of Youku and the combined entity will be
named "Youku Tudou Inc."
The notice of the annual general meeting included in the joint
proxy statement/prospectus sets forth the resolutions to be
submitted to shareholders of the Company for approval and other
relevant information regarding the annual general meeting, the
Merger and the Merger Agreement and how to vote ordinary shares or
direct Citibank, N.A. to vote the Class A ordinary shares
represented by the ADSs at the annual general meeting.
Conference Call Information
Youku's management will host an earnings conference call at
8:00 a.m. U.S. Eastern Time on
August 6, 2012 (8:00 p.m. Beijing/Hong Kong Time on August 6, 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 16226822#. The replay will be available through
August 13, 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,
|
|
June
30,
|
|
June
30,
|
|
2011
|
|
2012
|
|
2012
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
ASSETS
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
2,292,538
|
|
3,215,106
|
|
506,077
|
|
Short-term investments
|
|
1,400,858
|
|
257,197
|
|
40,484
|
|
Accounts receivable, net
|
|
420,706
|
|
677,067
|
|
106,574
|
|
Intangible assets, net
|
|
16,078
|
|
18,721
|
|
2,947
|
|
Amounts due from related party
|
|
768
|
|
-
|
|
-
|
|
Prepayments and other assets
|
|
16,832
|
|
45,075
|
|
7,095
|
Total
current assets
|
|
4,147,780
|
|
4,213,166
|
|
663,177
|
|
|
|
|
|
|
|
|
Non-current assets:
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
96,567
|
|
116,382
|
|
18,319
|
|
Long-term investment in related
party
|
|
1,707
|
|
-
|
|
-
|
|
Intangible assets, net
|
|
211,978
|
|
209,041
|
|
32,904
|
|
Capitalized content production
costs
|
|
7,782
|
|
796
|
|
125
|
|
Amounts due from related party
|
|
65,352
|
|
-
|
|
-
|
|
Prepayments and other assets
|
|
144,392
|
|
207,749
|
|
32,701
|
|
Goodwill
|
|
-
|
|
61,824
|
|
9,731
|
Total non-current
assets
|
|
527,778
|
|
595,792
|
|
93,780
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
4,675,558
|
|
4,808,958
|
|
756,957
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
57,276
|
|
109,712
|
|
17,269
|
|
Advances from customers
|
|
3,140
|
|
45,440
|
|
7,153
|
|
Amounts due to related party
|
|
2,794
|
|
-
|
|
-
|
|
Accrued expenses and other
liabilities
|
|
390,607
|
|
549,661
|
|
86,520
|
|
Current portion of long-term
debt
|
|
9,182
|
|
11,838
|
|
1,863
|
Total
current liabilities
|
|
462,999
|
|
716,651
|
|
112,805
|
|
|
|
|
|
|
|
|
Non-current liabilities:
|
|
|
|
|
|
|
|
Long-term debt
|
|
7,382
|
|
1,137
|
|
179
|
Total
non-current liabilities
|
|
7,382
|
|
1,137
|
|
179
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
470,381
|
|
717,788
|
|
112,984
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
Class A Ordinary Shares (US$0.00001 par value, 9,340,238,793
authorized, 1,395,435,339 and 1,437,039,252 issued and
outstanding as of December 31, 2011 and June 30, 2012,
respectively)
|
|
93
|
|
95
|
|
15
|
|
Class B
Ordinary Shares (US$0.00001 par value, 659,761,207 authorized,
659,561,893 and 659,561,893 issued and outstanding as of December
31, 2011 and June 30, 2012, respectively)
|
|
49
|
|
49
|
|
8
|
|
Additional paid-in capital
|
|
5,185,257
|
|
5,283,356
|
|
831,632
|
|
Accumulated deficit
|
|
(871,644)
|
|
(1,090,617)
|
|
(171,671)
|
|
Accumulated other comprehensive
loss
|
|
(108,578)
|
|
(101,713)
|
|
(16,011)
|
Total
shareholders' equity
|
|
4,205,177
|
|
4,091,170
|
|
643,973
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
4,675,558
|
|
4,808,958
|
|
756,957
|
YOUKU
INC.
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the Three Months Ended,
|
|
For the
Six Months Ended,
|
(Amounts in thousands, except for number of shares and ADS and
per share and per ADS data)
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
197,853
|
|
270,167
|
|
387,387
|
|
60,978
|
|
325,844
|
|
657,554
|
|
103,502
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues (Note 1)
|
|
(144,945)
|
|
(292,736)
|
|
(310,463)
|
|
(48,869)
|
|
(258,916)
|
|
(603,199)
|
|
(94,947)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit (loss)
|
|
52,908
|
|
(22,569)
|
|
76,924
|
|
12,109
|
|
66,928
|
|
54,355
|
|
8,555
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
development
|
|
(14,192)
|
|
(28,833)
|
|
(35,046)
|
|
(5,516)
|
|
(24,786)
|
|
(63,879)
|
|
(10,055)
|
Sales and
marketing
|
|
(52,732)
|
|
(66,406)
|
|
(80,255)
|
|
(12,633)
|
|
(89,401)
|
|
(146,661)
|
|
(23,085)
|
General and
administrative
|
|
(13,759)
|
|
(48,586)
|
|
(43,017)
|
|
(6,771)
|
|
(26,333)
|
|
(91,603)
|
|
(14,419)
|
Total
operating expenses
|
|
(80,683)
|
|
(143,825)
|
|
(158,318)
|
|
(24,920)
|
|
(140,520)
|
|
(302,143)
|
|
(47,559)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
profit from operations
|
|
(27,775)
|
|
(166,394)
|
|
(81,394)
|
|
(12,811)
|
|
(73,592)
|
|
(247,788)
|
|
(39,004)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
3,190
|
|
11,603
|
|
12,375
|
|
1,948
|
|
4,246
|
|
23,978
|
|
3,774
|
Interest
expenses
|
|
(1,801)
|
|
(1,151)
|
|
(982)
|
|
(155)
|
|
(3,956)
|
|
(2,133)
|
|
(336)
|
Other,
net
|
|
(1,714)
|
|
3,393
|
|
4,762
|
|
750
|
|
(1,714)
|
|
8,155
|
|
1,284
|
Total
other income (expenses), net
|
|
(325)
|
|
13,845
|
|
16,155
|
|
2,543
|
|
(1,424)
|
|
30,000
|
|
4,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss)
profit before income taxes
|
|
(28,100)
|
|
(152,549)
|
|
(65,239)
|
|
(10,268)
|
|
(75,016)
|
|
(217,788)
|
|
(34,282)
|
Income
taxes
|
|
-
|
|
(3,576)
|
|
2,391
|
|
376
|
|
-
|
|
(1,185)
|
|
(187)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
(loss) profit
|
|
(28,100)
|
|
(156,125)
|
|
(62,848)
|
|
(9,892)
|
|
(75,016)
|
|
(218,973)
|
|
(34,469)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
per share, basic and diluted
|
|
(0.01)
|
|
(0.08)
|
|
(0.03)
|
|
(0.00)
|
|
(0.04)
|
|
(0.11)
|
|
(0.02)
|
Net loss
per ADS (each ADS represents 18 class A ordinary shares), basic and
diluted
|
|
(0.26)
|
|
(1.36)
|
|
(0.54)
|
|
(0.09)
|
|
(0.70)
|
|
(1.90)
|
|
(0.30)
|
Shares
used in computation, basic and diluted
|
|
1,966,651,063
|
|
2,066,687,393
|
|
2,079,698,573
|
|
2,079,698,573
|
|
1,931,702,933
|
|
2,073,192,979
|
|
2,073,192,979
|
ADSs used
in computation, basic and diluted
|
|
109,258,392
|
|
114,815,966
|
|
115,538,809
|
|
115,538,809
|
|
107,316,829
|
|
115,177,387
|
|
115,177,387
|
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,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
(Amounts
in thousands)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Cost
of revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business tax and surcharges
|
|
20,241
|
|
27,842
|
|
41,830
|
|
6,584
|
|
32,633
|
|
69,672
|
|
10,967
|
Bandwidth costs
|
|
66,251
|
|
113,169
|
|
111,859
|
|
17,607
|
|
122,576
|
|
225,028
|
|
35,421
|
Depreciation of servers and other equipment
|
|
8,919
|
|
11,689
|
|
12,731
|
|
2,005
|
|
18,031
|
|
24,420
|
|
3,843
|
Content costs
|
|
49,534
|
|
140,036
|
|
144,043
|
|
22,673
|
|
85,676
|
|
284,079
|
|
44,716
|
Total Cost of Revenues
|
|
144,945
|
|
292,736
|
|
310,463
|
|
48,869
|
|
258,916
|
|
603,199
|
|
94,947
|
YOUKU
INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the Three Months Ended,
|
|
For
the Six Months Ended
|
(Amounts
in thousands)
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Cash
flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
(28,100)
|
|
(156,125)
|
|
(62,848)
|
|
(9,892)
|
|
(75,016)
|
|
(218,973)
|
|
(34,469)
|
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
10,358
|
|
14,001
|
|
14,742
|
|
2,320
|
|
20,883
|
|
28,743
|
|
4,524
|
|
Bad debt
expense
|
|
|
(279)
|
|
658
|
|
1,669
|
|
263
|
|
453
|
|
2,327
|
|
366
|
|
Amortization of intangible assets and capitalized content production costs
|
|
|
35,390
|
|
91,183
|
|
77,338
|
|
12,173
|
|
61,913
|
|
168,521
|
|
26,527
|
|
Amortization of long-term debt discounts
|
|
|
923
|
|
616
|
|
535
|
|
84
|
|
1,940
|
|
1,151
|
|
181
|
|
Gain on
disposal of property and equipment
|
|
|
(7)
|
|
-
|
|
-
|
|
-
|
|
(7)
|
|
-
|
|
-
|
|
Foreign
exchange loss
|
|
|
1,644
|
|
189
|
|
(374)
|
|
(59)
|
|
1,644
|
|
(185)
|
|
(29)
|
|
Share-based compensation
|
|
|
7,278
|
|
23,067
|
|
26,197
|
|
4,124
|
|
12,652
|
|
49,264
|
|
7,754
|
|
Capital
gain from step business combination
|
|
|
-
|
|
(3,344)
|
|
-
|
|
-
|
|
-
|
|
(3,344)
|
|
(526)
|
|
Change in
operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(86,113)
|
|
(2,048)
|
|
(232,847)
|
|
(36,652)
|
|
(62,852)
|
|
(234,895)
|
|
(36,974)
|
|
Prepayments and other assets
|
|
|
(4,776)
|
|
11,165
|
|
19,167
|
|
3,017
|
|
(7,741)
|
|
30,332
|
|
4,775
|
|
Capitalized content production costs (*)
|
|
|
(1,745)
|
|
(5,025)
|
|
(2,872)
|
|
(452)
|
|
(1,868)
|
|
(7,897)
|
|
(1,242)
|
|
Accounts
payable
|
|
|
(502)
|
|
13
|
|
(2,504)
|
|
(394)
|
|
(252)
|
|
(2,491)
|
|
(392)
|
|
Advances
from customers
|
|
|
(1,455)
|
|
28,986
|
|
(12,392)
|
|
(1,951)
|
|
(580)
|
|
16,594
|
|
2,612
|
|
Accrued
expenses and other liabilities
|
|
|
62,204
|
|
9,349
|
|
83,026
|
|
13,069
|
|
32,269
|
|
92,375
|
|
14,541
|
Net cash
(used in) provided by operating activities
|
|
|
(5,180)
|
|
12,685
|
|
(91,163)
|
|
(14,350)
|
|
(16,562)
|
|
(78,478)
|
|
(12,352)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of property and equipment
|
|
|
(18,878)
|
|
(10,069)
|
|
(22,603)
|
|
(3,558)
|
|
(32,352)
|
|
(32,672)
|
|
(5,143)
|
|
Proceeds
from short-term investments
|
|
|
-
|
|
253,673
|
|
1,145,908
|
|
180,373
|
|
-
|
|
1,399,581
|
|
220,302
|
|
Purchase
of short-term investments
|
|
|
(1,164,888)
|
|
(254,474)
|
|
-
|
|
-
|
|
(1,229,947)
|
|
(254,474)
|
|
(40,056)
|
|
Proceeds
from disposal of property and equipment
|
|
|
8
|
|
-
|
|
-
|
|
-
|
|
8
|
|
-
|
|
-
|
|
Cash paid
for acquired subsidiaries, net of cash received
|
|
|
-
|
|
(25,778)
|
|
-
|
|
-
|
|
-
|
|
(25,778)
|
|
(4,058)
|
|
Acquisition of intangible assets
|
|
|
(144,156)
|
|
(50,420)
|
|
(51,625)
|
|
(8,126)
|
|
(185,834)
|
|
(102,045)
|
|
(16,062)
|
Net cash
(used in) provided by investing activities
|
|
|
(1,327,914)
|
|
(87,068)
|
|
1,071,680
|
|
168,689
|
|
(1,448,125)
|
|
984,612
|
|
154,983
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise
of employee stock options
|
|
|
1,025
|
|
5,844
|
|
8,483
|
|
1,335
|
|
1,025
|
|
14,327
|
|
2,255
|
|
Principal
repayments on long-term debt
|
|
|
(7,406)
|
|
(1,987)
|
|
(2,956)
|
|
(465)
|
|
(16,772)
|
|
(4,943)
|
|
(778)
|
|
Proceeds
from IPO and secondary offering, net of issuance costs
|
|
|
2,508,974
|
|
-
|
|
-
|
|
-
|
|
2,513,755
|
|
-
|
|
-
|
Net cash
(used in) provided by financing activities
|
|
|
2,502,593
|
|
3,857
|
|
5,527
|
|
870
|
|
2,498,008
|
|
9,384
|
|
1,477
|
Effect of
exchange rate changes on cash and cash equivalents
|
|
|
(22,802)
|
|
(2,477)
|
|
9,527
|
|
1,500
|
|
(38,182)
|
|
7,050
|
|
1,110
|
Net
(decrease) increase in cash and cash equivalents
|
|
|
1,146,697
|
|
(73,003)
|
|
995,571
|
|
156,709
|
|
995,139
|
|
922,568
|
|
145,218
|
Cash and
cash equivalents at the beginning of the period
|
|
|
1,659,865
|
|
2,292,538
|
|
2,219,535
|
|
349,368
|
|
1,811,423
|
|
2,292,538
|
|
360,859
|
Cash and
cash equivalents at the end of the period
|
|
|
2,806,562
|
|
2,219,535
|
|
3,215,106
|
|
506,077
|
|
2,806,562
|
|
3,215,106
|
|
506,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* The
investments in TV drama production by Tianshi were expensed as
incurred since they did not meet the requirements of capitalization
according to Accounting Standard Codification Section 926. The
investments in TV drama production were RMB6,360 and RMB7,008 in Q1
2012 and Q2 2012, respectively.
|
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$"),
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Non-GAAP Gross Profit
(Loss)
|
|
For
the Three Months Ended,
|
|
For the
Six Months Ended,
|
|
|
June 30,
|
|
March 31,
|
|
June
30,
|
|
June 30,
|
|
June
30,
|
|
June
30,
|
|
June 30,
|
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
Gross
profit (loss)
|
|
52,908
|
|
(22,569)
|
|
76,924
|
|
12,109
|
|
66,928
|
|
54,355
|
|
8,555
|
Add
back: share-based compensation
|
|
701
|
|
1,999
|
|
2,615
|
|
412
|
|
1,133
|
|
4,614
|
|
726
|
Non-GAAP gross profit (loss)
|
|
53,609
|
|
(20,570)
|
|
79,539
|
|
12,521
|
|
68,061
|
|
58,969
|
|
9,281
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2. Non-GAAP Operating
Expenses
|
|
For
the Three Months Ended,
|
|
For the
Six Months Ended,
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
Operating
expenses
|
|
80,683
|
|
143,825
|
|
158,318
|
|
24,920
|
|
140,520
|
|
302,143
|
|
47,559
|
Deduct: share-based
compensation
|
|
6,577
|
|
21,068
|
|
23,582
|
|
3,712
|
|
11,519
|
|
44,650
|
|
7,028
|
Deduct: business combination related expenses
|
|
-
|
|
17,634
|
|
7,371
|
|
1,160
|
|
-
|
|
25,005
|
|
3,936
|
Non-GAAP operating expenses
|
|
74,106
|
|
105,123
|
|
127,365
|
|
20,048
|
|
129,001
|
|
232,488
|
|
36,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. Non-GAAP Sales and Marketing
Expenses
|
|
For
the Three Months Ended,
|
|
For the
Six Months Ended,
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
Sales and
marketing expenses
|
|
52,732
|
|
66,406
|
|
80,255
|
|
12,633
|
|
89,401
|
|
146,661
|
|
23,085
|
Deduct: share-based
compensation
|
|
3,045
|
|
4,911
|
|
5,935
|
|
934
|
|
5,709
|
|
10,846
|
|
1,707
|
Non-GAAP sales and marketing
expenses
|
|
49,687
|
|
61,495
|
|
74,320
|
|
11,699
|
|
83,692
|
|
135,815
|
|
21,378
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
Non-GAAP Product Development Expenses
|
|
For
the Three Months Ended,
|
|
For the
Six Months Ended,
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
Product
development expenses
|
|
14,192
|
|
28,833
|
|
35,046
|
|
5,516
|
|
24,786
|
|
63,879
|
|
10,055
|
Deduct: share-based
compensation
|
|
1,737
|
|
5,070
|
|
6,458
|
|
1,017
|
|
2,827
|
|
11,528
|
|
1,815
|
Non-GAAP product development
expenses
|
|
12,455
|
|
23,763
|
|
28,588
|
|
4,499
|
|
21,959
|
|
52,351
|
|
8,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.
Non-GAAP General and Administrative Expenses
|
|
For
the Three Months Ended,
|
|
For the
Six Months Ended,
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
General
and administrative expenses
|
|
13,759
|
|
48,586
|
|
43,017
|
|
6,771
|
|
26,333
|
|
91,603
|
|
14,419
|
Deduct: share-based
compensation
|
|
1,795
|
|
11,087
|
|
11,189
|
|
1,761
|
|
2,983
|
|
22,276
|
|
3,506
|
Deduct: business combination related
expenses
|
|
-
|
|
17,634
|
|
7,371
|
|
1,160
|
|
-
|
|
25,005
|
|
3,936
|
Non-GAAP general and administrative
expenses
|
|
11,964
|
|
19,865
|
|
24,457
|
|
3,850
|
|
23,350
|
|
44,322
|
|
6,977
|
6. Non-GAAP (Loss) Profit from
Operations
|
|
For
the Three Months Ended,
|
|
For the
Six Months Ended,
|
|
|
June
30,
|
|
March 31,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
(Loss)
profit from operations
|
|
(27,775)
|
|
(166,394)
|
|
(81,394)
|
|
(12,811)
|
|
(73,592)
|
|
(247,788)
|
|
(39,004)
|
Add
back: share-based compensation
|
|
7,278
|
|
23,067
|
|
26,197
|
|
4,124
|
|
12,652
|
|
49,264
|
|
7,754
|
Add
back: business combination related
expenses
|
|
-
|
|
17,634
|
|
7,371
|
|
1,160
|
|
-
|
|
25,005
|
|
3,936
|
Non-GAAP (loss) profit from
operations
|
|
(20,497)
|
|
(125,693)
|
|
(47,826)
|
|
(7,527)
|
|
(60,940)
|
|
(173,519)
|
|
(27,314)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.
Non-GAAP Net (Loss) Profit
|
|
For
the Three Months Ended,
|
|
For the
Six Months Ended,
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
Net
(loss) profit
|
|
(28,100)
|
|
(156,125)
|
|
(62,848)
|
|
(9,892)
|
|
(75,016)
|
|
(218,973)
|
|
(34,469)
|
Add
back: share-based compensation
|
|
7,278
|
|
23,067
|
|
26,197
|
|
4,124
|
|
12,652
|
|
49,264
|
|
7,754
|
Add
back: business combination related expenses
|
|
-
|
|
17,634
|
|
7,371
|
|
1,160
|
|
-
|
|
25,005
|
|
3,936
|
Non-GAAP net (loss)
profit
|
|
(20,822)
|
|
(115,424)
|
|
(29,280)
|
|
(4,608)
|
|
(62,364)
|
|
(144,704)
|
|
(22,779)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8. Non-GAAP EBITDA (Loss)
Profit
|
|
For
the Three Months Ended,
|
|
For the
Six Months Ended,
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
June
30,
|
|
|
2011
|
|
2012
|
|
2012
|
|
2012
|
|
2011
|
|
2012
|
|
2012
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
Net
(loss) profit
|
|
(28,100)
|
|
(156,125)
|
|
(62,848)
|
|
(9,892)
|
|
(75,016)
|
|
(218,973)
|
|
(34,469)
|
Add
back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization (excluding amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of acquired
content )***
|
|
10,373
|
|
14,016
|
|
14,757
|
|
2,323
|
|
20,913
|
|
28,773
|
|
4,529
|
Interest income
|
|
(3,190)
|
|
(11,603)
|
|
(12,375)
|
|
(1,948)
|
|
(4,246)
|
|
(23,978)
|
|
(3,774)
|
Interest expenses
|
|
1,801
|
|
1,151
|
|
982
|
|
155
|
|
3,956
|
|
2,133
|
|
336
|
Income taxes
|
|
-
|
|
3,576
|
|
(2,391)
|
|
(376)
|
|
-
|
|
1,185
|
|
187
|
EBITDA (Loss) Profit
|
|
(19,116)
|
|
(148,985)
|
|
(61,875)
|
|
(9,738)
|
|
(54,393)
|
|
(210,860)
|
|
(33,191)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
7,278
|
|
23,067
|
|
26,197
|
|
4,124
|
|
12,652
|
|
49,264
|
|
7,754
|
Business combination related
expenses
|
|
-
|
|
17,634
|
|
7,371
|
|
1,160
|
|
-
|
|
25,005
|
|
3,936
|
Others, net
|
|
1,714
|
|
(3,393)
|
|
(4,762)
|
|
(750)
|
|
1,714
|
|
(8,155)
|
|
(1,284)
|
Non-GAAP EBITDA (Loss) Profit
|
|
(10,124)
|
|
(111,677)
|
|
(33,069)
|
|
(5,204)
|
|
(40,027)
|
|
(144,746)
|
|
(22,785)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
** 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.