BEIJING, May 15, 2013 /PRNewswire/ -- Youku Tudou Inc.
(NYSE: YOKU, and formerly Youku Inc. or "Youku"), China's leading
Internet television company ("Youku Tudou" or the "Company"), today
announced its unaudited financial results for first quarter
2013.
Basis of Presentation
On August 23, 2012, the Company
and Tudou Holdings Limited ("Tudou") announced the completion of
the merger between Youku and Tudou. Following the completion of the
merger, Tudou's financial results were consolidated into the
Company from the date of the completion of the merger.
This press release includes the Company's selected unaudited pro
forma combined financial information for the three months ended
March 31, 2012 derived from the
accompanying unaudited pro forma condensed combined statements of
operations (the "Pro Forma Statement of Operations") for the three
months ended March 31, 2012. The Pro
Forma Statement of Operations combines the historical consolidated
statements of operations of Youku and Tudou, giving effect to the
merger as if it had been completed on January 1, 2012.
The Pro Forma Statement of Operations has been derived from the
unaudited historical consolidated statement of operations of Youku
and Tudou. Certain financial statement line items included in
Tudou's historical presentation have been disaggregated or
condensed to conform to corresponding financial statement line
items included in Youku's historical presentation. These include:
business taxes, value-added tax, share based compensation expenses,
selling and general administrative expenses relating to product
development, professional licensed content, and intangible assets
related to purchased software.
Additionally, based on Youku's review with Tudou management of
Tudou's publicly disclosed summary of significant accounting
policies prior to the merger, the nature and amount of any
adjustments to the historical statements of operations to conform
its accounting policies to those of Youku's are not material.
First Quarter Highlights[1]
- Consolidated net revenues were RMB516.0
million (US$83.1 million),a
21% increase from the pro forma combined net revenues for the
corresponding period in 2012.
- Consolidated gross profit was RMB14.2
million (US$2.3 million), as
compared to the pro forma combined gross loss of RMB43.5 million (US$7.0
million) for the corresponding period in 2012. Consolidated
or pro forma combined non-GAAP gross profit or loss is herein
defined as consolidated or pro forma combined gross profit or loss
excluding share-based compensation expenses and amortization of
intangible assets from business combination in relation to user
generated content. Consolidated non-GAAP gross profit was
RMB28.2 million (US$4.5 million), as compared to the pro forma
combined non-GAAP loss of RMB16.6
million (US$2.7 million) for
the corresponding period in 2012.
- Consolidated net loss was RMB232.5
million (US$37.4 million), a
12% decrease from the pro forma combined net loss for the
corresponding period in 2012. Consolidated or pro forma combined
non-GAAP net loss is herein defined as consolidated or pro forma
combined net loss excluding share-based compensation expenses,
amortization of intangible assets from business combination and
business combination related expenses. Consolidated non-GAAP net
loss was RMB182.1 million
(US$29.3 million), a decrease of 8%
from the pro forma combined non-GAAP net loss for the corresponding
period in 2012.
- Consolidated basic and diluted loss per ADS, each representing
18 Class A ordinary shares, amounted to RMB1.42 (US$0.23)
and RMB1.42 (US$0.23), respectively.
- Consolidated cash, cash equivalents, restricted cash and
short-term investments totaled RMB3.5
billion (US$569.5 million) as
of March 31, 2013.
- Consolidated acquisition of property and equipment was
RMB27.4 million (US$4.4 million).
- Consolidated acquisition of intangible assets was RMB238.9 million (US$38.5
million).
[1]
|
The
reporting currency of the Company is Renminbi ("RMB"), but for the
convenience of the reader, the amounts presented throughout the
release are in US dollars ("US$"). Unless otherwise noted, all
conversions from RMB to US$ are made at a rate of RMB6.2108 to
US$1.00, the effective noon buying rate as of March 29, 2013 in the
City of New York for cable transfers of RMB as certified for
customs purposes by the Federal Reserve Bank of New York. No
representation is made that the RMB amounts could have been, or
could be, converted into US$ at such rate.
|
"I am pleased with our progress. We are in the final phase of
the merger integration process with Tudou and have completed the
restructuring of our sales team in the first quarter. Our
combined sales team is positively impacting demand and our
increased scale is helping us to optimize our cost structure," said
Victor Koo, Chairman and Chief
Executive Officer of Youku Tudou. "The three key video mobile
traffic metrics all recorded exciting growth in the first quarter
and now we have over 100 million active monthly users, over 170
million daily video views and over 70 minutes average daily user
time spent. We are emerging as the leading multi-screen online
video platform in China as a
result of this rapid rise in mobile traffic. Youku Tudou
is developing product, content, marketing solutions and paid
services across different screens to capitalize on the growing
popularity of multi-screen video viewing behavior."
Dele Liu, President of Youku Tudou, added, "We recently adjusted
our organizational structure to encourage unity, flexibility, and
innovation and to cement our leadership in the evolving Internet
space. Under the new group structure, we can further differentiate
the brands, content and products of our Youku and Tudou platforms
to elevate the entire group's media value. Our content strategy is
to decrease our dependence on premium licensed content while
strengthening in-house production and user-generated content. We
will take a balanced approach and continue to deliver high-impact
self-produced content that strengthens brand identity for Youku and
Tudou, enhances social media value and supports our content
marketing solutions."
First Quarter 2013 Results
Consolidated net revenues were RMB516.0 million (US$83.1
million) in the first quarter of 2013, a 21% increase from
the pro forma combined net revenues for the corresponding period in
2012 and meeting the consolidated net revenues guidance previously
announced by the Company. Consolidated advertising net revenues
were RMB429.1 million (US$69.1 million), meeting the consolidated
advertising net revenues guidance previously announced by the
Company. The growth was primarily attributable to the increased use
by brand advertisers of our advertising services as evidenced by an
increase in the number of advertisers and the rising average spend
per advertiser.
Consolidated bandwidth costs as a component of
consolidated cost of revenues were RMB161.0
million (US$25.9 million) in
the first quarter of 2013, representing 31% of the consolidated net
revenues, as compared to the pro forma combined bandwidth costs of
RMB184.7 million (US$29.7 million), representing 43% of the pro
forma combined net revenues for the corresponding period in
2012.
Consolidated content costs as a component of consolidated
cost of revenues were RMB269.3
million (US$43.4 million)
in the first quarter of 2013, representing 52% of the consolidated
net revenues, as compared to the pro forma combined content costs
representing 52% of the pro forma combined net revenues for the
corresponding period in 2012. Consolidated non-GAAP content
costs, which is herein defined as consolidated content costs
excluding share-based compensation expenses and amortization of
intangible assets from business combination in relation to user
generated content, were RMB255.3
million (US$41.1 million) in
the first quarter of 2013, representing 49% of consolidated net
revenues, as compared to the pro forma combined non-GAAP content
costs of RMB195.1 (US$31.4 million), representing 46% of the pro
forma combined net revenues for the corresponding period in 2012.
Consolidated in-house content production cost and investment in TV
serial dramas production was RMB46.6
million (US$7.5 million) in
the first quarter of 2013, as compared to RMB40.9 million (US$6.6
million) of the pro forma combined in-house content
production cost for the corresponding period in 2012.
Consolidated gross profit was RMB14.2 million (US$2.3
million)in the first quarter of 2013, as compared to the pro
forma combined gross loss of RMB43.5
million (US$7.0 million) for
the corresponding period in 2012. Consolidated non-GAAP
gross profit was RMB28.2 million
(US$4.5 million) in the first quarter
of 2013, representing 5% of consolidated net revenues, as compared
to the pro forma combined non-GAAP gross loss of RMB16.6 million (US$2.7
million), representing negative 4% of the pro forma combined
net revenues for the corresponding period in 2012.
Consolidated operating expenses were RMB267.8 million (US$43.1
million) in the first quarter of 2013, as compared to
RMB230.5 million (US$37.1 million) of the pro forma combined
operating expenses for the corresponding period in 2012.
Consolidated non-GAAP operating expenses, which is herein
defined as consolidated operating expenses excluding share-based
compensation expenses, business combination related expenses and
amortization of intangible assets from business combination in
relation to customer relationship, technology and non-compete
provisions, were RMB231.4 million
(US$37.3 million) in the first
quarter of 2013, an increase of 22% compared to RMB189.1 million (US$30.4
million) of the pro forma combined non-GAAP operating
expenses for the corresponding period in 2012. Detailed discussion
of each component of consolidated operating expenses is as
follows:
Consolidated sales and marketing expenses were
RMB127.6 million (US$20.5 million) in the first quarter of 2013, as
compared to RMB110.7 million
(US$17.8 million) of the pro forma
combined sales and marketing expenses for the corresponding period
in 2012. Consolidated non-GAAP sales and marketing expenses,
which is herein defined as consolidated sales and marketing
expenses excluding share-based compensation expenses and
amortization of intangible assets from business combination in
relation to customer relationship, were RMB115.5 million (US$18.6
million) in the first quarter of 2013, an increase of 10%
compared to RMB104.5 million
(US$16.8 million) of the pro forma
combined non-GAAP sales and marketing expenses for the
corresponding period in 2012. This increase was primarily due to
higher commission expenses paid to our sales force in line with our
revenue growth.
Consolidated product development expenses were
RMB56.8 million (US$9.2 million) in the first quarter of 2013, as
compared to RMB48.1 million
(US$7.7 million) of the pro forma
combined product development expenses for the corresponding period
in 2012. Consolidated non-GAAP product development expenses,
which is herein defined as consolidated product development
expenses excluding share-based compensation expenses and
amortization of intangible assets from business combination in
relation to technology, were RMB48.5
million (US$7.8 million) in
the first quarter of 2013, an increase of 11% compared to
RMB43.7 million (US$7.0 million) of the pro forma combined
non-GAAP product development expenses for the corresponding period
in 2012. This increase was primarily due to higher personnel
related expenses for our product development in mobile, search,
social and paid-services.
Consolidated general and administrative expenses were
RMB83.4 million (US$13.4 million) in the first quarter of 2013, as
compared to RMB71.8 million
(US$11.6 million) of the pro forma
combined general and administrative expenses for the corresponding
period in 2012. Consolidated non-GAAP general and administrative
expenses, which is herein defined as consolidated general and
administrative expenses excluding share-based compensation
expenses, business combination related expenses and amortization of
intangible assets from business combination in relation to
non-compete provisions, were RMB67.5
million (US$10.9 million) in
the first quarter of 2013, an increase of 65% compared to
RMB41.0 million (US$6.6 million) of the pro forma combined
non-GAAP general and administrative expenses for the corresponding
period in 2012. This increase was primarily due to additional
rental and depreciation expenses relating to the relocation of our
offices due to the merger.
Consolidated net loss was RMB232.5
million (US$37.4 million) in
the first quarter of 2013, a decrease of 12% compared to
RMB265.5 million (US$42.7 million) of the pro forma combined net
loss for the corresponding period in 2012. Consolidated non-GAAP
net loss was RMB182.1 million
(US$29.3 million) in the first
quarter of 2013, a decrease of 8% compared to RMB197.2 million (US$31.8
million) of the pro forma combined non-GAAP net loss for the
corresponding period in 2012.
Consolidated non-GAAP adjusted EBITDA loss, which is
herein defined as consolidated or pro forma combined net loss
before income taxes, interest expenses, interest income,
depreciation and amortization (excluding amortization of acquired
content), further adjusted for share-based compensation expenses,
amortization of intangible assets from business combination,
business combination related expenses and other non-operating
items, was RMB176.4 million
(US$28.4 million) in the first
quarter of 2013, a decrease of 3% compared to RMB182.1 million (US$29.3
million) of the pro forma combined non-GAAP adjusted EBITDA
loss for the corresponding period in 2012.
Business Outlook
For the second quarter of 2013, the Company expects consolidated
net revenues will be between RMB720 million
and RMB770 million, with consolidated advertising net
revenues contributing between RMB700 million
and RMB740 million. This forecast reflects the Company's
current and preliminary view, which is subject to change.
Conference Call Information
Youku Tudou's management will host an earnings conference call
at 9:00 p.m. U.S. Eastern Time on
May 15, 2013 (9:00 a.m. Beijing/Hong Kong Time on May 16, 2013).
Interested parties may participate in the conference call by
dialing one of the following numbers below and entering passcode
Youku# (i.e., 96858#) starting 10-15 minutes prior to the beginning
of the call.
US Toll Free Dial In: +1-866-519-4004
International Dial In: +65-6723-9381
Mainland China Dial In:
+86-400-620-8038 / +86-800-819-0121
Hong Kong Dial In: +852-2475-0994
A replay of the call will be available by dialing
+1-855-452-5696 and entering passcode 70542361#. The replay will be
available through May 23, 2013.
This call will be webcast live and the replay will be available
for 12 months. Both will be available on the Investor Relations
section of Youku Tudou's corporate website at
http://ir.youku.com.
About Youku Tudou Inc.
Youku Tudou Inc. (NYSE: YOKU) is China's leading Internet
television company. Its Youku and Tudou Internet television
platforms enable users to search, view and share high-quality video
content quickly and easily across multiple devices. Its Youku brand
and Tudou brand are among the most recognized online video brands
in China. Youku Tudou's American
depositary shares, each representing 18 of Youku Tudou's Class A
ordinary shares, are traded on the NYSE under the symbol
"YOKU."
Safe Harbor Statement
This announcement contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as
"will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates" and similar statements. Among other things,
the business outlook and quotations from management in this
announcement, as well as Youku Tudou's strategic and operational
plans, contain forward-looking statements. Youku may also make
written or oral forward-looking statements in its filings with the
U.S. Securities and Exchange Commission ("SEC"), in its annual
report to shareholders, in press releases and other written
materials and in oral statements made by its officers, directors or
employees to third parties. Statements that are not historical
facts, including statements about Youku Tudou's beliefs and
expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties. A number of
factors could cause actual results to differ materially from those
contained in any forward-looking statement, including but not
limited to the following: our goals and strategies; our future
business development, financial condition and results of
operations; the expected growth of the online video market in
China; our expectations regarding
demand for and market acceptance of our services; our expectations
regarding the retention and strengthening of our relationships with
key advertisers and customers; our plans to enhance user
experience, infrastructure and service offerings; competition in
our industry in China; and
relevant government policies and regulations relating to our
industry. Further information regarding these and other risks is
included in our annual report on Form 20-F and other documents
filed with the SEC. All information provided in this press release
and in the attachments is as of the date of this press release, and
Youku does not undertake any obligation to update any
forward-looking statement, except as required under applicable
law.
About Non-GAAP Financial Measures
To supplement Youku Tudou's consolidated financial results
presented in accordance with United States Generally Accepted
Accounting Principles ("GAAP"), Youku Tudou uses the following
measures defined as non-GAAP financial measures by the SEC in
evaluating its business: consolidated non-GAAP content costs,
consolidated non-GAAP gross profit or loss, consolidated non-GAAP
operating expenses, consolidated non-GAAP sales and marketing
expense, consolidated non-GAAP product development expenses,
consolidated non-GAAP general and administrative expenses,
consolidated non- GAAP profit or loss from operations, consolidated
non-GAAP net profit or loss and consolidated non-GAAP adjusted
EBITDA profit or loss. We define consolidated non-GAAP content
costs as consolidated content costs excluding share-based
compensation expenses and amortization of intangible assets from
business combination in relation to user generated content. We
define consolidated non-GAAP gross profit or loss as the respective
nearest comparable GAAP financial measure to exclude share-based
compensation expenses and amortization of intangible assets from
business combination in relation to user generated content. We
define consolidated non-GAAP operating expenses as operating
expenses excluding share-based compensation expenses, business
combination related expenses and amortization of intangible assets
from business combination in relation to customer relationship,
technology and non-compete provisions. We define consolidated
non-GAAP sales and marketing expenses as consolidated sales and
marketing expenses excluding share-based compensation expenses and
amortization of intangible assets from business combination in
relation to customer relationship. We define consolidated non-GAAP
product development expense as consolidated product development
expenses excluding share-based compensation expenses and
amortization of intangible assets from business combination in
relation to technology. We define consolidated non-GAAP general and
administrative expenses as consolidated general and administrative
expenses excluding share-based compensation expenses, business
combination related expenses and amortization of intangible assets
from business combination in relation to non-compete provisions. We
define consolidated non-GAAP profit or loss from operations as
consolidated profit or loss from operations excluding share-based
compensation expenses, amortization of intangible assets from
business combination and business combination related expenses. We
define consolidated non-GAAP net profit or loss as consolidated net
loss excluding share-based compensation expenses, amortization of
intangible assets from business combination and business
combination related expenses. We define consolidated non-GAAP
adjusted EBITDA profit or loss as consolidated net profit or loss
before income taxes, interest expenses, interest income,
depreciation and amortization (excluding amortization of acquired
content), further adjusted for share-based compensation expenses,
amortization of intangible assets from business combination,
business combination related expenses and other non-operating
items.
We present non-GAAP financial measures because they are used by
our management to evaluate our operating performance. We also
believe that these non-GAAP financial measures provide useful
information to investors and others in understanding and evaluating
our 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 Tudou's business for
the foreseeable future. In addition, in this press release we also
included unaudited pro forma combined non-GAAP measures for the
three months ended March 31, 2012,
after giving effect to the merger between Youku and Tudou as if the
merger had been completed on January 1,
2012 to provide comparative reference of the corresponding
consolidated non-GAAP measures of the Company for the three months
ended March 31, 2012. The pro forma
data is presented for informational purposes only and does not
purport to be indicative of the results of future operations, or of
the results that would have occurred had the merger taken place at
the beginning of 2012.
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:
Ryan Cheung
Corporate Finance Director
Youku Tudou Inc.
Tel: (+8610) 5885-1881 x6090
Email: ryan.cheung@youku.com
YOUKU TUDOU INC.
|
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
(Amounts
in thousands, except for number of shares)
|
|
|
For the
Three Months
Ended
|
|
|
12/31/2012
|
|
3/31/2013
|
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
ASSETS
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
|
1,655,857
|
|
1,264,090
|
|
203,531
|
|
Restricted cash
|
|
|
9,003
|
|
9,013
|
|
1,451
|
|
Short-term investments
|
|
|
2,110,073
|
|
2,264,195
|
|
364,558
|
|
Accounts receivable, net
|
|
|
932,796
|
|
964,362
|
|
155,272
|
|
Intangible assets, net
|
|
|
19,607
|
|
33,190
|
|
5,344
|
|
Deferred tax assets
|
|
|
10,470
|
|
10,470
|
|
1,686
|
|
Prepayments and other assets
|
|
|
64,909
|
|
34,608
|
|
5,572
|
Total
current assets
|
|
|
4,802,715
|
|
4,579,928
|
|
737,414
|
|
|
|
|
|
|
|
|
|
Non-current assets:
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
200,681
|
|
205,385
|
|
33,069
|
|
Intangible assets, net
|
|
|
1,304,923
|
|
1,318,822
|
|
212,343
|
|
Capitalized content production
costs
|
|
|
-
|
|
546
|
|
88
|
|
Prepayments and other assets
|
|
|
229,185
|
|
318,877
|
|
51,342
|
|
Goodwill
|
|
|
4,255,570
|
|
4,255,570
|
|
685,189
|
Total non-current
assets
|
|
|
5,990,359
|
|
6,099,200
|
|
982,031
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
|
10,793,074
|
|
10,679,128
|
|
1,719,445
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
181,878
|
|
205,556
|
|
33,097
|
|
Advances from customers
|
|
|
21,603
|
|
60,060
|
|
9,670
|
|
Accrued expenses and other
liabilities
|
|
|
981,353
|
|
993,291
|
|
159,932
|
|
Current portion of long-term
debt
|
|
|
7,441
|
|
4,393
|
|
707
|
Total
current liabilities
|
|
|
1,192,275
|
|
1,263,300
|
|
203,406
|
|
|
|
|
|
|
|
|
|
Non-current liabilities:
|
|
|
|
|
|
|
|
|
Deferred tax liability
|
|
|
224,374
|
|
224,374
|
|
36,126
|
|
Other liabilities
|
|
|
19,552
|
|
4,212
|
|
678
|
Total
non-current liabilities
|
|
|
243,926
|
|
228,586
|
|
36,804
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
1,436,201
|
|
1,491,886
|
|
240,210
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
|
|
|
|
Class A
Ordinary Shares (US$0.00001 par value, 9,340,238,793 authorized,
2,286,643,502 and 2,308,183,759 issued and outstanding as of
December 31, 2012 and March 31, 2013, respectively)
|
|
|
149
|
|
151
|
|
24
|
|
Class B
Ordinary Shares (US$0.00001 par value, 659,761,207 authorized,
659,561,893 and 659,561,893 issued and outstanding as of December
31, 2012 and March 31, 2013, respectively)
|
|
|
49
|
|
49
|
|
8
|
|
Additional paid-in capital
|
|
|
10,768,204
|
|
10,837,011
|
|
1,744,866
|
|
Statutory reserves
|
|
|
1,500
|
|
1,500
|
|
242
|
|
Accumulated deficit
|
|
|
(1,297,147)
|
|
(1,529,621)
|
|
(246,286)
|
|
Accumulated other comprehensive
loss
|
|
|
(115,882)
|
|
(121,848)
|
|
(19,619)
|
Total
shareholders' equity
|
|
|
9,356,873
|
|
9,187,242
|
|
1,479,235
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
10,793,074
|
|
10,679,128
|
|
1,719,445
|
YOUKU
TUDOU INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
|
For the
Three Months Ended
|
(Amounts
in thousands, except for number of shares and ADS and per
share and per ADS data)
|
|
|
|
|
|
|
|
Pro
Forma
March 31,
2012
|
|
December
31, 2012
|
|
March 31,
2013
|
|
March 31,
2013
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
425,441
|
|
635,831
|
|
515,997
|
|
83,080
|
|
|
|
|
|
|
|
|
|
Cost of
revenues (Note 1)
|
|
(468,898)
|
|
(519,544)
|
|
(501,766)
|
|
(80,789)
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
(43,457)
|
|
116,287
|
|
14,231
|
|
2,291
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Product
development
|
|
(48,064)
|
|
(64,099)
|
|
(56,828)
|
|
(9,150)
|
Sales and
marketing
|
|
(110,702)
|
|
(107,787)
|
|
(127,600)
|
|
(20,545)
|
General and
administrative
|
|
(71,780)
|
|
(73,084)
|
|
(83,350)
|
|
(13,420)
|
Total
operating expenses
|
|
(230,546)
|
|
(244,970)
|
|
(267,778)
|
|
(43,115)
|
|
|
|
|
|
|
|
|
|
Loss
from operations
|
|
(274,003)
|
|
(128,683)
|
|
(253,547)
|
|
(40,824)
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
12,242
|
|
9,988
|
|
7,179
|
|
1,156
|
Interest
expenses
|
|
(2,669)
|
|
(830)
|
|
(387)
|
|
(62)
|
Other,
net
|
|
2,499
|
|
1,043
|
|
14,281
|
|
2,299
|
Total
other income, net
|
|
12,072
|
|
10,201
|
|
21,073
|
|
3,393
|
|
|
|
|
|
|
|
|
|
Loss
before income taxes
|
|
(261,931)
|
|
(118,482)
|
|
(232,474)
|
|
(37,431)
|
Income
taxes
|
|
(3,576)
|
|
4,912
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(265,507)
|
|
(113,570)
|
|
(232,474)
|
|
(37,431)
|
|
|
|
|
|
|
|
|
|
Net loss
per share, basic and diluted
|
|
(0.09)
|
|
(0.04)
|
|
(0.08)
|
|
(0.01)
|
Net loss
per ADS (each ADS represents 18 class A ordinary shares),
basic and
diluted
|
|
(1.65)
|
|
(0.70)
|
|
(1.42)
|
|
(0.23)
|
Shares
used in computation, basic and diluted
|
|
2,900,796,659
|
|
2,940,407,144
|
|
2,953,267,696
|
|
2,953,267,696
|
ADSs used
in computation, basic and diluted
|
|
161,155,369
|
|
163,355,952
|
|
164,070,427
|
|
164,070,427
|
The
accompanying notes are an integral part of the press
release.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 1.
Cost of Revenues
|
|
For
the Three Months Ended
|
|
|
Pro
Forma
|
|
|
|
|
|
|
March 31,
2012
|
|
December
31, 2012
|
|
March 31,
2013
|
|
March 31,
2013
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
(Amounts
in thousands)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Cost
of revenues:
|
|
|
|
|
|
|
|
|
Value added, business taxes and
surcharges
|
|
42,835
|
|
59,337
|
|
48,925
|
|
7,877
|
Bandwidth costs
|
|
184,651
|
|
162,959
|
|
161,045
|
|
25,930
|
Depreciation of servers and other
equipment
|
|
19,502
|
|
26,303
|
|
22,470
|
|
3,618
|
Content costs
|
|
221,910
|
|
270,945
|
|
269,326
|
|
43,364
|
Total Cost of Revenues
|
|
468,898
|
|
519,544
|
|
501,766
|
|
80,789
|
YOUKU TUDOU INC.
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
For
the Three Months Ended
|
(Amounts
in thousands)
|
|
|
|
|
|
|
|
|
March 31,
2012
|
|
December
31, 2012
|
|
March 31,
2013
|
|
March 31,
2013
|
|
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Cash
flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
|
(156,125)
|
|
(113,570)
|
|
(232,474)
|
|
(37,431)
|
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
|
14,001
|
|
31,249
|
|
26,795
|
|
4,314
|
|
Bad debt
expense
|
|
|
|
658
|
|
(1,828)
|
|
7,076
|
|
1,139
|
|
Amortization of intangible assets and capitalized
content production costs
|
|
|
|
91,183
|
|
135,508
|
|
138,991
|
|
22,379
|
|
Amortization of long-term debt discounts
|
|
|
|
616
|
|
336
|
|
221
|
|
36
|
|
Gain on
disposal of property and equipment
|
|
|
|
-
|
|
-
|
|
695
|
|
112
|
|
Foreign
exchange loss
|
|
|
|
189
|
|
826
|
|
325
|
|
52
|
|
Share-based compensation
|
|
|
|
23,067
|
|
38,779
|
|
37,850
|
|
6,095
|
|
Gain from
remeasurement of previously held investment in acquired
subsidiary
|
|
|
|
(3,344)
|
|
-
|
|
-
|
|
-
|
|
Deferred
income tax benefits
|
|
|
|
-
|
|
(7,675)
|
|
-
|
|
-
|
|
Change in
operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Restricted cash
|
|
|
|
-
|
|
(9,003)
|
|
(10)
|
|
(2)
|
|
Accounts
receivable
|
|
|
|
(2,048)
|
|
73,149
|
|
(33,644)
|
|
(5,417)
|
|
Prepayments and other assets
|
|
|
|
11,165
|
|
(22,427)
|
|
1,347
|
|
217
|
|
Capitalized content production costs
|
|
|
|
(5,025)
|
|
5,761
|
|
15,961
|
|
2,570
|
|
Accounts
payable
|
|
|
|
13
|
|
(22,506)
|
|
(9,864)
|
|
(1,588)
|
|
Advances
from customers
|
|
|
|
28,986
|
|
(10,812)
|
|
38,457
|
|
6,192
|
|
Accrued
expenses and other liabilities
|
|
|
|
9,349
|
|
60,886
|
|
12,468
|
|
2,008
|
Net cash
(used in) provided by operating activities
|
|
|
|
12,685
|
|
158,673
|
|
4,194
|
|
676
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of property and equipment
|
|
|
|
(10,069)
|
|
(24,364)
|
|
(27,364)
|
|
(4,406)
|
|
Proceeds
received from maturity of short-term investments
|
|
|
|
253,673
|
|
1,170,519
|
|
36,703
|
|
5,910
|
|
Short-term
investments placed with financial institutions
|
|
|
|
(254,474)
|
|
(2,113,464)
|
|
(185,590)
|
|
(29,882)
|
|
Proceeds
from disposal of property and equipment
|
|
|
|
-
|
|
1
|
|
-
|
|
-
|
|
Cash
acquired, net of cash paid for acquired subsidiaries
|
|
|
|
(25,778)
|
|
-
|
|
-
|
|
-
|
|
Acquisition of intangible assets from related
party
|
|
|
|
-
|
|
7,200
|
|
-
|
|
-
|
|
Acquisition of intangible assets
|
|
|
|
(50,420)
|
|
(118,256)
|
|
(238,921)
|
|
(38,469)
|
Net cash
(used in) provided by investing activities
|
|
|
|
(87,068)
|
|
(1,078,364)
|
|
(415,172)
|
|
(66,847)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Exercise
of employee stock options
|
|
|
|
5,844
|
|
3,561
|
|
28,740
|
|
4,627
|
|
Proceeds
from restricted cash
|
|
|
|
-
|
|
25,364
|
|
-
|
|
-
|
|
Principal
repayments on long-term debt
|
|
|
|
(1,987)
|
|
(23,685)
|
|
(3,236)
|
|
(521)
|
Net cash
(used in) provided by financing activities
|
|
|
|
3,857
|
|
5,240
|
|
25,504
|
|
4,106
|
Effect of
exchange rate changes on cash and cash equivalents
|
|
|
|
(2,477)
|
|
(21,474)
|
|
(6,293)
|
|
(1,013)
|
Net
(decrease) increase in cash and cash equivalents
|
|
|
|
(73,003)
|
|
(935,925)
|
|
(391,767)
|
|
(63,078)
|
Cash and
cash equivalents at the beginning of the period
|
|
|
|
2,292,538
|
|
2,591,782
|
|
1,655,857
|
|
266,609
|
Cash and
cash equivalents at the end of the period
|
|
|
|
2,219,535
|
|
1,655,857
|
|
1,264,090
|
|
203,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations of Non-GAAP results of operations
measures to the nearest comparable GAAP financial measures
(1)(Amounts in thousands of Renminbi ("RMB") and U.S.
dollars ("US$"), unaudited)
|
|
|
|
|
|
|
|
|
|
1. Non-GAAP Content Cost
|
|
For
the Three Months Ended
|
|
|
Pro
Forma
|
|
|
|
|
|
|
March 31,
2012
|
|
December
31, 2012
|
|
March 31,
2013
|
|
March 31,
2013
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Content
cost
|
|
221,910
|
|
270,945
|
|
269,326
|
|
43,364
|
Deduct: share-based
compensation
|
|
3,344
|
|
4,536
|
|
5,663
|
|
912
|
Deduct: amortization of intangible assets from
business combination
|
|
23,494
|
|
8,235
|
|
8,331
|
|
1,341
|
Non-GAAP content cost
|
|
195,072
|
|
258,174
|
|
255,332
|
|
41,111
|
|
|
|
|
|
|
|
|
|
2.
Non-GAAP Gross Profit
|
|
For
the Three Months Ended
|
|
|
Pro
Forma
|
|
|
|
|
|
|
March 31,
2012
|
|
December
31, 2012
|
|
March 31,
2013
|
|
March 31,
2013
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Gross
profit
|
|
(43,457)
|
|
116,287
|
|
14,231
|
|
2,291
|
Add
back: share-based compensation
|
|
3,344
|
|
4,536
|
|
5,663
|
|
912
|
Add
back: amortization of intangible assets from business
combination
|
|
23,494
|
|
8,235
|
|
8,331
|
|
1,341
|
Non-GAAP gross profit
|
|
(16,619)
|
|
129,058
|
|
28,225
|
|
4,544
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. Non-GAAP Operating
Expenses
|
|
For
the Three Months Ended
|
|
|
Pro
Forma
|
|
|
|
|
|
|
March 31,
2012
|
|
December
31, 2012
|
|
March 31,
2013
|
|
March 31,
2013
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Operating
expenses
|
|
230,546
|
|
244,970
|
|
267,778
|
|
43,115
|
Deduct: share-based
compensation
|
|
19,623
|
|
34,243
|
|
32,187
|
|
5,183
|
Deduct: business combination related
expenses
|
|
17,634
|
|
127
|
|
-
|
|
-
|
Deduct: amortization of intangible assets from
business combination
|
|
4,176
|
|
4,176
|
|
4,155
|
|
669
|
Non-GAAP operating expenses
|
|
189,113
|
|
206,424
|
|
231,436
|
|
37,263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.
Non-GAAP Sales and Marketing Expenses
|
|
For
the Three Months Ended
|
|
|
Pro
Forma
|
|
|
|
|
|
|
March 31,
2012
|
|
December
31, 2012
|
|
March 31,
2013
|
|
March 31,
2013
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Sales and
marketing expenses
|
|
110,702
|
|
107,787
|
|
127,600
|
|
20,545
|
Deduct: share-based
compensation
|
|
4,117
|
|
10,606
|
|
10,061
|
|
1,620
|
Deduct: amortization of intangible assets from
business combination
|
|
2,087
|
|
2,087
|
|
2,077
|
|
334
|
Non-GAAP sales and marketing
expenses
|
|
104,498
|
|
95,094
|
|
115,462
|
|
18,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.
Non-GAAP Product Development Expenses
|
|
For
the Three Months Ended
|
|
|
Pro
Forma
|
|
|
|
|
|
|
March 31,
2012
|
|
December
31, 2012
|
|
March 31,
2013
|
|
March 31,
2013
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Product
development expenses
|
|
48,064
|
|
64,099
|
|
56,828
|
|
9,150
|
Deduct: share-based
compensation
|
|
3,006
|
|
8,408
|
|
6,967
|
|
1,122
|
Deduct: amortization of intangible assets from
business combination
|
|
1,402
|
|
1,402
|
|
1,395
|
|
225
|
Non-GAAP product development
expenses
|
|
43,656
|
|
54,289
|
|
48,466
|
|
7,803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.
Non-GAAP General and Administrative Expenses
|
|
For
the Three Months Ended
|
|
|
Pro
Forma
|
|
|
|
|
|
|
March 31,
2012
|
|
December
31, 2012
|
|
March 31,
2013
|
|
March 31,
2013
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
General
and administrative expenses
|
|
71,780
|
|
73,084
|
|
83,350
|
|
13,420
|
Deduct: share-based
compensation
|
|
12,500
|
|
15,229
|
|
15,159
|
|
2,441
|
Deduct: business combination related
expenses
|
|
17,634
|
|
127
|
|
-
|
|
-
|
Deduct: amortization of intangible assets from
business combination
|
|
687
|
|
687
|
|
683
|
|
110
|
Non-GAAP general and administrative
expenses
|
|
40,959
|
|
57,041
|
|
67,508
|
|
10,869
|
|
|
|
|
|
|
|
|
|
7.
Non-GAAP Loss from Operations
|
|
For
the Three Months Ended
|
|
|
Pro
Forma
|
|
|
|
|
|
|
March 31,
2012
|
|
December
31, 2012
|
|
March 31,
2013
|
|
March 31,
2013
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Loss from
operations
|
|
(274,003)
|
|
(128,683)
|
|
(253,547)
|
|
(40,824)
|
Add
back: share-based compensation
|
|
22,967
|
|
38,779
|
|
37,850
|
|
6,095
|
Add
back: business combination related expenses
|
|
17,634
|
|
127
|
|
-
|
|
-
|
Add
back: amortization of intangible assets from business
combination
|
|
27,670
|
|
12,411
|
|
12,486
|
|
2,010
|
Non-GAAP loss from operations
|
|
(205,732)
|
|
(77,366)
|
|
(203,211)
|
|
(32,719)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.
Non-GAAP Net Loss
|
|
For
the Three Months Ended
|
|
|
Pro
Forma
|
|
|
|
|
|
|
March 31,
2012
|
|
December
31, 2012
|
|
March 31,
2013
|
|
March 31,
2013
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Net
loss
|
|
(265,507)
|
|
(113,570)
|
|
(232,474)
|
|
(37,431)
|
Add
back: share-based compensation
|
|
22,967
|
|
38,779
|
|
37,850
|
|
6,095
|
Add
back: business combination related expenses
|
|
17,634
|
|
127
|
|
-
|
|
-
|
Add
back: amortization of intangible assets from business
combination
|
|
27,670
|
|
12,411
|
|
12,486
|
|
2,010
|
Non-GAAP net loss
|
|
(197,236)
|
|
(62,253)
|
|
(182,138)
|
|
(29,326)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9. Non-GAAP EBITDA Loss
|
|
For
the Three Months Ended
|
|
|
Pro
Forma
|
|
|
|
|
|
|
March 31,
2012
|
|
December
31, 2012
|
|
March 31,
2013
|
|
March 31,
2013
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Net
loss
|
|
(265,507)
|
|
(113,570)
|
|
(232,474)
|
|
(37,431)
|
Add
back:
|
|
|
|
|
|
|
|
|
Depreciation and amortization (excluding
amortization
|
|
|
|
|
|
|
|
|
of acquired content )
(2)
|
|
23,653
|
|
31,263
|
|
26,810
|
|
4,317
|
Interest income
|
|
(12,242)
|
|
(9,988)
|
|
(7,179)
|
|
(1,156)
|
Interest expenses
|
|
2,669
|
|
830
|
|
387
|
|
62
|
Income taxes
|
|
3,576
|
|
(4,912)
|
|
-
|
|
-
|
EBITDA loss
|
|
(247,851)
|
|
(96,377)
|
|
(212,456)
|
|
(34,208)
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
22,967
|
|
38,779
|
|
37,850
|
|
6,095
|
Business combination related
expenses
|
|
17,634
|
|
127
|
|
-
|
|
-
|
Amortization of intangible assets from business
combination
|
|
27,670
|
|
12,411
|
|
12,486
|
|
2,010
|
Others, net
|
|
(2,499)
|
|
(1,043)
|
|
(14,281)
|
|
(2,299)
|
Non-GAAP EBITDA loss
|
|
(182,079)
|
|
(46,103)
|
|
(176,401)
|
|
(28,402)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For more information on
the Non-GAAP financial measures, please see the section captioned
"About Non-GAAP Financial Measures" in this earnings
release.
|
(2) The amortization expense was
related to an advertising license acquired in April 2010. The
amortization of acquired content was not treated as a Non-GAAP
adjustment.
|
SOURCE Youku Tudou Inc.