BEIJING, May 22, 2014 /PRNewswire/ -- Youku Tudou Inc.
(NYSE: YOKU), China's leading Internet television company ("Youku
Tudou" or the "Company"), today announced its unaudited financial
results for first quarter 2014.
First Quarter 2014
Highlights[1]
- Net revenues were RMB700.4
million (US$112.7 million),a
36% increase from the corresponding period in 2013.
- Gross profit was RMB85.6 million
(US$13.8 million), a 501% increase
from the corresponding period in 2013. Non-GAAP[2] gross profit was
RMB100.3 million (US$16.1 million) in the first quarter of 2014, an
increase of 255% from the corresponding period in
2013.
- Net loss was RMB224.7 million
(US$36.1 million), a 3% decrease from
the corresponding period in 2013. Non-GAAP net loss was
RMB148.3 million (US$23.8 million) in the first quarter of 2014, a
19% decrease from the corresponding period in 2013.
- Basic and diluted loss per ADS, each representing 18 Class A
ordinary shares of the Company, for the first quarter of 2014
amounted to RMB1.34 (US$0.22) and RMB1.34 (US$0.22),
respectively. Non-GAAP basic and diluted loss per ADS for the first
quarter of 2014 amounted to RMB0.88
(US$0.14) and RMB0.88 (US$0.14),
respectively.
- Cash, cash equivalents, restricted cash and short-term
investments totaled RMB3.3 billion
(US$525.4 million) as of March 31, 2014.
- Acquisition of property and equipment for the first quarter of
2014 was RMB28.2 million
(US$4.5 million).
- Acquisition of intangible assets for the first quarter of 2014
was RMB165.9 million (US$26.7 million).
"Mobile has already become the #1 screen for Youku Tudou. We are
the undisputed leader in all of the important mobile video traffic
metrics with mobile daily video views reaching 400 million. Our
continued investment in product and content development has enabled
us to diversify our revenue mix, with mobile monetization
surpassing 30% of total revenue to date," said Victor Koo, Chairman and Chief Executive Officer
of Youku Tudou. "Online video is a key growth area for the Internet
industry and we plan on further transforming Youku Tudou's business
model. The transformation requires us to make additional investment
in the areas of multi-screen development, diversified revenue
models and content ecosystem. The strategic investment from Alibaba
will boost our balance sheet and enable us to accelerate our
expansion in new business opportunities."
Dele Liu, President of Youku Tudou, added, "Our growing content
ecosystem represents a tremendous opportunity for Youku Tudou. We
will continue to build up our content portfolio by strengthening
original, partner generated and user generated content. We will
also continue to invest in human resources to improve our content
creation capabilities and to build out our consumer businesses. We
are well-positioned to realize the full potential of the online
video ecosystem and more investment will see us become an immersive
culture entertainment platform."
First Quarter 2014 Results
Net revenues were RMB700.4
million (US$112.7 million) in
the first quarter of 2014, a 36% increase from the corresponding
period in 2013 and meeting net revenues guidance previously
announced by the Company. Advertising net revenues were
RMB623.3 million (US$100.3 million), meeting the 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.
Bandwidth costs as a component of cost of revenues were
RMB201.9 million (US$32.5 million)in the first quarter of 2014,
representing 29% of net revenues, as compared to 31% of net
revenues for the corresponding period in 2013.
Content costs as a component of cost of revenues were
RMB325.7 million (US$52.4 million) in the first quarter of
2014, representing 46% of net revenues. Non-GAAP content
costs were RMB310.9 million
(US$50.0 million) in the first
quarter of 2014, representing 44% of net revenues, as compared to
49% of net revenues for the corresponding period in 2013.
Gross profit was RMB85.6
million (US$13.8 million)in
the first quarter of 2014, an increase of 501% from the
corresponding period in 2013. Non-GAAP gross profit was
RMB100.3 million (US$16.1 million) in the first quarter of 2014, an
increase of 255% from the corresponding period in 2013 due to
strong operating leverage.
Operating expenses were RMB314.1
million (US$50.5 million) in
the first quarter of 2014, as compared to RMB267.8 million (US$43.1
million) for the corresponding period in 2013. Non-GAAP
operating expenses were RMB252.3
million (US$40.6 million) in
the first quarter of 2014, an increase of 9% from the corresponding
period in 2013. Detailed discussion of each component of operating
expenses is as follows:
Sales and marketing expenses were RMB186.5 million (US$30.0
million) in the first quarter of 2014, as compared to
RMB127.6 million (US$20.5 million) for the corresponding period in
2013. Non-GAAP sales and marketing expenses were
RMB163.5 million (US$26.3 million) in the first quarter of 2014, an
increase of 42% from the corresponding period in 2013. This
increase was due to higher commission expenses paid to our sales
force in line with our revenue growth and marketing expenditures on
our mobile products.
Product development expenses were RMB80.7 million (US$13.0
million) in the first quarter of 2014, as compared to
RMB56.8 million (US$9.1 million) for the corresponding period in
2013. Non-GAAP product development expenses were
RMB62.2 million (US$10.0 million) in the first quarter of 2014, an
increase of 28% from the corresponding period in 2013. This
increase was primarily due to an increase in personnel related
expenses for our product development in mobile, search, social,
paid and live broadcasting services.
General and administrative expenses were RMB46.8 million (US$7.5
million) in the first quarter of 2014, as compared to
RMB83.4 million (US$13.4 million) for the corresponding period in
2013. Non-GAAP general and administrative expenses were
RMB26.6 million (US$4.3 million) in the first quarter of 2014, a
decrease of 61% from the corresponding period in 2013.
Net loss was RMB224.7
million (US$36.1 million)in
the first quarter of 2014, a decrease of 3% compared to
RMB232.5 million (US$37.4 million) for the corresponding period in
2013. Non-GAAP net loss was RMB148.3
million (US$23.8 million) in
the first quarter of 2014, a decrease of 19% from the corresponding
period in 2013.
Non-GAAP adjusted EBITDA Loss was RMB120.2 million (US$19.3
million) in the first quarter of 2014, a decrease of 32%
from the corresponding period in 2013.
Business Outlook
For the second quarter of 2014, the Company expects net revenues
will be between RMB940 million and RMB1
billion, with advertising net revenues contributing between
RMB910 million and RMB950 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 22, 2014 (9:00 a.m. Beijing/Hong Kong Time on May 23, 2014).
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 Toll Free 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 +61 2 8199
0299 and entering passcode 47256659#. The replay will be available
through May 30, 2014.
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 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 Tudou 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 Tudou 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 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: non-GAAP content costs, non-GAAP gross profit,
non-GAAP operating expenses, non-GAAP sales and marketing expenses,
non-GAAP product development expenses, non-GAAP general and
administrative expenses, non-GAAP profit or loss from
operations, non-GAAP net profit or loss and non-GAAP
EBITDA profit or loss. We define non-GAAP content costs as content
costs excluding share-based compensation expenses and amortization
of intangible assets from business combination in relation to user
generated content. We define 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 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 non-GAAP sales and
marketing expenses as sales and marketing expenses excluding
share-based compensation expenses and amortization of intangible
assets from business combination in relation to customer
relationship. We define non-GAAP product development expense as
product development expenses excluding share-based compensation
expenses and amortization of intangible assets from business
combination in relation to technology. We define non-GAAP general
and administrative expenses as 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 non-GAAP profit or loss from operations as profit or loss
from operations excluding share-based compensation expenses,
amortization of intangible assets from business combination and
business combination related expenses. We define non-GAAP net
profit or loss as net loss excluding share-based compensation
expenses, amortization of intangible assets from business
combination and business combination related expenses. We define
non-GAAP EBITDA profit or loss as 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 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.
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 Senior Director
Youku Tudou Inc.
Tel: (+8610) 5885-1881 x6090
Email: ryan.cheung@youku.com
[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 RMB6.2164 to
US$1.00, the effective noon buying rate as of March 31, 2014 in the
City of New York for cable transfers of RMB as certified for
customs purposes by the Federal Reserve Bank of New York. No
representation is made that the RMB amounts could have been, or
could be, converted into US$ at such rate.
|
[2]
|
All non-GAAP measures
exclude, as applicable, share-based compensation expenses and
amortization of intangible assets from business combination. For
further details on non-GAAP measures, please refer to the
reconciliation table and a detailed discussion of the Company's use
of non-GAAP information set forth elsewhere in this press
release.
|
|
|
|
|
|
|
|
|
YOUKU TUDOU
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
(Amounts in
thousands, except for number of shares)
|
|
|
For the Three Months
Ended
|
|
|
December 31,
2013
|
|
March 31,
2014
|
|
March 31,
2014
|
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
ASSETS
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
1,764,221
|
|
1,598,644
|
|
257,166
|
|
Restricted
cash
|
|
|
2,679
|
|
2,681
|
|
431
|
|
Short-term
investments
|
|
|
1,409,439
|
|
1,664,833
|
|
267,813
|
|
Accounts
receivable, net
|
|
|
1,370,031
|
|
1,197,350
|
|
192,611
|
|
Intangible
assets, net
|
|
|
51,942
|
|
39,459
|
|
6,348
|
|
Deferred tax
assets
|
|
|
7,843
|
|
7,843
|
|
1,262
|
|
Prepayments and
other assets
|
|
|
82,300
|
|
85,309
|
|
13,724
|
Total current
assets
|
|
|
4,688,455
|
|
4,596,119
|
|
739,355
|
|
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
222,229
|
|
225,391
|
|
36,257
|
|
Intangible
assets, net
|
|
|
1,197,671
|
|
1,241,202
|
|
199,666
|
|
Capitalized
content production costs
|
|
|
1,176
|
|
936
|
|
151
|
|
Prepayments and
other assets
|
|
|
197,856
|
|
187,667
|
|
30,189
|
|
Goodwill
|
|
|
4,262,569
|
|
4,262,569
|
|
685,697
|
Total
non-current assets
|
|
|
5,881,501
|
|
5,917,765
|
|
951,960
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
|
10,569,956
|
|
10,513,884
|
|
1,691,315
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
|
213,825
|
|
249,032
|
|
40,060
|
|
Advances from
customers
|
|
|
25,081
|
|
26,897
|
|
4,327
|
|
Accrued
expenses and other liabilities
|
|
|
1,124,342
|
|
1,152,595
|
|
185,412
|
Total current
liabilities
|
|
|
1,363,248
|
|
1,428,524
|
|
229,799
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
|
|
Deferred tax
liability
|
|
|
219,519
|
|
219,519
|
|
35,313
|
|
Other
liabilities
|
|
|
4,070
|
|
4,070
|
|
655
|
Total non-current
liabilities
|
|
|
223,589
|
|
223,589
|
|
35,968
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
1,586,837
|
|
1,652,113
|
|
265,767
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
Class A Ordinary
Shares (US$0.00001 par value, 9,340,238,793
authorized,
2,356,529,401 and 2,371,376,719 issued and
outstanding as
of December 31, 2013 and March 31, 2014,
respectively)
|
|
|
154
|
|
155
|
|
25
|
|
Class B Ordinary
Shares (US$0.00001 par value, 659,761,207
authorized,
659,561,893 and 659,561,893 issued and
outstanding as
of December 31, 2013 and March 31, 2014,
respectively)
|
|
|
49
|
|
49
|
|
8
|
|
Additional
paid-in capital
|
|
|
11,058,360
|
|
11,140,757
|
|
1,792,156
|
|
Statutory
reserves
|
|
|
2,063
|
|
2,063
|
|
332
|
|
Accumulated
deficit
|
|
|
(1,878,454)
|
|
(2,103,159)
|
|
(338,324)
|
|
Accumulated
other comprehensive loss
|
|
|
(199,053)
|
|
(178,094)
|
|
(28,649)
|
Total
shareholders' equity
|
|
|
8,983,119
|
|
8,861,771
|
|
1,425,548
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
|
10,569,956
|
|
10,513,884
|
|
1,691,315
|
|
|
|
|
|
|
|
|
|
|
YOUKU TUDOU
INC.
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE LOSS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
(Amounts in
thousands, except for number of shares and ADS and per share
and per
ADS data)
|
|
|
|
|
|
|
|
March 31,
2013
|
|
December 31,
2013
|
|
March 31,
2014
|
|
March 31,
2014
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
|
515,997
|
|
901,287
|
|
700,374
|
|
112,666
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
(Note 1)
|
|
|
(501,766)
|
|
(646,938)
|
|
(614,808)
|
|
(98,901)
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
|
14,231
|
|
254,349
|
|
85,566
|
|
13,765
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Product
development
|
|
|
(56,828)
|
|
(76,514)
|
|
(80,700)
|
|
(12,982)
|
Sales and
marketing
|
|
|
(127,600)
|
|
(216,444)
|
|
(186,542)
|
|
(30,008)
|
General and
administrative
|
|
|
(83,350)
|
|
(40,393)
|
|
(46,823)
|
|
(7,532)
|
Total operating
expenses
|
|
|
(267,778)
|
|
(333,351)
|
|
(314,065)
|
|
(50,522)
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
|
(253,547)
|
|
(79,002)
|
|
(228,499)
|
|
(36,757)
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
7,179
|
|
8,419
|
|
6,053
|
|
974
|
Interest
expenses
|
|
|
(387)
|
|
-
|
|
-
|
|
-
|
Other, net
|
|
|
14,281
|
|
46,878
|
|
(2,259)
|
|
(363)
|
Total other
income, net
|
|
|
21,073
|
|
55,297
|
|
3,794
|
|
611
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
|
(232,474)
|
|
(23,705)
|
|
(224,705)
|
|
(36,146)
|
Income
taxes
|
|
|
-
|
|
(876)
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
|
(232,474)
|
|
(24,581)
|
|
(224,705)
|
|
(36,146)
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
loss, before tax
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
|
(5,966)
|
|
(33,201)
|
|
20,959
|
|
3,372
|
Other comprehensive
loss, before tax
|
|
|
(5,966)
|
|
(33,201)
|
|
20,959
|
|
3,372
|
Income tax expense
related to components of other comprehensive loss
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive loss, net of tax
|
|
|
(5,966)
|
|
(33,201)
|
|
20,959
|
|
3,372
|
|
|
|
|
|
|
|
|
|
0
|
Net loss per share,
basic and diluted
|
|
|
(0.08)
|
|
(0.01)
|
|
(0.07)
|
|
(0.01)
|
Net loss per ADS
(each ADS represents 18 class A ordinary shares),
basic and
diluted
|
|
|
(1.42)
|
|
(0.15)
|
|
(1.34)
|
|
(0.22)
|
Shares used in
computation, basic and diluted
|
|
|
2,953,267,696
|
|
3,010,627,513
|
|
3,021,981,224
|
|
3,021,981,224
|
ADSs used in
computation, basic and diluted
|
|
|
164,070,427
|
|
167,257,084
|
|
167,887,845
|
|
167,887,845
|
The accompanying
notes are an integral part of the press release.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 1. Cost of
Revenues
|
|
|
For the Three
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
December 31,
2013
|
|
March 31,
2014
|
|
March 31,
2014
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
(Amounts in
thousands)
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
Value added,
business taxes and surcharges
|
|
|
48,925
|
|
77,758
|
|
62,958
|
|
10,128
|
Bandwidth
costs
|
|
|
161,045
|
|
178,824
|
|
201,889
|
|
32,477
|
Depreciation of
servers and other equipment
|
|
|
22,470
|
|
36,686
|
|
24,306
|
|
3,910
|
Content
costs
|
|
|
269,326
|
|
353,670
|
|
325,655
|
|
52,386
|
Total Cost
of Revenues
|
|
|
501,766
|
|
646,938
|
|
614,808
|
|
98,901
|
YOUKU TUDOU
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
December 31,
2013
|
|
March 31,
2014
|
|
March 31,
2014
|
|
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
(232,474)
|
|
(24,581)
|
|
(224,705)
|
|
(36,146)
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
impairment of fixed assets
|
|
|
|
26,795
|
|
46,972
|
|
31,883
|
|
5,129
|
|
Bad debt
expense
|
|
|
|
7,076
|
|
25,547
|
|
(6,473)
|
|
(1,041)
|
|
Amortisation and
impairment of intangible assets and capitalized content production
costs
|
|
|
|
138,991
|
|
225,109
|
|
181,777
|
|
29,242
|
|
Amortization of
long-term debt discounts
|
|
|
|
221
|
|
-
|
|
-
|
|
-
|
|
Gain on disposal
of property and equipment
|
|
|
|
695
|
|
(353)
|
|
90
|
|
14
|
|
Foreign exchange loss
(gain)
|
|
|
|
325
|
|
(15,336)
|
|
2,164
|
|
348
|
|
Share-based
compensation
|
|
|
|
37,850
|
|
53,061
|
|
70,220
|
|
11,296
|
|
Deferred income tax
benefits
|
|
|
|
-
|
|
(4,414)
|
|
-
|
|
-
|
|
Gain from
de-recognition of off-market liabilities
|
|
|
|
-
|
|
(16,540)
|
|
-
|
|
-
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Restricted cash
|
|
|
|
(10)
|
|
(1,129)
|
|
(2)
|
|
-
|
|
Accounts
receivable
|
|
|
|
(33,644)
|
|
(10,312)
|
|
179,153
|
|
28,819
|
|
Prepayments and other assets
|
|
|
|
1,347
|
|
(58,751)
|
|
(10,615)
|
|
(1,708)
|
|
Capitalized content production costs
|
|
|
|
15,961
|
|
22,687
|
|
(2,972)
|
|
(478)
|
|
Accounts
payable
|
|
|
|
(9,864)
|
|
(15,572)
|
|
4,574
|
|
736
|
|
Advances
from customers
|
|
|
|
38,457
|
|
(40,717)
|
|
1,816
|
|
292
|
|
Accrued
expenses and other liabilities
|
|
|
|
12,468
|
|
21,519
|
|
29,591
|
|
4,759
|
Net cash provided
by operating activities
|
|
|
|
4,194
|
|
207,190
|
|
256,501
|
|
41,262
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of
property and equipment
|
|
|
|
(27,364)
|
|
(14,955)
|
|
(28,191)
|
|
(4,535)
|
|
Proceeds received
from maturity of short-term investments
|
|
|
|
36,703
|
|
1,018,628
|
|
1,132,459
|
|
182,173
|
|
Short-term
investments placed with financial institutions
|
|
|
|
(185,590)
|
|
-
|
|
(1,391,239)
|
|
(223,801)
|
|
Proceeds from
disposal of property and equipment
|
|
|
|
-
|
|
(824)
|
|
180
|
|
29
|
|
Cash acquired, net of
cash paid for acquired subsidiaries
|
|
|
|
-
|
|
(6,999)
|
|
-
|
|
-
|
|
Acquisition of
intangible assets
|
|
|
|
(238,921)
|
|
(227,540)
|
|
(165,891)
|
|
(26,686)
|
Net cash (used in)
provided by investing activities
|
|
|
|
(415,172)
|
|
768,310
|
|
(452,682)
|
|
(72,820)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of employee
stock options
|
|
|
|
28,740
|
|
9,084
|
|
11,809
|
|
1,900
|
|
Principal repayments
on long-term debt
|
|
|
|
(3,236)
|
|
-
|
|
-
|
|
-
|
Net cash
provided by financing activities
|
|
|
|
25,504
|
|
9,084
|
|
11,809
|
|
1,900
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
|
|
(6,293)
|
|
(17,865)
|
|
18,795
|
|
3,023
|
Net (decrease)
increase in cash and cash equivalents
|
|
|
|
(391,767)
|
|
966,719
|
|
(165,577)
|
|
(26,635)
|
Cash and cash
equivalents at the beginning of the period
|
|
|
|
1,655,857
|
|
797,502
|
|
1,764,221
|
|
283,801
|
Cash and cash
equivalents at the end of the period
|
|
|
|
1,264,090
|
|
1,764,221
|
|
1,598,644
|
|
257,166
|
|
|
|
|
|
|
|
|
|
|
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$"), unaudited)
|
|
|
|
|
|
|
|
|
|
|
1. Non-GAAP
Content Costs
|
|
|
For the Three
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
December 31,
2013
|
|
March 31,
2014
|
|
March 31,
2014
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Content
costs
|
|
|
269,326
|
|
353,670
|
|
325,655
|
|
52,386
|
Deduct:
share-based compensation
|
|
|
5,663
|
|
7,846
|
|
12,223
|
|
1,966
|
Deduct:
amortization of intangible assets from business
combination
|
|
|
8,331
|
|
6,100
|
|
2,483
|
|
399
|
Non-GAAP content
costs
|
|
|
255,332
|
|
339,724
|
|
310,949
|
|
50,021
|
|
|
|
|
|
|
|
|
|
|
2. Non-GAAP Gross
Profit
|
|
|
For the Three
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
December 31,
2013
|
|
March 31,
2014
|
|
March 31,
2014
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Gross
profit
|
|
|
14,231
|
|
254,349
|
|
85,566
|
|
13,765
|
Add back:
share-based compensation
|
|
|
5,663
|
|
7,846
|
|
12,223
|
|
1,966
|
Add back:
amortization of intangible assets from business
combination
|
|
|
8,331
|
|
6,100
|
|
2,483
|
|
399
|
Non-GAAP gross
profit
|
|
|
28,225
|
|
268,295
|
|
100,272
|
|
16,130
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. Non-GAAP
Operating Expenses
|
|
|
For the Three
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
December 31,
2013
|
|
March 31,
2014
|
|
March 31,
2014
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Operating
expenses
|
|
|
267,778
|
|
333,351
|
|
314,065
|
|
50,522
|
Deduct:
share-based compensation
|
|
|
32,187
|
|
45,215
|
|
57,997
|
|
9,330
|
Deduct:
amortization of intangible assets from business
combination
|
|
|
4,155
|
|
9,623
|
|
3,743
|
|
602
|
Non-GAAP
operating expenses
|
|
|
231,436
|
|
278,513
|
|
252,325
|
|
40,590
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4. Non-GAAP Sales
and Marketing Expenses
|
|
|
For the Three
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
December 31,
2013
|
|
March 31,
2014
|
|
March 31,
2014
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Sales and marketing
expenses
|
|
|
127,600
|
|
216,444
|
|
186,542
|
|
30,008
|
Deduct:
share-based compensation
|
|
|
10,061
|
|
15,577
|
|
21,172
|
|
3,406
|
Deduct:
amortization of intangible assets from business
combination
|
|
|
2,077
|
|
5,077
|
|
1,871
|
|
301
|
Non-GAAP
sales and marketing expenses
|
|
|
115,462
|
|
195,790
|
|
163,499
|
|
26,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5. Non-GAAP
Product Development Expenses
|
|
|
For the Three
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
December 31,
2013
|
|
March 31,
2014
|
|
March 31,
2014
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Product development
expenses
|
|
|
56,828
|
|
76,514
|
|
80,700
|
|
12,982
|
Deduct:
share-based compensation
|
|
|
6,967
|
|
11,795
|
|
17,206
|
|
2,768
|
Deduct:
amortization of intangible assets from business
combination
|
|
|
1,395
|
|
3,411
|
|
1,257
|
|
202
|
Non-GAAP
product development expenses
|
|
|
48,466
|
|
61,308
|
|
62,237
|
|
10,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6. Non-GAAP
General and Administrative Expenses
|
|
|
For the Three
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
December 31,
2013
|
|
March 31,
2014
|
|
March 31,
2014
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
General and
administrative expenses
|
|
|
83,350
|
|
40,393
|
|
46,823
|
|
7,532
|
Deduct:
share-based compensation
|
|
|
15,159
|
|
17,843
|
|
19,619
|
|
3,156
|
Deduct:
amortization of intangible assets from business
combination
|
|
|
683
|
|
1,135
|
|
615
|
|
99
|
Non-GAAP
general and administrative expenses
|
|
|
67,508
|
|
21,415
|
|
26,589
|
|
4,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7. Non-GAAP Loss
from Operations
|
|
|
For the Three
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
December 31,
2013
|
|
March 31,
2014
|
|
March 31,
2014
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Loss from
operations
|
|
|
(253,547)
|
|
(79,002)
|
|
(228,499)
|
|
(36,757)
|
Add back:
share-based compensation
|
|
|
37,850
|
|
53,061
|
|
70,220
|
|
11,296
|
Add back:
amortization of intangible assets from business
combination
|
|
|
12,486
|
|
15,723
|
|
6,226
|
-
|
1,001
|
Non-GAAP
loss from operations
|
|
|
(203,211)
|
|
(10,218)
|
|
(152,053)
|
|
(24,460)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8. Non-GAAP
Net (Loss) Profit
|
|
|
For the Three
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
December 31,
2013
|
|
March 31,
2014
|
|
March 31,
2014
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Net
loss
|
|
|
(232,474)
|
|
(24,581)
|
|
(224,705)
|
|
(36,146)
|
Add back:
share-based compensation
|
|
|
37,850
|
|
53,061
|
|
70,220
|
|
11,296
|
Add back:
amortization of intangible assets from business
combination
|
|
|
12,486
|
|
15,723
|
|
6,226
|
|
1,001
|
Non-GAAP net
(loss) profit
|
|
|
(182,138)
|
|
44,203
|
|
(148,259)
|
|
(23,849)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9. Non-GAAP
EBITDA (Loss) Profit
|
|
|
For the Three
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2013
|
|
December 31,
2013
|
|
March 31,
2014
|
|
March 31,
2014
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
Net
loss
|
|
|
(232,474)
|
|
(24,581)
|
|
(224,705)
|
|
(36,146)
|
Add
back:
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization (excluding amortization
|
|
|
|
|
|
|
|
|
|
of acquired content )
(2)
|
|
|
26,810
|
|
46,986
|
|
31,897
|
|
5,131
|
Interest
income
|
|
|
(7,179)
|
|
(8,419)
|
|
(6,053)
|
|
(974)
|
Interest
expenses
|
|
|
387
|
|
-
|
|
-
|
|
-
|
Income
taxes
|
|
|
-
|
|
876
|
|
-
|
|
-
|
EBITDA (loss)
profit
|
|
|
(212,456)
|
|
14,862
|
|
(198,861)
|
|
(31,989)
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
|
37,850
|
|
53,061
|
|
70,220
|
|
11,296
|
Amortization of
intangible assets from business combination
|
|
|
12,486
|
|
15,723
|
|
6,226
|
|
1,001
|
Others,
net
|
|
|
(14,281)
|
|
(46,878)
|
|
2,259
|
|
363
|
Non-GAAP EBITDA
(loss) profit
|
|
|
(176,401)
|
|
36,768
|
|
(120,156)
|
|
(19,329)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.