omniture

Cheetah Mobile Announces Third Quarter 2016 Unaudited Consolidated Financial Results

2016-11-21 19:27 1357

BEIJING, Nov 21, 2016 /PRNewswire/ --Cheetah Mobile Inc. (NYSE: CMCM) ("Cheetah Mobile" or the "Company"), a leading mobile internet company that aims to provide leading applications to help make the internet and mobile experience smarter, speedier, and safer for users worldwide, today announced its unaudited consolidated financial results for the third quarter of 2016.

Third Quarter 2016 Financial Highlights

  • Total revenues increased by 9.7% year over year and 7.8% quarter over quarter to RMB1,128.3 million (US$169.2 million), slightly above the mid-point of the Company's guidance range. The quarter-over-quarter growth was driven by the steady and sustained revenue growth from the Company's utility apps.
  • Mobile revenues increased by 26.8% year over year and 16.3% quarter over quarter to RMB898.2 million (US$134.7 million). Mobile revenues accounted for 79.6% of total revenues.
  • Overseas revenues[1] increased by 28.9% year over year and 28.4% quarter over quarter to RMB719.9 million (US$108.0 million). Overseas revenues accounted for 63.8% of total revenues and 80.1% of mobile revenues.
  • Net income attributable to Cheetah Mobile shareholders was RMB0.4 million (US$0.07 million). Non-GAAP net income attributable to Cheetah Mobile shareholders was RMB72.4 million (US$10.9 million).

Third Quarter 2016 Key Operating Metrics

  • The number of mobile monthly active users ("Mobile MAUs") was 612 million in September 2016. The number of Mobile MAUs from overseas markets accounted for 80.3% of the total number of Mobile MAUs in September 2016.
  • The number of total global mobile user installations since the Company's inception has grown to 3,464 million as of September 30, 2016.

Mr. Sheng Fu, Cheetah Mobile's Chief Executive Officer, stated, "We are delighted to report strengthening financial results for the third quarter of 2016. Driven by the solid performance of our utility apps, total revenues resumed its sequential growth and our mobile and overseas revenues have hit all-time record highs, and the Company returned to profitability. Our utility apps continue to see steady revenue growth as well as improved profitability even as the overall utilities segment continues to mature. In particular, Clean Master maintained its No. 1 position in the U.S. tool application category in early November, according to App Annie. In addition, two of our content-driven apps, Live.me and News Republic, demonstrated strong growth over the past quarter, particularly in the U.S. market. According to App Annie's October data, Live.me was the No.1 grossing social application in the U.S. on Google Play and was ranked as one of the top 5 social apps on Apple App Store. In addition, News Republic was ranked as one of the top 3 news and magazine apps in the U.S. on Google Play in October 2016. Looking ahead, we will continue to implement our mobile content strategy and focus on connecting our over 600 million global Mobile MAUs with more personalized and rich content, further strengthening our user experience, user engagement and growth engine for Cheetah Mobile."

Mr. Andy Yeung, Cheetah Mobile's Chief Financial Officer, commented, "We delivered solid financial results in the third quarter of 2016, with resumed sequential growth in total revenues and improved profitability despite stepped-up investments in our content apps. During the second quarter, we set a clear goal to rejuvenate revenue growth and expand profitability of our utility apps. We have delivered on our promises with strong performance from our utility apps, which continued to drive our total revenue growth and margin expansion. Going forward, we remain focused on executing on our mobile content strategy to establish a sustainable and profitable growth model for the long term. We believe that consistent, strong operational and financial performance of our utility apps will continue to lay a solid foundation for our mobile content strategy, providing another round of strong growth in the coming quarters."

Third Quarter 2016 Consolidated Financial Results

REVENUES

Total revenues increased by 9.7% year over year and 7.8% quarter over quarter to RMB1,128.3 million (US$169.2 million) in the third quarter of 2016, which was primarily driven by the steady and sustained revenue growth from the Company's utility apps and the contribution from the Company's new content-driven apps, namely Live.me and News Republic, which accounted for approximately 4% of total revenues in the quarter.

  • Revenues from online marketing services increased by 8.9% year over year and 5.0% quarter over quarter to RMB986.4 million (US$147.9 million) in the third quarter of 2016. Mobile advertising revenues represented approximately 82% of online marketing revenues in the quarter, as compared with approximately 72% in the prior year period and approximately 78% in the previous quarter. The increase in mobile advertising revenues was driven by higher demand from advertisers, including direct customers, for the Company's mobile advertising services worldwide, as well as the monetization of light causal games through in-game advertising.
  • Revenues from internet value added services ("IVAS") increased by 11.0% year over year and 38.8% quarter over quarter to RMB110.5 million (US$16.6 million) in the third quarter of 2016, which was primarily driven by the Company's initial monetization of Live.me in overseas markets.
  • Revenues from internet security services and others increased by 32.3% year over year and 12.7% quarter over quarter to RMB31.5 million (US$4.7 million) in the third quarter of 2016, which was primarily driven by higher mobile internet software licensing revenues.

By platform, revenues generated from mobile business increased by 26.8% year over year and 16.3% quarter over quarter to RMB898.2 million (US$134.7 million) in the third quarter of 2016, which was primarily driven by higher popularity of the Company's mobile marketing services worldwide.

By region, revenues generated from overseas markets increased by 28.9% year over year and 28.4% quarter over quarter to RMB719.9 million (US$108.0 million) in the third quarter of 2016, which was primarily driven by improvements in overseas monetization.

COST OF REVENUES AND GROSS PROFIT

Cost of revenues increased by 47.4% year over year and 13.9% quarter over quarter to RMB403.9 million (US$60.6 million) in the third quarter of 2016, which was primarily driven by increased investments in content for the Company's content-driven apps, higher bandwidth and internet data center costs associated with increased user traffic worldwide, and data analytics.

Gross profit decreased by 4.0% year over year, but increased by 4.7% quarter over quarter to RMB724.4 million (US$108.6 million) in the third quarter of 2016.

OPERATING INCOME/LOSS AND EXPENSES

Total operating expenses increased by 7.6% year over year and 0.4% quarter over quarter to RMB758.3 million (US$113.7 million) in the third quarter of 2016. Total non-GAAP operating expenses increased by 16.1% year over year and 3.0% quarter over quarter to RMB686.5 million (US$102.9 million).

  • Research and development expenses increased by 14.8% year over year and 3.5% quarter over quarter to RMB235.5 million (US$35.3 million) in the third quarter of 2016, which was primarily driven by an increase in personnel-related costs. The increase in personnel costs associated with research and development was primarily driven by the Company's increased investments in big data analytics and new product development, particularly the development of new content-driven mobile applications and services. Non-GAAP research and development expenses, which exclude share-based compensation expenses, increased by 42.5% year over year and 12.1% quarter over quarter to RMB199.6 million (US$29.9 million).
  • Selling and marketing expenses increased by 0.5% year over year, but decreased by 3.9% quarter over quarter to RMB391.5 million (US$58.7 million) in the third quarter of 2016. The quarter-over-quarter decrease was due to lower expenses on promotional activities as a result of the Company's strategy to implement cost controls for the Company's utility apps, which was partially offset by increased product promotional activities for the Company's content-driven apps, and an increase in direct sales personnel headcount. Non-GAAP selling and marketing expenses, which exclude share-based compensation expenses, increased by 0.8% year over year, but decreased by 5.1% quarter over quarter to RMB385.1 million (US$57.8 million).
  • General and administrative expenses increased by 8.8% year over year, but decreased by 12.2% quarter over quarter to RMB141.2 million (US$21.2 million) in the third quarter of 2016. The year-over year increase was primarily driven by an increase in expenses associated with higher headcount for the general and administration function. The quarter-over-quarter decrease was due to lower professional service fee in the third quarter of 2016. Non-GAAP general and administrative expenses, which exclude share-based compensation expenses, increased by 25.1% year over year, but decreased by 9.2% quarter over quarter to RMB111.7 million (US$16.8 million).

Operating loss was RMB33.8 million (US$5.1 million), as compared with an operating profit of RMB50.0 million in the prior year period and an operating loss of RMB63.0 million in the previous quarter. The year-over-year decline in operating profit was mainly attributable to increased investments in content-driven apps, which lowered operating margin by almost 17% in the quarter. The quarter-over-quarter improvement was due to higher total revenues in the quarter as well as the Company's improved efficiency and cost control measures concerning its marketing efforts, which helped in expanding the profitability of its utility apps.

Non-GAAP operating profit decreased by 76.9% year over year, but increased by 49.3% quarter over quarter to RMB38.1 million (US$5.7 million) in the third quarter of 2016.

Share-based compensation expenses decreased by 37.3% year over year and 18.8% quarter over quarter to RMB71.9 million (US$10.8 million) in the third quarter of 2016.

OTHER INCOME, NET

Other income, net was RMB30.9 million (US$4.6 million) in the third quarter of 2016, which was primarily due to gains on disposal of certain investment assets in the quarter.

NET INCOME/LOSS ATTRIBUTABLE TO CHEETAH MOBILE SHAREHOLDERS

Net income attributable to Cheetah Mobile shareholders was RMB0.4 million (US$0.07 million) in the third quarter of 2016, which represents a decrease of 98.5% year over year, but a significant improvement from a net loss attributable to Cheetah Mobile shareholders of RMB150.5 million in the previous quarter.

Non-GAAP net income attributable to Cheetah Mobile shareholders was RMB72.4 million (US$10.9 million), which represents a decrease of 49.6% year over year, but a significant improvement from a non-GAAP net loss attributable to Cheetah Mobile shareholders of RMB61.9 million in the previous quarter.

NET INCOME PER ADS

Diluted income per ADS in the third quarter of 2016 was RMB0.00 (US$0.00), as compared with diluted income per ADS of RMB0.20 in the prior year period, and diluted loss per ADS of RMB1.08 in the previous quarter.

Non-GAAP diluted income per ADS in the third quarter of 2016 was RMB0.51 (US$0.08), as compared with non-GAAP diluted earnings per ADS of RMB1.00 in the prior year period and non-GAAP diluted loss per ADS of RMB0.44 in the previous quarter.

ADJUSTED EBITDA

Adjusted EBITDA (Non-GAAP) decreased by 60.5% year over year, but increased by 18.4% quarter over quarter to RMB80.1 million (US$12.0 million) in the third quarter of 2016.

CASH AND CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM INVESTMENTS BALANCE

As of September 30, 2016, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB1,437.2 million (US$215.5 million).

SHARES ISSUED AND OUTSTANDING

As of September 30, 2016, the Company had a total of 1,425,736,715 Class A and Class B ordinary shares issued and outstanding. One ADS represents 10 Class A ordinary shares.

Cheetah Mobile and Tencent Continue to Expand Strategic Cooperation Agreement

Cheetah Mobile increased the annual cap for promotional services fees payable by Cheetah Mobile to Tencent for each of the years ending December 31, 2016 and 2017. Under the new supplemental agreement, the annual cap for the year ending December 31, 2016 increased from RMB30 million to RMB47.5 million. In addition, the annual cap for the year ending December 31, 2017 increased from RMB45 million to RMB62.5 million. Except for the foregoing, all the existing terms and conditions under the Strategic Cooperation Agreement, as amended, remain unchanged. For the first nine months of 2016, the historical transaction amount for the promotion services fees payable by Cheetah Mobile to Tencent was RMB26 million.

Update on Share Repurchase Program

On March 16, 2016, the Company's Board of Directors authorized a share repurchase plan, pursuant to which the Company may repurchase its own issued and outstanding ADSs with an aggregate value of up to US$100 million from the open market, in negotiated transactions off the market, or through other legally permissible means in accordance with applicable securities laws from time to time within one year after March 16, 2016. The share repurchase plan does not require the Company to acquire a specific number of ADSs. As of November 18, 2016, the Company had repurchased a total of 2,536,808 ADSs, representing 25,368,080 Class A ordinary shares, at an average price of $10.7483 per ADS.

Business Outlook

For the fourth quarter of 2016, the Company expects its total revenues to be between RMB1,200 million (US$180 million) and RMB1,240 million (US$186 million), representing an estimated year-over-year growth of 4% to 8%, and quarter-over-quarter growth of 6% to 10%. This estimate represents management's preliminary view as of the date of this release, which is subject to change and any change could be material.

Conference Call Information

Company will hold a conference call on Monday, November 21, 2016 at 8:00 am Eastern Time or 9:00 pm Beijing Time to discuss the financial results. Listeners may access the call by dialing the following numbers:

International:

+1-412-902-4272

United States Toll Free:

+1-888-346-8982

China Toll Free:

4001-201203

Hong Kong Toll Free:

800-905945

Conference ID:

Cheetah Mobile

A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.cmcm.com/.

Exchange Rate

This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to U.S. dollars in this press release were made at a rate of RMB6.6685 to US$1.00, the exchange rate in effect as of September 30, 2016 as set forth in the H. 10 statistical release of the Federal Reserve Board. Such translations should not be construed as representations that RMB amounts could be converted into U.S. dollars at that rate or any other rate, or to be the amounts that would have been reported under accounting principles generally accepted in the United States of America ("U.S. GAAP").

About Cheetah Mobile Inc.

Cheetah Mobile is a leading mobile internet company. It aims to provide leading apps for mobile users worldwide and connect users with personalized content on the mobile platform.

Cheetah Mobile's products, including its popular mission-critical utility applications Clean Master, CM Security and Battery Doctor, help make users' mobile internet experience smarter, speedier, and safer. The Company has attracted 612 million global Mobile MAUs as of September 2016, of which approximately 80% are located outside of China. Leveraging the success of its mission-critical applications, Cheetah Mobile has launched its line of mobile content-driven applications, including News Republic and Live.me.

Cheetah Mobile provides its advertising customers, which include direct advertisers and mobile advertising networks through which advertisers place their advertisements, with direct access to highly targeted mobile users and global promotional channels, which are capable of delivering targeted content to hundreds of millions of users.

Safe Harbor Statement

This press release contains forward-looking statements. These statements, including management quotes and business outlook, constitute forward-looking statements under 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. Such statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in the forward-looking statements, including but are not limited to the following: Cheetah Mobile's growth strategies; Cheetah Mobile's ability to retain and increase its user base and expand its product and service offerings; Cheetah Mobile's ability to monetize its platform; Cheetah Mobile's future business development, financial condition and results of operations; competition with companies in a number of industries including internet companies that provide online marketing services and internet value-added services; expected changes in Cheetah Mobile's revenues and certain cost or expense items; and general economic and business condition globally and in China. Further information regarding these and other risks is included in Cheetah Mobile's filings with the U.S. Securities and Exchange Commission. Cheetah Mobile does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

Use of Non-GAAP Financial Measures

To supplement Cheetah Mobile's consolidated financial information presented in accordance with U.S. GAAP, Cheetah Mobile uses the following non-GAAP financial measures:

  • Non-GAAP operating expenses reflect operating expenses excluding share-based compensation expenses.
  • Non-GAAP operating profit reflects operating profit excluding share-based compensation expenses.
  • Non-GAAP net income (loss) attributable to Cheetah Mobile shareholders is net income attributable to Cheetah Mobile shareholders excluding share-based compensation expenses.
  • Non-GAAP diluted earnings (loss) per ADS is non-GAAP net income (loss) attributable to Cheetah Mobile shareholders divided by weighted average number of diluted ADSs.
  • Adjusted EBITDA is earnings before interest, taxes, depreciation, amortization, other non-operating income and share-based compensation expenses.

The Company believes that separate analysis and exclusion of share-based compensation expenses and the use of Adjusted EBITDA add clarity to the constituent parts of its performance from the cash perspective. The Company reviews these non-GAAP financial measures together with GAAP financial measures to obtain a better understanding of its operating performance. It uses the non-GAAP financial measures for planning, forecasting and measuring results against the forecast. The Company believes that non-GAAP financial measures are useful supplemental information for investors and analysts to assess its operating performance without the effect of share-based compensation expenses, which have been and will continue to be significant recurring expenses in its business. However, the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact the Company's net income for the period. In addition, because non-GAAP financial measures are not measured in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measure in isolation from or as an alternative to the financial measure prepared in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the tables captioned "Cheetah Mobile Inc. Reconciliations of GAAP and Non-GAAP Results" and "Cheetah Mobile Inc. Reconciliation of Net Income (Loss) Attributable to Cheetah Mobile Shareholders to Adjusted EBITDA (Non-GAAP)" at the end of this release.

Investor Relations Contact

Cheetah Mobile Inc.
Helen Jing Zhu
Tel: +86 10 6292 7779 ext. 1600
Email: IR@cmcm.com

ICR, Inc.
Jessie Fan
Tel: +1 (646) 417-5395
Email: IR@cmcm.com

[1] Overseas revenues refer to revenues generated by the Company's operating legal entities incorporated outside the People's Republic of China (excluding Hong Kong, Macau and Taiwan for the purposes of this press release), or the PRC. Such revenues are primarily attributable to customers located outside the PRC.

CHEETAH MOBILE INC.






Condensed Consolidated Balance Sheets





(Unaudited, amounts in thousands of Renminbi ("RMB") and US dollars ("US$")








As of


31-Dec-15


30-Sep-16


30-Sep-16


RMB


RMB


USD


(As adjusted, unaudited) (a)


(Unaudited)


(Unaudited)

ASSETS






Current assets:






Cash and cash equivalents

1,843,233


950,467


142,531

Restricted cash

156,161


158,131


23,713

Short-term investments

29,234


328,588


49,275

Accounts receivable

633,440


602,325


90,324

Prepayments and other current assets

360,004


494,045


74,086

Due from related parities

60,794


84,393


12,655

Deferred tax assets

5,101


15,031


2,254

Total current assets

3,087,967


2,632,980


394,838







Non-current assets:






Property and equipment, net

121,241


124,716


18,702

Intangible assets, net

233,092


242,200


36,320

Goodwill

617,863


954,745


143,172

Investment in equity investees

124,708


96,522


14,474

Other long term investments

700,113


893,303


133,959

Deferred tax assets

12,843


40,326


6,047

Other non-current assets

28,724


27,002


4,049

Total non-current assets

1,838,584


2,378,814


356,723







Total assets

4,926,551


5,011,794


751,561







LIABILITIES AND SHAREHOLDERS' EQUITY











Current liabilities:






Bank loans

130,273


358,136


53,706

Accounts payable

137,883


162,296


24,338

Accrued expenses and other current liabilities

1,308,717


1,024,006


153,559

Redemption right liabilities

474


563


84

Deferred revenue

56,070


55,887


8,381

Due to related parties

56,932


64,385


9,655

Income tax payable

29,822


65,618


9,840

Deferred tax liabilities

414


-


-

Total current liabilities

1,720,585


1,730,891


259,563







Non-current liabilities:






Bank loans

10,523


127,475


19,116

Deferred revenue

8,166


8,113


1,217

Deferred tax liabilities

99,006


106,185


15,923

Other non-current liabilities

73,826


33,708


5,055

Total non-current liabilities

191,521


275,481


41,311







Total liabilities

1,912,106


2,006,372


300,874







Shareholders' equity:






Ordinary shares

226


230


34

Treasury stock

-


(178,991)


(26,841)

Additional paid-in capital

2,414,706


2,668,573


400,176

Retained earnings

317,818


178,518


26,770

Accumulated other comprehensive income

121,317


155,207


23,273

Total Cheetah Mobile shareholders' equity

2,854,067


2,823,537


423,412

Noncontrolling interests

160,378


181,885


27,275

Total equity

3,014,445


3,005,422


450,687







Total liabilities, noncontrolling interests and shareholders' equity

4,926,551


5,011,794


751,561







Note:






(a) The above condensed consolidated balance sheets have been prepared as if the Kingsoft Japan had been owned and operated by the Cheetah Mobile throughout the periods presented in accordance with ASC 805-50. Kingsoft Japan became a subsidiary of the Company on January 29, 2016.

CHEETAH MOBILE INC.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited, amounts in thousands of Renminbi ("RMB") and US dollars ("US$"), except for number of shares and per share(or ADS) data)










For The Three Months Ended


30-Sep-15


30-Jun-16


30-Sep-16


30-Sep-16


RMB


RMB


RMB


USD


(As adjusted, unaudited) (b)


(Unaudited)


(Unaudited)


(Unaudited)

Revenues

1,028,708


1,046,664


1,128,326


169,202

Online marketing services

905,381


939,125


986,379


147,916

Internet value-added services

99,516


79,601


110,452


16,563

Internet security services and others

23,811


27,938


31,495


4,723









Cost of revenues (a)

(274,089)


(354,710)


(403,900)


(60,568)

Gross profit

754,619


691,954


724,426


108,634









Operating income and expenses:








Research and development (a)

(205,207)


(227,496)


(235,541)


(35,321)

Selling and marketing (a)

(389,584)


(407,206)


(391,496)


(58,708)

General and administrative (a)

(129,806)


(160,735)


(141,168)


(21,169)

Impairment of goodwill and intangible assets

(11,750)


-


-


-

Other operating income

31,763


40,446


9,938


1,490

Total operating income and expenses

(704,584)


(754,991)


(758,267)


(113,708)









Operating profit (loss)

50,035


(63,037)


(33,841)


(5,074)

Other income (expense):








Interest income, net

2,558


2,715


727


109

Changes in fair value of redemption right and put options granted

(213)


(308)


251


38

Settlement and changes in fair value of contingent consideration

(1,286)


(664)


981


147

Foreign exchange (loss) gain, net

(1,302)


486


1,672


251

Impairment of investments

-


(95,206)


-


-

Losses from equity method investments

(6,055)


(6,070)


(451)


(68)

Other income, net

1,089


17,620


30,949


4,641









Income (Loss) before taxes

44,826


(144,464)


288


44

Income tax (expenses) benefits

(14,503)


(1,964)


7,873


1,181

Net income (loss)

30,323


(146,428)


8,161


1,225

Less: net income attributable to noncontrolling interests

1,489


4,022


7,716


1,157

Net income (loss) attributable to Cheetah Mobile
shareholders

28,834


(150,450)


445


68









Earnings (Losses) per share








Basic

0.02


(0.11)


0.00


0.00

Diluted

0.02


(0.11)


0.00


0.00









Earnings (Losses) per ADS








Basic

0.21


(1.08)


0.00


0.00

Diluted

0.20


(1.08)


0.00


0.00









Weighted average number of shares outstanding








Basic

1,383,355,451


1,391,355,172


1,381,491,089


1,381,491,089

Diluted

1,434,461,272


1,391,355,172


1,417,898,001


1,417,898,001

Weighted average number of ADSs used in computation








Basic

138,335,545


139,135,517


138,149,109


138,149,109

Diluted

143,446,127


139,135,517


141,789,800


141,789,800









Other comprehensive income (loss), net of tax of nil








Foreign currency translation adjustments

75,693


54,165


12,347


1,852

Unrealized gains (losses) on available-for-sale
securities, net

413


(389)


(21,666)


(3,249)

Other comprehensive income (loss)

76,106


53,776


(9,319)


(1,397)

Total comprehensive income (loss)

106,429


(92,652)


(1,158)


(172)

Less: Total comprehensive (loss) income attributable to
noncontrolling interests

(549)


7,117


8,522


1,278

Total comprehensive income (loss) attributable to Cheetah Mobile shareholders

106,978


(99,769)


(9,680)


(1,450)









(a) Share-based compensation expenses








Cost of revenues

1,656


140


187


28

Research and development

65,180


49,410


35,956


5,392

Selling and marketing

7,505


1,300


6,352


953

General and administrative

40,471


37,707


29,449


4,416

Total

114,812


88,557


71,944


10,789









Notes:








(b) The above condensed consolidated statements of comprehensive income have been prepared as if the Kingsoft Japan had been owned and operated by the Cheetah Mobile throughout the periods presented in accordance with ASC 805-50. Kingsoft Japan became a subsidiary of the Company on January 29, 2016.

CHEETAH MOBILE INC.



Reconciliation of GAAP and Non-GAAP Results



(Unaudited, in'000, except for per share data and percentage)
























For The Three Months Ended September 2016




GAAP


% of Net


Share-based


% of Net


Non-GAAP


% of Net


Non-GAAP


Result


Revenues


Compensation


Revenues


Result


Revenues


Result ($)

Revenues

1,128,326








1,128,326




169,202

Cost of revenues

(403,900)


35.8%


187


0.0%


(403,713)


35.8%


(60,540)

Gross profit

724,426


64.2%


187


0.0%


724,613


64.2%


108,662















Research and development

(235,541)


20.9%


35,956


3.2%


(199,585)


17.7%


(29,930)

Selling and marketing

(391,496)


34.7%


6,352


0.6%


(385,144)


34.1%


(57,756)

General and administrative

(141,168)


12.5%


29,449


2.6%


(111,719)


9.9%


(16,753)

Other operating income

9,938


0.9%


-


-


9,938


0.9%


1,490

Total operating income and expenses

(758,267)


67.2%


71,757


6.4%


(686,510)


60.8%


(102,949)















Operating (loss) profit

(33,841)


3.0%


71,944


6.4%


38,103


3.4%


5,713

Net income attributable to Cheetah Mobile shareholders

445


0.0%


71,944


6.4%


72,389


6.4%


10,855















Diluted earnings per ordinary share (RMB)

0.00




0.05




0.05





Diluted earnings per ADS (RMB)

0.00




0.51




0.51





Diluted earnings per ADS (USD)

0.00




0.08




0.08
















































For The Three Months Ended June 2016




GAAP


% of Net


Share-based


% of Net


Non-GAAP


% of Net




Result


Revenues


Compensation


Revenues


Result


Revenues



Revenues

1,046,664








1,046,664





Cost of revenues

(354,710)


33.9%


140


0.0%


(354,570)


33.9%



Gross profit

691,954


66.1%


140


0.0%


692,094


66.1%

















Research and development

(227,496)


21.7%


49,410


4.7%


(178,086)


17.0%



Selling and marketing

(407,206)


38.9%


1,300


0.1%


(405,906)


38.8%



General and administrative

(160,735)


15.4%


37,707


3.6%


(123,028)


11.8%



Other operating income

40,446


3.9%


-


-


40,446


3.9%



Total operating income and expenses

(754,991)


72.1%


88,417


8.4%


(666,574)


63.7%

















Operating (loss) profit

(63,037)


6.0%


88,557


8.5%


25,520


2.4%



Net loss attributable to Cheetah Mobile shareholders

(150,450)


14.4%


88,557


8.5%


(61,893)


5.9%

















Diluted losses per ordinary share (RMB)

(0.11)




0.07




(0.04)





Diluted losses per ADS (RMB)

(1.08)




0.64




(0.44)


































For The Three Months Ended September 2015




GAAP


% of Net


Share-based


% of Net


Non-GAAP


% of Net




Result


Revenues


Compensation


Revenues


Result


Revenues



Revenues

1,028,708








1,028,708





Cost of revenues

(274,089)


26.6%


1,656


0.2%


(272,433)


26.5%



Gross profit

754,619


73.4%


1,656


0.2%


756,275


73.5%

















Research and development

(205,207)


19.9%


65,180


6.3%


(140,027)


13.6%



Selling and marketing

(389,584)


37.9%


7,505


0.7%


(382,079)


37.1%



General and administrative

(129,806)


12.6%


40,471


3.9%


(89,335)


8.7%



Impairment of goodwill and intangible assets

(11,750)


1.1%


-


-


(11,750)


1.1%



Other operating income

31,763


3.1%


-


-


31,763


3.1%



Total operating income and expenses

(704,584)


68.5%


113,156


11.0%


(591,428)


57.5%

















Operating profit

50,035


4.9%


114,812


11.2%


164,847


16.0%



Net income attributable to Cheetah Mobile Shareholders

28,834


2.8%


114,812


11.2%


143,646


14.0%

















Diluted earnings per ordinary share (RMB)

0.02




0.08




0.10





Diluted earnings per ADS (RMB)

0.20




0.80




1.00





CHEETAH MOBILE INC.





Reconciliation from Net Income (Loss) Attributable to Cheetah Mobile Shareholders to Adjusted EBITDA (Non-GAAP)

(Unaudited, in '000)









For The Three Months Ended


30-Sep-15

30-Jun-16

30-Sep-16

30-Sep-16


RMB

RMB

RMB

USD

Net income (loss) attributable to Cheetah Mobile shareholders

28,834

(150,450)

445

68

Add:





Income tax expense (benefits)

14,503

1,964

(7,873)

(1,181)

Interest income,net

(2,558)

(2,715)

(727)

(109)

Depreciation and amortization

37,589

42,126

41,959

6,292

Net income attributable to noncontrolling interests

1,489

4,022

7,716

1,157

Other non-operating expense (income), net

7,767

84,142

(33,402)

(5,009)

Share-based compensation

114,812

88,557

71,944

10,789

Adjusted EBITDA

202,436

67,646

80,062

12,007

Cheetah Mobile Inc.




Revenues Generated from PC-based and Mobile-based Applications and Services

(Unaudited, in '000)









For The Three Months Ended


30-Sep-15

30-Jun-16

30-Sep-16

30-Sep-16


RMB

RMB

RMB

USD

PC

320,155

274,329

230,125

34,509

Mobile

708,553

772,335

898,201

134,693

Total

1,028,708

1,046,664

1,128,326

169,202

Cheetah Mobile Inc.





Revenues Generated from Domestic and Overseas Markets



(Unaudited, in '000)










For The Three Months Ended


30-Sep-15

30-Jun-16

30-Sep-16

30-Sep-16


RMB

RMB

RMB

USD

Domestic revenues

470,337

485,972

408,440

61,249

Overseas revenues

558,371

560,692

719,886

107,953

Total

1,028,708

1,046,664

1,128,326

169,202

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/cheetah-mobile-announces-third-quarter-2016-unaudited-consolidated-financial-results-300366464.html

Source: Cheetah Mobile
collection