omniture

CooTek Announces Third Quarter 2018 Unaudited Financial Results

2018-11-14 13:27 1101

SHANGHAI, Nov. 14, 2018 /PRNewswire/ -- CooTek (Cayman) Inc. (NYSE: CTK) ("CooTek" or the "Company"), a fast-growing global mobile internet company, today reported unaudited financial results for the quarter ended September 30, 2018.

Third Quarter 2018 Financial Highlights

  • Net revenue was US$36.8 million, an increase of 300% from US$9.2 million during the same period last year.
  • Gross profit margin was 90.7%, an increase of 43.5% from 47.2% during the same period last year.
  • Net income was US$2.8 million, compared to a net loss of US$5.2 million during the same period last year.
  • Adjusted net income[1] (Non-GAAP) was US$3.5 million, compared to adjusted net loss (Non-GAAP) of US$4.9 million during the same period last year.

Third Quarter 2018 Operational and Other Financial Highlights

  • The average daily active users ("DAUs") of our global products[2] were 143.9 million in September 2018, compared to 89.4 million in September 2017, representing a 61% year-on-year growth.
  • The average monthly active users ("MAUs") of our global products[2] were 213.7 million in September 2018, compared to 133.9 million in September 2017, representing a 60% year-on-year growth.
  • The average DAUs of our portfolio products[3] were 11.0 million in September 2018, compared to 0.7 million in September 2017, representing a 14.7 times year-on-year growth.
  • The average MAUs of our portfolio products[3] were 33.7 million, compared to 2.3 million in September 2017, representing a 13.5 times year-on-year growth.
  • The user engagement[4] of our portfolio products in September 2018 was approximately 33%, which remained stable as compared to that in June 2018.
  • The average DAUs of TouchPal Smart Input were 132.9 million in September 2018, compared to 88.7 million in September 2017, representing a 50% year-on-year growth.
  • The average MAUs of TouchPal Smart Input were 180.0 million in September 2018, compared to 131.6 million in September 2017, representing a 37% year-on-year growth.
  • The user engagement of TouchPal Smart Input in September 2018 was approximately 74%, which remained stable as compared to that in June 2018.

 


Portfolio Products


TouchPal Smart Input


DAUs

MAUs

Engagement


DAUs

MAUs

Engagement

Mar '17

0.1

0.5

20.0%


61.7

96.6

63.9%

Jun '17

0.3

0.8

37.5%


75.3

113.8

66.2%

Sep '17

0.7

2.3

30.4%


88.7

131.6

67.4%

Dec '17

2.9

9.4

30.9%


101.9

148.2

68.8%

Mar '18

4.6

14.4

31.9%


115.7

161.6

71.6%

Jun '18

7.3

22.2

32.9%


125.4

171.7

73.0%

Sep '18

11.0

33.7

32.6%


132.9

180.0

73.8%

  • Portfolio products continued to be the main driver of revenue growth, contributing approximately 66.6% to the total revenue.
  • The effective price per impression delivered on our global products in the third quarter of 2018 increased by 107% year-on-year.

 

[1] "Adjusted net income" (Non-GAAP) is a non-GAAP measure, which is defined as net income excluding share-based compensation and compensation expense related to ordinary share repurchase. For further information, please see "Non-GAAP Financial Measures" and "Reconciliations of GAAP and non-GAAP results" at the bottom of this release.

[2] "global products" is to the mobile applications that we develop and provide to our users and business partners, which excludes TouchPal Phonebook. TouchPal Phonebook targets the Chinese domestic market and is different from TouchPal Smart Input and portfolio products that are designed for the global market.

[3] "Portfolio products" is to the mobile applications that we develop and provide to our users and business partners, which exclude TouchPal Smart Input and TouchPal Phonebook.

[4] User engagement is calculated by dividing DAUs by MAUs of certain products for a certain period of time.

"We are achieving meaningful progress in our efforts to empower everyone to enjoy relevant content seamlessly," said Karl Zhang, CooTek co-founder and Chairman. "We are pleased with our third quarter DAU growth for both our portfolio products and TouchPal Smart Input. Especially, in September, the average DAUs of our portfolio products increased by about 50% to reach 11 million, compared to the average DAU in June. Our third quarter results reflect our success in effectively growing our global user base, sustaining high level of user engagement and retaining our users by delivering more relevant content through news feed."

"We are committed to building an AI-driven global content delivery platform and to realizing our mission. Our strategies focus on growing our global user base and investing in AI and big-data technologies to improve our content delivery capabilities and strengthen our advertising business," concluded Mr. Zhang.

Third Quarter 2018 Financial Results

Net Revenue


(in US$ thousands,
except percentage)

3Q 2018

2Q 2018

3Q 2017

QoQ %
Change

YoY %
Change

Advertising Revenue

36,332

27,643

8,656

31.4%

319.7%

Other Revenue

455

716

531

-36.4%

-14.3%

Total Revenue

36,787

28,359

9,187

29.7%

300.4%

Net revenue for the third quarter was US$36.8 million,an increase of 30% from US$28.4million last quarter and 300% from US$9.2 million during the third quarter of 2017. The increases were primarily due to the increase in the mobile advertising revenues.

Mobile advertising revenue was US$36.3million, an increase of 31% from US$27.6 million last quarter and 320% from US$8.7 million during the third quarter of 2017. The increases were primarily due to the rapid growth of DAUs of portfolio products.

It is estimated that, of the total advertising revenue for the third quarter of 2018, the portfolio products contributed approximately 67%, TouchPal Smart Input contributed approximately 18% and TouchPal Phonebook contributed approximately 15%.

Cost and Operating Expenses



3Q 2018

2Q 2018

3Q 2017

QoQ %
Change

YoY %
change

(in US$ thousands, except
percentage)

US$

% of
revenue

US$

% of
revenue

US$

% of
revenue

Cost of revenue

3,408

9.3%

3,828

13.5%

4,850

52.8%

(11.0%)

(29.7%)

Sales and marketing

22,546

61.3%

15,655

55.2%

4,672

50.9%

44.0%

382.6%

Research and development

5,169

14.1%

4,494

15.8%

3,627

39.5%

15.0%

42.5%

General and administrative

2,962

8.1%

2,279

8.0%

1,350

14.7%

30.0%

119.4%

Total Cost and Expenses

34,085

92.7%

26,256

92.6%

14,499

157.8%

29.8%

135.1%


Share-based compensation expenses by function

Cost of revenue

15

0.0%

15

0.1%

12

0.1%

(1.8%)

24.6%

Sales and marketing

33

0.1%

33

0.1%

22

0.2%

1.1%

47.3%

Research and development

501

1.4%

470

1.7%

140

1.5%

6.6%

256.4%

General and administrative

109

0.3%

95

0.3%

58

0.6%

14.0%

87.8%

Total share-based compensation
expense

658

1.8%

613

2.2%

232

2.5%

7.2%

182.4%

Cost of revenue was US$3.4 million, a decrease of 11% from US$3.8 million in the second quarter of 2018 and 29.7% from US$4.9 million during the same period last year. The sequential and year-on-year decrease was mainly due to a decrease in VoIP related expense as a result of our continuous effort to improve telecommunication services utilization efficiency.

Gross profit was US$33.4 million, an increase of 36.1% from US$24.5 million last quarter and 6.7 times from US$ 4.3 million in the third quarter of 2017. Gross profit margin was 90.7%, compared to 86.5% last quarter and 47.2% in the same period last year.

Sales and marketing expenses were US$22.5 million, an increase of 44.0% from US$15.7 million last quarter and 382.6% from US$4.7 million during the same period last year. As a percentage of total revenue, sales and marketing expenses accounted for 61.3%, compared to 55.2% last quarter and 50.9% during the same period last year. The sequential and year-on-year increases in sales and marketing expenses as a percentage of total revenue were primarily due to increased investment in user acquisition.

Research and development expenses were US$5.2 million, an increase of 15.0% from US$4.5 million last quarter and 42.5% from US$3.6 million during the same period last year. The sequential and year-on-year increases were primarily due to the increased R&D staff cost to keep the competency of our technology. As a percentage of total revenue, research and development expenses accounted for 14.1%, compared to 15.8% last quarter and 39.5% during the same period last year.

General and administrative expenses were US$3.0 million, an increase of 30.0% from US$2.3 million last quarter and 119.4% from US$1.4 million during the same period last year. The increases were mainly due to the increase in staff headcount and professional services fees. As a percentage of total revenue, general and administrative expenses accounted for 8.1%, compared to 8.0% last quarter and 14.7% during the same period last year.

Net income was US$2.8 million, compared to US$2.1 million last quarter, representing 30.8% growth, and a net loss of US$5.2 million during the same period last year.

Adjusted net (loss) income, a non-GAAP financial measure, represents net (loss) income excluding share-based compensation and compensation from ordinary share repurchase. Adjusted net income was US$3.5 million, an increase of 25.6% from US$2.8 million last quarter and an increase of US$8.4 million from adjusted net loss of USD4.9 million in the same period last year.

In US$ thousands,

except percentage

3Q 2018

2Q 2018

3Q 2017

QoQ %
Change

YoY %
change

Net (loss) income

2,798

2,139

(5,173)

30.8%

/

Add: Share-based Compensation
related to share options and
restricted share units

658

613

232

7.2%

182.4%

Adjusted Net (Loss) Income (Non-
GAAP)

3,456

2,752

(4,941)

25.6%

     /

Basic and diluted net income per ADS were US$0.05 and US$0.04 in the third quarter of 2018, and basic and diluted Adjusted Net Income (Non-GAAP) per ADS were US$0.06 and US$0.05 in this period.

Balance Sheet and Cash Flow

As of September 30, 2018, Cash and cash equivalents was US$29.4 million compared to US$26.7 million as of December 31, 2017. No loans remained as the Company repaid all bank borrowings in the third quarter of 2018. The proceeds from the IPO of the Company on the New York Stock Exchange on September 28, 2018 were not received by the Company until October 2, 2018.

Net cash inflow from operating activities during the third quarter of 2018 was US$5.3 million, compared to outflow from operations of US$7.0 million for the corresponding period in 2017.

Business Outlook

For the fourth quarter of 2018, CooTek expects total revenue to be between US$46 million and US$47 million, representing a 141.7 % to 146.9% increase year-on-year.

Conference Call and Webcast

CooTek's management team will host a conference call at 8:00am U.S. Eastern Time, (9:00pm Beijing/Hong Kong time) on November 14, 2018, following the quarterly results announcement.

The dial-in details for the live conference call are:

U.S. Toll Free:

1-888-346-8982

Mainland China:

4001-201-203

Hong Kong:

800-905-945

International:

1-412-902-4272

Passcode:

10126179

Please dial in 10 minutes before the call is scheduled to begin. When prompted, ask to be connected to the CooTek (Cayman) Inc. call.

A live webcast and archive of the conference call will be available on the Investor Relations section of CooTek's website at https://ir.cootek.com/.

About CooTek (Cayman) Inc.

CooTek is a fast-growing global mobile internet company. The mission of CooTek is to empower everyone to express themselves and enjoy relevant content seamlessly. The Company's user-centric and data-driven approach has enabled it to release appealing products to capture mobile internet users' ever-evolving content needs and helps it rapidly attract targeted users. Focusing on 5 verticals of fitness, news and short videos, healthcare, lifestyle and entertainment, CooTek has developed multiple rapidly growing content-rich portfolio apps with news feed to deliver relevant content.

Non-GAAP Financial Measure

To supplement the unaudited consolidated financial information prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"), the Company uses non-GAAP financial measure of adjusted net income (loss) that is adjusted from results based on GAAP to exclude the impact of share-based compensation and compensation expense related to ordinary share repurchase. The measure should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results.

The Company believes that the non-GAAP measure help identify underlying financial and business trends relating to the Company's results of operations that could otherwise be distorted by the effect of certain expenses that the Company include in (loss) income from operations and net (loss) income. By making the Company's financial results comparable period over period, the Company believes adjusted net (loss) income provides useful information to better understand the Company's historical business operations and future prospects and allows for greater visibility with respect to key metrics used by the management in financial and operational decision-making. In order to mitigate these limitations, the Company has provided specific information regarding the GAAP amounts excluded from the non-GAAP measure. The table at the bottom of this press release includes details on the reconciliation between GAAP financial measure that is most directly comparable to the non-GAAP financial measure the Company has presented.

Safe Harbor Statement

This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and 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," "confident" and similar statements. CooTek may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, 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. Any statements that are not historical facts, including statements about CooTek's beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: CooTek's mission and strategies; future business development, financial conditions and results of operations; the expected growth of the mobile internet industry and mobile advertising industry; the expected growth of mobile advertising; expectations regarding demand for and market acceptance of our products and services; competition in mobile application and advertising industry; and relevant government policies and regulations relating to the industry. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and CooTek does not undertake any obligation to update such information, except as required under applicable law.

For investor enquiries, please contact:

CooTek (Cayman) Inc.
Jean Zhang 
Email: IR@cootek.com

Christensen
In China 
Mr. Christian Arnell 
+86-10-5900-1548 
carnell@christensenir.com

In US 
Ms. Linda Bergkamp 
+1-480-614-3004
lbergkamp@christensenir.com

CooTek (Cayman) INC.

Unaudited Condensed Consolidated Statement of Operations



Three Months Ended,


Nine Months Ended 


September 30,


June 30,


September 30,


September 30,


2017


2018


2018


2017


2018


US$


US$


US$


US$


US$


(in thousands, except for share and per share data)



Net revenues

9,187


28,359


36,787


18,300


87,065

Cost of revenues

(4,850)


(3,828)


(3,408)


(15,022)


(11,446)

Gross Profit

4,337


24,531


33,379


3,278


75,619

Operating expenses:










Sales and marketing expenses

(4,672)


(15,655)


(22,546)


(10,325)


(48,892)

Research and development expenses

(3,627)


(4,494)


(5,169)


(9,274)


(13,491)

General and administrative expenses

(1,350)


(2,279)


(2,962)


(5,384)


(7,104)

Other operating income, net

29


48


13


147


83

Total operating expenses

(9,620)


(22,380)


(30,664)


(24,836)


(69,404)

(Loss) Income from operations

(5,283)


2,151


2,715


(21,558)


6,215

Interest income, net

166


9


37


332


108

Foreign exchange (loss) gain

(56)


(21)


46


(181)


(13)

(Loss) income before income taxes

(5,173)


2,139


2,798


(21,407)


6,310

     Income tax expense

-


-


-


(1)


-

Net (loss) income

(5,173)


2,139


2,798


(21,408)


6,310

Net (loss) income per ordinary share










Basic

(0.01)


0.001


0.001


(0.02)


0.002

Diluted

(0.01)


0.001


0.001


(0.02)


0.002

Weighted average shares used in
     calculating net (loss) income per
     ordinary share










Basic

898,393,690


898,393,690


898,393,690


898,912,307


898,393,690

Diluted

898,393,690


1,047,952,460


1,038,101,836


898,912,307


1,021,309,169

Non-GAAP Financial Data










Adjusted Net (Loss) Income

(4,941)


2,752


3,456


(19,196)


7,858

 

Unaudited Condensed Consolidated Balance Sheets 




As of



December 31,
2017


September 30, 
2018



US$


US$



(in thousands, except for share and per share data)






ASSETS





Current assets:





Cash and cash equivalents


26,720


29,448

Restricted cash


306


-

Accounts receivable, net of allowance for doubtful
     accounts of $1,295,149 and $1,286,238 as of
     December 31, 2017 and September 30, 2018,
     respectively


10,980


17,855

Amounts due from related parties


341


-

Deferred offering cost *


-


3,026

Prepaid expenses and other current assets


5,392


4,689

Total current assets


43,739


55,018

Long-term investments


-


500

Property and equipment, net


1,944


2,814

Amounts due from related parties-non-current


24


-

Other non-current assets


554


525

TOTAL ASSETS


46,261


58,857

LIABILITIES, CONVERTIBLE REDEEMABLE PREFERRED
     SHARES AND SHAREHOLDERS' DEFICIT





Current liabilities





Accounts payable


5,433


13,741

Short-term bank borrowings and current portion of long-
     term bank borrowings


3,193


-

Accrued salary and benefits


3,245


2,549

Accrued expenses and other current liabilities**


2,422


4,962

Deferred revenue


522


329

Total current liabilities


14,815


21,581

Deferred government subsidies


-


272

TOTAL LIABILITIES


14,815


21,853






Commitments





Convertible redeemable preferred shares***


156,368


156,368






Shareholders' equity (deficit)*** :





Ordinary shares (US$0.00001 par value; 2,920,061,989
     shares authorized and 898,393,690 shares issued and
     outstanding as of December 31, 2017 and September 30,
     2018, respectively)


9


9

Additional paid-in capital


876


2,425

Accumulated deficit


(126,900)


(120,590)

Accumulated other comprehensive income (loss)


1,093


(1,208)

Total Shareholders' Equity (Deficit)


(124,922)


(119,364)

TOTAL LIABILITIES, CONVERTIBLE REDEEMABLE
     PREFERRED SHARES AND SHAREHOLDERS' EQUITY
     (DEFICIT)


46,261


58,857


* The Deferred offering cost included expenses related to the initial public offering ("IPO") as of
September 30, 2018.

** Accrued expenses and other current liabilities included approximately US$2.7 million
unpaid expenses related to the initial public offering ("IPO") as of September 30, 2018.

*** As the closing date of the initial public offering ("IPO") was October 2, 2018, the
Shareholders' equity and Convertible redeemable preferred shares as of September 30, 2018
do not reflect the effect of the IPO completed on October 2, 2018.

 

Unaudited Condensed Consolidated Statement of Cash Flows




Three Months Ended,


 Nine Months Ended



September 30,


June 30,


September 30,


 September 30,



2017


2018


2018


2017


2018



US$


US$


US$


US$


US$



(in thousands)












Net cash provided by (used in)
     operating activities


(7,023)


1,961


5,265


(26,823)


9,805

Net cash used in investing activities


(305)


(333)


(915)


(1,407)


(1,863)

Net cash provided by (used in)
     financing activities


(554)


(544)


(2,463)


13,140


(3,565)

Net increase (decrease) in cash and
     cash equivalents


(7,882)


1,084


1,887


(15,090)


4,377

Cash, cash equivalents, and restricted
     cash at beginning of period


34,681


29,018


27,689


41,345


27,026

Effect of exchange rate changes on
     cash and cash equivalents


121


(2,413)


(128)


665


(1,955)

Cash, cash equivalents, and restricted
     cash at end of period


26,920


27,689


29,448


26,920


29,448

 

Reconciliations of GAAP and Non-GAAP Results




Three Months Ended September 30,


Nine Months Ended



September 30,


June 30,


September 30,


September 30,



2017


2018


2018


2017


2018



US$


US$


US$


US$


US$



(in thousands, except for share and per share data)




Net (loss) income


(5,173)


2,139


2,798


(21,408)


6,310


Add:












Share-based compensation
     related to share options and
     restricted share units


232


613


658


664


1,548


Compensation expense related
     to ordinary share repurchase


-


-


-


1,548


-


Adjusted Net (Loss) Income (Non-
     GAAP)*


(4,941)


2,752


3,456


(19,196)


7,858



* The non-GAAP adjustments do not take into consideration the impact of taxes on such adjustments.

 

Cision View original content:http://www.prnewswire.com/news-releases/cootek-announces-third-quarter-2018-unaudited-financial-results-300749951.html

Source: CooTek
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