BEIJING, March 19, 2018 /PRNewswire/ -- Cheetah Mobile
Inc. (NYSE: CMCM) ("Cheetah Mobile" or the "Company"), a leading
mobile internet company with strong global vision, today announced
its unaudited consolidated financial results for the fourth quarter
and fiscal year ended December 31,
2017.
Fourth Quarter 2017 Financial Highlights
- Total revenues increased by 8.9% year over year and 16.2%
quarter over quarter to RMB1,387.8
million (US$213.3 million),
exceeding the Company's previous guidance range of RMB1,250 million to RMB
1,310 million. Stronger-than-expected growth was driven by
the Company's record-high mobile revenues in the fourth quarter of
2017, which increased by 17.8% year over year and 15.9% quarter
over quarter.
- Gross profit increased by 14.3% year over year and 16.5%
quarter over quarter to RMB926.4
million (US$142.4 million).
Gross margin was 66.8% in the fourth quarter of 2017, compared to
63.6% in the same period last year and 66.5% in the third quarter
of 2017.
- Operating profit increased to RMB222.0
million (US$34.1 million) from
RMB62.2 million in the same period
last year and RMB132.3 million in the
third quarter of 2017. Operating margin expanded to 16.0% from 4.9%
in the same period last year and 11.1% in the third quarter of
2017.
- Operating profit for utility products and related services
increased by 3.0% year over year and 25.5% quarter over quarter to
RMB327.0 million (US$50.3 million) in the fourth quarter of 2017.
Operating margin for utility products and related services expanded
to 33.8% in the fourth quarter of 2017 from 31.5% in the same
period last year and 31.6% in the third quarter of 2017.
- Net income attributable to Cheetah Mobile shareholders
increased to RMB1,047.1 million
(US$160.9 million) from RMB58.8 million in the same period last year and
RMB139.7 million in the third quarter
of 2017.
- Diluted income per ADS increased to RMB7.27 (US$1.12)
in the fourth quarter of 2017 from RMB0.41 in the same period last year and
RMB0.95 in the third quarter of
2017.
- The Company generated RMB267.5
million (US$41.1 million) of
net cash from operating activities and RMB258.9 million (US$39.8
million) of free cash flow[1] in the fourth
quarter of 2017.
[1] Free
cash flow is defined as net cash generated by operating activities
less capital expenditure
|
Fourth Quarter 2017 Operating Metric
- The average number of global mobile monthly active users
("Mobile MAUs") was 552 million in the fourth quarter of 2017. The
number of Mobile MAUs from markets outside of China, or overseas markets, accounted for
75.4% of the total number of Mobile MAUs in the fourth quarter of
2017.
Fiscal Year 2017 Financial Highlights
- Total revenues increased by 9.0% year over year to RMB4,974.8 million (US$764.6 million).
- Gross profit increased by 5.8% year over year to RMB3,194.7 million (US$491.0 million).
- Operating profit increased to RMB446.9
million (US$68.7 million) from
an operating loss of RMB12.4 million
in 2016.
- Operating profit for utility products and related services
increased by 16.1% year over year to RMB979.4 million (US$150.5
million) in 2017. Operating margin for utility products and
related services expanded to 28.5% in 2017 from 21.8% in 2016.
- Net income attributable to Cheetah Mobile shareholders
increased to RMB1,348.2 million
(US$207.2 million) from a net loss
attributable to Cheetah Mobile shareholders of RMB80.5 million in 2016.
- Diluted net income per ADS in 2017 was RMB9.37 (US$1.44)
as compared to diluted loss per ADS of RMB0.58 in 2016.
- Net cash generated by operating activities was RMB621.1 million (US$95.5
million).
Mr. Sheng Fu, Cheetah Mobile's
Chairman and Chief Executive Officer, stated, "We are delighted to
report a strong set of results for the fourth quarter of 2017. Our
utility products and related service continued to expand its
profitability and generate cash flow. Revenues from our Live.me and
mobile game business continued to grow, thanks to our efforts in
product innovation, creative operations, and content enrichment.
Cheetah Mobile is a user- and product-focused company, so it is
encouraging that our products continue to achieve notable progress.
In this quarter, Live.me remained the No.1 grossing social app in
the U.S. on Google Play and one of the top 6 in the Apple App
Store. CM Launcher and Cheetah Keyboard were among the top 10
personalized apps in the U.S. on Google Play. Recently, we became
one of the top 10 game publishers in the U.S. on both Google Play
and the Apple App Store. Going forward, we will continue to use
artificial intelligence ("AI") to enhance our products and
services. We also believe that technologies such as blockchain will
create opportunities for us to expand our product offerings."
Mr. Vincent Jiang, Cheetah
Mobile's Chief Financial Officer, commented, "Driven by
considerable growth in our mobile utility products and related
services businesses in China and
the overall growth of Live.me and mobile games, our total revenues
exceeded the high end of our revenue guidance in the fourth quarter
of 2017. Our operating profits continued to improve and achieved
all-time highs in the quarter, driven by robust revenue growth and
continued optimization of the cost and expense structure for
utility products and related services. In the fourth quarter,
we closed two significant disposals, News Republic and our
interests in Musical.ly, which generated a gain of RMB1,089.0 million (US$167.4 million) in the fourth quarter of 2017
and greatly boosted our balance sheet. In addition, our core
business continues to generate strong cash flow, which allows us to
reallocate our resources to execute expansion plans in order to
drive our long-term growth."
Fourth Quarter 2017 Consolidated Financial
Results
REVENUES
Total revenues increased by 8.9% year over year and 16.2%
quarter over quarter to RMB1,387.8
million (US$213.3 million) in
the fourth quarter of 2017.
- Revenues from utility products and related
services decreased by 4.2% year over year but increased by
17.3% quarter over quarter to RMB967.2
million (US$148.7 million) in
the fourth quarter of 2017. The year-over-year decrease was
primarily due to (i) a decline in revenues from mobile utility
products and related services business in the overseas markets as
certain ad formats, i.e., ads on mobile phone lock screens, have
been discontinued by one of our overseas third-party advertising
partners, and (ii) a decline in PC revenues. This decrease was
largely offset by an increase in our mobile utility products and
related services business in China. The quarter-over-quarter increase was
primarily due to the strong growth of our mobile utility products
and related services business in China and seasonality in advertising spending
in both China and the overseas
markets.
- Revenues from the mobile entertainment business
increased by 50.5% year over year and 10.2% quarter over quarter to
RMB399.5 million (US$61.4 million). The year-over-year increase was
primarily a result of the rapid growth in Live.me's broadcasting
revenues and the Company's continued efforts to expand the mobile
game portfolio by introducing several new mobile games in early
2017. The quarter-over-quarter growth was mainly attributable to
Live.me's increased revenues in the overseas market and mobile game
revenues in China, where the
Company's mobile games continue to gain popularity.
By platform, revenues generated from the mobile business
increased by 17.8% year over year and 15.9% quarter over quarter to
RMB1,217.5 million (US$187.1 million), or 87.7% of our total revenues
in the fourth quarter of 2017.
By region, revenues generated from the overseas markets
increased by 1.4% year over year and 5.4% quarter over quarter to
RMB843.8 million (US$129.7 million) in the fourth quarter of 2017.
Revenues generated from the Chinese market increased by 23.0% year
over year and 38.0% quarter over quarter to RMB544.0 million (US$83.6
million) in the fourth quarter of 2017. The growth of our
revenues in the Chinese market was attributable to a ramp-up of
mobile utility products and related services businesses in
China and increased mobile game
revenues in the Chinese market, where the Company's mobile games
continue to gain popularity. Revenues generated from the overseas
markets constitutes 60.8% of our total revenues in the fourth
quarter of 2017.
COST OF REVENUES AND GROSS PROFIT
Cost of revenues decreased by 0.6% year over year but
increased by 15.4% quarter over quarter to RMB461.4 million (US$70.9
million) in the fourth quarter of 2017. The
quarter-over-quarter increase was a result of one-time higher
channel costs associated with our mobile game business in
China, and higher revenue sharing
fees with online broadcasters associated with the Live.me business.
Non-GAAP cost of revenues decreased by 0.2% year over year
but increased by 15.7% quarter over quarter to RMB462.4 million (US$71.1
million) in the fourth quarter of 2017.
Gross profit increased by 14.3% year over year and 16.5%
quarter over quarter to
RMB926.4 million (US$142.4 million) in the fourth quarter of 2017.
Non-GAAP gross profit increased by 14.1% year over year and
16.4% quarter over quarter to
RMB925.4 million (US$142.2 million) in the fourth quarter of
2017.
OPERATING INCOME AND EXPENSES
Total operating expenses decreased by 5.9% year over year
but increased by 6.3% quarter over quarter to RMB704.4 million (US$108.3
million) in the fourth quarter of 2017. Total non-GAAP
operating expenses increased by 0.7% year over year and 9.2%
quarter over quarter to RMB700.1
million (US$107.6 million) in
the fourth quarter of 2017.
- Research and development (R&D) expense decreased by
35.5% year over year and 13.0% quarter over quarter to RMB151.9 million (US$23.3
million) in the fourth quarter of 2017. The decreases were
due to lower share-based compensation expenses and reduced R&D
headcount resulting from the disposal of News Republic and the
Company's strategy to optimize the cost and expense structure for
its utility products and related services business. Non-GAAP
R&D expenses, which exclude share-based compensation
expenses, decreased by 30.7% year over year and 14.2% quarter over
quarter to RMB147.4 million
(US$22.7 million) in the fourth
quarter of 2017.
- Selling and marketing expenses increased by 2.9% year
over year and 2.7% quarter over quarter to RMB420.1 million (US$64.6
million) in the fourth quarter of 2017. The increases were
mainly due to increased promotional activities for the Company's
mobile utility products in China
and Cheez, a short video application operated by Live.me in the
overseas markets. Non-GAAP selling and marketing expenses,
which exclude share-based compensation expenses, increased by 3.7%
year over year and 3.0% quarter over quarter to RMB423.1 million (US$65.0
million) in the fourth quarter of 2017.
- General and administrative expenses decreased by 9.3%
year over year but increased by 29.7% quarter over quarter to
RMB115.1 million (US$17.7 million) in the fourth quarter of 2017.
The year-over-year decrease was primarily due to higher
professional service fees and employee benefits, which was offset
by lower share-based compensation expenses. The
quarter-over-quarter increase primarily resulted from increased
professional service fees and employee benefits. Non-GAAP
general and administrative expenses, which exclude share-based
compensation expenses, increased by 16.6% year over year and 63.9%
quarter over quarter to RMB112.2
million (US$17.2 million) in
the fourth quarter of 2017.
- Impairment of goodwill and intangible assets were
RMB38.7 million (US$5.9 million) in the fourth quarter of 2017
primarily due to a one-time non-cash write-down of intangible
assets, which the Company considered other-than-temporary. Their
carrying values exceed the expected undiscounted cash flows
expected to result from the use of the assets and their eventual
disposition.
Operating profit increased to RMB222.0 million (US$34.1
million) from RMB62.2 million
in the same period last year and RMB132.3
million in the previous quarter. Non-GAAP operating
profit increased by 93.7% year over year and 46.6% quarter over
quarter to RMB225.4 million
(US$34.6 million) in the fourth
quarter of 2017.
The Company has reported its operating profit along the
following segments since the second quarter of 2017:
- Operating profit for utility products and related
services increased by 3.0% year over year and 25.5% quarter
over quarter to RMB327.0 million
(US$50.3 million) in the fourth
quarter of 2017 mainly due to the optimization of the cost and
expense structure and the increase in revenue in the fourth quarter
of 2017.
- Operating loss for the mobile entertainment business was
RMB61.8 million (US$9.5 million) in the fourth quarter of 2017,
compared to operating losses of RMB201.1
million in the same period last year and RMB105.0 million in the third quarter of 2017.
The reduced loss was mainly a result of increased revenues
generated from the Company's Live.me and mobile game businesses and
reduced costs and expenses from the News Republic business,
partially offset by the Company's increased investments in Live.me
and Cheez, the short video business operated by Live.me in overseas
markets.
Share-based compensation expenses decreased by 93.8% year
over year and 84.2% quarter over quarter to RMB3.4 million (US$0.5
million) in the fourth quarter of 2017. The decrease
resulted from a combination of several factors. The Company
employed an accelerated method to recognize share-based
compensation expenses. A significant number of share-based awards
that were granted by the Company during its IPO in 2014 approached
the end of their vesting periods in 2017. Furthermore, fewer
share-based awards were granted in 2017 than in previous years and
more unvested awarded shares were forfeited in 2017.
IMPAIRMENT OF INVESTMENTS
Impairment of investments were RMB209.6
million (US$32.2 million) in
the fourth quarter of 2017 primarily due to a one-time non-cash
write-down of some investment assets, which the Company considered
other-than-temporary, to its fair value. This write-down was the
result of lower-than-expected performance and financial position of
the investment assets.
OTHER INCOME, NET
Other income, net, was RMB1,089.0
million (US$167.4 million) in
the fourth quarter of 2017, mainly resulting from the disposals of
the Company's interests in Musical.ly and the Company's News
Republic business.
NET INCOME ATTRIBUTABLE TO CHEETAH MOBILE
SHAREHOLDERS
Net income attributable to Cheetah Mobile shareholders
increased to RMB1,047.1 million
(US$160.9 million) in the fourth
quarter of 2017 from RMB58.8 million
in the same period last year and RMB139.7
million in the third quarter of 2017. Non-GAAP net income
attributable to Cheetah Mobile shareholders increased to
RMB1,050.5 million (US$161.5 million) in the fourth quarter of 2017
from RMB113.0 million in the same
period last year and RMB161.1 million
in the third quarter of 2017.
NET INCOME PER ADS
Diluted income per ADS increased to RMB7.27 (US$1.12)
in the fourth quarter of 2017 from RMB0.41 in the same period last year and
RMB0.95 in the third quarter of 2017.
Non-GAAP diluted income per ADS increased to RMB7.29 (US$1.12)
in the fourth quarter of 2017 from RMB0.80 in the same period last year and
RMB1.10 in the third quarter of
2017.
ADJUSTED EBITDA
Adjusted EBITDA (Non-GAAP) increased by 61.3% year over
year and 36.8% quarter over quarter to RMB255.8 million (US$39.3
million) in the fourth quarter of 2017.
CASH AND CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM
INVESTMENTS BALANCE
As of December 31, 2017, the
Company had cash and cash equivalents, restricted cash, and
short-term investments of RMB3,803.3
million (US$584.6
million).
CASH FLOW FROM OPERATING ACTIVITIES AND FREE CASH
FLOW
In the fourth quarter of 2017, the Company generated
RMB267.5 million (US$41.1 million) of net cash from operating
activities and RMB258.9 million
(US$39.8 million) of free cash
flow.
SHARES ISSUED AND OUTSTANDING
As of December 31, 2017, the
Company had a total of 1,421,649,639 Class A and Class B ordinary
shares issued and outstanding. One ADS represents 10 Class A
ordinary shares.
Fiscal Year 2017 Results
REVENUES
Total revenues increased by 9.0% year over year to RMB4,974.8 million (US$764.6 million) in 2017, which was primarily
driven by rapid growth in the Company's Live.me and mobile game
businesses.
- Revenues from utility products and related services
decreased by 11.1% year over year to RMB3,439.6 million (US$528.7 million) in 2017. The decrease was
primarily due to a decline in PC revenues as internet traffic in
China continued to migrate from PC
to mobile devices.
- Revenues from the mobile entertainment business
increased by 115.9% year over year to RMB1,496.4 million (US$230.0 million). The increase was primarily due
to the rapid growth in Live.me's revenues and the Company's
enriched mobile game portfolio as a result of the introduction of
several new mobile games in early 2017.
By platform, revenues generated from the mobile business
increased by 22.2% year over year to RMB4,315.0 million (US$663.2 million), or 86.7% of our total revenues
in 2017. The increase was a result of the rapid growth of the
Company's Live.me business in the overseas markets and the growth
of the Company's mobile game revenues, particularly in the overseas
markets.
By region, revenues generated from overseas markets
increased by 21.4% year over year to RMB3,335.5 million (US$512.7 million), or 67.0% of our total
revenues, in 2017.
COST OF REVENUES AND GROSS PROFIT
Cost of revenues increased by 15.3% year over year to
RMB1,780.1 million (US$273.6 million) in 2017, which primarily
resulted from increased investment in the Company's Live.me
business. Non-GAAP cost of revenues increased by 15.4% year
over year to RMB1,779.3 million
(US$273.5 million) in 2017.
Gross profit increased by 5.8% year over year to
RMB3,194.7 million (US$491.0 million) in 2017. Non-GAAP gross
profit increased by 5.7% year over year to RMB3,195.4 million (US$491.1 million) in 2017.
OPERATING INCOME/LOSS AND EXPENSES
Total operating expenses decreased by 9.4% year over year
to RMB2,747.8 million (US$422.3 million) in 2017. Total non-GAAP
operating expenses decreased by 2.0% year over year to
RMB2,675.2 million (US$411.2 million).
- Research and development expenses decreased by 24.4%
year over year to RMB684.9 million
(US$105.3 million) in 2017, which
primarily resulted from lower share-based compensation expenses and
reduced R&D headcount for the Company's News Republic business
and mobile utility product operation. Non-GAAP research and
development expenses, which exclude share-based compensation
expenses, decreased by 12.3% year over year to RMB664.2 million (US$102.1
million).
- Selling and marketing expenses remained relatively flat
year over year at RMB1,656.5 million
(US$254.6 million) in 2017, which was
primarily due to increased product promotional activities for the
Live.me business. This was partially offset by reduced spending on
product promotional activities for utility applications in the
overseas markets. Non-GAAP selling and marketing expenses,
which exclude share-based compensation expenses, remained
relatively flat year over year at RMB1,656.5
million (US$254.6
million).
- General and administrative expenses decreased by 27.5%
year over year to RMB407.4 million
(US$62.6 million) in 2017, which was
a result of lower share-based compensation expenses and a decrease
in allowance for doubtful accounts. Non-GAAP general and
administrative expenses, which exclude share-based compensation
expenses, decreased by 15.2% year over year to RMB355.6 million (US$54.7
million).
Operating profit was RMB446.9
million (US$68.7 million) in
2017 as compared to an operating loss of RMB12.4 million in 2016. Non-GAAP operating
profit increased by 77.1% year over year to RMB520.2 million (US$80.0
million) in 2017.
The Company has reported its operating profit along the
following segments since the second quarter of 2017:
- Operating profit for utility products and related
services increased by 16.1% year over year to RMB979.4 million (US$150.5
million) in 2017 mainly due to the optimization of the cost
and expense structure of this segment.
- Operating loss for the mobile entertainment business was
RMB417.4 million (US$64.1 million) in 2017, compared to operating
loss of RMB532.0 million in 2016. The
reduced loss was mainly a result of the year-over-year increases in
revenues generated from the Company's Live.me and mobile game
businesses and reduced costs and expenses from News Republic
business, partially offset by the Company's increased investments
in Live.me and Cheez, the short video business operated by Live.me
in the overseas markets.
Share-based compensation expenses decreased by 76.1% year
over year to RMB73.3 million
(US$11.3 million) in 2017. The
decrease resulted from a combination of several factors. The
Company employed an accelerated method to recognize share-based
compensation expenses. A significant number of share-based awards
that were granted by the Company during its IPO in 2014 approached
the end of their vesting periods in 2017. Furthermore, fewer
share-based awards were granted in 2017 than in previous years and
more unvested awarded shares were forfeited in 2017.
NET INCOME/LOSS ATTRIBUTABLE TO CHEETAH MOBILE
SHAREHOLDERS
Net income attributable to Cheetah Mobile shareholders
was RMB1,348.2 million (US$207.2 million) in 2017 as compared to a net
loss attributable to Cheetah Mobile shareholders of RMB80.5 million in 2016. Non-GAAP net income
attributable to Cheetah Mobile shareholders increased by 530.0%
year over year to RMB1,421.5 million
(US$218.5 million) in 2017.
NET INCOME/LOSS PER ADS
Diluted income per ADS in 2017 was RMB9.37 (US$1.44)
as compared to diluted loss per ADS of RMB0.58 in 2016. Non-GAAP diluted income per
ADS in 2017 was RMB9.88
(US$1.52) as compared to RMB1.59 in 2016.
ADJUSTED EBITDA
Adjusted EBITDA (Non-GAAP) increased by 43.6% year over
year to RMB656.5 million
(US$100.9 million) in 2017.
Recent Developments
Senior Management Promotions
Cheetah Mobile's board of directors has approved the promotions
of Ms. Yuki Yandan He and Mr.
Edward Mingyan Sun as Senior Vice
Presidents in the fourth quarter of 2017.
Yuki joined Cheetah Mobile in 2010 and has been in charge of a
number of the Company's flagship products, including Duba
Anti-virus, Clean Master, and Battery Doctor. In particular, Clean
Master has been the Company's most significant mobile product. Yuki
has led the launch of Live.me, a popular living streaming
application, in the overseas markets since April 2016. Live.me is Cheetah Mobile's first
subsidiary to raise funds from outside investors. As the chief
executive officer of Live.me, Yuki led Live.me's two rounds of
financing in 2017 and raised an aggregate of US$110 million. Live.me has also been named one
of Fast Company's Most Innovative Companies in Video for 2017.
Prior to Cheetah Mobile, Yuki was a product director at
Tencent and Kingsoft and played a
significant role in designing various products. Yuki received a
bachelor's degree in electronic science and technology from the
University of Electronic Science and Technology of China.
Edward joined Cheetah Mobile in 2010 and has been in charge of
various mobile utility products, including CM Launcher, Cheetah
Keyboard, Cheetah Browser for both PC and mobile, and Duba
Aiti-virus. Prior to Cheetah Mobile, Edward worked at Qihoo 360 and
Trent Micro, serving in various management roles. Edward received a
college degree and continued his post-graduate studies at the
University of Science and Technology of China.
Update Regarding Bytedance-Related Deals
Cheetah Mobile completed the disposals of News Republic and
Musical.ly to Bytedance in the fourth quarter of 2017. The
two transactions resulted in a gain of RMB1,089.0 million (US$167.4 million) in the fourth quarter of
2017. In addition, Live.me Inc., which operates Live.me, a
live video streaming application raised US$50 million from Bytedance in the fourth
quarter of 2017. The new funding is presented as redeemable
non-controlling interests on the Company's balance sheet as of
December 31, 2017.
Business Outlook
For the first quarter of 2018, the Company expects its total
revenues to be between RMB1,100
million (US$169 million) and
RMB1,140 million (US$175 million). This estimate represents
management's preliminary view as of the date of this release, which
is subject to change.
Conference Call Information
The Company will hold a conference call on Monday, March 19, 2018 at 8:00 a.m. Eastern Time or 8:00 p.m. 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 RMB6.5063 to
US$1.00, the exchange rate in effect
as of December 31, 2017, 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 with strong
global vision. It has attracted hundreds of millions of monthly
actively users through its mobile utilities products such as Clean
Master and Cheetah Keyboard, casual games such as Piano Tiles 2,
and live streaming product Live.me. The Company 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. The Company also provides
value-added services to its mobile application users through the
sale of in-app virtual items on select mobile products and games.
Cheetah Mobile is committed to leveraging its cutting-edge
artificial intelligence technologies to power its products and make
the world smarter. It has been listed on the New York Stock
Exchange since May 2014.
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 cost of revenues reflects cost of revenues excluding
the portion of share-based compensation expenses allocated to cost
of revenues.
- Non-GAAP gross profit reflects gross profit excluding the
portion of share-based compensation expenses allocated to gross
profit.
- ŸNon-GAAP operating income and expenses reflect operating
income and expenses excluding the portion of share-based
compensation expenses allocated to operating expenses.
- ŸNon-GAAP operating profit reflects operating profit excluding
share-based compensation expenses.
- Non-GAAP net income attributable to Cheetah Mobile shareholders
is net income attributable to Cheetah Mobile shareholders excluding
share-based compensation expenses.
- Non-GAAP diluted earnings per ADS is non-GAAP net income
attributable to Cheetah Mobile shareholders excluding net income
attributable to redeemable noncontrolling interests, 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.
- ŸFree cash flow is net cash generated by operating activities
less capital expenditure.
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 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: helenjingzhu@cmcm.com
ICR, Inc.
Jack Wang
Tel: +1 (646) 417-5395
Email: IR@cmcm.com
CHEETAH MOBILE
INC.
|
Condensed
Consolidated Balance Sheets
|
(Unaudited,
amounts in thousands of Renminbi ("RMB") and US dollars
("US$")
|
|
|
|
|
|
|
|
As
of
|
|
31-Dec-16
|
|
31-Dec-17
|
|
31-Dec-17
|
|
RMB
|
|
RMB
|
|
USD
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
1,411,000
|
|
2,317,488
|
|
356,191
|
Restricted
cash
|
167,751
|
|
90,149
|
|
13,856
|
Short-term
investments
|
361,499
|
|
1,395,694
|
|
214,514
|
Accounts
receivable
|
600,885
|
|
621,272
|
|
95,488
|
Prepayments and other
current assets
|
571,306
|
|
918,243
|
|
141,131
|
Due from related
parities
|
44,278
|
|
54,052
|
|
8,308
|
Deferred tax
assets
|
15,527
|
|
-
|
|
-
|
Total current
assets
|
3,172,246
|
|
5,396,898
|
|
829,488
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
Property and
equipment, net
|
117,439
|
|
89,137
|
|
13,700
|
Intangible assets,
net
|
227,251
|
|
70,225
|
|
10,793
|
Goodwill
|
943,922
|
|
634,157
|
|
97,468
|
Investment in equity investees
|
100,063
|
|
149,969
|
|
23,050
|
Other long term investments
|
877,094
|
|
1,002,721
|
|
154,115
|
Due from related
parities
|
-
|
|
5,216
|
|
802
|
Deferred tax
assets
|
74,809
|
|
57,642
|
|
8,859
|
Other non-current
assets
|
28,310
|
|
42,966
|
|
6,604
|
Total non-current
assets
|
2,368,888
|
|
2,052,033
|
|
315,391
|
|
|
|
|
|
|
Total
assets
|
5,541,134
|
|
7,448,931
|
|
1,144,879
|
|
|
|
|
|
|
LIABILITIES,
MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Bank loans
|
379,544
|
|
336,304
|
|
51,689
|
Accounts
payable
|
194,882
|
|
164,537
|
|
25,289
|
Accrued expenses and
other current liabilities
|
1,408,419
|
|
1,532,489
|
|
235,539
|
Due to related
parties
|
71,167
|
|
81,810
|
|
12,574
|
Income tax
payable
|
12,209
|
|
50,614
|
|
7,779
|
Total current
liabilities
|
2,066,221
|
|
2,165,754
|
|
332,870
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
Bank loans
|
118,797
|
|
-
|
|
-
|
Deferred tax
liabilities
|
112,438
|
|
73,393
|
|
11,280
|
Other non-current
liabilities
|
42,500
|
|
54,574
|
|
8,388
|
Total non-current
liabilities
|
273,735
|
|
127,967
|
|
19,668
|
|
|
|
|
|
|
Total
liabilities
|
2,339,956
|
|
2,293,721
|
|
352,538
|
|
|
|
|
|
|
Mezzanine
equity:
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
-
|
|
649,246
|
|
99,787
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
Ordinary
shares
|
230
|
|
229
|
|
35
|
Treasury
stock
|
(178,991)
|
|
-
|
|
-
|
Additional paid-in
capital
|
2,725,675
|
|
2,644,043
|
|
406,382
|
Retained
earnings
|
237,293
|
|
1,564,883
|
|
240,518
|
Accumulated other
comprehensive income
|
228,145
|
|
84,206
|
|
12,943
|
Total Cheetah
Mobile shareholders' equity
|
3,012,352
|
|
4,293,361
|
|
659,878
|
Noncontrolling
interests
|
188,826
|
|
212,603
|
|
32,676
|
|
|
|
|
|
|
Total
equity
|
3,201,178
|
|
4,505,964
|
|
692,554
|
|
|
|
|
|
|
Total liabilities,
mezzanine equity and equity
|
5,541,134
|
|
7,448,931
|
|
1,144,879
|
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
|
|
31-Dec-16
|
|
30-Sep-17
|
|
31-Dec-17
|
|
31-Dec-17
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD
|
Revenues
|
1,274,672
|
|
1,194,687
|
|
1,387,806
|
|
213,302
|
Utility products and
related services
|
1,009,206
|
|
824,764
|
|
967,232
|
|
148,661
|
Mobile
entertainment
|
265,466
|
|
362,448
|
|
399,493
|
|
61,401
|
Others
|
-
|
|
7,475
|
|
21,081
|
|
3,240
|
|
|
|
|
|
|
|
|
Cost of revenues
(a)
|
(464,197)
|
|
(399,664)
|
|
(461,383)
|
|
(70,913)
|
Gross
profit
|
810,475
|
|
795,023
|
|
926,423
|
|
142,389
|
|
|
|
|
|
|
|
|
Operating income
and expenses:
|
|
|
|
|
|
|
|
Research and
development (a)
|
(235,355)
|
|
(174,646)
|
|
(151,867)
|
|
(23,342)
|
Selling and marketing
(a)
|
(408,097)
|
|
(409,045)
|
|
(420,080)
|
|
(64,565)
|
General and
administrative (a)
|
(126,846)
|
|
(88,737)
|
|
(115,089)
|
|
(17,689)
|
Impairment of
goodwill and intangible assets
|
(539)
|
|
-
|
|
(38,690)
|
|
(5,947)
|
Other operating
income
|
22,545
|
|
9,739
|
|
21,307
|
|
3,275
|
Total operating
income and expenses
|
(748,292)
|
|
(662,689)
|
|
(704,419)
|
|
(108,268)
|
|
|
|
|
|
|
|
|
Operating
profit
|
62,183
|
|
132,334
|
|
222,004
|
|
34,121
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest income,
net
|
954
|
|
7,380
|
|
10,227
|
|
1,572
|
Settlement and
changes in fair value of contingent consideration
|
(3,011)
|
|
-
|
|
-
|
|
-
|
Foreign exchange gain
(loss), net
|
2,951
|
|
(3,867)
|
|
(5,943)
|
|
(913)
|
Impairment of
investments
|
(45,863)
|
|
(65,461)
|
|
(209,565)
|
|
(32,210)
|
Gains (Losses) from
equity method investments, net
|
2,889
|
|
(582)
|
|
1,921
|
|
295
|
Other income,
net
|
38,648
|
|
82,370
|
|
1,088,965
|
|
167,371
|
|
|
|
|
|
|
|
|
Income before
taxes
|
58,751
|
|
152,174
|
|
1,107,609
|
|
170,236
|
Income tax benefits
(expenses)
|
9,278
|
|
(7,767)
|
|
(40,259)
|
|
(6,188)
|
Net
income
|
68,029
|
|
144,407
|
|
1,067,350
|
|
164,048
|
Less: net income
attributable to noncontrolling interests
|
9,254
|
|
4,727
|
|
20,264
|
|
3,115
|
Net income
attributable to Cheetah Mobile shareholders
|
58,775
|
|
139,680
|
|
1,047,086
|
|
160,933
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
Basic
|
0.04
|
|
0.10
|
|
0.74
|
|
0.11
|
Diluted
|
0.04
|
|
0.09
|
|
0.73
|
|
0.11
|
|
|
|
|
|
|
|
|
Earnings per
ADS
|
|
|
|
|
|
|
|
Basic
|
0.42
|
|
0.97
|
|
7.43
|
|
1.14
|
Diluted
|
0.41
|
|
0.95
|
|
7.27
|
|
1.12
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding
|
|
|
|
|
|
|
|
Basic
|
1,384,035,270
|
|
1,396,601,023
|
|
1,400,420,814
|
|
1,400,420,814
|
Diluted
|
1,419,820,902
|
|
1,429,237,411
|
|
1,432,849,633
|
|
1,432,849,633
|
Weighted average
number of ADSs outstanding
|
|
|
|
|
|
|
|
Basic
|
138,403,527
|
|
139,660,102
|
|
140,042,081
|
|
140,042,081
|
Diluted
|
141,982,090
|
|
142,923,741
|
|
143,284,963
|
|
143,284,963
|
|
|
|
|
|
|
|
|
Other
comprehensive income (loss), net of tax of nil
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
72,411
|
|
(48,572)
|
|
(52,267)
|
|
(8,033)
|
Unrealized gains
(losses) on available-for-sale securities, net
|
415
|
|
-
|
|
(433)
|
|
(67)
|
Other
comprehensive income (loss)
|
72,826
|
|
(48,572)
|
|
(52,700)
|
|
(8,100)
|
Total
comprehensive income
|
140,855
|
|
95,835
|
|
1,014,650
|
|
155,948
|
Less: Total
comprehensive income attributable to
noncontrolling interests
|
6,941
|
|
2,604
|
|
18,568
|
|
2,854
|
Total
comprehensive income attributable to
Cheetah Mobile shareholders
|
133,914
|
|
93,231
|
|
996,082
|
|
153,094
|
|
|
|
|
|
|
|
|
(a) Share-based
compensation expenses
|
|
|
|
|
|
|
|
Cost of
revenues
|
824
|
|
(63)
|
|
(981)
|
|
(151)
|
Research and
development
|
22,716
|
|
2,847
|
|
4,471
|
|
687
|
Selling and
marketing
|
34
|
|
(1,680)
|
|
(3,049)
|
|
(469)
|
General and
administrative
|
30,627
|
|
20,288
|
|
2,933
|
|
451
|
Total
|
54,201
|
|
21,392
|
|
3,374
|
|
518
|
CHEETAH MOBILE
INC.
|
Information about
Segment
|
(Unaudited,
in'000, except for percentage)
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended December 31, 2017
|
|
|
Utility
Products
and
Related Services
|
|
Mobile
Entertainment
|
|
Others
|
|
Unallocated*
|
|
Consolidated
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
USD
|
Revenue
|
967,232
|
|
399,493
|
|
21,081
|
|
-
|
|
1,387,806
|
213,302
|
Operating profit
(loss)
|
326,950
|
|
(61,846)
|
|
(39,726)
|
|
(3,374)
|
|
222,004
|
34,121
|
Operating
margin
|
33.8%
|
|
(15.5)%
|
|
(188.4)%
|
|
|
|
16.0%
|
16.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended September 30, 2017
|
|
|
Utility
Products
and
Related Services
|
|
Mobile
Entertainment
|
|
Others
|
|
Unallocated*
|
|
Consolidated
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
Revenue
|
824,764
|
|
362,448
|
|
7,475
|
|
-
|
|
1,194,687
|
|
Operating profit
(loss)
|
260,490
|
|
(104,957)
|
|
(1,807)
|
|
(21,392)
|
|
132,334
|
|
Operating
margin
|
31.6%
|
|
(29.0)%
|
|
(24.2)%
|
|
|
|
11.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended December 31, 2016
|
|
|
Utility
Products
and
Related Services
|
|
Mobile
Entertainment
|
|
Others
|
|
Unallocated*
|
|
Consolidated
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
Revenue
|
1,009,206
|
|
265,466
|
|
-
|
|
-
|
|
1,274,672
|
|
Operating profit
(loss)
|
317,463
|
|
(201,079)
|
|
-
|
|
(54,201)
|
|
62,183
|
|
Operating
margin
|
31.5%
|
|
(75.7)%
|
|
|
|
|
|
4.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
* Unallocated
expenses refer to SBC expenses that are not allocated to individual
segments.
|
|
|
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 December 31, 2017
|
|
|
|
GAAP
|
|
% of
Net
|
|
Share-based
|
|
% of
Net
|
|
Non-GAAP
|
|
% of
Net
|
|
Non-GAAP
|
|
Result
|
|
Revenues
|
|
Compensation
|
|
Revenues
|
|
Result
|
|
Revenues
|
|
Result
($)
|
Revenues
|
1,387,806
|
|
|
|
|
|
|
|
1,387,806
|
|
|
|
213,302
|
Cost of
revenues
|
(461,383)
|
|
33.2%
|
|
(981)
|
|
0.1%
|
|
(462,364)
|
|
33.3%
|
|
(71,064)
|
Gross
profit
|
926,423
|
|
66.8%
|
|
(981)
|
|
0.1%
|
|
925,442
|
|
66.7%
|
|
142,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
(151,867)
|
|
10.9%
|
|
4,471
|
|
0.3%
|
|
(147,396)
|
|
10.6%
|
|
(22,654)
|
Selling and
marketing
|
(420,080)
|
|
30.3%
|
|
(3,049)
|
|
0.2%
|
|
(423,129)
|
|
30.5%
|
|
(65,034)
|
General and
administrative
|
(115,089)
|
|
8.3%
|
|
2,933
|
|
0.2%
|
|
(112,156)
|
|
8.1%
|
|
(17,238)
|
Impairment of
goodwill and intangible assets
|
(38,690)
|
|
2.8%
|
|
-
|
|
0.0%
|
|
(38,690)
|
|
2.8%
|
|
(5,947)
|
Other operating
income
|
21,307
|
|
1.5%
|
|
-
|
|
0.0%
|
|
21,307
|
|
1.5%
|
|
3,275
|
Total operating
income and expenses
|
(704,419)
|
|
50.8%
|
|
4,355
|
|
0.3%
|
|
(700,064)
|
|
50.4%
|
|
(107,598)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
222,004
|
|
16.0%
|
|
3,374
|
|
0.2%
|
|
225,378
|
|
16.2%
|
|
34,640
|
Net income
attributable to Cheetah Mobile shareholders
|
1,047,086
|
|
75.4%
|
|
3,374
|
|
0.2%
|
|
1,050,460
|
|
75.7%
|
|
161,453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
ordinary share (RMB)
|
0.73
|
|
|
|
0.00
|
|
|
|
0.73
|
|
|
|
|
Diluted earnings per
ADS (RMB)
|
7.27
|
|
|
|
0.02
|
|
|
|
7.29
|
|
|
|
|
Diluted earnings per
ADS (USD)
|
1.12
|
|
|
|
0.00
|
|
|
|
1.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended September 30, 2017
|
|
|
|
GAAP
|
|
% of
Net
|
|
Share-based
|
|
% of
Net
|
|
Non-GAAP
|
|
% of
Net
|
|
|
|
Result
|
|
Revenues
|
|
Compensation
|
|
Revenues
|
|
Result
|
|
Revenues
|
|
|
Revenues
|
1,194,687
|
|
|
|
|
|
|
|
1,194,687
|
|
|
|
|
Cost of
revenues
|
(399,664)
|
|
33.5%
|
|
(63)
|
|
0.0%
|
|
(399,727)
|
|
33.5%
|
|
|
Gross
profit
|
795,023
|
|
66.5%
|
|
(63)
|
|
0.0%
|
|
794,960
|
|
66.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
(174,646)
|
|
14.6%
|
|
2,847
|
|
0.2%
|
|
(171,799)
|
|
14.4%
|
|
|
Selling and
marketing
|
(409,045)
|
|
34.2%
|
|
(1,680)
|
|
0.1%
|
|
(410,725)
|
|
34.4%
|
|
|
General and
administrative
|
(88,737)
|
|
7.4%
|
|
20,288
|
|
1.7%
|
|
(68,449)
|
|
5.7%
|
|
|
Impairment of
goodwill and intangible assets
|
-
|
|
0.0%
|
|
-
|
|
0.0%
|
|
-
|
|
0.0%
|
|
|
Other operating
income
|
9,739
|
|
0.8%
|
|
-
|
|
0.0%
|
|
9,739
|
|
0.8%
|
|
|
Total operating
income and expenses
|
(662,689)
|
|
55.5%
|
|
21,455
|
|
1.8%
|
|
(641,234)
|
|
53.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
132,334
|
|
11.1%
|
|
21,392
|
|
1.8%
|
|
153,726
|
|
12.9%
|
|
|
Net income
attributable to Cheetah Mobile shareholders
|
139,680
|
|
11.7%
|
|
21,392
|
|
1.8%
|
|
161,072
|
|
13.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
ordinary share (RMB)
|
0.09
|
|
|
|
0.02
|
|
|
|
0.11
|
|
|
|
|
Diluted earnings per
ADS (RMB)
|
0.95
|
|
|
|
0.15
|
|
|
|
1.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended December 31, 2016
|
|
|
|
GAAP
|
|
% of
Net
|
|
Share-based
|
|
% of
Net
|
|
Non-GAAP
|
|
% of
Net
|
|
|
|
Result
|
|
Revenues
|
|
Compensation
|
|
Revenues
|
|
Result
|
|
Revenues
|
|
|
Revenues
|
1,274,672
|
|
|
|
|
|
|
|
1,274,672
|
|
|
|
|
Cost of
revenues
|
(464,197)
|
|
36.4%
|
|
824
|
|
0.1%
|
|
(463,373)
|
|
36.4%
|
|
|
Gross
profit
|
810,475
|
|
63.6%
|
|
824
|
|
0.1%
|
|
811,299
|
|
63.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
(235,355)
|
|
18.5%
|
|
22,716
|
|
1.8%
|
|
(212,639)
|
|
16.7%
|
|
|
Selling and
marketing
|
(408,097)
|
|
32.0%
|
|
34
|
|
0.0%
|
|
(408,063)
|
|
32.0%
|
|
|
General and
administrative
|
(126,846)
|
|
10.0%
|
|
30,627
|
|
2.4%
|
|
(96,219)
|
|
7.5%
|
|
|
Impairment of
goodwill and intangible assets
|
(539)
|
|
0.0%
|
|
-
|
|
0.0%
|
|
(539)
|
|
0.0%
|
|
|
Other operating
income
|
22,545
|
|
1.8%
|
|
-
|
|
0.0%
|
|
22,545
|
|
1.8%
|
|
|
Total operating
income and expenses
|
(748,292)
|
|
58.7%
|
|
53,377
|
|
4.2%
|
|
(694,915)
|
|
54.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
62,183
|
|
4.9%
|
|
54,201
|
|
4.3%
|
|
116,384
|
|
9.1%
|
|
|
Net income
attributable to Cheetah Mobile Shareholders
|
58,775
|
|
4.6%
|
|
54,201
|
|
4.3%
|
|
112,976
|
|
8.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
ordinary share (RMB)
|
0.04
|
|
|
|
0.04
|
|
|
|
0.08
|
|
|
|
|
Diluted earnings per
ADS (RMB)
|
0.41
|
|
|
|
0.39
|
|
|
|
0.80
|
|
|
|
|
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)
|
|
|
|
|
|
Year Ended
December 31
|
|
2016
|
2017
|
2017
|
|
RMB
|
RMB
|
USD
|
Revenues
|
4,564,650
|
4,974,757
|
764,606
|
Utility products and
related services
|
3,870,995
|
3,439,563
|
528,651
|
Mobile
entertainment
|
693,195
|
1,496,443
|
229,999
|
Others
|
460
|
38,751
|
5,956
|
|
|
|
|
Cost of revenues
(a)
|
(1,543,817)
|
(1,780,089)
|
(273,595)
|
Gross
profit
|
3,020,833
|
3,194,668
|
491,011
|
|
|
|
|
Operating income
and expenses:
|
|
|
|
Research and
development (a)
|
(905,854)
|
(684,863)
|
(105,262)
|
Selling and marketing
(a)
|
(1,650,581)
|
(1,656,505)
|
(254,600)
|
General and
administrative (a)
|
(561,834)
|
(407,410)
|
(62,618)
|
Impairment of
goodwill and intangible assets
|
(2,889)
|
(38,862)
|
(5,973)
|
Other operating
income
|
87,877
|
39,852
|
6,125
|
Total operating
income and expenses
|
(3,033,281)
|
(2,747,788)
|
(422,328)
|
|
|
|
|
Operating (loss)
profit
|
(12,448)
|
446,880
|
68,683
|
Other income
(expense):
|
|
|
|
Interest income,
net
|
7,783
|
22,603
|
3,474
|
Settlement and
changes in fair value of contingent consideration
|
(3,377)
|
(9,014)
|
(1,385)
|
Foreign exchange gain
(loss) , net
|
3,747
|
(15,224)
|
(2,340)
|
Impairment of
investments
|
(141,069)
|
(275,026)
|
(42,271)
|
(Losses) Gains from equity
method investments, net
|
(11,363)
|
495
|
76
|
Other income,
net
|
87,831
|
1,262,551
|
194,051
|
|
|
|
|
(Loss) Income
before taxes
|
(68,896)
|
1,433,265
|
220,288
|
Income tax benefits
(expenses)
|
12,189
|
(57,602)
|
(8,853)
|
Net (loss)
income
|
(56,707)
|
1,375,663
|
211,435
|
Less: net income
attributable to noncontrolling interests
|
23,818
|
27,469
|
4,222
|
Net (loss) income
attributable to Cheetah Mobile shareholders
|
(80,525)
|
1,348,194
|
207,213
|
|
|
|
|
(Losses) Earnings
per share
|
|
|
|
Basic
|
(0.06)
|
0.96
|
0.15
|
Diluted
|
(0.06)
|
0.94
|
0.14
|
|
|
|
|
(Losses) Earnings
per ADS
|
|
|
|
Basic
|
(0.58)
|
9.57
|
1.47
|
Diluted
|
(0.58)
|
9.37
|
1.44
|
|
|
|
|
Non-GAAP earnings
per ADS
|
|
|
|
Basic
|
1.63
|
10.10
|
1.55
|
Diluted
|
1.59
|
9.88
|
1.52
|
|
|
|
|
Weighted average
number of shares outstanding
|
|
|
|
Basic
|
1,387,254,551
|
1,394,303,326
|
1,394,303,326
|
Diluted
|
1,387,254,551
|
1,425,154,838
|
1,425,154,838
|
Diluted
(non-GAAP)
|
1,423,086,096
|
1,425,154,838
|
1,425,154,838
|
Weighted average
number of ADSs used in computation
|
|
|
|
Basic
|
138,725,455
|
139,430,333
|
139,430,333
|
Diluted
|
138,725,455
|
142,515,484
|
142,515,484
|
Diluted
(non-GAAP)
|
142,308,610
|
142,515,484
|
142,515,484
|
|
|
|
|
Other
comprehensive income (loss), net of tax of nil
|
|
|
|
Foreign currency
translation adjustments
|
132,450
|
(148,304)
|
-22,794
|
Unrealized gains
(losses) on available-for-sale securities, net
|
1,241
|
(433)
|
(67)
|
Reclassification adjustments
for gains included in net loss
|
(21,666)
|
-
|
-
|
Other
comprehensive income (loss)
|
112,025
|
(148,737)
|
(22,861)
|
Total
comprehensive income
|
55,318
|
1,226,926
|
188,574
|
Less: Total
comprehensive income attributable to
noncontrolling interests
|
26,814
|
22,671
|
3,484
|
Total
comprehensive income attributable to
Cheetah Mobile shareholders
|
28,504
|
1,204,255
|
185,090
|
|
|
|
|
(a) Share-based
compensation expenses
|
|
|
|
Cost of
revenues
|
1,490
|
762
|
117
|
Research and
development
|
148,211
|
20,691
|
3,180
|
Selling and
marketing
|
13,830
|
39
|
6
|
General and
administrative
|
142,618
|
51,824
|
7,965
|
Total
|
306,149
|
73,316
|
11,268
|
CHEETAH MOBILE
INC.
|
Information about
Segment
|
(Unaudited,
in'000, except for percentage)
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Year Ended
December 31, 2017
|
|
Utility
Products
and
Related Services
|
|
Mobile
Entertainment
|
|
Others
|
|
Unallocated*
|
|
Consolidated
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
USD
|
Revenue
|
3,439,563
|
|
1,496,443
|
|
38,751
|
|
-
|
|
4,974,757
|
764,606
|
Operating profit
(loss)
|
979,447
|
|
(417,350)
|
|
(41,901)
|
|
(73,316)
|
|
446,880
|
68,683
|
Operating
margin
|
28.5%
|
|
(27.9)%
|
|
(108.1)%
|
|
|
|
9.0%
|
9.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Year Ended
December 31, 2016
|
|
|
Utility
Products
and
Related Services
|
|
Mobile
Entertainment
|
|
Others
|
|
Unallocated*
|
|
Consolidated
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
Revenue
|
3,870,995
|
|
693,195
|
|
460
|
|
-
|
|
4,564,650
|
|
Operating profit
(loss)
|
843,518
|
|
(531,989)
|
|
(17,828)
|
|
(306,149)
|
|
(12,448)
|
|
Operating
margin
|
21.8%
|
|
(76.7)%
|
|
(3,875.7)%
|
|
|
|
-0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
* Unallocated expenses refer to
SBC expenses that are not allocated to individual
segments.
|
|
|
|
CHEETAH MOBILE
INC.
|
Reconciliation of
GAAP and Non-GAAP Results
|
(Unaudited, in'000,
except for per share data and percentage)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Year Ended
December 31, 2017
|
|
|
|
GAAP
|
|
% of
Net
|
|
Share-based
|
|
% of
Net
|
|
Non-GAAP
|
|
% of
Net
|
|
Non-GAAP
|
|
Result
|
|
Revenues
|
|
Compensation
|
|
Revenues
|
|
Result
|
|
Revenues
|
|
Result
($)
|
Revenues
|
4,974,757
|
|
|
|
|
|
|
|
4,974,757
|
|
|
|
764,606
|
Cost of
revenues
|
(1,780,089)
|
|
35.8%
|
|
762
|
|
0.0%
|
|
(1,779,327)
|
|
35.8%
|
|
(273,478)
|
Gross
profit
|
3,194,668
|
|
64.2%
|
|
762
|
|
0.0%
|
|
3,195,430
|
|
64.2%
|
|
491,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
(684,863)
|
|
13.8%
|
|
20,691
|
|
0.4%
|
|
(664,172)
|
|
13.4%
|
|
(102,081)
|
Selling and
marketing
|
(1,656,505)
|
|
33.3%
|
|
39
|
|
0.0%
|
|
(1,656,466)
|
|
33.3%
|
|
(254,594)
|
General and
administrative
|
(407,410)
|
|
8.2%
|
|
51,824
|
|
1.0%
|
|
(355,586)
|
|
7.1%
|
|
(54,653)
|
Impairment of
goodwill and intangible assets
|
(38,862)
|
|
0.8%
|
|
-
|
|
0.0%
|
|
(38,862)
|
|
0.8%
|
|
(5,973)
|
Other operating
income
|
39,852
|
|
0.8%
|
|
-
|
|
0.0%
|
|
39,852
|
|
0.8%
|
|
6,125
|
Total operating
income and expenses
|
(2,747,788)
|
|
55.2%
|
|
72,554
|
|
1.5%
|
|
(2,675,234)
|
|
53.8%
|
|
(411,176)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
446,880
|
|
9.0%
|
|
73,316
|
|
1.5%
|
|
520,196
|
|
10.5%
|
|
79,953
|
Net income
attributable to Cheetah Mobile shareholders
|
1,348,194
|
|
27.1%
|
|
73,316
|
|
1.5%
|
|
1,421,510
|
|
28.6%
|
|
218,482
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per ordinary
share (RMB)
|
0.94
|
|
|
|
0.05
|
|
|
|
0.99
|
|
|
|
|
Diluted earnings per ADS
(RMB)
|
9.37
|
|
|
|
0.51
|
|
|
|
9.88
|
|
|
|
|
Diluted earnings per ADS
(USD)
|
1.44
|
|
|
|
0.08
|
|
|
|
1.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Year Ended
December 31, 2016
|
|
|
|
GAAP
|
|
% of
Net
|
|
Share-based
|
|
% of
Net
|
|
Non-GAAP
|
|
% of
Net
|
|
|
|
Result
|
|
Revenues
|
|
Compensation
|
|
Revenues
|
|
Result
|
|
Revenues
|
|
|
Revenues
|
4,564,650
|
|
|
|
|
|
|
|
4,564,650
|
|
|
|
|
Cost of
revenues
|
(1,543,817)
|
|
33.8%
|
|
1,490
|
|
0.0%
|
|
(1,542,327)
|
|
33.8%
|
|
|
Gross
profit
|
3,020,833
|
|
66.2%
|
|
1,490
|
|
0.0%
|
|
3,022,323
|
|
66.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
(905,854)
|
|
19.8%
|
|
148,211
|
|
3.2%
|
|
(757,643)
|
|
16.6%
|
|
|
Selling and
marketing
|
(1,650,581)
|
|
36.2%
|
|
13,830
|
|
0.3%
|
|
(1,636,751)
|
|
35.9%
|
|
|
General and
administrative
|
(561,834)
|
|
12.3%
|
|
142,618
|
|
3.1%
|
|
(419,216)
|
|
9.2%
|
|
|
Impairment of
goodwill and intangible assets
|
(2,889)
|
|
0.1%
|
|
-
|
|
0.0%
|
|
(2,889)
|
|
0.1%
|
|
|
Other operating
income
|
87,877
|
|
1.9%
|
|
-
|
|
0.0%
|
|
87,877
|
|
1.9%
|
|
|
Total operating
income and expenses
|
(3,033,281)
|
|
66.5%
|
|
304,659
|
|
6.7%
|
|
(2,728,622)
|
|
59.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss)
profit
|
(12,448)
|
|
0.3%
|
|
306,149
|
|
6.7%
|
|
293,701
|
|
6.4%
|
|
|
Net (loss) income
attributable to Cheetah Mobile shareholders
|
(80,525)
|
|
1.8%
|
|
306,149
|
|
6.7%
|
|
225,624
|
|
4.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (losses) earnings
per ordinary share (RMB)
|
(0.06)
|
|
|
|
0.22
|
|
|
|
0.16
|
|
|
|
|
Diluted (losses) earnings per
ADS (RMB)
|
(0.58)
|
|
|
|
2.17
|
|
|
|
1.59
|
|
|
|
|
CHEETAH MOBILE
INC.
|
Reconciliation
from Net Income Attributable to Cheetah Mobile Shareholders to
Adjusted EBITDA (Non-GAAP)
|
(Unaudited, in
'000)
|
|
|
|
|
|
For The Three
Months Ended
|
|
31-Dec-16
|
30-Sep-17
|
31-Dec-17
|
31-Dec-17
|
|
RMB
|
RMB
|
RMB
|
USD
|
Net income
attributable to Cheetah Mobile shareholders
|
58,775
|
139,680
|
1,047,086
|
160,933
|
Add:
|
|
|
|
|
Income tax (benefits)
expenses
|
(9,278)
|
7,767
|
40,259
|
6,188
|
Interest income,
net
|
(954)
|
(7,380)
|
(10,227)
|
(1,572)
|
Depreciation and
amortization
|
42,196
|
33,162
|
30,377
|
4,669
|
Net income
attributable to noncontrolling interests
|
9,254
|
4,727
|
20,264
|
3,115
|
Other non-operating
expense (income), net
|
4,386
|
(12,460)
|
(875,378)
|
(134,543)
|
Share-based
compensation
|
54,201
|
21,392
|
3,374
|
518
|
Adjusted
EBITDA
|
158,580
|
186,888
|
255,755
|
39,308
|
CHEETAH MOBILE
INC.
|
Reconciliation
from Net Income (Loss) Attributable to Cheetah Mobile Shareholders
to Adjusted EBITDA (Non-GAAP)
|
(Unaudited, in
'000)
|
|
|
|
|
|
For The Year Ended
December 31
|
|
31-Dec-16
|
31-Dec-17
|
31-Dec-17
|
|
RMB
|
RMB
|
USD
|
Net (loss)
income attributable to Cheetah Mobile shareholders
|
(80,525)
|
1,348,194
|
207,213
|
Add:
|
|
|
|
Income tax
(benefits) expense
|
(12,189)
|
57,602
|
8,853
|
Interest
income,net
|
(7,783)
|
(22,603)
|
(3,474)
|
Depreciation and amortization
|
163,357
|
136,301
|
20,949
|
Net income
attributable to noncontrolling interests
|
23,818
|
27,469
|
4,222
|
Other
non-operating expense (income), net
|
64,231
|
(963,782)
|
(148,131)
|
Share-based compensation
|
306,149
|
73,316
|
11,268
|
Adjusted
EBITDA
|
457,058
|
656,497
|
100,900
|
CHEETAH MOBILE
INC.
|
Revenues Generated
from PC-based and Mobile-based Applications and
Services
|
(Unaudited, in
'000)
|
|
|
|
|
|
|
For The Three
Months Ended
|
|
31-Dec-16
|
30-Sep-17
|
31-Dec-17
|
31-Dec-17
|
|
RMB
|
RMB
|
RMB
|
USD
|
PC
|
241,353
|
144,377
|
170,259
|
26,168
|
Mobile
|
1,033,319
|
1,050,310
|
1,217,547
|
187,134
|
Total
|
1,274,672
|
1,194,687
|
1,387,806
|
213,302
|
Cheetah Mobile
Inc.
|
Revenues Generated
from PC-based and Mobile-based Applications and
Services
|
(Unaudited, in
'000)
|
|
|
|
|
|
For The Year Ended
December 31
|
|
31-Dec-16
|
31-Dec-17
|
31-Dec-17
|
|
RMB
|
RMB
|
USD
|
PC
|
1,034,205
|
659,744
|
101,400
|
Mobile
|
3,530,445
|
4,315,013
|
663,206
|
Total
|
4,564,650
|
4,974,757
|
764,606
|
CHEETAH MOBILE
INC.
|
Revenues Generated
from Domestic and Overseas Markets
|
(Unaudited, in
'000)
|
|
|
|
|
|
|
For The Three
Months Ended
|
|
31-Dec-16
|
30-Sep-17
|
31-Dec-17
|
31-Dec-17
|
|
RMB
|
RMB
|
RMB
|
USD
|
Domestic
|
442,089
|
394,236
|
543,974
|
83,607
|
Overseas
|
832,583
|
800,451
|
843,832
|
129,695
|
Total
|
1,274,672
|
1,194,687
|
1,387,806
|
213,302
|
Cheetah Mobile
Inc.
|
Revenues Generated
from Domestic and Overseas Markets
|
(Unaudited, in
'000)
|
|
|
|
|
|
For The Year Ended
December 31
|
|
31-Dec-16
|
31-Dec-17
|
31-Dec-17
|
|
RMB
|
RMB
|
USD
|
Domestic
|
1,817,874
|
1,639,248
|
251,947
|
Overseas
|
2,746,776
|
3,335,509
|
512,659
|
Total
|
4,564,650
|
4,974,757
|
764,606
|
View original
content:http://www.prnewswire.com/news-releases/cheetah-mobile-announces-fourth-quarter-and-fiscal-year-2017-unaudited-consolidated-financial-results-300615790.html
SOURCE Cheetah Mobile