BEIJING, May 21, 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 first quarter
ended March 31, 2018.
First Quarter 2018 Financial Highlights
- Total revenues[1] were RMB1,145.1 million (US$182.6 million), exceeding the Company's
previous guidance range of RMB1,100
million to RMB1,140
million.
- Gross profit increased by 2.9% year over year to RMB753.9 million (US$120.2
million). Gross margin was 65.8% in the first quarter of
2018 compared to 61.5% in the same period last year.
- Operating profit increased to RMB136.4
million (US$21.7 million) from
RMB26.3 million in the same period
last year. Operating margin expanded to 11.9% from 2.2% in the same
period last year.
- Operating profit for utility products and related services
increased by 47.8% year over year to RMB264.7 million (US$42.2
million) in the first quarter of 2018. Operating margin for
utility products and related services expanded to 35.5% in the
first quarter of 2018 from 21.7% in the same period last year.
First Quarter 2018 Operating Metrics
- The average number of global mobile monthly active users
("Mobile MAUs") was 574 million in the first quarter of 2018. 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 first quarter of
2018.
Artificial Intelligence Technology
- In March 2018, Beijing OrionStar
Technology, an investee of Cheetah Mobile, achieved a
record-setting 98.355% recognition rate in the MegaFace challenge
(Challenge1/FaceScrub identification), an internationally
recognized facial recognition test managed by the Paul G. Allen
School of Computer Science & Engineering at the University of Washington. Cheetah Mobile holds
approximately 30% equity interest in Beijing OrionStar Technology
and has a two-year warrant to subscribe for additional equity
interest to achieve a controlling position.
Mr. Sheng Fu, Cheetah Mobile's
Chairman and Chief Executive Officer, stated, "We began 2018 on a
solid note with total revenues exceeding the high-end of our
guidance. In the first quarter of 2018, our utility product
business continued to generate strong profits and cash flow. We
also solidified our leading position in the mobile casual game
market by further enriching our game pipeline. Our artificial
intelligence ("AI") powered businesses made steady progress as
well. In March, Cheetah Mobile and Beijing OrionStar jointly
launched five practical and easy-to-use robotics products, which
are powered by Orion OS, an open platform for robotics, which has
been developed by Beijing OrionStar. Going forward, we aim to drive
steady and healthy profit from our core businesses while
simultaneously leveraging our extensive technology and product
experience to expand our robotic product offerings."
Mr. Vincent Jiang, Cheetah
Mobile's Chief Financial Officer, commented, "We continued to
expand our profits and margins in the first quarter of 2018 as a
result of our strategic efforts to optimize the cost and expense
structure for our utility products business and our initiative to
dispose of News Republic. Looking ahead, we will continue to drive
higher operational efficiency for our core businesses, which in
turn will fund our investment in AI-powered business and build
long-term growth for Cheetah Mobile and its shareholders."
[1]
Starting from January 1, 2018, Cheetah Mobile adopted a new revenue
accounting standard (ASC 606), which reclassifies value added tax
from the cost of
revenues to net against revenues. To increase comparability of
operating results and help investors better understand our business
performance and operating
trends, 2017 net revenues have been used to calculate all
percentage changes in revenues. 2017 net revenues are defined as
gross revenues under legacy GAAP
after the deduction of value added taxes, which is presented on the
same basis as 2018 and going forward.
|
First Quarter 2018 Consolidated Financial
Results
REVENUES
Total revenues were RMB1,145.1
million (US$182.6 million) in
the first quarter of 2018.
- Revenues from utility products and related
services decreased by 7.7% year over year to RMB744.8 million (US$118.7
million) in the first quarter of 2018. The year-over-year
change 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 our overseas third-party
advertising partners, and (ii) a decline in PC revenues. This
decrease was largely offset by an increase in mobile utility
products and related services business in China.
- Revenues from the mobile entertainment business
increased by 8.0% year over year to RMB392.5
million (US$62.6 million). The
year-over-year increase was driven by the Company's mobile game
business, which grew by 25.3% year over year to RMB174.7 million (US$27.9
million) in the quarter. The increase in the mobile game
operation was a result of the Company's continued efforts to expand
its mobile game portfolio by introducing some new mobile games in
early 2017. In the first quarter of 2018, revenues from
content-driven product decreased by 2.7% year over year to
RMB217.7 million (US$34.7 million). The decrease was a result of a
year-over-year growth in revenues from Live.me, which was offset by
a decline in revenues from the News Republic application as the
Company disposed of this operation in the fourth quarter of
2017.
By platform, revenues generated from the mobile business
were 88.9% of total revenues in the first quarter of 2018, up from
85.3% in the same period last year.
By region, revenues generated from the Chinese market
constituted 39.1% of total revenues in the first quarter of 2018,
up from 27.6% in the same period last year. The growth of the
Company's 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 market constituted 60.9% of
total revenues in the first quarter of 2018, a 17.6% decrease year
over year to RMB697.5 million
(US$111.2 million), mainly due to the
impact of lock screen ads. Excluding the foreign exchange impact,
revenues from the overseas market decreased by 11.4% year over
year.
COST OF REVENUES AND GROSS PROFIT
Cost of revenues decreased by 14.6% year over year to
RMB391.2 million (US$62.4 million) in the first quarter of 2018.
The year-over-year decrease resulted from reduced bandwidth and IDC
costs associated with the Company's mobile utility applications in
the overseas markets as well as lower amortization of acquired
intangible assets. Non-GAAP cost of revenues decreased by
14.4% year over year to RMB391.3
million (US$62.4 million) in
the first quarter of 2018.
Gross profit increased by 2.9% year over year to
RMB753.9 million (US$120.2 million) in the first quarter of 2018.
Non-GAAP gross profit increased by 2.7% year over year to
RMB753.8 million (US$120.2 million) in the first quarter of
2018.
OPERATING INCOME AND EXPENSES
Total operating expenses decreased by 12.6% year over
year to RMB617.6 million
(US$98.5 million) in the first
quarter of 2018. Total non-GAAP operating expenses decreased
by 10.9% year over year to RMB608.5
million (US$97.0 million) in
the first quarter of 2018.
- Research and development (R&D) expense decreased by
23.0% year over year to RMB147.3
million (US$23.5 million) in
the first quarter of 2018. The decreases were due to lower
share-based compensation expenses and reduced R&D headcount
resulting from the Company's mobile utility application business in
the overseas markets, and the disposal of News Republic.
Non-GAAP R&D expenses, which exclude share-based
compensation expenses, decreased by 15.6% year over year to
RMB153.4 million (US$24.5 million) in the first quarter of
2018.
- Selling and marketing expenses decreased by 5.5% year
over year to RMB391.4 million
(US$62.4 million) in the first
quarter of 2018. The decreases were mainly due to decreased
promotional activities for the Company's mobile products in the
overseas markets. Non-GAAP selling and marketing expenses,
which exclude share-based compensation expenses, decreased by 5.6%
year over year to RMB391.1 million
(US$62.3 million) in the first
quarter of 2018.
- General and administrative expenses decreased by 12.5%
year over year to RMB90.6 million
(US$14.4 million) in the first
quarter of 2018. The year-over-year decrease was primarily due to
lower professional service fees and employee benefits. Non-GAAP
general and administrative expenses, which exclude share-based
compensation expenses, decreased by 15.4% year over year to
RMB75.8 million (US$12.1 million) in the first quarter of
2018.
Operating profit increased to RMB136.4 million (US$21.7
million) in the first quarter of 2018 from RMB26.3 million in the same period last year.
Non-GAAP operating profit increased to RMB145.3 million (US$23.2
million) in the first quarter of 2018 from RMB50.7 million in the same period last
year.
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 47.8% year over year to RMB264.7 million (US$42.2
million) in the first quarter of 2018 due to the
optimization of the cost and expense structure for this
segment.
- Operating loss for the mobile entertainment business was
RMB75.0 million (US$12.0 million) in the first quarter of 2018,
compared to operating loss of RMB128.5
million in the same period last year. The reduced loss was
mainly a result of increased revenues generated from the Company's
mobile game businesses and reduced costs and expenses from the News
Republic business, partially offset by the Company's increased
investments in the Live.me operation.
Share-based compensation expenses decreased by 63.4% year
over year to RMB8.9 million
(US$1.4 million) in the first quarter
of 2018. The decrease resulted from a combination of several
factors. The Company employed an accelerated method to recognize
share-based compensation expenses. In addition, 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 the
first quarter of 2018 than in the same period last year.
IMPAIRMENT OF INVESTMENTS
Impairment of investments were RMB58.0
million (US$9.2 million) in
the first quarter of 2018 primarily due to a one-time non-cash
write-down of certain convertible loans to a third-party. The loss
was recorded as a non-operating item since the loans were provided
for investment purposes, which is outside of the Company's main
business activity.
NET INCOME ATTRIBUTABLE TO CHEETAH MOBILE
SHAREHOLDERS
Net income attributable to Cheetah Mobile shareholders
was RMB70.0 million (US$11.2 million) in the first quarter of 2018.
Non-GAAP net income attributable to Cheetah Mobile
shareholders was RMB78.9 million
(US$12.6 million) in the first
quarter of 2018.
NET INCOME PER ADS
Diluted income per ADS was RMB0.42 (US$0.07)
in the first quarter of 2018. Non-GAAP diluted income per
ADS was RMB0.48 (US$0.08) in the first quarter of 2018.
ADJUSTED EBITDA
Adjusted EBITDA (Non-GAAP) increased by 93.3% year over
year to RMB168.8 million
(US$26.9 million) in the first
quarter of 2018.
CASH AND CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM
INVESTMENTS BALANCE
As of March 31, 2018, the Company
had cash and cash equivalents, restricted cash, and short-term
investments of RMB3,355.8 million
(US$535.0 million).
SHARES ISSUED AND OUTSTANDING
As of March 31, 2018, 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.
Business Outlook
For the second quarter of 2018, the Company expects its total
revenues to be between RMB1,020
million (US$163 million) and
RMB1,080 million (US$172 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, May 21, 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:
|
4001-201-203
|
Hong Kong Toll
Free:
|
800-905-945
|
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/.
A presentation for the Company's earnings call is available at
the Company's investor relations website.
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 RMB6.2726 to
US$1.00, the exchange rate in effect
as of March 31, 2018, 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
active users through its mobile utility 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 selected 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.
- Non-GAAP operating income and expenses reflect operating income
and expenses excluding the portion of share-based compensation
expenses allocated to operating expenses.
- Non-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.
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
|
|
December 31, 2017
|
|
March 31,
2018
|
|
March 31,
2018
|
|
RMB
|
|
RMB
|
|
USD
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
2,317,488
|
|
1,580,591
|
|
251,983
|
Restricted
cash
|
90,149
|
|
9,494
|
|
1,514
|
Short-term
investments
|
1,395,694
|
|
1,765,758
|
|
281,503
|
Accounts
receivable
|
621,272
|
|
585,810
|
|
93,392
|
Prepayments and other
current assets
|
918,243
|
|
881,568
|
|
140,544
|
Due from related
parities
|
54,052
|
|
47,049
|
|
7,501
|
Total current
assets
|
5,396,898
|
|
4,870,270
|
|
776,437
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
Property and
equipment, net
|
89,137
|
|
81,468
|
|
12,988
|
Intangible assets,
net
|
70,225
|
|
67,548
|
|
10,769
|
Goodwill
|
634,157
|
|
615,947
|
|
98,196
|
Investment in equity investees
|
149,969
|
|
147,833
|
|
23,568
|
Other long term investments
|
1,002,721
|
|
982,797
|
|
156,681
|
Due from related
parities
|
5,216
|
|
8,148
|
|
1,299
|
Deferred tax
assets
|
57,642
|
|
65,267
|
|
10,405
|
Other non-current
assets
|
42,966
|
|
42,020
|
|
6,699
|
Total non-current
assets
|
2,052,033
|
|
2,011,028
|
|
320,605
|
|
|
|
|
|
|
Total
assets
|
7,448,931
|
|
6,881,298
|
|
1,097,042
|
|
|
|
|
|
|
LIABILITIES,
MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Bank loans
|
336,304
|
|
-
|
|
-
|
Accounts
payable
|
164,537
|
|
174,520
|
|
27,823
|
Accrued expenses and
other current liabilities
|
1,532,489
|
|
1,356,612
|
|
216,276
|
Due to related
parties
|
81,810
|
|
45,535
|
|
7,259
|
Income tax
payable
|
50,614
|
|
55,980
|
|
8,925
|
Total current
liabilities
|
2,165,754
|
|
1,632,647
|
|
260,283
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
Deferred tax
liabilities
|
73,393
|
|
74,427
|
|
11,865
|
Other non-current
liabilities
|
54,574
|
|
52,806
|
|
8,419
|
Total non-current
liabilities
|
127,967
|
|
127,233
|
|
20,284
|
|
|
|
|
|
|
Total
liabilities
|
2,293,721
|
|
1,759,880
|
|
280,567
|
|
|
|
|
|
|
Mezzanine
equity:
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
649,246
|
|
658,247
|
|
104,940
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
Ordinary
shares
|
229
|
|
230
|
|
37
|
Additional paid-in
capital
|
2,644,043
|
|
2,656,818
|
|
423,559
|
Retained
earnings
|
1,564,883
|
|
1,637,837
|
|
261,110
|
Accumulated other
comprehensive income (loss)
|
84,206
|
|
(48,983)
|
|
(7,809)
|
Total Cheetah
Mobile shareholders' equity
|
4,293,361
|
|
4,245,902
|
|
676,897
|
Noncontrolling
interests
|
212,603
|
|
217,269
|
|
34,638
|
|
|
|
|
|
|
Total
equity
|
4,505,964
|
|
4,463,171
|
|
711,535
|
|
|
|
|
|
|
Total liabilities,
mezzanine equity and equity
|
7,448,931
|
|
6,881,298
|
|
1,097,042
|
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
|
|
March 31,
2017
|
|
December 31,
2017
|
|
March 31,
2018
|
|
March 31,
2018
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD
|
Revenues
(a)
|
1,190,703
|
|
1,387,806
|
|
1,145,097
|
|
182,555
|
Utility products and
related services
|
827,225
|
|
967,232
|
|
744,763
|
|
118,732
|
Mobile
entertainment
|
363,468
|
|
399,493
|
|
392,452
|
|
62,566
|
Others
|
10
|
|
21,081
|
|
7,882
|
|
1,257
|
|
|
|
|
|
|
|
|
Cost of revenues
(b)
|
(457,953)
|
|
(461,383)
|
|
(391,182)
|
|
(62,364)
|
Gross
profit
|
732,750
|
|
926,423
|
|
753,915
|
|
120,191
|
|
|
|
|
|
|
|
|
Operating income
and expenses:
|
|
|
|
|
|
|
|
Research and
development (b)
|
(191,367)
|
|
(151,867)
|
|
(147,278)
|
|
(23,480)
|
Selling and marketing
(b)
|
(414,264)
|
|
(420,080)
|
|
(391,355)
|
|
(62,391)
|
General and
administrative (b)
|
(103,588)
|
|
(115,089)
|
|
(90,600)
|
|
(14,444)
|
Impairment of
goodwill and intangible assets
|
-
|
|
(38,690)
|
|
-
|
|
-
|
Other operating
income
|
2,784
|
|
21,307
|
|
11,679
|
|
1,862
|
Total operating
income and expenses
|
(706,435)
|
|
(704,419)
|
|
(617,554)
|
|
(98,453)
|
|
|
|
|
|
|
|
|
Operating
profit
|
26,315
|
|
222,004
|
|
136,361
|
|
21,738
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest income,
net
|
1,616
|
|
10,227
|
|
16,652
|
|
2,655
|
Foreign exchange gain
(loss), net
|
1,213
|
|
(5,943)
|
|
(12,829)
|
|
(2,045)
|
Impairment of
investments
|
-
|
|
(209,565)
|
|
(58,000)
|
|
(9,247)
|
(Losses) Gain from
equity method investments, net
|
(367)
|
|
1,921
|
|
(2,739)
|
|
(437)
|
Other income,
net
|
66,685
|
|
1,088,965
|
|
500
|
|
80
|
|
|
|
|
|
|
|
|
Income before
taxes
|
95,462
|
|
1,107,609
|
|
79,945
|
|
12,744
|
Income tax
expenses
|
(4,912)
|
|
(40,259)
|
|
(5,042)
|
|
(804)
|
Net
income
|
90,550
|
|
1,067,350
|
|
74,903
|
|
11,940
|
Less: net (loss)
income attributable to noncontrolling interests
|
(679)
|
|
20,264
|
|
4,906
|
|
782
|
Net income
attributable to Cheetah Mobile shareholders
|
91,229
|
|
1,047,086
|
|
69,997
|
|
11,158
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
Basic
|
0.07
|
|
0.74
|
|
0.04
|
|
0.01
|
Diluted
|
0.06
|
|
0.73
|
|
0.04
|
|
0.01
|
|
|
|
|
|
|
|
|
Earnings per
ADS
|
|
|
|
|
|
|
|
Basic
|
0.66
|
|
7.43
|
|
0.43
|
|
0.07
|
Diluted
|
0.64
|
|
7.27
|
|
0.42
|
|
0.07
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding
|
|
|
|
|
|
|
|
Basic
|
1,387,446,596
|
|
1,400,420,814
|
|
1,403,597,719
|
|
1,403,597,719
|
Diluted
|
1,422,443,105
|
|
1,432,849,633
|
|
1,452,802,118
|
|
1,452,802,118
|
Weighted average
number of ADSs outstanding
|
|
|
|
|
|
|
|
Basic
|
138,744,660
|
|
140,042,081
|
|
140,359,772
|
|
140,359,772
|
Diluted
|
142,244,310
|
|
143,284,963
|
|
145,280,212
|
|
145,280,212
|
|
|
|
|
|
|
|
|
Other
comprehensive loss, net of tax of nil
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
(8,517)
|
|
(52,267)
|
|
(134,774)
|
|
(21,486)
|
Unrealized losses on
available-for-sale securities, net
|
-
|
|
(433)
|
|
-
|
|
-
|
Other
comprehensive loss
|
(8,517)
|
|
(52,700)
|
|
(134,774)
|
|
(21,486)
|
Total
comprehensive income (loss)
|
82,033
|
|
1,014,650
|
|
(59,871)
|
|
(9,546)
|
Less: Total
comprehensive income attributable to noncontrolling
interests
|
119
|
|
18,568
|
|
3,321
|
|
529
|
Total
comprehensive income (loss) attributable to Cheetah Mobile
shareholders
|
81,914
|
|
996,082
|
|
(63,192)
|
|
(10,075)
|
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)
|
(a) On January
1, 2018, The Group adopted ASC 606, applying the modified
retrospective method to contracts that were not completed as of
January 1, 2018. Adoption did
not have a material impact as of January 1, 2018. Results for
reporting periods beginning on or after January 1, 2018 are
presented under ASC 606, while prior period amounts are not adjusted and
continue to be reported in accordance with historic accounting
under ASC 605. As ASC 605 has
been superseded by ASC 606 on this subject, value added tax was
reclassified from the cost of revenues to net against
revenues. Advertising-for-advertising barter transactions
should be recorded at the fair value of the advertising received by
reference to the fair value of advertising
services provided to other
customers. Revenues are recognized in the same amount with costs
and expenses. Previously, such transactions were recorded
at cost which was nil
as no consideration was exchanged. The following table illustrates
the effect of the adoption of ASC 606 by presenting a comparison of
revenues for the three months
ended March 31, 2018, as actually reported and as they would have
been reported under ASC 605, without the adoption of ASC
606:
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended
|
|
|
|
|
|
March 31,
2018
|
|
March 31,
2018
|
|
|
|
|
|
RMB
|
|
USD
|
|
|
|
|
As
reported
|
1,145,097
|
|
182,555
|
|
|
|
|
Add: value added
taxes
|
28,314
|
|
4,514
|
|
|
|
|
Less: barter
transactions
|
3,801
|
|
606
|
|
|
|
|
Without adoption
of ASC 606
|
1,169,610
|
|
186,463
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended
|
|
March 31,
2017
|
|
December 31,
2017
|
|
March 31,
2018
|
|
March 31,
2018
|
(b) Share-based
compensation expenses
|
RMB
|
|
RMB
|
|
RMB
|
|
USD
|
Cost of
revenues
|
934
|
|
(981)
|
|
(90)
|
|
(14)
|
Research and
development
|
9,571
|
|
4,471
|
|
(6,143)
|
|
(979)
|
Selling and
marketing
|
(188)
|
|
(3,049)
|
|
302
|
|
48
|
General and
administrative
|
14,051
|
|
2,933
|
|
14,850
|
|
2,367
|
Total
|
24,368
|
|
3,374
|
|
8,919
|
|
1,422
|
CHEETAH MOBILE
INC.
|
Information about
Segment
|
(Unaudited,
in'000, except for percentage)
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended March 31, 2018
|
|
|
Utility Products
and
Related Services
|
|
Mobile
Entertainment
|
|
Others
|
|
Unallocated*
|
|
Consolidated
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
USD
|
Revenue
|
744,763
|
|
392,452
|
|
7,882
|
|
-
|
|
1,145,097
|
182,555
|
Operating profit
(loss)
|
264,706
|
|
(75,046)
|
|
(44,380)
|
|
(8,919)
|
|
136,361
|
21,738
|
Operating
margin
|
35.5%
|
|
(19.1)%
|
|
(563.1)%
|
|
|
|
11.9%
|
11.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended December 31, 2017
|
|
|
Utility Products
and
Related
Services
|
|
Mobile
Entertainment
|
|
Others
|
|
Unallocated*
|
|
Consolidated
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
Revenue
|
967,232
|
|
399,493
|
|
21,081
|
|
-
|
|
1,387,806
|
|
Operating profit
(loss)
|
326,950
|
|
(61,846)
|
|
(39,726)
|
|
(3,374)
|
|
222,004
|
|
Operating
margin
|
33.8%
|
|
(15.5)%
|
|
(188.4)%
|
|
|
|
16.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended March 31, 2017
|
|
|
Utility Products
and
Related Services
|
|
Mobile
Entertainment
|
|
Others
|
|
Unallocated*
|
|
Consolidated
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
Revenue
|
827,225
|
|
363,468
|
|
10
|
|
-
|
|
1,190,703
|
|
Operating profit
(loss)
|
179,158
|
|
(128,478)
|
|
3
|
|
(24,368)
|
|
26,315
|
|
Operating
margin
|
21.7%
|
|
(35.3)%
|
|
30.0%
|
|
|
|
2.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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 March 31, 2018
|
|
|
|
GAAP
|
|
% of
Net
|
|
Share-based
|
|
% of
Net
|
|
Non-GAAP
|
|
% of
Net
|
|
Non-GAAP
|
|
Result
|
|
Revenues
|
|
Compensation
|
|
Revenues
|
|
Result
|
|
Revenues
|
|
Result
($)
|
Revenues
|
1,145,097
|
|
|
|
|
|
|
|
1,145,097
|
|
|
|
182,555
|
Cost of
revenues
|
(391,182)
|
|
34.2%
|
|
(90)
|
|
0.0%
|
|
(391,272)
|
|
34.2%
|
|
(62,378)
|
Gross
profit
|
753,915
|
|
65.8%
|
|
(90)
|
|
0.0%
|
|
753,825
|
|
65.8%
|
|
120,177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
(147,278)
|
|
12.9%
|
|
(6,143)
|
|
0.5%
|
|
(153,421)
|
|
13.4%
|
|
(24,459)
|
Selling and
marketing
|
(391,355)
|
|
34.2%
|
|
302
|
|
0.0%
|
|
(391,053)
|
|
34.2%
|
|
(62,343)
|
General and
administrative
|
(90,600)
|
|
7.9%
|
|
14,850
|
|
1.3%
|
|
(75,750)
|
|
6.6%
|
|
(12,077)
|
Other operating
income
|
11,679
|
|
1.0%
|
|
-
|
|
0.0%
|
|
11,679
|
|
1.0%
|
|
1,862
|
Total operating
income and expenses
|
(617,554)
|
|
53.9%
|
|
9,009
|
|
0.8%
|
|
(608,545)
|
|
53.1%
|
|
(97,017)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
136,361
|
|
11.9%
|
|
8,919
|
|
0.8%
|
|
145,280
|
|
12.7%
|
|
23,160
|
Net income
attributable to
Cheetah Mobile
shareholders
|
69,997
|
|
6.1%
|
|
8,919
|
|
0.8%
|
|
78,916
|
|
6.9%
|
|
12,581
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
ordinary share (RMB)
|
0.04
|
|
|
|
0.01
|
|
|
|
0.05
|
|
|
|
|
Diluted earnings per
ADS (RMB)
|
0.42
|
|
|
|
0.06
|
|
|
|
0.48
|
|
|
|
|
Diluted earnings per
ADS (USD)
|
0.07
|
|
|
|
0.01
|
|
|
|
0.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended December 31, 2017
|
|
|
|
GAAP
|
|
% of
Net
|
|
Share-based
|
|
% of
Net
|
|
Non-GAAP
|
|
% of
Net
|
|
|
|
Result
|
|
Revenues
|
|
Compensation
|
|
Revenues
|
|
Result
|
|
Revenues
|
|
|
Revenues
|
1,387,806
|
|
|
|
|
|
|
|
1,387,806
|
|
|
|
|
Cost of
revenues
|
(461,383)
|
|
33.2%
|
|
(981)
|
|
0.1%
|
|
(462,364)
|
|
33.3%
|
|
|
Gross
profit
|
926,423
|
|
66.8%
|
|
(981)
|
|
0.1%
|
|
925,442
|
|
66.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
(151,867)
|
|
10.9%
|
|
4,471
|
|
0.3%
|
|
(147,396)
|
|
10.6%
|
|
|
Selling and
marketing
|
(420,080)
|
|
30.3%
|
|
(3,049)
|
|
0.2%
|
|
(423,129)
|
|
30.5%
|
|
|
General and
administrative
|
(115,089)
|
|
8.3%
|
|
2,933
|
|
0.2%
|
|
(112,156)
|
|
8.1%
|
|
|
Impairment of
goodwill and intangible assets
|
(38,690)
|
|
2.8%
|
|
-
|
|
0.0%
|
|
(38,690)
|
|
2.8%
|
|
|
Other operating
income
|
21,307
|
|
1.5%
|
|
-
|
|
0.0%
|
|
21,307
|
|
1.5%
|
|
|
Total operating
income and expenses
|
(704,419)
|
|
50.8%
|
|
4,355
|
|
0.3%
|
|
(700,064)
|
|
50.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
222,004
|
|
16.0%
|
|
3,374
|
|
0.2%
|
|
225,378
|
|
16.2%
|
|
|
Net income
attributable to Cheetah Mobile shareholders
|
1,047,086
|
|
75.4%
|
|
3,374
|
|
0.2%
|
|
1,050,460
|
|
75.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
ordinary share (RMB)
|
0.73
|
|
|
|
0.00
|
|
|
|
0.73
|
|
|
|
|
Diluted earnings per
ADS (RMB)
|
7.27
|
|
|
|
0.02
|
|
|
|
7.29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended March 31, 2017
|
|
|
|
GAAP
|
|
% of
Net
|
|
Share-based
|
|
% of
Net
|
|
Non-GAAP
|
|
% of
Net
|
|
|
|
Result
|
|
Revenues
|
|
Compensation
|
|
Revenues
|
|
Result
|
|
Revenues
|
|
|
Revenues
|
1,190,703
|
|
|
|
|
|
|
|
1,190,703
|
|
|
|
|
Cost of
revenues
|
(457,953)
|
|
38.5%
|
|
934
|
|
0.1%
|
|
(457,019)
|
|
38.4%
|
|
|
Gross
profit
|
732,750
|
|
61.5%
|
|
934
|
|
0.1%
|
|
733,684
|
|
61.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
(191,367)
|
|
16.1%
|
|
9,571
|
|
0.8%
|
|
(181,796)
|
|
15.3%
|
|
|
Selling and
marketing
|
(414,264)
|
|
34.8%
|
|
(188)
|
|
0.0%
|
|
(414,452)
|
|
34.8%
|
|
|
General and
administrative
|
(103,588)
|
|
8.7%
|
|
14,051
|
|
1.2%
|
|
(89,537)
|
|
7.5%
|
|
|
Other operating
income
|
2,784
|
|
0.2%
|
|
-
|
|
0.0%
|
|
2,784
|
|
0.2%
|
|
|
Total operating
income and expenses
|
(706,435)
|
|
59.3%
|
|
23,434
|
|
2.0%
|
|
(683,001)
|
|
57.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
26,315
|
|
2.2%
|
|
24,368
|
|
2.0%
|
|
50,683
|
|
4.3%
|
|
|
Net income
attributable to
Cheetah Mobile
Shareholders
|
91,229
|
|
7.7%
|
|
24,368
|
|
2.0%
|
|
115,597
|
|
9.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
ordinary share (RMB)
|
0.06
|
|
|
|
0.02
|
|
|
|
0.08
|
|
|
|
|
Diluted earnings per
ADS (RMB)
|
0.64
|
|
|
|
0.17
|
|
|
|
0.81
|
|
|
|
|
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
|
|
March 31,
2017
|
December 31,
2017
|
March 31,
2018
|
March 31,
2018
|
|
RMB
|
RMB
|
RMB
|
USD
|
Net income
attributable to Cheetah Mobile shareholders
|
91,229
|
1,047,086
|
69,997
|
11,158
|
Add:
|
|
|
|
|
Income tax
expenses
|
4,912
|
40,259
|
5,042
|
804
|
Interest income,
net
|
(1,616)
|
(10,227)
|
(16,652)
|
(2,655)
|
Depreciation and
amortization
|
36,595
|
30,377
|
23,472
|
3,742
|
Net (loss) income
attributable to noncontrolling interests
|
(679)
|
20,264
|
4,906
|
782
|
Other
non-operating (income) expense, net
|
(67,531)
|
(875,378)
|
73,068
|
11,649
|
Share-based
compensation
|
24,368
|
3,374
|
8,919
|
1,422
|
Adjusted
EBITDA
|
87,278
|
255,755
|
168,752
|
26,902
|
CHEETAH MOBILE
INC.
|
Revenues Generated
from PC-based and Mobile-based Applications and
Services
|
(Unaudited, in
'000)
|
|
|
|
|
|
For The Three
Months Ended
|
|
March 31,
2017
|
December 31,
2017
|
March 31,
2018
|
March 31,
2018
|
|
RMB
|
RMB
|
RMB
|
USD
|
PC
|
182,337
|
170,259
|
127,094
|
20,262
|
Mobile
|
1,008,366
|
1,217,547
|
1,018,003
|
162,293
|
Total
|
1,190,703
|
1,387,806
|
1,145,097
|
182,555
|
CHEETAH MOBILE
INC.
|
Revenues Generated
from Domestic and Overseas Markets
|
(Unaudited, in
'000)
|
|
|
|
|
|
For The Three
Months Ended
|
|
March 31,
2017
|
December 31,
2017
|
March 31,
2018
|
March 31,
2018
|
|
RMB
|
RMB
|
RMB
|
USD
|
Domestic
|
342,383
|
543,974
|
447,620
|
71,361
|
Overseas
|
848,320
|
843,832
|
697,477
|
111,194
|
Total
|
1,190,703
|
1,387,806
|
1,145,097
|
182,555
|
View original
content:http://www.prnewswire.com/news-releases/cheetah-mobile-announces-first-quarter-2018-unaudited-consolidated-financial-results-300651707.html
SOURCE Cheetah Mobile