BEIJING, Aug. 20, 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 second quarter
ended June 30, 2018.
Second Quarter 2018 Financial Highlights
- Total revenues[1] were RMB1,103.5 million (US$166.8 million), exceeding the Company's
previous guidance range of RMB1,020.0
million to RMB1080.0
million.
- Gross profit increased by 1.6% year over year to RMB752.1 million (US$113.7
million). Gross margin was 68.2% in the second quarter of
2018 compared to 62.8% in the same period last year. Non-GAAP gross
profit increased by 1.5% year over year to RMB752.2 million (US$113.7
million) in the second quarter of 2018. Non-GAAP gross
margin was 68.2% in the second quarter of 2018 compared to 62.9% in
the same period last year.
- Operating profit increased to RMB127.9
million (US$19.3 million) from
RMB66.2 million in the same period
last year. Operating margin expanded to 11.6% from 5.6% in the same
period last year. Non-GAAP operating profit increased to
RMB142.6 million (US$21.5 million) from RMB90.4 million in the same period last year.
Non-GAAP operating margin expanded to 12.9% from 7.7% in the same
period last year.
- Operating profit for utility products and related services
increased by 32.5% year over year to RMB282.1 million (US$42.6
million) in the second quarter of 2018. Operating margin for
utility products and related services expanded to 37.3% in the
second quarter of 2018 from 26.7% in the same period last
year.
- The Company generated RMB21.7
million (US$3.3 million) of
net cash from operating activities and RMB12.6 million (US$1.9
million) of free cash flow in the second quarter of
2018.
Second Quarter 2018 Operating Metric
- The average number of global mobile monthly active users
("Mobile MAUs") was 540 million in the second quarter of 2018. The
number of Mobile MAUs from markets outside of China, or overseas markets, accounted for
70.2% of the total number of Mobile MAUs in the second quarter of
2018.
Mr. Sheng Fu, Cheetah Mobile's
Chairman and Chief Executive Officer, stated, "We are pleased that
the initiatives we have implemented to resume growth for our
company are starting to bear fruit. In the second quarter of 2018,
we reported better-than-expected total revenue. In the second half
of 2018, we expect revenues to recover its sequential growth
trends, primarily driven by growth in our mobile utility products
business in the domestic market, growth in our mobile game business
and the normal seasonality effect. In this quarter, revenues from
mobile utility products in the domestic market grew substantially,
primarily driven by our Clean Master application for the Chinese
market, which reached over 30 million DAUs in June. In addition,
our existing game portfolio has continued to achieve solid
performance. Going forward, we expect our existing businesses in
mobile utility products and mobile games will continue to grow
steadily and generate healthy profits. Meanwhile, we are excited to
further develop our new artificial intelligence ("A.I.") robotics
products, with the help of Beijing OrionStar."
Mr. Vincent Jiang, Cheetah
Mobile's Chief Financial Officer, commented, "We are pleased with
the continued profit and margin improvements during the second
quarter of 2018, especially in our utility product and related
services business driven by the strong performance of our mobile
utility products in the domestic market. Going forward, we will
remain committed to our ongoing efforts in optimizing the Company's
cost structures and operating efficiency. We are confident that the
strong cash flow generated by our existing business and our strong
cash reserves will enable us to further expand into the A.I. space
which we expect to be the key to our long term growth."
[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 the Company's 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.
|
Second Quarter 2018 Consolidated Financial
Results
REVENUES
Total revenues were RMB1,103.5
million (US$166.8 million) in
the second quarter of 2018.
- Revenues from utility products and related
services decreased by 5.2% year over year to RMB756.1 million (US$114.3
million) in the second 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 the Company's overseas
third-party advertising partners, and (ii) a decline in PC revenues
as the internet traffic continued its migration from PC to mobile.
This decrease was largely offset by an increase in revenues from
the mobile utility products and related services business in
China.
- Revenues from the mobile entertainment business
decreased by 10.2% year over year to RMB332.9 million (US$50.3
million). Revenues from mobile game business decreased by
9.2% year-over-year to RMB138.7
million (US$21.0 million),
mainly due to a short-term delay in the release schedules of new
titles in the second quarter of 2018, whereas revenues generated by
the Company's existing game titles remained stable. Revenues from
content-driven product decreased by 10.9% year over year to
RMB194.2 million (US$29.3 million), mainly due to a decline in
revenues from the News Republic application as the Company disposed
of this operation in the fourth quarter of 2017, as well as a
year-over-year decrease in revenues from Live.me. The decrease in
Live.me revenues was primarily attributable to the year over year
depreciation of US dollar against RMB in the second quarter of 2018
as most the revenues generated by Live.me were recognized in US
dollars then reported in RMB.
By platform, revenues generated from the mobile business
accounted for 87.5% of the Company's total revenues in the second
quarter of 2018, up from 87.0% in the same period last year.
By region, revenues generated from the Chinese market
constituted 41.1% of the Company's total revenues in the second
quarter of 2018, up from 28.7% in the same period last year. The
revenue growth in the Chinese market was attributable to a ramp-up
of mobile utility products and related services in China.
Revenues generated from the overseas market constituted 58.9% of
the Company's total revenues in the second quarter of 2018,
decreased by 22.7% year over year to RMB649.6 million (US$98.2
million), mainly due to the impact of the removal of lock
screen ads.
COST OF REVENUES AND GROSS PROFIT
Cost of revenues decreased by 19.8% year over year to
RMB351.4 million (US$53.1 million) in the second 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 intangible
assets in the quarter as we had disposed News Republic and
completed the amortization of MobPartner, which was acquired in
April 2015. Non-GAAP cost of
revenues decreased by 19.6% year over year to RMB351.3 million (US$53.1
million) in the second quarter of 2018.
Gross profit increased by 1.6% year over year to
RMB752.1 million (US$113.7 million). Non-GAAP gross
profit increased by 1.5% year over year to RMB752.2 million (US$113.7
million) in the second quarter of 2018.
OPERATING INCOME AND EXPENSES
Total operating expenses decreased by 7.4% year over year
to RMB624.2 million (US$94.3 million) in the second quarter of 2018.
Total non-GAAP operating expenses decreased by 6.3% year
over year to RMB609.6 million
(US$92.1 million) in the second
quarter of 2018.
- Research and development (R&D) expenses decreased by
7.1% year over year to RMB155.2
million (US$23.5 million) in
the second quarter of 2018. The decreases were due to lower
share-based compensation expenses and reduced R&D headcount
associated with 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 2.8% year over year to
RMB158.6 million (US$24.0 million) in the second quarter of
2018.
- Selling and marketing expenses decreased by 10.5% year
over year to RMB369.9 million
(US$55.9 million) in the second
quarter of 2018. The decreases were mainly due to decreased
promotional activities for the Company's utility products in the
overseas markets, and our mobile game business as we were delayed
in the release schedules of new titles. Non-GAAP selling and
marketing expenses, which exclude share-based compensation
expenses, decreased by 10.0% year over year to RMB367.2 million (US$55.5
million) in the second quarter of 2018.
- General and administrative expenses remained relatively
flat year over year to RMB100.1
million (US$15.1 million) in
the second quarter of 2018. Non-GAAP general and administrative
expenses, which exclude share-based compensation expenses,
remained relatively flat year over year to RMB84.9 million (US$12.8
million) in the second quarter of 2018.
- Impairment of goodwill and intangible assets were
RMB5.6 million (US$0.8 million) in the second quarter of 2018
primarily due to a one-time non-cash write-down of intangible
assets.
Operating profit increased by 93.2% to RMB127.9 million (US$19.3
million) from RMB66.2 million
in the same period last year. Non-GAAP operating profit
increased by 57.7% to RMB142.6
million (US$21.5 million) from
RMB90.4 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 32.5% year over year to RMB282.1 million (US$42.6
million) in the second quarter of 2018 due to the
optimization of the Company's cost and expense structure for this
segment, and the increased revenue from mobile utility products and
related services in China.
- Operating loss for the mobile entertainment business was
RMB98.6 million (US$14.9 million) in the second quarter of 2018,
compared to an operating loss of RMB122.1
million in the same period last year. The reduced loss was
mainly a result of 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 39.5% year
over year to RMB14.6 million
(US$2.2 million) in the second
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 higher
number of share-based awards were granted by the Company in earlier
years than 2018.
Reversal of Impairment
The company's net reversed impairment was RMB14.5 million (US$2.2
million) in the second quarter of 2018, mainly due to the
disposal of certain long-term investment asset with consideration
higher than its carry value.
OTHER INCOME, NET
Other income, net was RMB52.7
million (US$8.0 million) in
the second quarter of 2018, which was primarily due to increases in
fair value of certain long-term investments in the second quarter
of 2018.
NET INCOME ATTRIBUTABLE TO CHEETAH MOBILE
SHAREHOLDERS
Net income attributable to Cheetah Mobile shareholders
increased by 180.0% year over year to RMB196.5 million (US$29.7
million) in the second quarter of 2018. Non-GAAP net
income attributable to Cheetah Mobile shareholders increased by
123.7% year over year to RMB211.2
million (US$31.9 million) in
the second quarter of 2018.
NET INCOME PER ADS
Diluted income per ADS was RMB1.29 (US$0.19)
in the second quarter of 2018. Non-GAAP diluted income per
ADS was RMB1.39 (US$0.21) in the second quarter of 2018 from
RMB0.64 in the same period last
year.
ADJUSTED EBITDA
Adjusted EBITDA (Non-GAAP) increased by 29.7% year over
year to RMB164.2 million
(US$24.8 million) in the second
quarter of 2018.
CASH AND CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM
INVESTMENTS BALANCE
As of June 30, 2018, the Company
had cash and cash equivalents, restricted cash, and short-term
investments of RMB3,515.0 million
(US$531.2 million).
SHARES ISSUED AND OUTSTANDING
As of June 30, 2018, the Company
had a total of 1,426,649,639 Class A and Class B ordinary shares
issued and outstanding. One ADS represents 10 Class A ordinary
shares.
Business Outlook
For the third quarter of 2018,
the Company expects its total revenues to be between RMB1,290 million (US$194.9
million) and RMB1,350 million
(US$204.0 million), representing a
year-over-year increase of 10% to 15%. 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, August 20, 2018 at 8:00 am Eastern Time or 8:00 pm Beijing Time to discuss the financial
results. Listeners may access the call by dialing the following
numbers:
International:
|
+1-412-902-4272
|
United States Toll
Free:
|
+1-888-346-8982
|
China Toll
Free:
|
4001-201-203
|
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 RMB6.6171 to
US$1.00, the exchange rate in effect
as of June 30, 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.
- Free 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
|
|
December 31,
2017
|
|
June 30,
2018
|
|
June 30,
2018
|
|
RMB
|
|
RMB
|
|
USD
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
2,317,488
|
|
1,819,907
|
|
275,031
|
Restricted
cash
|
90,149
|
|
5,899
|
|
891
|
Short-term
investments
|
1,395,694
|
|
1,689,218
|
|
255,281
|
Accounts
receivable
|
621,272
|
|
625,835
|
|
94,578
|
Prepayments and other
current assets
|
918,243
|
|
845,969
|
|
127,849
|
Due from related
parties
|
54,052
|
|
89,418
|
|
13,513
|
Total current
assets
|
5,396,898
|
|
5,076,246
|
|
767,143
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
Property and
equipment, net
|
89,137
|
|
73,702
|
|
11,138
|
Intangible assets,
net
|
70,225
|
|
62,327
|
|
9,419
|
Goodwill
|
634,157
|
|
640,464
|
|
96,789
|
Investment in equity investees
|
149,969
|
|
147,377
|
|
22,272
|
Other long term investments
|
1,002,721
|
|
1,196,545
|
|
180,826
|
Due from related
parties
|
5,216
|
|
10,253
|
|
1,549
|
Deferred tax
assets
|
57,642
|
|
62,888
|
|
9,504
|
Other non-current
assets
|
42,966
|
|
39,606
|
|
5,985
|
Total non-current
assets
|
2,052,033
|
|
2,233,162
|
|
337,482
|
|
|
|
|
|
|
Total
assets
|
7,448,931
|
|
7,309,408
|
|
1,104,625
|
|
|
|
|
|
|
LIABILITIES,
MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Bank loans
|
336,304
|
|
-
|
|
-
|
Accounts
payable
|
164,537
|
|
174,797
|
|
26,416
|
Accrued expenses and
other current liabilities
|
1,532,489
|
|
1,383,813
|
|
209,127
|
Due to related
parties
|
81,810
|
|
44,376
|
|
6,706
|
Income tax
payable
|
50,614
|
|
54,850
|
|
8,289
|
Total current
liabilities
|
2,165,754
|
|
1,657,836
|
|
250,538
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
Deferred tax
liabilities
|
73,393
|
|
73,613
|
|
11,125
|
Other non-current
liabilities
|
54,574
|
|
53,658
|
|
8,109
|
Total non-current
liabilities
|
127,967
|
|
127,271
|
|
19,234
|
|
|
|
|
|
|
Total
liabilities
|
2,293,721
|
|
1,785,107
|
|
269,772
|
|
|
|
|
|
|
Mezzanine
equity:
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
649,246
|
|
667,573
|
|
100,886
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
Ordinary
shares
|
229
|
|
230
|
|
35
|
Additional paid-in
capital
|
2,644,043
|
|
2,674,546
|
|
404,187
|
Retained
earnings
|
1,564,883
|
|
1,825,265
|
|
275,841
|
Accumulated other
comprehensive income
|
84,206
|
|
135,397
|
|
20,462
|
Total Cheetah
Mobile shareholders' equity
|
4,293,361
|
|
4,635,438
|
|
700,525
|
Noncontrolling
interests
|
212,603
|
|
221,290
|
|
33,442
|
|
|
|
|
|
|
Total
equity
|
4,505,964
|
|
4,856,728
|
|
733,967
|
|
|
|
|
|
|
Total liabilities,
mezzanine equity and equity
|
7,448,931
|
|
7,309,408
|
|
1,104,625
|
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
|
|
June 30,
2017
|
|
March 31,
2018
|
|
June 30,
2018
|
|
June 30,
2018
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD
|
Revenues
(a)
|
1,201,561
|
|
1,145,097
|
|
1,103,456
|
|
166,758
|
Utility products and
related services
|
820,342
|
|
744,763
|
|
756,093
|
|
114,263
|
Mobile
entertainment
|
371,034
|
|
392,452
|
|
332,907
|
|
50,310
|
Others
|
10,185
|
|
7,882
|
|
14,456
|
|
2,185
|
|
|
|
|
|
|
|
|
Cost of revenues
(b)
|
(461,089)
|
|
(391,182)
|
|
(351,360)
|
|
(53,099)
|
Gross
profit
|
740,472
|
|
753,915
|
|
752,096
|
|
113,659
|
|
|
|
|
|
|
|
|
Operating income
and expenses:
|
|
|
|
|
|
|
|
Research and
development (b)
|
(166,983)
|
|
(147,278)
|
|
(155,202)
|
|
(23,455)
|
Selling and marketing
(b)
|
(413,116)
|
|
(391,355)
|
|
(369,914)
|
|
(55,903)
|
General and
administrative (b)
|
(99,996)
|
|
(90,600)
|
|
(100,107)
|
|
(15,129)
|
Impairment of
goodwill and intangible assets
|
(172)
|
|
-
|
|
(5,587)
|
|
(844)
|
Other operating
income
|
6,022
|
|
11,679
|
|
6,660
|
|
1,006
|
Total operating
income and expenses
|
(674,245)
|
|
(617,554)
|
|
(624,150)
|
|
(94,325)
|
|
|
|
|
|
|
|
|
Operating
profit
|
66,227
|
|
136,361
|
|
127,946
|
|
19,334
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest income,
net
|
3,380
|
|
16,652
|
|
19,425
|
|
2,936
|
Foreign exchange
(loss) gain, net
|
(6,627)
|
|
(12,829)
|
|
10,022
|
|
1,515
|
(Impairment) reversal
of investment impairment
|
-
|
|
(58,000)
|
|
14,500
|
|
2,191
|
Losses from equity
method investments, net
|
(477)
|
|
(2,739)
|
|
(2,818)
|
|
(426)
|
Other income,
net
|
15,517
|
|
500
|
|
52,666
|
|
7,959
|
|
|
|
|
|
|
|
|
Income before
taxes
|
78,020
|
|
79,945
|
|
221,741
|
|
33,509
|
Income tax
expenses
|
(4,664)
|
|
(5,042)
|
|
(27,993)
|
|
(4,230)
|
Net
income
|
73,356
|
|
74,903
|
|
193,748
|
|
29,279
|
Less: net income
(loss) attributable to noncontrolling interests
|
3,157
|
|
4,906
|
|
(2,792)
|
|
(422)
|
Net income
attributable to Cheetah Mobile shareholders
|
70,199
|
|
69,997
|
|
196,540
|
|
29,701
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
Basic
|
0.05
|
|
0.04
|
|
0.13
|
|
0.02
|
Diluted
|
0.05
|
|
0.04
|
|
0.13
|
|
0.02
|
|
|
|
|
|
|
|
|
Earnings per
ADS
|
|
|
|
|
|
|
|
Basic
|
0.48
|
|
0.43
|
|
1.33
|
|
0.20
|
Diluted
|
0.47
|
|
0.42
|
|
1.29
|
|
0.19
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding
|
|
|
|
|
|
|
|
Basic
|
1,392,558,263
|
|
1,403,597,719
|
|
1,407,191,965
|
|
1,407,191,965
|
Diluted
|
1,430,957,071
|
|
1,452,802,118
|
|
1,452,195,012
|
|
1,452,195,012
|
Weighted average
number of ADSs outstanding
|
|
|
|
|
|
|
|
Basic
|
139,255,826
|
|
140,359,772
|
|
140,719,197
|
|
140,719,197
|
Diluted
|
143,095,707
|
|
145,280,212
|
|
145,219,501
|
|
145,219,501
|
|
|
|
|
|
|
|
|
Other
comprehensive loss, net of tax of nil
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
(38,948)
|
|
(134,774)
|
|
188,530
|
|
28,491
|
Other
comprehensive (loss) income
|
(38,948)
|
|
(134,774)
|
|
188,530
|
|
28,491
|
Total
comprehensive income (loss)
|
34,408
|
|
(59,871)
|
|
382,278
|
|
57,770
|
Less: Total
comprehensive income attributable to
noncontrolling interests
|
1,380
|
|
3,321
|
|
1,358
|
|
205
|
Total
comprehensive income (loss) attributable to
Cheetah Mobile shareholders
|
33,028
|
|
(63,192)
|
|
380,920
|
|
57,565
|
|
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 June 30, 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
|
|
|
|
|
|
June 30,
2018
|
|
June 30,
2018
|
|
|
|
|
|
RMB
|
|
USD
|
|
|
|
|
As
reported
|
1,103,456
|
|
166,758
|
|
|
|
|
Add: value added
taxes
|
27,638
|
|
4,177
|
|
|
|
|
Less: barter
transactions
|
5,137
|
|
776
|
|
|
|
|
Without adoption
of ASC 606
|
1,125,957
|
|
170,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended
|
|
June 30,
2017
|
|
March 31,
2018
|
|
June 30,
2018
|
|
June 30,
2018
|
(b) Share-based
compensation expenses
|
RMB
|
|
RMB
|
|
RMB
|
|
USD
|
Cost of
revenues
|
872
|
|
(90)
|
|
90
|
|
14
|
Research and
development
|
3,802
|
|
(6,143)
|
|
(3,365)
|
|
(509)
|
Selling and
marketing
|
4,956
|
|
302
|
|
2,683
|
|
405
|
General and
administrative
|
14,552
|
|
14,850
|
|
15,225
|
|
2,301
|
Total
|
24,182
|
|
8,919
|
|
14,633
|
|
2,211
|
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 June 30, 2018
|
|
|
|
GAAP
|
|
% of
Net
|
|
Share-based
|
|
% of
Net
|
|
Non-GAAP
|
|
% of
Net
|
|
Non-GAAP
|
|
Result
|
|
Revenues
|
|
Compensation
|
|
Revenues
|
|
Result
|
|
Revenues
|
|
Result
($)
|
Revenues
|
1,103,456
|
|
|
|
|
|
|
|
1,103,456
|
|
|
|
166,758
|
Cost of
revenues
|
(351,360)
|
|
31.8%
|
|
90
|
|
0.0%
|
|
(351,270)
|
|
31.8%
|
|
(53,085)
|
Gross
profit
|
752,096
|
|
68.2%
|
|
90
|
|
0.0%
|
|
752,186
|
|
68.2%
|
|
113,673
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
(155,202)
|
|
14.1%
|
|
(3,365)
|
|
0.3%
|
|
(158,567)
|
|
14.4%
|
|
(23,964)
|
Selling and
marketing
|
(369,914)
|
|
33.5%
|
|
2,683
|
|
0.2%
|
|
(367,231)
|
|
33.3%
|
|
(55,498)
|
General and
administrative
|
(100,107)
|
|
9.1%
|
|
15,225
|
|
1.4%
|
|
(84,882)
|
|
7.7%
|
|
(12,828)
|
Impairment of
goodwill and intangible assets
|
(5,587)
|
|
0.5%
|
|
-
|
|
0.0%
|
|
(5,587)
|
|
0.5%
|
|
(844)
|
Other operating
income
|
6,660
|
|
0.6%
|
|
-
|
|
0.0%
|
|
6,660
|
|
0.6%
|
|
1,006
|
Total operating
income and expenses
|
(624,150)
|
|
56.6%
|
|
14,543
|
|
1.3%
|
|
(609,607)
|
|
55.2%
|
|
(92,128)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
127,946
|
|
11.6%
|
|
14,633
|
|
1.3%
|
|
142,579
|
|
12.9%
|
|
21,545
|
Net income
attributable to Cheetah Mobile shareholders
|
196,540
|
|
17.8%
|
|
14,633
|
|
1.3%
|
|
211,173
|
|
19.1%
|
|
31,913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
ordinary share (RMB)
|
0.13
|
|
|
|
0.01
|
|
|
|
0.14
|
|
|
|
|
Diluted earnings per
ADS (RMB)
|
1.29
|
|
|
|
0.10
|
|
|
|
1.39
|
|
|
|
|
Diluted earnings per
ADS (USD)
|
0.19
|
|
|
|
0.02
|
|
|
|
0.21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended March 31, 2018
|
|
|
|
GAAP
|
|
% of
Net
|
|
Share-based
|
|
% of
Net
|
|
Non-GAAP
|
|
% of
Net
|
|
|
|
Result
|
|
Revenues
|
|
Compensation
|
|
Revenues
|
|
Result
|
|
Revenues
|
|
|
Revenues
|
1,145,097
|
|
|
|
|
|
|
|
1,145,097
|
|
|
|
|
Cost of
revenues
|
(391,182)
|
|
34.2%
|
|
(90)
|
|
0.0%
|
|
(391,272)
|
|
34.2%
|
|
|
Gross
profit
|
753,915
|
|
65.8%
|
|
(90)
|
|
0.0%
|
|
753,825
|
|
65.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
(147,278)
|
|
12.9%
|
|
(6,143)
|
|
0.5%
|
|
(153,421)
|
|
13.4%
|
|
|
Selling and
marketing
|
(391,355)
|
|
34.2%
|
|
302
|
|
0.0%
|
|
(391,053)
|
|
34.2%
|
|
|
General and
administrative
|
(90,600)
|
|
7.9%
|
|
14,850
|
|
1.3%
|
|
(75,750)
|
|
6.6%
|
|
|
Other operating
income
|
11,679
|
|
1.0%
|
|
-
|
|
0.0%
|
|
11,679
|
|
1.0%
|
|
|
Total operating
income and expenses
|
(617,554)
|
|
53.9%
|
|
9,009
|
|
0.8%
|
|
(608,545)
|
|
53.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
136,361
|
|
11.9%
|
|
8,919
|
|
0.8%
|
|
145,280
|
|
12.7%
|
|
|
Net income
attributable to Cheetah Mobile shareholders
|
69,997
|
|
6.1%
|
|
8,919
|
|
0.8%
|
|
78,916
|
|
6.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
ordinary share (RMB)
|
0.04
|
|
|
|
0.01
|
|
|
|
0.05
|
|
|
|
|
Diluted earnings per
ADS (RMB)
|
0.42
|
|
|
|
0.06
|
|
|
|
0.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended June 30, 2017
|
|
|
|
GAAP
|
|
% of
Net
|
|
Share-based
|
|
% of
Net
|
|
Non-GAAP
|
|
% of
Net
|
|
|
|
Result
|
|
Revenues
|
|
Compensation
|
|
Revenues
|
|
Result
|
|
Revenues
|
|
|
Revenues
|
1,201,561
|
|
|
|
|
|
|
|
1,201,561
|
|
|
|
|
Cost of
revenues
|
(461,089)
|
|
38.4%
|
|
872
|
|
0.1%
|
|
(460,217)
|
|
38.3%
|
|
|
Gross
profit
|
740,472
|
|
61.6%
|
|
872
|
|
0.1%
|
|
741,344
|
|
61.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
(166,983)
|
|
13.9%
|
|
3,802
|
|
0.3%
|
|
(163,181)
|
|
13.6%
|
|
|
Selling and
marketing
|
(413,116)
|
|
34.4%
|
|
4,956
|
|
0.4%
|
|
(408,160)
|
|
34.0%
|
|
|
General and
administrative
|
(99,996)
|
|
8.3%
|
|
14,552
|
|
1.2%
|
|
(85,444)
|
|
7.1%
|
|
|
Impairment of
goodwill and intangible assets
|
(172)
|
|
0.0%
|
|
-
|
|
0.0%
|
|
(172)
|
|
0.0%
|
|
|
Other operating
income
|
6,022
|
|
0.5%
|
|
-
|
|
0.0%
|
|
6,022
|
|
0.5%
|
|
|
Total operating
income and expenses
|
(674,245)
|
|
56.1%
|
|
23,310
|
|
1.9%
|
|
(650,935)
|
|
54.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
66,227
|
|
5.5%
|
|
24,182
|
|
2.0%
|
|
90,409
|
|
7.5%
|
|
|
Net income
attributable to Cheetah Mobile shareholders
|
70,199
|
|
5.8%
|
|
24,182
|
|
2.0%
|
|
94,381
|
|
7.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
ordinary share (RMB)
|
0.05
|
|
|
|
0.01
|
|
|
|
0.06
|
|
|
|
|
Diluted earnings per
ADS (RMB)
|
0.47
|
|
|
|
0.17
|
|
|
|
0.64
|
|
|
|
|
CHEETAH MOBILE
INC.
|
Information about
Segment
|
(Unaudited,
in'000, except for percentage)
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended June 30, 2018
|
|
|
Utility
Products
and
Related Services
|
|
Mobile
Entertainment
|
|
Others
|
|
Unallocated*
|
|
Consolidated
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
USD
|
Revenue
|
756,093
|
|
332,907
|
|
14,456
|
|
-
|
|
1,103,456
|
166,758
|
Operating profit
(loss)
|
282,090
|
|
(98,568)
|
|
(40,943)
|
|
(14,633)
|
|
127,946
|
19,334
|
Operating
margin
|
37.3%
|
|
(29.6)%
|
|
(283.2)%
|
|
|
|
11.6%
|
11.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended March 31, 2018
|
|
|
Utility
Products
and
Related Services
|
|
Mobile
Entertainment
|
|
Others
|
|
Unallocated*
|
|
Consolidated
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
Revenue
|
744,763
|
|
392,452
|
|
7,882
|
|
-
|
|
1,145,097
|
|
Operating profit
(loss)
|
264,706
|
|
(75,046)
|
|
(44,380)
|
|
(8,919)
|
|
136,361
|
|
Operating
margin
|
35.5%
|
|
(19.1)%
|
|
(563.1)%
|
|
|
|
11.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended June 30, 2017
|
|
|
Utility
Products
and
Related Services
|
|
Mobile
Entertainment
|
|
Others
|
|
Unallocated*
|
|
Consolidated
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
Revenue
|
820,342
|
|
371,034
|
|
10,185
|
|
-
|
|
1,201,561
|
|
Operating profit
(loss)
|
212,849
|
|
(122,069)
|
|
(371)
|
|
(24,182)
|
|
66,227
|
|
Operating
margin
|
25.9%
|
|
(32.9)%
|
|
(3.6)%
|
|
|
|
5.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
* Unallocated
expenses refer to SBC expenses that are not allocated to individual
segments.
|
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
|
|
June 30,
2017
|
March 31,
2018
|
June 30,
2018
|
June 30,
2018
|
|
RMB
|
RMB
|
RMB
|
USD
|
Net income
attributable to Cheetah Mobile shareholders
|
70,199
|
69,997
|
196,540
|
29,701
|
Add:
|
|
|
|
|
Income tax
expenses
|
4,664
|
5,042
|
27,993
|
4,230
|
Interest income,
net
|
(3,380)
|
(16,652)
|
(19,425)
|
(2,936)
|
Depreciation and
amortization
|
36,166
|
23,472
|
21,573
|
3,260
|
Net income (loss)
attributable to noncontrolling interests
|
3,157
|
4,906
|
(2,792)
|
(422)
|
Other non-operating
(income) expense, net
|
(8,413)
|
73,068
|
(74,370)
|
(11,239)
|
Share-based
compensation
|
24,182
|
8,919
|
14,633
|
2,211
|
Adjusted
EBITDA
|
126,575
|
168,752
|
164,152
|
24,805
|
CHEETAH MOBILE
INC.
|
Revenues Generated
from PC-based and Mobile-based Applications and
Services
|
(Unaudited, in
'000)
|
|
|
|
|
|
For The Three
Months Ended
|
|
June 30,
2017
|
March 31,
2018
|
June 30,
2018
|
June 30,
2018
|
|
RMB
|
RMB
|
RMB
|
USD
|
PC
|
162,771
|
127,094
|
137,763
|
20,819
|
Mobile
|
1,038,790
|
1,018,003
|
965,693
|
145,939
|
Total
|
1,201,561
|
1,145,097
|
1,103,456
|
166,758
|
|
|
CHEETAH MOBILE
INC.
|
Revenues Generated
from Domestic and Overseas Markets
|
(Unaudited, in
'000)
|
|
|
|
|
|
For The Three
Months Ended
|
|
June 30,
2017
|
March 31,
2018
|
June 30,
2018
|
June 30,
2018
|
|
RMB
|
RMB
|
RMB
|
USD
|
Domestic
|
358,655
|
447,620
|
453,837
|
68,585
|
Overseas
|
842,906
|
697,477
|
649,619
|
98,173
|
Total
|
1,201,561
|
1,145,097
|
1,103,456
|
166,758
|
View original
content:http://www.prnewswire.com/news-releases/cheetah-mobile-announces-second-quarter-2018-unaudited-consolidated-financial-results-300699312.html
SOURCE Cheetah Mobile