BEIJING, March 25, 2019 /PRNewswire/ -- Cheetah Mobile
Inc. (NYSE: CMCM) ("Cheetah Mobile" or the "Company"), a leading
mobile internet company with global market coverage, today
announced its unaudited consolidated financial results for the
fourth quarter and full year ended December
31, 2018.
Fourth Quarter 2018 Financial Highlights
- Total revenues[1] increased by 1.8% year over year
and 2.2% quarter over quarter to RMB1,381.2
million (US$200.9
million).
- Revenues[1] from the mobile entertainment business
increased by 39.4% year over year and 11.6% quarter over quarter to
RMB555.6 million (US$80.8 million), accounting for 40.2% of total
revenues in the fourth quarter of 2018.
- Gross profit was RMB964.8 million
(US$140.3 million). Gross margin was
69.9%. Non-GAAP[2] gross profit was RMB964.9 million (US$140.3
million). Non-GAAP gross margin was 69.9%.
- Net income attributable to Cheetah Mobile shareholders was
RMB770.2 million (US$112.0 million). Non-GAAP[2] net
income attributable to Cheetah Mobile shareholders was RMB805.5 million (US$117.2
million).
- Diluted net income per ADS was RMB5.35 (US$0.78).
Non-GAAP[2] diluted net income per ADS was RMB5.60 (US$0.81).
Fiscal Year 2018 Financial Highlights
- Total revenues[1] increased by 2.2% to RMB4,981.7 million (US$724.6 million).
- Revenues[1] from the mobile entertainment business
increased by 19.0% to RMB1,778.9
million (US$258.7
million).
- Gross profit was RMB3,441.1
million (US$500.5 million).
Gross margin was 69.1%. Non-GAAP[2] gross profit was
RMB3,441.3 million (US$500.5 million). Non-GAAP gross margin was
69.1%.
- Net income attributable to Cheetah Mobile shareholders was
RMB1,203.8 million (US$175.1 million). Non-GAAP[2] net
income attributable to Cheetah Mobile shareholders was RMB1,288.9 million (US$187.5 million).
- Diluted net income per ADS was RMB8.10 (US$1.18).
Non-GAAP[2] diluted net income per ADS was RMB8.69 (US$1.26).
- Net cash from operating activities in 2018 was RMB342.1 million (US$49.8
million). Free cash flow was RMB276.7
million (US$40.2 million) in
2018.
[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.
|
[2]
Non-GAAP measures exclude share-based compensation expenses. See
details in the section titled "USE OF NON-GAAP FINANCIAL
MEASURES".
|
Fourth Quarter 2018 Operating Metrics
- The average number of global mobile monthly active users
("Mobile MAUs") was 470 million in the fourth quarter of 2018. The
number of Mobile MAUs from markets outside of China, or overseas markets, accounted for 72%
of the total number of Mobile MAUs in the fourth quarter of
2018.
Mr. Sheng Fu, Cheetah Mobile's
Chairman and Chief Executive Officer, stated, "We achieved full
year 2018 financial results that were in line with our previous
expectations, mostly driven by growths in our mobile games
operation, mobile utility products business in the domestic market,
and artificial intelligence ("AI") powered business. In 2018, we
further expanded our product offerings by launching many new games
including Bricks n Balls, a popular casual elimination game, and
introducing a number of new utility products focused on delivering
personalized experiences. We also made substantial progress in
attracting our users to purchase virtual items and premium services
within our mobile applications, which diversified our revenue
streams. More importantly, we have been leveraging AI technologies
and expanding into AI-powered businesses. We have successfully
launched AI hardware such as Cheetah Translator and deployed
Cheetah GreetBot in many customer locations. Looking ahead, we are
confident that our long-term growth prospects remain healthy and
that our business will maximize the benefits of our users and
advertisers continuously."
Mr. Vincent Jiang, Cheetah
Mobile's Chief Financial Officer, commented, "In 2018, we grew our
profits and expanded our margins. Our gross profit increased to
RMB3.4 billion, and gross margin
expanded to 69.1%. Our operating profit increased to RMB467 million and operating margin expanded to
9.4%. In addition, we continued investing in our mobile games
business and our mobile utility products business in the domestic
market. More importantly, we generated RMB342 million of net cash from operating
activities in 2018. In the fourth quarter of 2018, we sold a
certain portion of our equity ownership in Bytedance Ltd., which
generated a total investment gain of US$87
million and further augmented our balance sheet. As of
December 31, 2018, we had cash and
cash equivalents, restricted cash, and short-term investments of
approximately US$541 million. Our
strong cash generation capabilities and our high cash balance
should allow us to continue to invest in our long-term growth and
our business expansion into the AI space."
Fourth Quarter 2018 Consolidated Financial Results
REVENUES
Total revenues in the fourth quarter increased by 1.8% year over
year and 2.2% quarter over quarter to RMB1,381.2 million (US$200.9 million).
Revenues from utility products and related services
decreased by 16.5% year over year and 6.3% quarter over quarter to
RMB783.0 million (US$113.9 million) in the fourth quarter of 2018.
The year over year decrease was mainly due to the discontinuation
of certain ad formats, i.e., ads on mobile phone lock screens, by
the Company's overseas third-party advertising partners. The
quarter over quarter decrease was mainly due to disruptions to the
Company's business as a result of the negative publicity caused by
a news article released in November
2018, about which the Company has made a number of public
clarification statements.
Revenues from the mobile entertainment business increased
by 39.4% year over year and 11.6% quarter over quarter to
RMB555.6 million (US$80.8 million) primarily driven by the growth
of the Company's mobile games business in the fourth quarter of
2018. Revenues from the mobile entertainment business contributed
to 40.2% of total revenues in the quarter.
- Revenues from the mobile games business increased by 91.4% year
over year and 14.3% quarter over quarter to RMB326.2 million (US$47.4
million). The increases were mainly due to contributions
from Bricks n Balls, a casual elimination game that started
ramping up in the middle of July
2018.
- Revenues from the content-driven products, namely LiveMe,
increased by 0.6% year over year and 7.9% quarter over quarter to
RMB229.4 million (US$33.4 million), primarily driven by growths in
both of its paying user count and average revenue per user as
LiveMe continued to introduce new features to increase its user
stickiness.
Revenues from others increased to RMB42.6 million (US$6.2
million) from RMB20.0 million
in the same period last year and RMB18.5
million in the third quarter of 2018, mainly driven by the
sales of Cheetah Translator, an AI-based interpretation device.
Revenues from others accounted for 3.1% of total revenues in the
fourth quarter of 2018.
By region, revenues generated from the China market increased by 3.7% year over year,
but decreased by 0.6% quarter over quarter to RMB533.2 million (US$77.6
million), and constituted 38.6% of the Company's total
revenues in the fourth quarter of 2018, compared to 37.9% in the
same period last year and 39.7% in the third quarter of 2018. The
year over year revenue growth in the China market was primarily attributable to the
sales of Cheetah Translator.
Revenues generated from the overseas market increased by 0.7%
year over year and 4.0% quarter over quarter to RMB848.0 million (US$123.3
million), constituting 61.4% of the Company's total revenues
in the fourth quarter of 2018, up from 62.1% in the same period
last year and 60.3% in the third quarter of 2018. The revenue
growth in the overseas market was primarily driven by the rapid
growth of the Company's mobile games business, whose market is
mostly overseas.
COST OF REVENUES AND GROSS PROFIT
Cost of revenues decreased by 3.2% year over year and increased
by 9.1% quarter over quarter to RMB416.4
million (US$60.6 million) in
the fourth quarter of 2018. The year-over-year decrease was
primarily due to (i) reduced traffic acquisition costs associated
with third-party advertising, and (ii) reduced bandwidth and IDC
costs and personnel costs involved in the Company's operation for
the News Republic business. The quarter-over-quarter increase was
primarily driven by (i) higher revenue sharing with live
broadcasters of the Company's LiveMe business, (ii) higher costs as
a result of revenue growth in the Company's hardware business, and
(iii) higher costs of payment channels, such as Google Play and
Apple's App Store, for the Company's
mobile games business, as in-game purchase revenues from the
Company's mobile games business grew. Non-GAAP cost of revenues
decreased by 3.5% year over year and increased by 9.1% quarter over
quarter to RMB416.2 million
(US$60.5 million) in the fourth
quarter of 2018.
Gross profit increased by 4.1% year over year and remained
relatively flat quarter over quarter at RMB964.8 million (US$140.3
million). Non-GAAP gross profit increased by 4.3% year over
year and remained relatively flat quarter over quarter at
RMB964.9 million (US$140.3 million) in the fourth quarter of 2018.
Gross margin was 69.9% in the fourth quarter of 2018, as compared
to 68.3% in the same period last year and 71.8% in the third
quarter of 2018. Non-GAAP gross margin was 69.9% in the fourth
quarter of 2018, as compared to 68.2% in the same period last year
and 71.8% in the third quarter of 2018.
OPERATING INCOME AND EXPENSES
Total operating expenses increased by 26.3% year over year and
5.6% quarter over quarter to RMB889.7
million (US$129.4 million) in
the fourth quarter of 2018. Total non-GAAP operating expenses
increased by 22.1% year over year and 4.7% quarter over quarter to
RMB854.6 million (US$124.3 million) in the fourth quarter of
2018.
- Research and development (R&D) expenses increased by 25.9%
year over year and 9.0% quarter over quarter to RMB191.1 million (US$27.8
million) in the fourth quarter of 2018. The increases were
primarily due to increased share-based compensation expenses and
increased R&D headcount for the mobile games business. Non-GAAP
R&D expenses, which exclude share-based compensation expenses,
increased by 19.4% year over year and 5.5% quarter over quarter to
RMB176.0 million (US$25.6 million) in the fourth quarter of
2018.
- Selling and marketing expenses increased by 38.1% year over
year but remained relatively flat quarter over quarter at
RMB580.3 million (US$84.4 million) in the fourth quarter of 2018.
The increases were mainly due to increased marketing promotions for
the Company's utility products and related services business in the
domestic market and its mobile games business in all markets.
Non-GAAP selling and marketing expenses, which exclude share-based
compensation expenses, increased by 36.5% year over year and 2.2%
quarter over quarter to RMB577.7
million (US$84.0 million) in
the fourth quarter of 2018.
- General and administrative expenses increased by 14.6% year
over year and 21.8% quarter over quarter to RMB131.8 million (US$19.2
million) in the fourth quarter of 2018. The year-over-year
increase was primarily due to the increased share-based
compensation expenses. The quarter-over-quarter increase was
primarily due to higher employee benefits. Non-GAAP general and
administrative expenses, which exclude share-based compensation
expenses, increased by 2.2% year over year and 22.0% quarter over
quarter to RMB114.6 million
(US$16.7 million) in the fourth
quarter of 2018.
Operating profit decreased by 66.2% year over year and
41.3% quarter over quarter to RMB75.1
million (US$10.9 million). The
year-over-year decrease in the Company's operating profit was
primarily due to the Company's investments in both its mobile
utility products business in the domestic market and its mobile
games business in all markets. Non-GAAP operating profit decreased
by 51.1% year over year and 28.4% quarter over quarter to
RMB110.3 million (US$16.0 million).
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
decreased by 31.5% year over year and 15.2% quarter over quarter to
RMB224.0 million (US$32.6 million) in the fourth quarter of 2018.
The decreases were primarily due to a decrease in revenues from
this segment and the Company's increased marketing promotions for
its utility products and related services business in the domestic
market.
- Operating loss for the mobile entertainment business was
RMB64.8 million (US$9.4 million) in the fourth quarter of 2018,
compared to an operating loss of RMB61.8
million in the same period last year and RMB74.1 million in the third quarter of 2018. The
wider year-over-year loss was mainly due to higher sales and
marketing expenses for the Company's mobile games operation. The
reduced quarter-over-quarter loss was mainly a result of reduced
expenses from the LiveMe business.
Share-based compensation expenses increased to RMB35.3 million (US$5.1
million) in the fourth quarter of 2018 from RMB3.4 million in the same period last year and
RMB26.3 million in the third quarter
of 2018, as the Company granted a certain quantity of restricted
shares to key employees.
IMPAIRMENT OF INVESTMENTS
Impairment of investments were RMB98.9
million (US$14.4 million) in
the fourth quarter of 2018 primarily due to a one-time non-cash
write-down of some investment assets, which the Company considered
as 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 RMB789.3
million (US$114.8 million) in
the fourth quarter of 2018, mainly resulting from the disposals of
a certain portion of the Company's equity ownership in Bytedance
Ltd., whose transaction agreement was entered in the fourth quarter
of 2018 and resulted in a disposal gain of investment of
US$43.3 million. This transaction
also resulted in a fair value gain of US$43.3 million in the fourth quarter of 2018 for
the remaining portion of the equity ownership which the Company
still holds, in accordance with ASC 321, adopted on January 1, 2018.
NET INCOME ATTRIBUTABLE TO CHEETAH MOBILE
SHAREHOLDERS
Net income attributable to Cheetah Mobile shareholders decreased
by 26.4% year over year, and increased by 361.1% quarter over
quarter to RMB770.2 million
(US$112.0 million) in the fourth
quarter of 2018. Non-GAAP net income attributable to Cheetah Mobile
shareholders decreased by 23.3% year over year and increased by
316.6% quarter over quarter to RMB805.5
million (US$117.2 million) in
the fourth quarter of 2018.
NET INCOME PER ADS
Diluted income per ADS decreased by 26.4% year over year and
increased by 390.8% quarter over quarter to RMB5.35 (US$0.78)
in the fourth quarter of 2018. Non-GAAP diluted income per ADS
decreased by 23.2% year over year and increased by 340.9% quarter
over quarter to RMB5.60 (US$0.81) in the fourth quarter of 2018.
BALANCE SHEET
As of December 31, 2018, the
Company had cash and cash equivalents, restricted cash, and
short-term investments of RMB3,720.6
million (US$541.1
million).
SHARES ISSUED AND OUTSTANDING
As of December 31, 2018, the
Company had a total of 1,433,343,199 Class A and Class B ordinary
shares issued and outstanding. One ADS represents 10 Class A
ordinary shares.
Fiscal Year 2018 Results
REVENUES
Total revenues increased by 2.2% to RMB4,981.7 million (US$724.6 million) in 2018.
Revenues from utility products and related services
decreased by 6.7% year over year to RMB3,119.5 million (US$453.7 million) in 2018. The decrease was due
to (i) a decline in revenues from the Company's mobile utility
products and related services business in the overseas markets
mostly as a result of the discontinuation of certain ad formats,
i.e., ads on mobile phone lock screens, by the Company's overseas
third-party advertising partners, and (ii) a decline in the
Company's PC-related revenues. This decrease was largely offset by
an increase in revenues from the mobile utility products and
related services business in China. Revenues from utility products and
related services in the domestic market increased by 22.3% year
over year to RMB1,794.4 million
(US$261.0 million) in 2018,
accounting for 36.0% of total revenues.
Revenues from the mobile entertainment business increased
by 19.0% year over year to RMB1,778.9
million (US$258.7 million),
mostly driven by the growth of the Company's mobile games
operations. Revenues from the mobile entertainment business
contributed 35.7% of total revenues in 2018.
- Revenues from the mobile game business increased by 48.5% year
over year to RMB925.0 million
(US$134.5 million). The increases
were mainly due to the contribution from Bricks n Balls, a
casual elimination game that started ramping up in the middle of
July 2018.
- Revenues from the content-driven products remained relatively
flat year over year at RMB853.9
million (US$124.2
million).
By region, revenues generated from the China market increased by 27.5% year over year
to RMB 1,971.1 million (US$286.7 million), and constituted 39.6% of the
Company's total revenues in 2018, up from 31.7% in 2017. The
revenue growth in the China market
was primarily attributable to a ramp-up of the mobile utility
products and related services in China.
Revenues generated from the overseas market decreased by 9.5%
year over year to RMB3,010.6 million
(US$437.9 million), constituting
60.4% of the Company's total revenues in 2018, down from 68.3% in
2017. The revenue decrease in the overseas market was primarily
driven by a decline in revenues from the mobile utility products
and related services business in the overseas markets.
COST OF REVENUES AND GROSS PROFIT
Cost of revenues decreased by 8.3% year over year to
RMB1,540.6 million (US$224.1 million) in 2018, primarily due to (i)
reduced traffic acquisition costs associated with the Company's
third-party advertising business, (ii) reduced bandwidth and IDC
costs associated with the Company's mobile utility applications in
the overseas markets, (iii) reduced personnel costs involved in the
Company's PC business, and (iv) lower amortization of intangible
assets in 2018 as the Company had disposed News Republic and
completed the amortization of MobPartner, which was acquired in
April 2015. Non-GAAP cost of revenues
decreased by 8.3% year over year to RMB1,540.4 million (US$224.0 million) in 2018.
Gross profit increased by 7.7% year over year to RMB3,441.1 million (US$500.5 million) in 2018. Gross Margin expanded
to 69.1% in 2018 from 65.5% in 2017. Non-GAAP gross profit
increased by 7.7% year over year to RMB3,441.3 million (US$500.5 million) in 2018. Non-GAAP gross margin
expanded to 69.1% in 2018 from 65.6% in 2017.
OPERATING INCOME/LOSS AND EXPENSES
Total operating expenses increased by 8.2% year over year to
RMB2,973.9 million (US$432.5 million) in 2018. Total non-GAAP
operating expenses increased by 8.0% year over year to RMB2,888.9 million (US$420.2 million).
- Research and development expenses decreased by 2.3% year over
year to RMB668.9 million
(US$97.3 million) in 2018, mainly due
to lower share-based compensation expenses. Non-GAAP research and
development expenses, which exclude share-based compensation
expenses, decreased by 1.4% year over year to RMB654.7 million (US$95.2
million).
- Selling and marketing expenses increased by 15.3% year over
year at RMB1,910.0 million
(US$277.8 million) in 2018, which was
primarily due to increased promotional activities for the Company's
utility products and related services business in the domestic
market and its mobile games business in all markets. Non-GAAP
selling and marketing expenses, which exclude share-based
compensation expenses, increased by 14.8% year over year to
RMB1,901.1 million (US$276.5 million).
- General and administrative expenses increased by 5.7% year over
year to RMB430.8 million
(US$62.7 million) in 2018, which was
mainly due to higher share-based compensation expenses and an
increase in allowances for doubtful accounts. Non-GAAP general and
administrative expenses, which exclude share-based compensation
expenses, increased by 3.8% year over year to RMB369.1 million (US$53.7
million).
Operating profit increased by 4.6% to RMB467.2 million (US$68.0
million) in 2018. Operating margin was 9.4% in 2018, as
compared to 9.2% in 2017. Non-GAAP operating profit increased by
6.2% year over year to RMB552.3
million (US$80.3 million) in
2018. Non-GAAP operating margin was 11.1% in 2018, as compared to
10.7% 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 5.7% year over year to RMB1,035.0 million (US$150.5 million) in 2018. The increase was a
result of the Company's strategy to optimize the cost and expense
structure of the mobile utility products and related services
business in the overseas markets, as well as revenue increase from
the Company's mobile utility products and related services business
in the domestic market.
- Operating loss for the mobile entertainment business decreased
to RMB312.5 (US$45.5 million) in 2018 from RMB417.4 million in 2017. The reduced loss was
mainly a result of the year-over-year increases in revenues
generated from the Company's mobile games business and reduced
costs and expenses from News Republic business, which were
partially offset by the Company's increased investments in the
LiveMe operations.
Share-based compensation expenses increased by 16.1% year over
year to RMB85.1 million (US$12.4 million) in 2018, as the Company granted
a certain quantity of restricted shares to key employees.
NET INCOME ATTRIBUTABLE TO CHEETAH MOBILE
SHAREHOLDERS
Net income attributable to Cheetah Mobile shareholders was
RMB1,203.8 million (US$175.1 million) in 2018 as compared to
RMB1,348.2 million in 2017. Net
margin was 24.2% in 2018, as compared to 27.7% in 2017. Non-GAAP
net income attributable to Cheetah Mobile shareholders was
RMB1,288.9 million (US$187.5 million) in 2018, as compared to
RMB1,421.5 million in 2017. Non-GAAP
net margin was 25.9% in 2018, as compared to 29.2% in 2017.
NET INCOME PER ADS
Diluted income per ADS was RMB8.10
(US$1.18) in 2018, as compared to
RMB9.37 in 2017. Non-GAAP diluted
income per ADS was RMB8.69
(US$1.26) in 2018, as compared to
RMB9.88 in 2017.
CASH FLOW
Net cash from operating activities in 2018 was RMB342.1 million (US$49.8
million). Free cash flow was RMB276.7
million (US$40.2 million) in
2018.
BUSINESS OUTLOOK
For the first quarter of 2019, the Company expects its total
revenues to be between RMB1,060
million (US$154.2 million)
and RMB1,090 million (US$158.5 million). This estimate represents
management's preliminary view as of the date of this release, which
is subject to change.
SHARE REPURCHASE PROGRAM
On September 13, 2018, the Company
announced that its board of directors had approved a share
repurchase program of up to US$100
million of the Company's outstanding ADSs for a period not
to exceed 12 months. Cheetah funded repurchases made under this
program from its available cash balance. As of March 22, 2019, the Company had repurchased
approximately 4.5 million ADSs for approximately US$32 million under this program.
CONFERENCE CALL INFORMATION
The Company will hold a conference call on Monday, March 25, 2019 at 8:00 am Eastern Time or 8:00 pm Beijing Time to discuss its 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 be
available at the Company's investor relations website at
http://ir.cmcm.com/.
A presentation for the Company's earnings call is also available
at the aforementioned 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 RMB6.8755 to US$1.00, the exchange rate in effect as of
December 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 global
market coverage. 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,
Bricks n Balls, and live streaming product LiveME. 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 non-controlling 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
|
|
December 31,
2018
|
|
December 31,
2018
|
|
RMB
|
|
RMB
|
|
USD
|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
2,317,488
|
|
2,783,843
|
|
404,893
|
Restricted
cash
|
90,149
|
|
6,133
|
|
892
|
Short-term
investments
|
1,395,694
|
|
930,610
|
|
135,352
|
Accounts
receivable
|
621,272
|
|
655,261
|
|
95,304
|
Prepayments and other
current assets
|
918,243
|
|
1,064,714
|
|
154,853
|
Due from related
parties
|
54,052
|
|
126,990
|
|
18,470
|
Total current
assets
|
5,396,898
|
|
5,567,551
|
|
809,764
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
Property and
equipment, net
|
89,137
|
|
63,919
|
|
9,297
|
Intangible assets,
net
|
70,225
|
|
48,421
|
|
7,043
|
Goodwill
|
634,157
|
|
617,837
|
|
89,861
|
Investment in equity investees
|
149,969
|
|
151,533
|
|
22,040
|
Other long term investments
|
1,002,721
|
|
1,697,510
|
|
246,893
|
Due from related
parties
|
5,216
|
|
21,139
|
|
3,075
|
Deferred tax
assets
|
57,642
|
|
93,733
|
|
13,633
|
Other non-current
assets
|
42,966
|
|
35,830
|
|
5,211
|
Total non-current
assets
|
2,052,033
|
|
2,729,922
|
|
397,053
|
|
|
|
|
|
|
Total
assets
|
7,448,931
|
|
8,297,473
|
|
1,206,817
|
|
|
|
|
|
|
LIABILITIES,
MEZZANINE EQUITY AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Bank loans
|
336,304
|
|
-
|
|
-
|
Accounts
payable
|
164,537
|
|
171,055
|
|
24,879
|
Accrued expenses and
other current liabilities
|
1,532,489
|
|
1,514,642
|
|
220,296
|
Due to related
parties
|
81,810
|
|
37,298
|
|
5,425
|
Income tax
payable
|
50,614
|
|
117,957
|
|
17,156
|
Total current
liabilities
|
2,165,754
|
|
1,840,952
|
|
267,756
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
Deferred tax
liabilities
|
73,393
|
|
73,718
|
|
10,722
|
Other non-current
liabilities
|
54,574
|
|
63,632
|
|
9,255
|
Total non-current
liabilities
|
127,967
|
|
137,350
|
|
19,977
|
|
|
|
|
|
|
Total
liabilities
|
2,293,721
|
|
1,978,302
|
|
287,733
|
|
|
|
|
|
|
Mezzanine
equity:
|
|
|
|
|
|
Redeemable
noncontrolling interests
|
649,246
|
|
687,847
|
|
100,043
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
Ordinary
shares
|
229
|
|
230
|
|
33
|
Treasury
stock
|
-
|
|
(198,360)
|
|
(28,850)
|
Additional paid-in
capital
|
2,644,043
|
|
2,742,893
|
|
398,937
|
Retained
earnings
|
1,564,883
|
|
2,742,839
|
|
398,929
|
Accumulated other
comprehensive income
|
84,206
|
|
225,639
|
|
32,818
|
Total Cheetah
Mobile shareholders' equity
|
4,293,361
|
|
5,513,241
|
|
801,867
|
Noncontrolling
interests
|
212,603
|
|
118,083
|
|
17,174
|
|
|
|
|
|
|
Total
equity
|
4,505,964
|
|
5,631,324
|
|
819,041
|
|
|
|
|
|
|
Total liabilities,
mezzanine equity and equity
|
7,448,931
|
|
8,297,473
|
|
1,206,817
|
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
|
|
December 31,
2017
|
|
September
30, 2018
|
|
December 31,
2018
|
|
December 31,
2018
|
|
RMB
|
|
RMB
|
|
RMB
|
|
USD
|
Revenues
(a)
|
1,387,806
|
|
1,351,979
|
|
1,381,173
|
|
200,883
|
Utility products and
related services
|
967,232
|
|
835,606
|
|
783,021
|
|
113,886
|
Mobile
entertainment
|
399,493
|
|
497,911
|
|
555,597
|
|
80,808
|
Others
|
21,081
|
|
18,462
|
|
42,555
|
|
6,189
|
|
|
|
|
|
|
|
|
Cost of revenues
(b)
|
(461,383)
|
|
(381,692)
|
|
(416,399)
|
|
(60,563)
|
Gross
profit
|
926,423
|
|
970,287
|
|
964,774
|
|
140,320
|
|
|
|
|
|
|
|
|
Operating income
and expenses:
|
|
|
|
|
|
|
|
Research and
development (b)
|
(151,867)
|
|
(175,303)
|
|
(191,135)
|
|
(27,799)
|
Selling and marketing
(b)
|
(420,080)
|
|
(568,445)
|
|
(580,330)
|
|
(84,405)
|
General and
administrative (b)
|
(115,089)
|
|
(108,270)
|
|
(131,849)
|
|
(19,177)
|
Impairment of
goodwill and intangible assets
|
(38,690)
|
|
-
|
|
(7,180)
|
|
(1,044)
|
Other operating
income
|
21,307
|
|
9,595
|
|
20,771
|
|
3,021
|
Total operating
income and expenses
|
(704,419)
|
|
(842,423)
|
|
(889,723)
|
|
(129,404)
|
|
|
|
|
|
|
|
|
Operating
profit
|
222,004
|
|
127,864
|
|
75,051
|
|
10,916
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest income,
net
|
10,227
|
|
24,120
|
|
27,519
|
|
4,002
|
Foreign exchange
(loss) gain, net
|
(5,943)
|
|
10,532
|
|
6,096
|
|
887
|
Impairment of
investment impairment
|
(209,565)
|
|
-
|
|
(98,885)
|
|
(14,382)
|
Gain from equity
method investments, net
|
1,921
|
|
2,479
|
|
2,694
|
|
392
|
Other income,
net
|
1,088,965
|
|
1,242
|
|
789,325
|
|
114,803
|
|
|
|
|
|
|
|
|
Income before
taxes
|
1,107,609
|
|
166,237
|
|
801,800
|
|
116,618
|
Income tax
expenses
|
(40,259)
|
|
(26,957)
|
|
(20,138)
|
|
(2,929)
|
Net
income
|
1,067,350
|
|
139,280
|
|
781,662
|
|
113,689
|
Less: net income
(loss) attributable to noncontrolling interests
|
20,264
|
|
(27,757)
|
|
11,457
|
|
1,666
|
Net income
attributable to Cheetah Mobile shareholders
|
1,047,086
|
|
167,037
|
|
770,205
|
|
112,023
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
Basic
|
0.74
|
|
0.11
|
|
0.55
|
|
0.08
|
Diluted
|
0.73
|
|
0.11
|
|
0.54
|
|
0.08
|
|
|
|
|
|
|
|
|
Earnings per
ADS
|
|
|
|
|
|
|
|
Basic
|
7.43
|
|
1.12
|
|
5.46
|
|
0.79
|
Diluted
|
7.27
|
|
1.09
|
|
5.35
|
|
0.78
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding
|
|
|
|
|
|
|
|
Basic
|
1,400,420,814
|
|
1,408,570,797
|
|
1,393,015,891
|
|
1,393,015,891
|
Diluted
|
1,432,849,633
|
|
1,440,581,762
|
|
1,420,765,216
|
|
1,420,765,216
|
Weighted average
number of ADSs outstanding
|
|
|
|
|
|
|
|
Basic
|
140,042,081
|
|
140,857,080
|
|
139,301,589
|
|
139,301,589
|
Diluted
|
143,284,963
|
|
144,058,176
|
|
142,076,522
|
|
142,076,522
|
|
|
|
|
|
|
|
|
Other
comprehensive (loss) income, net of tax of
nil
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
(52,267)
|
|
149,722
|
|
(47,900)
|
|
(6,967)
|
Unrealized losses on
available-for-sale securities, net
|
(433)
|
|
-
|
|
-
|
|
-
|
Other
comprehensive (loss) income
|
(52,700)
|
|
149,722
|
|
(47,900)
|
|
(6,967)
|
Total
comprehensive income
|
1,014,650
|
|
289,002
|
|
733,762
|
|
106,722
|
Less: Total
comprehensive income (loss)
attributable to noncontrolling
interests
|
18,568
|
|
(17,293)
|
|
12,573
|
|
1,829
|
Total
comprehensive income attributable to
Cheetah Mobile shareholders
|
996,082
|
|
306,295
|
|
721,189
|
|
104,893
|
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 December 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
|
|
|
|
|
|
December 31,
2018
|
|
December 31,
2018
|
|
|
|
|
|
RMB
|
|
USD
|
|
|
|
|
As
reported
|
1,381,173
|
|
200,883
|
|
|
|
|
Add: value added
taxes
|
34,412
|
|
5,005
|
|
|
|
|
Less: barter
transactions
|
4,432
|
|
645
|
|
|
|
|
Without adoption
of ASC 606
|
1,411,153
|
|
205,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended
|
|
December 31,
2017
|
|
September
30, 2018
|
|
December 31,
2018
|
|
December 31,
2018
|
(b) Share-based
compensation expenses
|
RMB
|
|
RMB
|
|
RMB
|
|
USD
|
Cost of
revenues
|
(981)
|
|
46
|
|
160
|
|
23
|
Research and
development
|
4,471
|
|
8,563
|
|
15,169
|
|
2,206
|
Selling and
marketing
|
(3,049)
|
|
3,317
|
|
2,665
|
|
388
|
General and
administrative
|
2,933
|
|
14,380
|
|
17,266
|
|
2,511
|
Total
|
3,374
|
|
26,306
|
|
35,260
|
|
5,128
|
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, 2018
|
|
|
|
GAAP
|
|
% of
Net
|
|
Share-based
|
|
% of
Net
|
|
Non-GAAP
|
|
% of
Net
|
|
Non-GAAP
|
|
Result
|
|
Revenues
|
|
Compensation
|
|
Revenues
|
|
Result
|
|
Revenues
|
|
Result
($)
|
Revenues
|
1,381,173
|
|
|
|
|
|
|
|
1,381,173
|
|
|
|
200,883
|
Cost of
revenues
|
(416,399)
|
|
30.1%
|
|
160
|
|
0.0%
|
|
(416,239)
|
|
30.1%
|
|
(60,540)
|
Gross
profit
|
964,774
|
|
69.9%
|
|
160
|
|
0.0%
|
|
964,934
|
|
69.9%
|
|
140,343
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
(191,135)
|
|
13.8%
|
|
15,169
|
|
1.1%
|
|
(175,966)
|
|
12.7%
|
|
(25,593)
|
Selling and
marketing
|
(580,330)
|
|
42.0%
|
|
2,665
|
|
0.2%
|
|
(577,665)
|
|
41.8%
|
|
(84,017)
|
General and
administrative
|
(131,849)
|
|
9.5%
|
|
17,266
|
|
1.3%
|
|
(114,583)
|
|
8.3%
|
|
(16,666)
|
Impairment of
goodwill and intangible assets
|
(7,180)
|
|
0.5%
|
|
-
|
|
0.0%
|
|
(7,180)
|
|
0.5%
|
|
(1,044)
|
Other operating
income
|
20,771
|
|
1.5%
|
|
-
|
|
0.0%
|
|
20,771
|
|
1.5%
|
|
3,021
|
Total operating
income and expenses
|
(889,723)
|
|
64.4%
|
|
35,100
|
|
2.5%
|
|
(854,623)
|
|
61.9%
|
|
(124,299)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
75,051
|
|
5.4%
|
|
35,260
|
|
2.6%
|
|
110,311
|
|
8.0%
|
|
16,044
|
Net income
attributable to Cheetah Mobile shareholders
|
770,205
|
|
55.8%
|
|
35,260
|
|
2.6%
|
|
805,465
|
|
58.3%
|
|
117,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
ordinary share (RMB)
|
0.54
|
|
|
|
0.02
|
|
|
|
0.56
|
|
|
|
|
Diluted earnings per
ADS (RMB)
|
5.35
|
|
|
|
0.25
|
|
|
|
5.60
|
|
|
|
|
Diluted earnings per
ADS (USD)
|
0.78
|
|
|
|
0.03
|
|
|
|
0.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three Months Ended
September 30, 2018
|
|
|
|
GAAP
|
|
% of Net
|
|
Share-based
|
|
% of Net
|
|
Non-GAAP
|
|
% of Net
|
|
|
|
Result
|
|
Revenues
|
|
Compensation
|
|
Revenues
|
|
Result
|
|
Revenues
|
|
|
Revenues
|
1,351,979
|
|
|
|
|
|
|
|
1,351,979
|
|
|
|
|
Cost of
revenues
|
(381,692)
|
|
28.2%
|
|
46
|
|
0.0%
|
|
(381,646)
|
|
28.2%
|
|
|
Gross profit
|
970,287
|
|
71.8%
|
|
46
|
|
0.0%
|
|
970,333
|
|
71.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
(175,303)
|
|
13.0%
|
|
8,563
|
|
0.6%
|
|
(166,740)
|
|
12.3%
|
|
|
Selling and
marketing
|
(568,445)
|
|
42.0%
|
|
3,317
|
|
0.2%
|
|
(565,128)
|
|
41.8%
|
|
|
General and
administrative
|
(108,270)
|
|
8.0%
|
|
14,380
|
|
1.1%
|
|
(93,890)
|
|
6.9%
|
|
|
Other operating
income
|
9,595
|
|
0.7%
|
|
-
|
|
0.0%
|
|
9,595
|
|
0.7%
|
|
|
Total operating income and
expenses
|
(842,423)
|
|
62.3%
|
|
26,260
|
|
1.9%
|
|
(816,163)
|
|
60.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
127,864
|
|
9.5%
|
|
26,306
|
|
1.9%
|
|
154,170
|
|
11.4%
|
|
|
Net income attributable to
Cheetah Mobile shareholders
|
167,037
|
|
12.4%
|
|
26,306
|
|
1.9%
|
|
193,343
|
|
14.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per ordinary
share (RMB)
|
0.11
|
|
|
|
0.02
|
|
|
|
0.13
|
|
|
|
|
Diluted earnings per ADS
(RMB)
|
1.09
|
|
|
|
0.18
|
|
|
|
1.27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEETAH MOBILE
INC.
|
Information about
Segment
|
(Unaudited, in'000,
except for percentage)
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended December 31, 2018
|
|
|
Utility
Products
and
Related Services
|
|
Mobile
Entertainment
|
|
Others
|
|
Unallocated*
|
|
Consolidated
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
USD
|
Revenue
|
783,021
|
|
555,597
|
|
42,555
|
|
-
|
|
1,381,173
|
200,883
|
Operating profit
(loss)
|
224,033
|
|
(64,780)
|
|
(48,942)
|
|
(35,260)
|
|
75,051
|
10,916
|
Operating
margin
|
28.6%
|
|
(11.7)%
|
|
(115.0)%
|
|
|
|
5.4%
|
5.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Three
Months Ended September 30, 2018
|
|
|
Utility
Products
and
Related Services
|
|
Mobile
Entertainment
|
|
Others
|
|
Unallocated*
|
|
Consolidated
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
Revenue
|
835,606
|
|
497,911
|
|
18,462
|
|
-
|
|
1,351,979
|
|
Operating profit
(loss)
|
264,139
|
|
(74,121)
|
|
(35,848)
|
|
(26,306)
|
|
127,864
|
|
Operating
margin
|
31.6%
|
|
(14.9)%
|
|
(194.2)%
|
|
|
|
9.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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%
|
|
|
|
|
|
|
|
|
|
|
|
|
* 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
|
|
December 31,
2017
|
September
30, 2018
|
December 31,
2018
|
December 31,
2018
|
|
RMB
|
RMB
|
RMB
|
USD
|
Net income
attributable to Cheetah Mobile shareholders
|
1,047,086
|
167,037
|
770,205
|
112,023
|
Add:
|
|
|
|
|
Income tax
expenses
|
40,259
|
26,957
|
20,138
|
2,929
|
Interest income,
net
|
(10,227)
|
(24,120)
|
(27,519)
|
(4,002)
|
Depreciation and
amortization
|
30,377
|
17,826
|
17,237
|
2,507
|
Net income (loss)
attributable to noncontrolling interests
|
20,264
|
(27,757)
|
11,457
|
1,666
|
Other non-operating
income, net
|
(875,378)
|
(14,253)
|
(699,230)
|
(101,700)
|
Share-based
compensation
|
3,374
|
26,306
|
35,260
|
5,128
|
Adjusted
EBITDA
|
255,755
|
171,996
|
127,548
|
18,551
|
CHEETAH MOBILE
INC.
|
Revenues Generated
from PC-based and Mobile-based Applications and
Services
|
(Unaudited, in
'000)
|
|
|
|
|
|
For The Three
Months Ended
|
|
December 31,
2017
|
September
30, 2018
|
December 31,
2018
|
December 31,
2018
|
|
RMB
|
RMB
|
RMB
|
USD
|
PC
|
170,259
|
143,322
|
171,837
|
24,993
|
Mobile
|
1,217,547
|
1,208,657
|
1,209,336
|
175,890
|
Total
|
1,387,806
|
1,351,979
|
1,381,173
|
200,883
|
CHEETAH MOBILE
INC.
|
Revenues Generated
from Domestic and Overseas Markets
|
(Unaudited, in
'000)
|
|
|
|
|
|
For The Three
Months Ended
|
|
December 31,
2017
|
September
30, 2018
|
December 31,
2018
|
December 31,
2018
|
|
RMB
|
RMB
|
RMB
|
USD
|
Domestic
|
543,974
|
536,435
|
533,221
|
77,554
|
Overseas
|
843,832
|
815,544
|
847,952
|
123,329
|
Total
|
1,387,806
|
1,351,979
|
1,381,173
|
200,883
|
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)
|
|
|
|
|
|
|
|
2017
|
2018
|
2018
|
|
RMB
|
RMB
|
USD
|
Revenues
|
4,974,757
|
4,981,705
|
724,559
|
Utility products and
related services
|
3,439,563
|
3,119,483
|
453,711
|
Mobile
entertainment
|
1,496,443
|
1,778,867
|
258,725
|
Others
|
38,751
|
83,355
|
12,123
|
|
|
|
|
Cost of revenues
(a)
|
(1,780,089)
|
(1,540,633)
|
(224,076)
|
Gross
profit
|
3,194,668
|
3,441,072
|
500,483
|
|
|
|
|
Operating income
and expenses:
|
|
|
|
Research and
development (a)
|
(684,863)
|
(668,918)
|
(97,290)
|
Selling and marketing
(a)
|
(1,656,505)
|
(1,910,044)
|
(277,804)
|
General and
administrative (a)
|
(407,410)
|
(430,826)
|
(62,661)
|
Impairment of
goodwill and intangible assets
|
(38,862)
|
(12,767)
|
(1,857)
|
Other operating
income
|
39,852
|
48,705
|
7,084
|
Total operating
income and expenses
|
(2,747,788)
|
(2,973,850)
|
(432,528)
|
|
|
|
|
Operating
profit
|
446,880
|
467,222
|
67,955
|
Other income
(expense):
|
|
|
|
Interest income,
net
|
22,603
|
87,716
|
12,758
|
Settlement and
changes in fair value of contingent consideration
|
(9,014)
|
-
|
-
|
Foreign exchange
(loss) gain, net
|
(15,224)
|
13,821
|
2,010
|
Impairment of
investments
|
(275,026)
|
(142,385)
|
(20,709)
|
Gains (Losses) from
equity method investments, net
|
495
|
(384)
|
(56)
|
Other income,
net
|
1,262,551
|
843,733
|
122,716
|
|
|
|
|
Income before
taxes
|
1,433,265
|
1,269,723
|
184,674
|
Income tax
expenses
|
(57,602)
|
(80,130)
|
(11,654)
|
Net
income
|
1,375,663
|
1,189,593
|
173,020
|
Less: net income
(loss) attributable to noncontrolling interests
|
27,469
|
(14,186)
|
(2,063)
|
Net income
attributable to Cheetah Mobile shareholders
|
1,348,194
|
1,203,779
|
175,083
|
|
|
|
|
Earnings per
share
|
|
|
|
Basic
|
0.96
|
0.83
|
0.12
|
Diluted
|
0.94
|
0.81
|
0.12
|
|
|
|
|
Earnings per
ADS
|
|
|
|
Basic
|
9.57
|
8.31
|
1.21
|
Diluted
|
9.37
|
8.10
|
1.18
|
|
|
|
|
Non-GAAP earnings
per ADS
|
|
|
|
Basic
|
10.10
|
8.92
|
1.30
|
Diluted
|
9.88
|
8.69
|
1.26
|
|
|
|
|
Weighted average
number of shares outstanding
|
|
|
|
Basic
|
1,394,303,326
|
1,403,089,609
|
1,403,089,609
|
Diluted
|
1,425,154,838
|
1,440,414,849
|
1,440,414,849
|
Diluted
(non-GAAP)
|
1,425,154,838
|
1,440,414,849
|
1,440,414,849
|
Weighted average
number of ADSs used in computation
|
|
|
|
Basic
|
139,430,333
|
140,308,961
|
140,308,961
|
Diluted
|
142,515,484
|
144,041,485
|
144,041,485
|
Diluted
(non-GAAP)
|
142,515,484
|
144,041,485
|
144,041,485
|
|
|
|
|
Other
comprehensive (loss) income, net of tax of nil
|
|
|
|
Foreign currency
translation adjustments
|
(148,304)
|
155,578
|
22,628
|
Unrealized losses on
available-for-sale securities, net
|
(433)
|
-
|
-
|
Other
comprehensive (loss) income
|
(148,737)
|
155,578
|
22,628
|
Total
comprehensive income
|
1,226,926
|
1,345,171
|
195,648
|
Less: Total
comprehensive income (loss) attributable to
noncontrolling interests
|
22,671
|
(41)
|
(6)
|
Total
comprehensive income attributable to Cheetah
Mobile shareholders
|
1,204,255
|
1,345,212
|
195,654
|
|
|
|
|
(a) Share-based
compensation expenses
|
|
|
|
Cost of
revenues
|
762
|
206
|
30
|
Research and
development
|
20,691
|
14,224
|
2,069
|
Selling and
marketing
|
39
|
8,967
|
1,304
|
General and
administrative
|
51,824
|
61,721
|
8,977
|
Total
|
73,316
|
85,118
|
12,380
|
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, 2018
|
|
|
|
GAAP
|
|
% of
Net
|
|
Share-based
|
|
% of
Net
|
|
Non-GAAP
|
|
% of
Net
|
|
Non-GAAP
|
|
Result
|
|
Revenues
|
|
Compensation
|
|
Revenues
|
|
Result
|
|
Revenues
|
|
Result
($)
|
Revenues
|
4,981,705
|
|
|
|
|
|
|
|
4,981,705
|
|
|
|
724,559
|
Cost of
revenues
|
(1,540,633)
|
|
30.9%
|
|
206
|
|
0.0%
|
|
(1,540,427)
|
|
30.9%
|
|
(224,046)
|
Gross
profit
|
3,441,072
|
|
69.1%
|
|
206
|
|
0.0%
|
|
3,441,278
|
|
69.1%
|
|
500,513
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
(668,918)
|
|
13.4%
|
|
14,224
|
|
0.3%
|
|
(654,694)
|
|
13.1%
|
|
(95,221)
|
Selling and
marketing
|
(1,910,044)
|
|
38.3%
|
|
8,967
|
|
0.2%
|
|
(1,901,077)
|
|
38.2%
|
|
(276,500)
|
General and
administrative
|
(430,826)
|
|
8.6%
|
|
61,721
|
|
1.2%
|
|
(369,105)
|
|
7.4%
|
|
(53,684)
|
Impairment of
goodwill and intangible assets
|
(12,767)
|
|
0.3%
|
|
-
|
|
0.0%
|
|
(12,767)
|
|
0.3%
|
|
(1,857)
|
Other operating
income
|
48,705
|
|
1.0%
|
|
-
|
|
0.0%
|
|
48,705
|
|
1.0%
|
|
7,084
|
Total operating
income and expenses
|
(2,973,850)
|
|
59.7%
|
|
84,912
|
|
1.7%
|
|
(2,888,938)
|
|
58.0%
|
|
(420,178)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
467,222
|
|
9.4%
|
|
85,118
|
|
1.7%
|
|
552,340
|
|
11.1%
|
|
80,335
|
Net income
attributable to Cheetah Mobile shareholders
|
1,203,779
|
|
24.2%
|
|
85,118
|
|
1.7%
|
|
1,288,897
|
|
25.9%
|
|
187,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
ordinary share (RMB)
|
0.81
|
|
|
|
0.06
|
|
|
|
0.87
|
|
|
|
|
Diluted earnings per
ADS (RMB)
|
8.10
|
|
|
|
0.59
|
|
|
|
8.69
|
|
|
|
|
Diluted earnings per
ADS (USD)
|
1.18
|
|
|
|
0.09
|
|
|
|
1.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Year Ended
December 31, 2017
|
|
|
|
GAAP
|
|
% of
Net
|
|
Share-based
|
|
% of
Net
|
|
Non-GAAP
|
|
% of
Net
|
|
|
|
Result
|
|
Revenues
|
|
Compensation
|
|
Revenues
|
|
Result
|
|
Revenues
|
|
|
Revenues
|
4,974,757
|
|
|
|
|
|
|
|
4,974,757
|
|
|
|
|
Cost of
revenues
|
(1,780,089)
|
|
35.8%
|
|
762
|
|
0.0%
|
|
(1,779,327)
|
|
35.8%
|
|
|
Gross
profit
|
3,194,668
|
|
64.2%
|
|
762
|
|
0.0%
|
|
3,195,430
|
|
64.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
(684,863)
|
|
13.8%
|
|
20,691
|
|
0.4%
|
|
(664,172)
|
|
13.4%
|
|
|
Selling and
marketing
|
(1,656,505)
|
|
33.3%
|
|
39
|
|
0.0%
|
|
(1,656,466)
|
|
33.3%
|
|
|
General and
administrative
|
(407,410)
|
|
8.2%
|
|
51,824
|
|
1.0%
|
|
(355,586)
|
|
7.1%
|
|
|
Impairment of
goodwill and intangible assets
|
(38,862)
|
|
0.8%
|
|
-
|
|
0.0%
|
|
(38,862)
|
|
0.8%
|
|
|
Other operating
income
|
39,852
|
|
0.8%
|
|
-
|
|
0.0%
|
|
39,852
|
|
0.8%
|
|
|
Total operating
income and expenses
|
(2,747,788)
|
|
55.2%
|
|
72,554
|
|
1.5%
|
|
(2,675,234)
|
|
53.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
446,880
|
|
9.0%
|
|
73,316
|
|
1.5%
|
|
520,196
|
|
10.5%
|
|
|
Net income
attributable to Cheetah Mobile shareholders
|
1,348,194
|
|
27.1%
|
|
73,316
|
|
1.5%
|
|
1,421,510
|
|
28.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
ordinary share (RMB)
|
0.94
|
|
|
|
0.05
|
|
|
|
0.99
|
|
|
|
|
Diluted earnings per
ADS (RMB)
|
9.37
|
|
|
|
0.51
|
|
|
|
9.88
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHEETAH MOBILE
INC.
|
Information about
Segment
|
(Unaudited,
in'000, except for percentage)
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Year Ended
December 31, 2018
|
|
|
Utility
Products
and
Related Services
|
|
Mobile
Entertainment
|
|
Others
|
|
Unallocated*
|
|
Consolidated
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
USD
|
Revenue
|
3,119,483
|
|
1,778,867
|
|
83,355
|
|
-
|
|
4,981,705
|
724,559
|
Operating profit
(loss)
|
1,034,968
|
|
(312,515)
|
|
(170,113)
|
|
(85,118)
|
|
467,222
|
67,955
|
Operating
margin
|
33.2%
|
|
(17.6)%
|
|
(204.1)%
|
|
|
|
9.4%
|
9.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For The Year Ended
December 31, 2017
|
|
|
Utility
Products
and
Related Services
|
|
Mobile
Entertainment
|
|
Others
|
|
Unallocated*
|
|
Consolidated
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
RMB
|
|
Revenue
|
3,439,563
|
|
1,496,443
|
|
38,751
|
|
-
|
|
4,974,757
|
|
Operating profit
(loss)
|
979,447
|
|
(417,350)
|
|
(41,901)
|
|
(73,316)
|
|
446,880
|
|
Operating
margin
|
28.5%
|
|
(27.9)%
|
|
(108.1)%
|
|
|
|
9.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Unallocated
expenses refer to SBC expenses that are not allocated to individual
segments.
|
|
|
|
CHEETAH MOBILE
INC.
|
Reconciliation
from Net Income (Loss) Attributable to Cheetah Mobile Shareholders
to Adjusted EBITDA (Non-GAAP)
|
(Unaudited, in
'000)
|
|
|
|
|
|
|
|
|
|
31-Dec-17
|
31-Dec-18
|
31-Dec-18
|
|
RMB
|
RMB
|
USD
|
Net income
attributable to Cheetah Mobile shareholders
|
1,348,194
|
1,203,779
|
175,083
|
Add:
|
|
|
|
Income tax
expense
|
57,602
|
80,130
|
11,654
|
Interest
income, net
|
(22,603)
|
(87,716)
|
(12,758)
|
Depreciation and amortization
|
136,301
|
80,108
|
11,651
|
Net income
(loss) attributable to noncontrolling interests
|
27,469
|
(14,186)
|
(2,063)
|
Other
non-operating income, net
|
(963,782)
|
(714,785)
|
(103,961)
|
Share-based compensation
|
73,316
|
85,118
|
12,380
|
Adjusted
EBITDA
|
656,497
|
632,448
|
91,986
|
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-17
|
31-Dec-18
|
31-Dec-18
|
|
RMB
|
RMB
|
USD
|
PC
|
659,744
|
580,016
|
84,360
|
Mobile
|
4,315,013
|
4,401,689
|
640,199
|
Total
|
4,974,757
|
4,981,705
|
724,559
|
CHEETAH MOBILE
INC.
|
Revenues
Generated from Domestic and
Overseas Markets
|
(Unaudited, in
'000)
|
|
|
|
|
For The Year Ended
December 31
|
|
31-Dec-17
|
31-Dec-18
|
31-Dec-18
|
|
RMB
|
RMB
|
USD
|
Domestic
revenues
|
1,639,248
|
1,971,113
|
286,687
|
Overseas
revenues
|
3,335,509
|
3,010,592
|
437,872
|
Total
|
4,974,757
|
4,981,705
|
724,559
|
View original
content:http://www.prnewswire.com/news-releases/cheetah-mobile-announces-fourth-quarter-and-full-year-2018-unaudited-consolidated-financial-results-300817613.html
SOURCE Cheetah Mobile