BEIJING, Aug. 19, 2014
/PRNewswire/ -- Youku Tudou Inc. (NYSE: YOKU), China's leading
Internet television company ("Youku Tudou" or the "Company"), today
announced its unaudited financial results for second quarter
2014.
Second Quarter 2014
Highlights[1]
- Net revenues were RMB958.7
million (US$154.5 million), a
27% increase from the corresponding period in 2013. We derive a
part of our revenues from mobile value-added services through
partnership agreements with third party mobile network operators
and shares the fees collected by the mobile network operators for
such services. We were still in the process of renewing the service
agreement with one of our major mobile network operators by the end
of the second quarter of 2014 and as a result, we deferred
recognition of such revenues, about RMB40
million, until the completion of the service agreement
renewal process.
- Gross profit was RMB208.6 million
(US$33.6 million), a 10% increase
from the corresponding period in 2013. Non-GAAP[2] gross profit was
RMB223.9 million (US$36.1 million) in the second quarter of 2014,
an increase of 10% from the corresponding period in 2013.
- Net loss was RMB164.4 million
(US$26.5 million), a 57% increase
from the corresponding period in 2013. Non-GAAP net loss was
RMB75.9 million (US$12.2 million) in the second quarter of 2014,
as compared to RMB44.6 million
(US$7.2 million) from the
corresponding period in 2013. .
- Basic and diluted loss per ADS, each representing 18 Class A
ordinary shares of the Company, for the second quarter of 2014
amounted to RMB0.88 (US$0.14) and RMB0.88 (US$0.14),
respectively. Non-GAAP basic and diluted loss per ADS for the
second quarter of 2014 amounted to RMB0.41 (US$0.07)
and RMB0.41 (US$0.07), respectively.
- Cash, cash equivalents, restricted cash and short-term
investments totaled RMB10.2 billion
(US$1.6 billion) as of June 30, 2014.
- Acquisition of property and equipment for the second quarter of
2014 was RMB85.0 million
(US$13.7 million).
- Acquisition of intangible assets for the second quarter of 2014
was RMB246.3 million (US$39.7 million).
"Multi-screen Internet is increasingly mainstream and the
convergence of online and offline entertainment has presented new
market opportunities. We are scaling our investment and leveraging
our strengthened resources to enhance our business model," said
Victor Koo, Chairman and Chief
Executive Officer of Youku Tudou. "Youku Tudou has helped transform
how media and entertainment related content is distributed and
marketed since our inception. Going forward, we will work with our
online and offline partners to continue to change how content is
created and monetized by directly connecting with the ever-growing
consumer economy as Youku Tudou is best positioned in developing
the leading multi-screen media and entertainment ecosystem in
China."
Dele Liu, President and Board Director of Youku Tudou, added,
"Our traffic has grown strongly this quarter with our user base
reaching over 500 million on a monthly basis. We have made a smooth
transition to multi-screen monetization with over 30% of revenues
generated from mobile and solid progress on subscription services
with 379% growth year on year. By partnering with Alibaba on big
data initiatives, we are enhancing our products to create an unique
value proposition to advertising partners and consumers. We are
confident that our revenue will continue to diversify and
grow."
Second Quarter 2014 Results
Net revenues were RMB958.7
million (US$154.5 million) in
the second quarter of 2014, a 27% increase from the corresponding
period in 2013, meeting net revenues guidance previously announced
by the Company. Advertising net revenues were RMB915.5 million (US$147.6
million), meeting the advertising net revenues guidance
previously announced by the Company. The growth was primarily
attributable to the increased use by brand advertisers of our
advertising services as evidenced by an increase in the number of
advertisers and the rising average spend per advertiser.
Bandwidth costs as a component of cost of revenues were
RMB213.5 million (US$34.4 million)in the second quarter of 2014,
representing 22% of net revenues, as compared to 22% of net
revenues for the corresponding period in 2013.
Content costs as a component of cost of revenues were
RMB418.3 million (US$67.4 million) in the second quarter of
2014, representing 44% of net revenues as compared to 40% of net
revenues for the corresponding period in 2013. Non-GAAP content
costs were RMB402.9 million
(US$65.0 million) in the second
quarter of 2014, representing 42% of net revenues, as compared to
38% of net revenues for the corresponding period in 2013.
Gross profit was RMB208.6
million (US$33.6 million)in
the second quarter of 2014, an increase of 10% from the
corresponding period in 2013. Non-GAAP gross profit was
RMB223.9 million (US$36.1 million) in the second quarter of 2014,
an increase of 10% from the corresponding period in 2013 due to
strong operating leverage.
Operating expenses were RMB386.4
million (US$62.3 million) in
the second quarter of 2014, as compared to RMB306.8 million (US$49.5
million) for the corresponding period in 2013. Non-GAAP
operating expenses were RMB313.2
million (US$50.5 million) in
the second quarter of 2014, as compared to RMB260.6 million (US$42.0
million) for the corresponding period in 2013. Detailed
discussion of each component of operating expenses is as
follows:
Sales and marketing expenses were RMB212.8 million (US$34.3
million) in the second quarter of 2014, as compared to
RMB165.2 million (US$26.6 million) for the corresponding period in
2013. Non-GAAP sales and marketing expenses were
RMB186.1 million (US$30.0 million) in the second quarter of 2014,
as compared to RMB150.4 million
(US$24.2 million) for the
corresponding period in 2013. This increase was due to higher
commission expenses paid to our sales force in line with our
revenue growth.
Product development expenses were RMB99.1 million (US$16.0
million) in the second quarter of 2014, as compared to
RMB66.1 million (US$10.7 million) for the corresponding period in
2013. Non-GAAP product development expenses were
RMB78.9 million (US$12.7 million) in the second quarter of 2014,
as compared to RMB54.8 million
(US$8.8 million) for the
corresponding period in 2013. This increase was primarily due to an
increase in personnel related expenses for our product development
in mobile, search, social, paid and live broadcasting services.
General and administrative expenses were RMB74.5 million (US$12.0
million) in the second quarter of 2014, as compared to
RMB75.6 million (US$12.2 million) for the corresponding period in
2013. Non-GAAP general and administrative expenses were
RMB48.2 million (US$7.8 million) in the second quarter of 2014, a
decrease of 13% from the corresponding period in 2013.
Net loss was RMB164.4
million (US$26.5 million)in
the second quarter of 2014, as compared to RMB105.1 million (US$16.9
million) for the corresponding period in 2013. Non-GAAP
net loss was RMB75.9 million
(US$12.2 million) in the second
quarter of 2014, as compared to RMB44.6
million (US$7.2 million) from
the corresponding period in 2013.
Non-GAAP adjusted EBITDA Loss was RMB52.9 million (US$8.5
million) in the second quarter of 2014, as compared to
RMB28.7 million (US$4.6 million) from the corresponding period in
2013.
Business Outlook
For the third quarter of 2014, the Companyexpects net revenues
will be between RMB1.09 billion and RMB1.13
billion, with advertising net revenues contributing between
RMB965 million and RMB1.01 billion.
This forecast reflects the Company's current and preliminary view,
which is subject to change.
Conference Call Information
Youku Tudou's management will host an earnings conference call
at 9:00 p.m. U.S. Eastern Time on
August 19, 2014 (9:00 a.m. Beijing/Hong Kong Time on August 20, 2014).
Interested parties may participate in the conference call by
dialing one of the following numbers below and entering passcode
Youku# (i.e., 96858#) starting 10-15 minutes prior to the beginning
of the call.
US Toll Free Dial In: 1-866-519-4004
International Dial In:
+65-6723-9381
Mainland China Toll Free Dial In:
+86-400-620-8038 / +86-800-819-0121
Hong Kong Dial In:
+852-2475-0994
A replay of the call will be available by dialing +61 2 8199
0299 and entering passcode 87262225#. The replay will be available
through August 27, 2014.
This call will be webcast live and the replay will be available
for 12 months. Both will be available on the Investor Relations
section of Youku Tudou's corporate website at
http://ir.youku.com.
About Youku Tudou Inc.
Youku Tudou Inc. (NYSE: YOKU) is China's leading Internet
television company. Its Youku and Tudou Internet television
platforms enable users to search, view and share high-quality video
content quickly and easily across multiple devices. Its Youku brand
and Tudou brand are the most recognized online video brands in
China. Youku Tudou's American
depositary shares, each representing 18 of Youku Tudou's Class A
ordinary shares, are traded on the NYSE under the symbol
"YOKU."
Safe Harbor Statement
This announcement contains forward-looking statements. These
statements are made under the "safe harbor" provisions of 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. Among other things,
the business outlook and quotations from management in this
announcement, as well as Youku Tudou's strategic and operational
plans, contain forward-looking statements. Youku Tudou may also
make written or oral forward-looking statements in its filings with
the U.S. Securities and Exchange Commission ("SEC"), in its annual
report to shareholders, in press releases and other written
materials and in oral statements made by its officers, directors or
employees to third parties. Statements that are not historical
facts, including statements about Youku Tudou's beliefs and
expectations, are forward-looking statements. Forward-looking
statements involve inherent risks and uncertainties. A number of
factors could cause actual results to differ materially from those
contained in any forward-looking statement, including but not
limited to the following: our goals and strategies; our future
business development, financial condition and results of
operations; the expected growth of the online video market in
China; our expectations regarding
demand for and market acceptance of our services; our expectations
regarding the retention and strengthening of our relationships with
key advertisers and customers; our plans to enhance user
experience, infrastructure and service offerings; competition in
our industry in China; and
relevant government policies and regulations relating to our
industry. Further information regarding these and other risks is
included in our annual report on Form 20-F and other documents
filed with the SEC. All information provided in this press release
and in the attachments is as of the date of this press release, and
Youku Tudou does not undertake any obligation to update any
forward-looking statement, except as required under applicable
law.
About Non-GAAP Financial Measures
To supplement Youku Tudou's financial results presented in
accordance with United States Generally Accepted Accounting
Principles (GAAP), Youku Tudou uses the following measures defined
as non-GAAP financial measures by the SEC in evaluating its
business: non-GAAP content costs, non-GAAP gross profit,
non-GAAP operating expenses, non-GAAP sales and marketing expenses,
non-GAAP product development expenses, non-GAAP general and
administrative expenses, non-GAAP loss from
operations, non-GAAP net loss and non-GAAP EBITDA loss.
We define non-GAAP content costs as content costs excluding
share-based compensation expenses and amortization of intangible
assets from business combination in relation to user generated
content. We define non-GAAP gross profit or loss as the respective
nearest comparable GAAP financial measure to exclude share-based
compensation expenses and amortization of intangible assets from
business combination in relation to user generated content. We
define non-GAAP operating expenses as operating expenses excluding
share-based compensation expenses, business combination related
expenses and amortization of intangible assets from business
combination in relation to customer relationship, technology and
non-compete provisions. We define non-GAAP sales and marketing
expenses as sales and marketing expenses excluding share-based
compensation expenses and amortization of intangible assets from
business combination in relation to customer relationship. We
define non-GAAP product development expense as product development
expenses excluding share-based compensation expenses and
amortization of intangible assets from business combination in
relation to technology. We define non-GAAP general and
administrative expenses as general and administrative expenses
excluding share-based compensation expenses, business combination
related expenses and amortization of intangible assets from
business combination in relation to non-compete provisions. We
define non-GAAP loss from operations as loss from operations
excluding share-based compensation expenses, amortization of
intangible assets from business combination and business
combination related expenses. We define non-GAAP net loss as net
loss excluding share-based compensation expenses, amortization of
intangible assets from business combination and business
combination related expenses. We define non-GAAP EBITDA loss as net
loss before income taxes, interest expenses, interest income,
depreciation and amortization (excluding amortization of acquired
content), further adjusted for share-based compensation expenses,
amortization of intangible assets from business combination,
business combination related expenses and other non-operating
items.
We present non-GAAP financial measures because they are used by
our management to evaluate our operating performance. We also
believe that these non-GAAP financial measures provide useful
information to investors and others in understanding and evaluating
our results of operations in the same manner as our management and
in comparing financial results across accounting periods and to
those of our peer companies. A limitation of using non-GAAP
financial measures is that non-GAAP measures exclude share-based
compensation charges that have been and will continue to be
significant recurring expenses in Youku Tudou's business for the
foreseeable future.
The presentation of these non-GAAP financial measures is not
intended to be considered in isolation from, or as a substitute
for, the financial information prepared and presented in accordance
with GAAP. For more information on these non-GAAP financial
measures, please see the table captioned "Reconciliations of
non-GAAP results of operations measures to the nearest comparable
GAAP financial measures" at the end of this release.
[1]
|
The reporting
currency of the Company is Renminbi ("RMB"), but for the
convenience of the reader, the amounts presented throughout the
release are in US dollars ("US$"). Unless otherwise noted, all
conversions from RMB to US$ are made at a rate of RMB6.2036 to
US$1.00, the effective noon buying rate as of June 30, 2014 in the
City of New York for cable transfers of RMB as certified for
customs purposes by the Federal Reserve Bank of New York. No
representation is made that the RMB amounts could have been, or
could be, converted into US$ at such rate.
|
|
|
[2]
|
All non-GAAP measures
exclude, as applicable, share-based compensation expenses and
amortization of intangible assets from business combination. For
further details on non-GAAP measures, please refer to the
reconciliation table and a detailed discussion of the Company's use
of non-GAAP information set forth elsewhere in this press
release.
|
For more information, please contact:
Ryan Cheung
Corporate Finance Senior Director
Youku Tudou Inc.
Tel: (+8610) 5885-1881 x6090
Email: ryan.cheung@youku.com
YOUKU TUDOU
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
(Amounts in
thousands, except for number of shares)
|
|
As of
|
|
December 31,
2013
|
|
June 30,
2014
|
|
June 30,
2014
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
ASSETS
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
1,764,221
|
|
8,553,933
|
|
1,378,866
|
|
Restricted
cash
|
|
2,679
|
|
2,682
|
|
432
|
|
Short-term
investments
|
|
1,409,439
|
|
1,610,026
|
|
259,531
|
|
Accounts
receivable, net
|
|
1,370,031
|
|
1,498,779
|
|
241,598
|
|
Intangible
assets, net
|
|
51,942
|
|
105,546
|
|
17,014
|
|
Deferred tax
assets
|
|
7,843
|
|
7,843
|
|
1,264
|
|
Prepayments and
other assets
|
|
82,300
|
|
100,386
|
|
16,183
|
Total current
assets
|
|
4,688,455
|
|
11,879,195
|
|
1,914,888
|
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
222,229
|
|
266,781
|
|
43,004
|
|
Intangible
assets, net
|
|
1,197,671
|
|
1,353,780
|
|
218,225
|
|
Capitalized
content production costs
|
|
1,176
|
|
9,843
|
|
1,587
|
|
Prepayments and
other assets
|
|
197,856
|
|
240,894
|
|
38,830
|
|
Goodwill
|
|
4,262,569
|
|
4,262,569
|
|
687,112
|
Total
non-current assets
|
|
5,881,501
|
|
6,133,867
|
|
988,758
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
10,569,956
|
|
18,013,062
|
|
2,903,646
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
|
213,825
|
|
361,253
|
|
58,233
|
|
Advances from
customers
|
|
25,081
|
|
23,668
|
|
3,815
|
|
Accrued
expenses and other liabilities
|
|
1,124,342
|
|
1,147,253
|
|
184,933
|
Total current
liabilities
|
|
1,363,248
|
|
1,532,174
|
|
246,981
|
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
|
Deferred tax
liability
|
|
219,519
|
|
219,519
|
|
35,386
|
|
Other
liabilities
|
|
4,070
|
|
6,380
|
|
1,028
|
Total non-current
liabilities
|
|
223,589
|
|
225,899
|
|
36,414
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
1,586,837
|
|
1,758,073
|
|
283,395
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
Class A Ordinary
Shares (US$0.00001 par value, 9,340,238,793 authorized,
2,356,529,401 and 3,103,408,891 issued and outstanding
as of December 31, 2013 and June 30, 2014,
respectively)
|
|
154
|
|
200
|
|
32
|
|
Class B Ordinary
Shares (US$0.00001 par value, 659,761,207 authorized, 659,561,893
and 645,691,903 issued and outstanding as of December 31,
2013 and June 30, 2014, respectively)
|
|
49
|
|
48
|
|
8
|
|
Additional
paid-in capital
|
|
11,058,360
|
|
18,712,011
|
|
3,016,315
|
|
Statutory
reserves
|
|
2,063
|
|
2,063
|
|
333
|
|
Accumulated
deficit
|
|
(1,878,454)
|
|
(2,267,594)
|
|
(365,529)
|
|
Accumulated
other comprehensive loss
|
|
(199,053)
|
|
(191,739)
|
|
(30,908)
|
Total
shareholders' equity
|
|
8,983,119
|
|
16,254,989
|
|
2,620,251
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
10,569,956
|
|
18,013,062
|
|
2,903,646
|
YOUKU TUDOU
INC.
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Six Months
Ended
|
(Amounts in
thousands, except for number of shares and ADS and per share
and per ADS data)
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2013
|
|
March 31,
2014
|
|
June 30,
2014
|
|
June 30,
2014
|
|
June 30,
2013
|
|
June 30,
2014
|
|
June 30,
2014
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
revenues
|
|
753,457
|
|
700,374
|
|
958,719
|
|
154,542
|
|
1,269,454
|
|
1,659,093
|
|
267,441
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
(Note 1)
|
|
(563,281)
|
|
(614,808)
|
|
(750,107)
|
|
(120,915)
|
|
(1,065,047)
|
|
(1,364,915)
|
|
(220,020)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
190,176
|
|
85,566
|
|
208,612
|
|
33,627
|
|
204,407
|
|
294,178
|
|
47,421
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product
development
|
|
(66,051)
|
|
(80,700)
|
|
(99,116)
|
|
(15,977)
|
|
(122,879)
|
|
(179,816)
|
|
(28,986)
|
Sales and marketing
|
|
(165,201)
|
|
(186,542)
|
|
(212,826)
|
|
(34,307)
|
|
(292,801)
|
|
(399,368)
|
|
(64,376)
|
General and
administrative
|
|
(75,569)
|
|
(46,823)
|
|
(74,457)
|
|
(12,002)
|
|
(158,919)
|
|
(121,280)
|
|
(19,550)
|
Total operating
expenses
|
|
(306,821)
|
|
(314,065)
|
|
(386,399)
|
|
(62,286)
|
|
(574,599)
|
|
(700,464)
|
|
(112,912)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(116,645)
|
|
(228,499)
|
|
(177,787)
|
|
(28,659)
|
|
(370,192)
|
|
(406,286)
|
|
(65,491)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
7,090
|
|
6,053
|
|
9,923
|
|
1,600
|
|
14,269
|
|
15,976
|
|
2,574
|
Interest
expenses
|
|
(158)
|
|
-
|
|
-
|
|
-
|
|
(545)
|
|
-
|
|
-
|
Other, net
|
|
4,720
|
|
(2,259)
|
|
3,441
|
|
555
|
|
19,001
|
|
1,182
|
|
191
|
Total other
income, net
|
|
11,652
|
|
3,794
|
|
13,364
|
|
2,155
|
|
32,725
|
|
17,158
|
|
2,765
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
(104,993)
|
|
(224,705)
|
|
(164,423)
|
|
(26,504)
|
|
(337,467)
|
|
(389,128)
|
|
(62,726)
|
Income
taxes
|
|
(58)
|
|
-
|
|
(12)
|
|
(2)
|
|
(58)
|
|
(12)
|
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
|
(105,051)
|
|
(224,705)
|
|
(164,435)
|
|
(26,506)
|
|
(337,525)
|
|
(389,140)
|
|
(62,728)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
(loss) income, before tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
(33,457)
|
|
20,959
|
|
(13,645)
|
|
(2,200)
|
|
(39,423)
|
|
7,314
|
|
1,179
|
Other comprehensive
(loss) income, before tax
|
|
(33,457)
|
|
20,959
|
|
(13,645)
|
|
(2,200)
|
|
(39,423)
|
|
7,314
|
|
1,179
|
Income tax expense
related to components of other comprehensive (loss)
income
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive (loss) income, net of tax
|
|
(33,457)
|
|
20,959
|
|
(13,645)
|
|
(2,200)
|
|
(39,423)
|
|
7,314
|
|
1,179
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
|
0
|
Net loss per share,
basic and diluted
|
|
(0.04)
|
|
(0.07)
|
|
(0.05)
|
|
(0.01)
|
|
(0.11)
|
|
(0.12)
|
|
(0.02)
|
Net loss per ADS
(each ADS represents 18 class A ordinary shares),
basic and
diluted
|
|
(0.63)
|
|
(1.34)
|
|
(0.88)
|
|
(0.14)
|
|
(2.05)
|
|
(2.20)
|
|
(0.35)
|
Shares used in
computation, basic and diluted
|
|
2,980,162,122
|
|
3,021,981,224
|
|
3,355,310,411
|
|
3,355,310,411
|
|
2,969,000,985
|
|
3,189,566,616
|
|
3,189,566,616
|
ADSs used in
computation, basic and diluted
|
|
165,564,562
|
|
167,887,845
|
|
186,406,133
|
|
186,406,133
|
|
164,944,499
|
|
177,198,145
|
|
177,198,145
|
The accompanying
notes are an integral part of the press release.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 1. Cost of
Revenues
|
|
For the Three
Months Ended
|
|
For the Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2013
|
|
March 31,
2014
|
|
June 30,
2014
|
|
June 30,
2014
|
|
June 30,
2013
|
|
June 30,
2014
|
|
June 30,
2014
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
(Amounts in
thousands)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value added,
business taxes and surcharges
|
|
74,334
|
|
62,958
|
|
89,550
|
|
14,435
|
|
123,259
|
|
152,508
|
|
24,584
|
Bandwidth
costs
|
|
164,111
|
|
201,889
|
|
213,538
|
|
34,422
|
|
325,156
|
|
415,427
|
|
66,965
|
Depreciation of
servers and other equipment
|
|
21,384
|
|
24,306
|
|
28,756
|
|
4,636
|
|
43,854
|
|
53,062
|
|
8,553
|
Content
costs
|
|
303,452
|
|
325,655
|
|
418,263
|
|
67,422
|
|
572,778
|
|
743,918
|
|
119,918
|
Total Cost
of Revenues
|
|
563,281
|
|
614,808
|
|
750,107
|
|
120,915
|
|
1,065,047
|
|
1,364,915
|
|
220,020
|
YOUKU TUDOU
INC.
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three
Months Ended
|
|
For the Six
Months Ended
|
(Amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
June 30,
2013
|
|
March 31,
2014
|
|
June 30,
2014
|
|
June 30,
2014
|
|
June 30,
2013
|
|
June 30,
2014
|
|
June 30,
2014
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(105,051)
|
|
(224,705)
|
|
(164,435)
|
|
(26,506)
|
|
(337,525)
|
|
(389,140)
|
|
(62,728)
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
impairment of fixed assets
|
|
27,502
|
|
31,883
|
|
36,328
|
|
5,856
|
|
54,297
|
|
68,211
|
|
10,995
|
|
Bad debt
expense
|
|
10,035
|
|
(6,473)
|
|
5,247
|
|
846
|
|
17,111
|
|
(1,226)
|
|
(198)
|
|
Amortisation and
impairment of intangible assets and capitalized content production
costs
|
|
176,523
|
|
181,777
|
|
229,561
|
|
37,004
|
|
315,514
|
|
411,338
|
|
66,306
|
|
Amortization of
long-term debt discounts
|
|
92
|
|
-
|
|
-
|
|
-
|
|
313
|
|
-
|
|
-
|
|
(Gain) loss on
disposal of property and equipment
|
|
(645)
|
|
90
|
|
128
|
|
21
|
|
50
|
|
218
|
|
35
|
|
Foreign exchange loss
(gain)
|
|
(847)
|
|
2,164
|
|
846
|
|
136
|
|
(522)
|
|
3,010
|
|
485
|
|
Share-based
compensation
|
|
48,529
|
|
70,220
|
|
82,131
|
|
13,239
|
|
86,379
|
|
152,351
|
|
24,557
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted cash
|
|
704
|
|
(2)
|
|
(1)
|
|
-
|
|
694
|
|
(3)
|
|
-
|
|
Accounts
receivable
|
|
(294,698)
|
|
179,153
|
|
(306,676)
|
|
(49,435)
|
|
(328,342)
|
|
(127,523)
|
|
(20,556)
|
|
Prepayments and other assets
|
|
21,794
|
|
(10,615)
|
|
(21,120)
|
|
(3,404)
|
|
23,141
|
|
(31,735)
|
|
(5,116)
|
|
Capitalized content production costs
|
|
(42,382)
|
|
(2,972)
|
|
(6,371)
|
|
(1,027)
|
|
(26,421)
|
|
(9,343)
|
|
(1,506)
|
|
Accounts
payable
|
|
11,179
|
|
4,574
|
|
8,631
|
|
1,391
|
|
1,315
|
|
13,205
|
|
2,129
|
|
Advances
from customers
|
|
(4,180)
|
|
1,816
|
|
(3,229)
|
|
(521)
|
|
34,277
|
|
(1,413)
|
|
(227)
|
|
Accrued
expenses and other liabilities
|
|
88,046
|
|
29,591
|
|
(16,196)
|
|
(2,611)
|
|
100,514
|
|
13,395
|
|
2,159
|
Net cash (used in)
provided by operating activities
|
|
(63,399)
|
|
256,501
|
|
(155,156)
|
|
(25,011)
|
|
(59,205)
|
|
101,345
|
|
16,335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of
property and equipment
|
|
(34,549)
|
|
(28,191)
|
|
(84,968)
|
|
(13,697)
|
|
(61,913)
|
|
(113,159)
|
|
(18,241)
|
|
Proceeds received
from maturity of short-term investments
|
|
621,948
|
|
1,132,459
|
|
66,037
|
|
10,645
|
|
658,651
|
|
1,198,496
|
|
193,194
|
|
Short-term
investments placed with financial institutions
|
|
(739,059)
|
|
(1,391,239)
|
|
(4,698)
|
|
(757)
|
|
(924,649)
|
|
(1,395,937)
|
|
(225,020)
|
|
Proceeds from
disposal of property and equipment
|
|
1,282
|
|
180
|
|
10
|
|
2
|
|
1,282
|
|
190
|
|
31
|
|
Acquisition of
intangible assets
|
|
(102,500)
|
|
(165,891)
|
|
(246,320)
|
|
(39,706)
|
|
(341,421)
|
|
(412,211)
|
|
(66,447)
|
Net cash used in
investing activities
|
|
(252,878)
|
|
(452,682)
|
|
(269,939)
|
|
(43,513)
|
|
(668,050)
|
|
(722,621)
|
|
(116,483)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of employee
stock options
|
|
35,935
|
|
11,809
|
|
7,355
|
|
1,186
|
|
64,675
|
|
19,164
|
|
3,089
|
|
Principal repayments
on long-term debt
|
|
(3,330)
|
|
-
|
|
-
|
|
-
|
|
(6,566)
|
|
-
|
|
-
|
|
Proceeds from Ali
investment, net of issuance costs
|
|
-
|
|
-
|
|
7,387,520
|
|
1,190,844
|
|
-
|
|
7,387,520
|
|
1,190,844
|
Net cash
provided by financing activities
|
|
32,605
|
|
11,809
|
|
7,394,875
|
|
1,192,030
|
|
58,109
|
|
7,406,684
|
|
1,193,933
|
Effect of exchange
rate changes on cash and cash equivalents
|
|
(32,608)
|
|
18,795
|
|
(14,491)
|
|
(2,336)
|
|
(38,901)
|
|
4,304
|
|
694
|
Net (decrease)
increase in cash and cash equivalents
|
|
(316,280)
|
|
(165,577)
|
|
6,955,289
|
|
1,121,170
|
|
(708,047)
|
|
6,789,712
|
|
1,094,479
|
Cash and cash
equivalents at the beginning of the period
|
|
1,264,090
|
|
1,764,221
|
|
1,598,644
|
|
257,696
|
|
1,655,857
|
|
1,764,221
|
|
284,387
|
Cash and cash
equivalents at the end of the period
|
|
947,810
|
|
1,598,644
|
|
8,553,933
|
|
1,378,866
|
|
947,810
|
|
8,553,933
|
|
1,378,866
|
Reconciliations of
Non-GAAP results of operations measures to the nearest comparable
GAAP financial measures (1) (Amounts in thousands of
Renminbi ("RMB") and U.S. dollars ("US$"), unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Non-GAAP
Content Costs
|
|
For the Three
Months Ended
|
|
For the Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2013
|
|
March 31,
2014
|
|
June 30,
2014
|
|
June 30,
2014
|
|
June 30,
2013
|
|
June 30,
2014
|
|
June 30,
2014
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
Content
costs
|
|
303,452
|
|
325,655
|
|
418,263
|
|
67,422
|
|
572,778
|
|
743,918
|
|
119,918
|
Deduct:
share-based compensation
|
|
6,465
|
|
12,223
|
|
12,694
|
|
2,046
|
|
12,128
|
|
24,917
|
|
4,016
|
Deduct:
amortization of intangible assets from business
combination
|
|
7,741
|
|
2,483
|
|
2,631
|
|
424
|
|
16,072
|
|
5,114
|
|
824
|
Non-GAAP content
costs
|
|
289,246
|
|
310,949
|
|
402,938
|
|
64,952
|
|
544,578
|
|
713,887
|
|
115,078
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2. Non-GAAP Gross
Profit
|
|
For the Three
Months Ended
|
|
For the Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2013
|
|
March 31,
2014
|
|
June 30,
2014
|
|
June 30,
2014
|
|
June 30,
2013
|
|
June 30,
2014
|
|
June 30,
2014
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
Gross
profit
|
|
190,176
|
|
85,566
|
|
208,612
|
|
33,627
|
|
204,407
|
|
294,178
|
|
47,421
|
Add back:
share-based compensation
|
|
6,465
|
|
12,223
|
|
12,694
|
|
2,046
|
|
12,128
|
|
24,917
|
|
4,016
|
Add back:
amortization of intangible assets from business
combination
|
|
7,741
|
|
2,483
|
|
2,631
|
|
424
|
|
16,072
|
|
5,114
|
|
824
|
Non-GAAP gross
profit
|
|
204,382
|
|
100,272
|
|
223,937
|
|
36,097
|
|
232,607
|
|
324,209
|
|
52,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. Non-GAAP
Operating Expenses
|
|
For the Three
Months Ended
|
|
For the Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2013
|
|
March 31,
2014
|
|
June 30,
2014
|
|
June 30,
2014
|
|
June 30,
2013
|
|
June 30,
2014
|
|
June 30,
2014
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
Operating
expenses
|
|
306,821
|
|
314,065
|
|
386,399
|
|
62,286
|
|
574,599
|
|
700,464
|
|
112,912
|
Deduct:
share-based compensation
|
|
42,064
|
|
57,997
|
|
69,437
|
|
11,193
|
|
74,251
|
|
127,434
|
|
20,541
|
Deduct:
amortization of intangible assets from business
combination
|
|
4,155
|
|
3,743
|
|
3,743
|
|
604
|
|
8,310
|
|
7,486
|
|
1,205
|
Non-GAAP
operating expenses
|
|
260,602
|
|
252,325
|
|
313,219
|
|
50,489
|
|
492,038
|
|
565,544
|
|
91,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4. Non-GAAP Sales
and Marketing Expenses
|
|
For the Three
Months Ended
|
|
For the Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2013
|
|
March 31,
2014
|
|
June 30,
2014
|
|
June 30,
2014
|
|
June 30,
2013
|
|
June 30,
2014
|
|
June 30,
2014
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
Sales and marketing
expenses
|
|
165,201
|
|
186,542
|
|
212,826
|
|
34,307
|
|
292,801
|
|
399,368
|
|
64,376
|
Deduct:
share-based compensation
|
|
12,708
|
|
21,172
|
|
24,824
|
|
4,001
|
|
22,769
|
|
45,996
|
|
7,414
|
Deduct:
amortization of intangible assets from business
combination
|
|
2,077
|
|
1,871
|
|
1,871
|
|
302
|
|
4,154
|
|
3,742
|
|
602
|
Non-GAAP
sales and marketing expenses
|
|
150,416
|
|
163,499
|
|
186,131
|
|
30,004
|
|
265,878
|
|
349,630
|
|
56,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5. Non-GAAP
Product Development Expenses
|
|
For the Three
Months Ended
|
|
For the Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2013
|
|
March 31,
2014
|
|
June 30,
2014
|
|
June 30,
2014
|
|
June 30,
2013
|
|
June 30,
2014
|
|
June 30,
2014
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
Product development
expenses
|
|
66,051
|
|
80,700
|
|
99,116
|
|
15,977
|
|
122,879
|
|
179,816
|
|
28,986
|
Deduct:
share-based compensation
|
|
9,890
|
|
17,206
|
|
19,006
|
|
3,064
|
|
16,857
|
|
36,212
|
|
5,837
|
Deduct:
amortization of intangible assets from business
combination
|
|
1,395
|
|
1,257
|
|
1,257
|
|
203
|
|
2,790
|
|
2,514
|
|
405
|
Non-GAAP
product development expenses
|
|
54,766
|
|
62,237
|
|
78,853
|
|
12,710
|
|
103,232
|
|
141,090
|
|
22,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6. Non-GAAP
General and Administrative Expenses
|
|
For the Three
Months Ended
|
|
For the Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2013
|
|
March 31,
2014
|
|
June 30,
2014
|
|
June 30,
2014
|
|
June 30,
2013
|
|
June 30,
2014
|
|
June 30,
2014
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
General and
administrative expenses
|
|
75,569
|
|
46,823
|
|
74,457
|
|
12,002
|
|
158,919
|
|
121,280
|
|
19,550
|
Deduct:
share-based compensation
|
|
19,466
|
|
19,619
|
|
25,607
|
|
4,128
|
|
34,625
|
|
45,226
|
|
7,290
|
Deduct:
amortization of intangible assets from business
combination
|
|
683
|
|
615
|
|
615
|
|
99
|
|
1,366
|
|
1,230
|
|
198
|
Non-GAAP
general and administrative expenses
|
|
55,420
|
|
26,589
|
|
48,235
|
|
7,775
|
|
122,928
|
|
74,824
|
|
12,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7. Non-GAAP Loss
from Operations
|
|
For the Three
Months Ended
|
|
For the Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2013
|
|
March 31,
2014
|
|
June 30,
2014
|
|
June 30,
2014
|
|
June 30,
2013
|
|
June 30,
2014
|
|
June 30,
2014
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
Loss from
operations
|
|
(116,645)
|
|
(228,499)
|
|
(177,787)
|
|
(28,659)
|
|
(370,192)
|
|
(406,286)
|
|
(65,491)
|
Add back:
share-based compensation
|
|
48,529
|
|
70,220
|
|
82,131
|
|
13,239
|
|
86,379
|
|
152,351
|
|
24,557
|
Add back:
amortization of intangible assets from business
combination
|
|
11,896
|
|
6,226
|
|
6,374
|
|
1,028
|
|
24,382
|
|
12,600
|
|
2,029
|
Non-GAAP
loss from operations
|
|
(56,220)
|
|
(152,053)
|
|
(89,282)
|
|
(14,392)
|
|
(259,431)
|
|
(241,335)
|
|
(38,905)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8. Non-GAAP Net
Loss
|
|
For the Three
Months Ended
|
|
For the Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2013
|
|
March 31,
2014
|
|
June 30,
2014
|
|
June 30,
2014
|
|
June 30,
2013
|
|
June 30,
2014
|
|
June 30,
2014
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
Net
loss
|
|
(105,051)
|
|
(224,705)
|
|
(164,435)
|
|
(26,506)
|
|
(337,525)
|
|
(389,140)
|
|
(62,728)
|
Add back:
share-based compensation
|
|
48,529
|
|
70,220
|
|
82,131
|
|
13,239
|
|
86,379
|
|
152,351
|
|
24,557
|
Add back:
amortization of intangible assets from business
combination
|
|
11,896
|
|
6,226
|
|
6,374
|
|
1,028
|
|
24,382
|
|
12,600
|
|
2,029
|
Non-GAAP net
loss
|
|
(44,626)
|
|
(148,259)
|
|
(75,930)
|
|
(12,239)
|
|
(226,764)
|
|
(224,189)
|
|
(36,142)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9. Non-GAAP
EBITDA Loss
|
|
For the Three
Months Ended
|
|
For the Six Months
Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2013
|
|
March 31,
2014
|
|
June 30,
2014
|
|
June 30,
2014
|
|
June 30,
2013
|
|
June 30,
2014
|
|
June 30,
2014
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
Net
loss
|
|
(105,051)
|
|
(224,705)
|
|
(164,435)
|
|
(26,506)
|
|
(337,525)
|
|
(389,140)
|
|
(62,728)
|
Add
back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
and amortization (excluding amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of acquired content )
(2)
|
|
27,516
|
|
31,897
|
|
36,341
|
|
5,858
|
|
54,326
|
|
68,238
|
|
11,000
|
Interest
income
|
|
(7,090)
|
|
(6,053)
|
|
(9,923)
|
|
(1,600)
|
|
(14,269)
|
|
(15,976)
|
|
(2,574)
|
Interest
expenses
|
|
158
|
|
-
|
|
-
|
|
-
|
|
545
|
|
-
|
|
-
|
Income
taxes
|
|
58
|
|
-
|
|
12
|
|
2
|
|
58
|
|
12
|
|
2
|
EBITDA
loss
|
|
(84,409)
|
|
(198,861)
|
|
(138,005)
|
|
(22,246)
|
|
(296,865)
|
|
(336,866)
|
|
(54,300)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based
compensation
|
|
48,529
|
|
70,220
|
|
82,131
|
|
13,239
|
|
86,379
|
|
152,351
|
|
24,557
|
Amortization of
intangible assets from business combination
|
|
11,896
|
|
6,226
|
|
6,374
|
|
1,028
|
|
24,382
|
|
12,600
|
|
2,029
|
Others,
net
|
|
(4,720)
|
|
2,259
|
|
(3,441)
|
|
(555)
|
|
(19,001)
|
|
(1,182)
|
|
(191)
|
Non-GAAP EBITDA
loss
|
|
(28,704)
|
|
(120,156)
|
|
(52,941)
|
|
(8,534)
|
|
(205,105)
|
|
(173,097)
|
|
(27,905)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For more information on
the Non-GAAP financial measures, please see the section captioned
"About Non-GAAP Financial Measures" in this earnings
release.
|
(2)
The amortization expense was related to an advertising license
acquired in April 2010. The amortization of acquired content was
not treated as a Non-GAAP adjustment.
|
SOURCE Youku Tudou Inc.