BEIJING, Nov. 16, 2011 /PRNewswire-Asia/ -- Youku Inc.
(NYSE: YOKU), China's leading
Internet television company ("Youku" or the "Company"), today
announced its unaudited financial results for the third quarter
ended September 30, 2011.
Third Quarter 2011 Highlights (1)
- Net revenues were RMB262.5
million (US$41.2 million), a
129% increase from the corresponding period in 2010, exceeding the
high end of the Company's guidance by 4%.
- Gross profit was RMB67.8 million
(US$10.6 million), a 330% increase
from the corresponding period in 2010.
- Operating expenses were RMB120.1
million (US$18.8 million), a
120% increase from the corresponding period in 2010.
- Net loss was RMB47.5 million
(US$7.4 million) in the third quarter
of 2011, an 11% decrease relative to the corresponding period in
2010.
- Non-GAAP net loss was RMB28.2
million (US$4.4 million) in
the third quarter of 2011, a 25% decrease relative to the
corresponding period in 2010.
- Basic and diluted loss per ADS, each representing 18 of our
Class A ordinary shares, for the third quarter of 2011 amounted to
RMB0.42 (US$0.07) and RMB0.42 (US$0.07),
respectively.
(1) The reporting currency of
the Company is Renminbi ("RMB"), but for the convenience of the
reader, the amounts presented throughout the release are in US
dollars ("US$"). Unless otherwise noted, all conversions from RMB
to US$ are made at a rate of RMB6.3780 to US$1.00, the effective
noon buying rate as of September 30, 2011 in the City of New York
for cable transfers of RMB as certified for customs purposes by the
Federal Reserve Bank of New York. No representation is made that
the RMB amounts could have been, or could be, converted into US$ at
such rate.
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|
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"We had another quarter of solid growth in both traffic and
revenues, and our gap with competitors both in terms of traffic and
revenues is clearly expanding as a result of network effect," said
Victor Koo, Chairman and Chief
Executive Officer of Youku. "Internet television is a young and
evolving space with tremendous opportunities. We are in an
aggressive investment cycle and we will continue to invest
proactively to expand and leverage our user base and client base,
brand, team and infrastructure as we move to establish one of the
largest Internet franchises in China."
Dele Liu, Senior Vice President and Chief Financial Officer of
Youku, commented, "We are happy to continue to realize another
quarter of triple digit growth year-on-year. We are committed to
creating shareholder value through long-term market
leadership."
Third Quarter 2011 Results
Net revenues were RMB262.5
million (US$41.2 million) in
the third quarter of 2011, representing a 129% increase from the
corresponding period in 2010 and exceeding the high end of the
revenue guidance previously announced by the Company by 4%. This
year-over-year growth was primarily attributable to the increased
average revenue per advertiser and the increased number of
advertisers on top of a base that grew 139% year-over-year in the
previous year partially due to the 2010 World Cup.
Bandwidth costs as a component of cost of revenues were
RMB92.4 million (US$14.5 million) in the third quarter of 2011,
representing 35% of net revenues, down from 44% in the
corresponding period in 2010. The increase of bandwidth costs was
primarily due to increased bandwidth capacity to support the growth
of traffic to our website and further enhance our user
experience.
Content costs as a component of cost of revenues were
RMB67.0 million (US$10.5 million) in the third quarter of 2011,
representing 26% of net revenues in the same period, compared to
26% in the corresponding period in 2010 despite our change in
accounting estimate to accelerate amortization of content costs
starting in fiscal year 2011. If the Company had continued using
straight-line amortization for content costs as in the
corresponding period in 2010, the total content costs would have
been RMB52.1 million (US$8.2 million), representing 20% of net revenues
in the third quarter of 2011.
Non-GAAP gross profit, which is herein
defined as gross profit excluding share-based compensation
expenses, was RMB69.2 million
(US$10.8 million) in the third
quarter of 2011, an increase of 332% compared to the non-GAAP gross
profit of RMB16.0 million
(US$2.5 million) in the corresponding
period in 2010.
Non-GAAP operating expenses, which is herein
defined as operating expenses excluding share-based compensation
expenses, were RMB102.3 million
(US$16.0 million) in the third
quarter of 2011, compared to the non-GAAP operating expenses of
RMB51.4 million (US$8.1 million) for the same period in 2010. The
increase was primarily due to increases in sales and marketing
expenses, product development expenses and general and
administrative expenses as a result of the substantial growth of
our business. The detailed discussion of each component of
operating expenses are as follows:
Non-GAAP sales and marketing expenses, which is herein
defined as sales and marketing expenses excluding share-based
compensation expenses, were RMB68.2
million (US$10.7 million) in
the third quarter of 2011, an increase of 85% compared to the
non-GAAP sales and marketing expenses of RMB36.7 million (US$5.8
million) in the corresponding period in 2010. This increase
was primarily due to increases in marketing expenses and commission
expenses paid to our sales force in line with our revenue
growth.
Non-GAAP product development
expenses, which is herein defined as product
development expenses excluding share-based compensation expenses,
were RMB18.5 million (US$2.9 million) in the third quarter of 2011, an
increase of 134% compared to the non-GAAP product development
expenses of RMB8.0 million
(US$1.3 million) in the corresponding
period in 2010. This increase was primarily due to an increase in
salaries and benefits for product and development personnel
resulting from increased headcount.
Non-GAAP general and administrative
expenses, which is herein defined as general and
administrative expenses excluding share-based compensation
expenses, were RMB15.6 million
(US$2.4 million) in the third quarter
of 2011, an increase of 131% compared to the non-GAAP general and
administrative expenses of RMB6.7
million (US$1.1 million) in
the corresponding period in 2010. This increase was primarily due
to an increase in salaries and benefits for our general and
administrative personnel primarily resulting from headcount
increase and the substantial growth of our business.
Non-GAAP net loss, which is herein defined as net
loss excluding share-based compensation expenses and change in fair
value of warrant liability, was RMB28.2
million (US$4.4 million) in
the third quarter of 2011, or a decrease of 25% relative to the
non-GAAP net loss in the corresponding period in 2010. If we had
continued using straight-line amortization for content costs as in
the corresponding period in 2010, our non-GAAP net loss in the
third quarter of 2011 would be RMB13.3
million (US$2.1 million), or a
decrease of 65% relative to the corresponding period in 2010.
Non-GAAP EBITDA loss, which is herein defined as
net loss before income taxes, interest expenses, interest income,
depreciation and amortization (excluding amortization of acquired
content), further adjusted for change in fair value of warrant
liability, share-based compensation expenses and other
non-operating items, was RMB21.4
million (US$3.4 million) for
the third quarter of 2011, or an improvement of 13% relative to the
non-GAAP EBITDA loss in the corresponding period in 2010.
Business Outlook
For the fourth quarter of 2011, the Company expects year-on-year
growth of 90% to 100% in net revenues. This forecast reflects the
Company's current and preliminary view, which is subject to
change.
Conference Call Information
Youku's management will host an earnings conference call at
8:00 p.m. U.S. Eastern Time on
November 16, 2011 (9:00 a.m. Beijing/Hong Kong Time on November 17, 2011).
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:
|
1-718-354-1231
|
|
Mainland China Toll Free Dial
In:
|
86-4006208038 /
86-8008190121
|
|
Hong Kong Dial In:
|
852-2475-0994
|
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|
A replay of the call will be available by dialing 1-866-214-5335
(international 1-718-354-1232), and entering passcode 24935949#.
The replay will be available through November 24, 2011.
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's corporate website at http://ir.youku.com.
About Youku
Youku Inc. is China's leading
Internet television company. Our Internet television platform
enables users to search, view and share high-quality video content
quickly and easily across multiple devices. Youku, which stands for
"what's best and what's cool" in Chinese, is the most recognized
online video brand in China.
Youku's American depositary shares, each representing 18 of our
Class A ordinary shares, are traded on 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's strategic and operational plans,
contain forward-looking statements. Youku 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'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 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's consolidated financial results presented
in accordance with United States Generally Accepted Accounting
Principles ("GAAP"), Youku uses the following measures defined as
non-GAAP financial measures by the SEC in evaluating its business:
non-GAAP gross profit, non-GAAP operating expenses, non-GAAP sales
and marketing expense, 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 gross profit, non-GAAP operating expenses, non-GAAP
sales and marketing expense, non-GAAP product development expenses,
non-GAAP general and administrative expenses, and non-GAAP loss
from operations as the respective nearest comparable GAAP financial
measure to exclude share-based compensation expenses. We define
non-GAAP net loss as net loss excluding share-based compensation
expenses and change in fair value of warrant liability. We define
non-GAAP EBITDA loss as net income or loss before income taxes,
interest expenses, interest income, depreciation and amortization
(excluding amortization of acquired content), further adjusted for
change in fair value of warrant liability, share-based compensation
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 consolidated 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.
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.
For more information, please contact:
Investor Relations:
Ryan Cheung
Corporate Finance Director
Youku Inc.
Tel: (+8610) 5885-1881 x6090
Email: ryan.cheung@youku.com
Caroline Straathof
IR Inside
Tel: (+31) 6-54624301
Email: caroline.straathof@irinside.com
YOUKU INC.
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
|
|
|
|
|
|
(Amounts in thousands, except for number of shares)
|
|
December 31,
|
|
September 30
|
|
September 30
|
|
|
|
|
2010
|
|
2011
|
|
2011
|
|
|
|
|
RMB
|
|
RMB
|
|
US$
|
|
ASSETS
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
1,811,423
|
|
2,387,847
|
|
374,388
|
|
|
Short-term
investments
|
|
-
|
|
1,405,619
|
|
220,386
|
|
|
Accounts receivable,
net
|
|
216,245
|
|
412,886
|
|
64,736
|
|
|
Intangible assets
|
|
10,230
|
|
19,329
|
|
3,031
|
|
|
Prepayments and other
assets
|
|
25,187
|
|
11,716
|
|
1,837
|
|
Total current
assets
|
|
2,063,085
|
|
4,237,397
|
|
664,378
|
|
|
|
|
|
|
|
|
|
|
Non-current
assets:
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
64,177
|
|
92,217
|
|
14,459
|
|
|
Long-term investment
|
|
-
|
|
1,707
|
|
268
|
|
|
Intangible assets
|
|
57,550
|
|
156,386
|
|
24,520
|
|
|
Capitalized content production
costs
|
|
-
|
|
1,805
|
|
283
|
|
|
Prepayments and other
assets
|
|
5,356
|
|
223,926
|
|
35,109
|
|
Total non-current
assets
|
|
127,083
|
|
476,041
|
|
74,639
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
2,190,168
|
|
4,713,438
|
|
739,017
|
|
|
|
|
|
|
|
|
|
|
LIABIILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
35,641
|
|
97,678
|
|
15,315
|
|
|
Advances from
customers
|
|
1,304
|
|
5,168
|
|
810
|
|
|
Accrued expenses and other
liabilities
|
|
201,100
|
|
336,156
|
|
52,706
|
|
|
Current portion of long-term
debt
|
|
22,180
|
|
10,554
|
|
1,655
|
|
Total current
liabilities
|
|
260,225
|
|
449,556
|
|
70,486
|
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
18,455
|
|
10,270
|
|
1,610
|
|
Total non-current
liabilities
|
|
18,455
|
|
10,270
|
|
1,610
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
278,680
|
|
459,826
|
|
72,096
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
Class A Ordinary Shares
(US$0.00001 par value, 9,340,238,793 authorized, 1,235,761,996 and
1,393,791,561 issued and outstanding as of December 31, 2010 and
September 30, 2011, respectively)
|
|
82
|
|
93
|
|
15
|
|
|
Class B Ordinary Shares
(US$0.00001 par value, 659,761,207 authorized, 659,761,207 issued
and outstanding as of December 31, 2010 and September 30,
2011)
|
|
49
|
|
49
|
|
8
|
|
|
Additional paid-in
capital
|
|
2,625,250
|
|
5,168,461
|
|
810,358
|
|
|
Accumulated deficit
|
|
(699,540)
|
|
(822,030)
|
|
(128,885)
|
|
|
Accumulated other comprehensive
loss
|
|
(14,353)
|
|
(92,961)
|
|
(14,575)
|
|
Total
shareholders' equity
|
|
1,911,488
|
|
4,253,612
|
|
666,921
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
2,190,168
|
|
4,713,438
|
|
739,017
|
|
|
|
|
|
|
|
|
|
YOUKU INC.
|
|
CONSOLIDATED STATEMENTS OF
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended,
|
|
For the Nine Months Ended,
|
|
(Amounts in thousands, except for number of
shares and ADS and per share and per ADS data)
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
2010
|
|
2011
|
|
2011
|
|
2011
|
|
2010
|
|
2011
|
|
2011
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenues
|
|
114,807
|
|
197,853
|
|
262,471
|
|
41,152
|
|
234,623
|
|
588,315
|
|
92,241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues (Note 1)
|
|
(99,054)
|
|
(144,945)
|
|
(194,686)
|
|
(30,525)
|
|
(248,719)
|
|
(453,602)
|
|
(71,120)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit (loss)
|
|
15,753
|
|
52,908
|
|
67,785
|
|
10,627
|
|
(14,096)
|
|
134,713
|
|
21,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product development
|
|
(8,824)
|
|
(14,192)
|
|
(24,053)
|
|
(3,771)
|
|
(21,260)
|
|
(48,839)
|
|
(7,657)
|
|
Sales and marketing
|
|
(38,539)
|
|
(52,732)
|
|
(74,205)
|
|
(11,635)
|
|
(91,527)
|
|
(163,606)
|
|
(25,652)
|
|
General and administrative
|
|
(7,242)
|
|
(13,759)
|
|
(21,845)
|
|
(3,425)
|
|
(18,716)
|
|
(48,178)
|
|
(7,554)
|
|
Total operating expenses
|
|
(54,605)
|
|
(80,683)
|
|
(120,103)
|
|
(18,831)
|
|
(131,503)
|
|
(260,623)
|
|
(40,863)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) profit from operations
|
|
(38,852)
|
|
(27,775)
|
|
(52,318)
|
|
(8,204)
|
|
(145,599)
|
|
(125,910)
|
|
(19,742)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
265
|
|
3,190
|
|
8,677
|
|
1,360
|
|
1,068
|
|
12,923
|
|
2,026
|
|
Interest expenses
|
|
(2,517)
|
|
(1,801)
|
|
(1,542)
|
|
(242)
|
|
(4,963)
|
|
(5,498)
|
|
(862)
|
|
Change in fair value of warrant liability
|
|
(11,976)
|
|
-
|
|
-
|
|
-
|
|
(17,532)
|
|
-
|
|
-
|
|
Other, net
|
|
(42)
|
|
(1,714)
|
|
(2,291)
|
|
(359)
|
|
65
|
|
(4,005)
|
|
(628)
|
|
Total other income (expenses), net
|
|
(14,270)
|
|
(325)
|
|
4,844
|
|
759
|
|
(21,362)
|
|
3,420
|
|
536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) profit before income taxes
|
|
(53,122)
|
|
(28,100)
|
|
(47,474)
|
|
(7,445)
|
|
(166,961)
|
|
(122,490)
|
|
(19,206)
|
|
Income taxes
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) profit
|
|
(53,122)
|
|
(28,100)
|
|
(47,474)
|
|
(7,445)
|
|
(166,961)
|
|
(122,490)
|
|
(19,206)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share, basic and diluted
|
|
(0.15)
|
|
(0.01)
|
|
(0.02)
|
|
*
|
|
(0.46)
|
|
(0.06)
|
|
(0.01)
|
|
Net loss per ADS, basic and diluted
|
|
(2.61)
|
|
(0.26)
|
|
(0.42)
|
|
(0.07)
|
|
(8.22)
|
|
(1.12)
|
|
(0.18)
|
|
Shares used in computation, basic and diluted
|
|
365,699,281
|
|
1,966,651,063
|
|
2,051,993,011
|
|
2,051,993,011
|
|
365,675,115
|
|
1,972,240,249
|
|
1,972,240,249
|
|
ADS used in computation, basic and diluted
|
|
20,316,627
|
|
109,258,392
|
|
113,999,611
|
|
113,999,611
|
|
20,315,284
|
|
109,568,902
|
|
109,568,902
|
|
* represents per share amount
which is less than (0.01)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an
integral part of the press release
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 1. Cost of Revenues
|
|
For the Three Months Ended,
|
|
For the Nine Months Ended,
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
2010
|
|
2011
|
|
2011
|
|
2011
|
|
2010
|
|
2011
|
|
2011
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
(Amounts in thousands)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Cost of revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business tax and surcharges
|
|
9,800
|
|
20,241
|
|
25,420
|
|
3,986
|
|
23,241
|
|
58,053
|
|
9,102
|
|
Bandwidth costs
|
|
50,211
|
|
66,251
|
|
92,388
|
|
14,485
|
|
139,994
|
|
214,964
|
|
33,704
|
|
Depreciation of servers and other equipment
|
|
9,316
|
|
8,919
|
|
9,855
|
|
1,546
|
|
29,008
|
|
27,886
|
|
4,372
|
|
Content costs
|
|
29,727
|
|
49,534
|
|
67,023
|
|
10,508
|
|
56,476
|
|
152,699
|
|
23,942
|
|
Total Cost of Revenues
|
|
99,054
|
|
144,945
|
|
194,686
|
|
30,525
|
|
248,719
|
|
453,602
|
|
71,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YOUKU INC.
|
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended,
|
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
|
(Amounts in thousands)
|
|
2010
|
|
2011
|
|
2011
|
|
2011
|
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(53,122)
|
|
(28,100)
|
|
(47,474)
|
|
(7,445)
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
10,741
|
|
10,358
|
|
11,557
|
|
1,812
|
|
|
Bad debt expense
|
|
285
|
|
(279)
|
|
1,066
|
|
167
|
|
|
Amortization of intangible
assets and self produced contents
|
|
18,135
|
|
35,390
|
|
43,111
|
|
6,759
|
|
|
Accretion of long-term debt
discounts
|
|
919
|
|
923
|
|
839
|
|
132
|
|
|
Gain on disposal of
property and equipment
|
|
-
|
|
(7)
|
|
-
|
|
-
|
|
|
Foreign exchange loss
|
|
-
|
|
1,644
|
|
1,971
|
|
309
|
|
|
Share-based
compensation
|
|
3,416
|
|
7,278
|
|
19,295
|
|
3,026
|
|
|
Change in fair value of warrant
liability
|
|
11,976
|
|
-
|
|
-
|
|
-
|
|
|
Change in operating assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(67,541)
|
|
(86,113)
|
|
(135,309)
|
|
(21,215)
|
|
|
Prepayments and other assets
|
|
9,203
|
|
(4,776)
|
|
(6,911)
|
|
(1,084)
|
|
|
Capitalized content production costs
|
|
(1,750)
|
|
(1,745)
|
|
(5,384)
|
|
(844)
|
|
|
Accounts payable
|
|
(6,980)
|
|
(502)
|
|
-
|
|
-
|
|
|
Advances from customers
|
|
(12)
|
|
(1,455)
|
|
4,444
|
|
697
|
|
|
Accrued expenses and other liabilities
|
|
35,684
|
|
62,204
|
|
111,676
|
|
17,511
|
|
Net cash used in operating activities
|
|
(39,046)
|
|
(5,180)
|
|
(1,119)
|
|
(175)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
Acquisition of property and
equipment
|
|
(11,496)
|
|
(18,878)
|
|
(11,797)
|
|
(1,850)
|
|
|
Proceeds from (purchase of)
short-term investments
|
|
34,000
|
|
(1,164,888)
|
|
(168,131)
|
|
(26,361)
|
|
|
Proceeds from disposal of
property and equipment
|
|
-
|
|
8
|
|
-
|
|
-
|
|
|
Acquisition of intangible
assets
|
|
(15,258)
|
|
(144,156)
|
|
(189,884)
|
|
(29,772)
|
|
Net cash provided by (used in) investing activities
|
|
7,246
|
|
(1,327,914)
|
|
(369,812)
|
|
(57,983)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
Exercise of employee stock
options
|
|
48
|
|
1,025
|
|
2,390
|
|
375
|
|
|
Proceeds from issuance of Series
F Preferred Shares
|
|
334,985
|
|
-
|
|
-
|
|
-
|
|
|
Drawdown of long-term
debt
|
|
33,875
|
|
-
|
|
-
|
|
-
|
|
|
Principal repayments on
long-term debt
|
|
(7,054)
|
|
(7,406)
|
|
(5,594)
|
|
(877)
|
|
|
Debt commitment fee
received
|
|
136
|
|
-
|
|
-
|
|
-
|
|
|
Proceeds from follow-on offering
& IPO activity, net of issuance costs
|
|
(566)
|
|
2,508,974
|
|
(539)
|
|
(85)
|
|
|
Payment of convertible
redeemable preferred shares issuance costs
|
|
(648)
|
|
-
|
|
-
|
|
-
|
|
Net cash (used in) provided by financing activities
|
|
360,776
|
|
2,502,593
|
|
(3,743)
|
|
(587)
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
254
|
|
(22,802)
|
|
(44,041)
|
|
(6,905)
|
|
Net (decrease) increase in cash and cash equivalents
|
|
329,230
|
|
1,146,697
|
|
(418,715)
|
|
(65,650)
|
|
Cash and cash equivalents at the beginning of the period
|
|
111,324
|
|
1,659,865
|
|
2,806,562
|
|
440,038
|
|
Cash and cash equivalents at the end of the period
|
|
440,554
|
|
2,806,562
|
|
2,387,847
|
|
374,388
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations of Non-GAAP
results of operations measures to the nearest comparable GAAP
financial measures (*) (Amounts in thousands of Renminbi
("RMB") and
U.S.dollars ("US$"),unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Non-GAAP Gross Profit (Loss)
|
|
For the Three Months Ended,
|
|
For the Nine Months Ended,
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
2010
|
|
2011
|
|
2011
|
|
2011
|
|
2010
|
|
2011
|
|
2011
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
Gross profit (loss)
|
|
15,753
|
|
52,908
|
|
67,785
|
|
10,627
|
|
(14,096)
|
|
134,713
|
|
21,121
|
|
Add back: share-based compensation
|
|
258
|
|
701
|
|
1,459
|
|
229
|
|
550
|
|
2,592
|
|
406
|
|
Non-GAAP gross profit (loss)
|
|
16,011
|
|
53,609
|
|
69,244
|
|
10,856
|
|
(13,546)
|
|
137,305
|
|
21,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2. Non-GAAP Operating Expenses
|
|
For the Three Months Ended,
|
|
For the Nine Months Ended,
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
2010
|
|
2011
|
|
2011
|
|
2011
|
|
2010
|
|
2011
|
|
2011
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
Operating expenses
|
|
54,605
|
|
80,683
|
|
120,103
|
|
18,831
|
|
131,503
|
|
260,623
|
|
40,863
|
|
Deduct: share-based compensation
|
|
3,158
|
|
6,577
|
|
17,836
|
|
2,797
|
|
6,825
|
|
29,355
|
|
4,602
|
|
Non-GAAP operating expenses
|
|
51,447
|
|
74,106
|
|
102,267
|
|
16,034
|
|
124,678
|
|
231,268
|
|
36,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3. Non-GAAP Sales and Marketing Expenses
|
|
For the Three Months Ended,
|
|
For the Nine Months Ended,
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
2010
|
|
2011
|
|
2011
|
|
2011
|
|
2010
|
|
2011
|
|
2011
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
Sales and marketing expenses
|
|
38,539
|
|
52,732
|
|
74,205
|
|
11,635
|
|
91,527
|
|
163,606
|
|
25,652
|
|
Deduct: share-based compensation
|
|
1,750
|
|
3,045
|
|
6,047
|
|
948
|
|
3,645
|
|
11,756
|
|
1,843
|
|
Non-GAAP sales and marketing expenses
|
|
36,789
|
|
49,687
|
|
68,158
|
|
10,687
|
|
87,882
|
|
151,850
|
|
23,809
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4. Non-GAAP Product Development Expenses
|
|
For the Three Months Ended,
|
|
For the Nine Months Ended,
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
2010
|
|
2011
|
|
2011
|
|
2011
|
|
2010
|
|
2011
|
|
2011
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
Product development expenses
|
|
8,824
|
|
14,192
|
|
24,053
|
|
3,771
|
|
21,260
|
|
48,839
|
|
7,657
|
|
Deduct: share-based compensation
|
|
903
|
|
1,737
|
|
5,534
|
|
868
|
|
2,038
|
|
8,361
|
|
1,311
|
|
Non-GAAP product development expenses
|
|
7,921
|
|
12,455
|
|
18,519
|
|
2,903
|
|
19,222
|
|
40,478
|
|
6,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5. Non-GAAP General and Administrative Expenses
|
|
For the Three Months Ended,
|
|
For the Nine Months Ended,
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
2010
|
|
2011
|
|
2011
|
|
2011
|
|
2010
|
|
2011
|
|
2011
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
General and administrative expenses
|
|
7,242
|
|
13,759
|
|
21,845
|
|
3,425
|
|
18,716
|
|
48,178
|
|
7,554
|
|
Deduct: share-based compensation
|
|
505
|
|
1,795
|
|
6,255
|
|
981
|
|
1,142
|
|
9,238
|
|
1,448
|
|
Non-GAAP general and administrative expenses
|
|
6,737
|
|
11,964
|
|
15,590
|
|
2,444
|
|
17,574
|
|
38,940
|
|
6,106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6. Non-GAAP (Loss) Profit from Operations
|
|
For the Three Months Ended,
|
|
For the Nine Months Ended,
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
2010
|
|
2011
|
|
2011
|
|
2011
|
|
2010
|
|
2011
|
|
2011
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
(Loss) profit from operations
|
|
(38,852)
|
|
(27,775)
|
|
(52,318)
|
|
(8,204)
|
|
(145,599)
|
|
(125,910)
|
|
(19,742)
|
|
Add back: share-based compensation
|
|
3,416
|
|
7,278
|
|
19,295
|
|
3,026
|
|
7,375
|
|
31,947
|
|
5,008
|
|
Non-GAAP (loss) profit from operations
|
|
(35,436)
|
|
(20,497)
|
|
(33,023)
|
|
(5,178)
|
|
(138,224)
|
|
(93,963)
|
|
(14,734)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7. Non-GAAP Net (Loss) Profit
|
|
For the Three Months Ended,
|
|
For the Nine Months Ended,
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
2010
|
|
2011
|
|
2011
|
|
2011
|
|
2010
|
|
2011
|
|
2011
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
Net (loss) profit
|
|
(53,122)
|
|
(28,100)
|
|
(47,474)
|
|
(7,445)
|
|
(166,961)
|
|
(122,490)
|
|
(19,206)
|
|
Add back: share-based compensation
|
|
3,416
|
|
7,278
|
|
19,295
|
|
3,026
|
|
7,375
|
|
31,947
|
|
5,008
|
|
Add back: change in fair value of warrant liability
|
|
11,976
|
|
-
|
|
-
|
|
-
|
|
17,532
|
|
-
|
|
-
|
|
Non-GAAP net (loss) profit
|
|
(37,730)
|
|
(20,822)
|
|
(28,179)
|
|
(4,419)
|
|
(142,054)
|
|
(90,543)
|
|
(14,198)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8. Non-GAAP EBITDA (Loss) Profit
|
|
For the Three Months Ended,
|
|
For the Nine Months Ended,
|
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
September 30,
|
|
|
|
2010
|
|
2011
|
|
2011
|
|
2011
|
|
2010
|
|
2011
|
|
2011
|
|
|
|
RMB
|
|
RMB
|
|
RMB
|
|
US$
|
|
RMB
|
|
RMB
|
|
US$
|
|
Net (loss) profit
|
|
(53,122)
|
|
(28,100)
|
|
(47,474)
|
|
(7,445)
|
|
(166,961)
|
|
(122,490)
|
|
(19,206)
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization (excluding amortization
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of acquired content )**
|
|
10,746
|
|
10,373
|
|
11,571
|
|
1,814
|
|
32,288
|
|
32,484
|
|
5,093
|
|
Interest income
|
|
(265)
|
|
(3,190)
|
|
(8,677)
|
|
(1,360)
|
|
(1,068)
|
|
(12,923)
|
|
(2,026)
|
|
Interest expenses
|
|
2,517
|
|
1,801
|
|
1,542
|
|
242
|
|
4,963
|
|
5,498
|
|
862
|
|
Income taxes
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
EBITDA (Loss) Profit
|
|
(40,124)
|
|
(19,116)
|
|
(43,038)
|
|
(6,749)
|
|
(130,778)
|
|
(97,431)
|
|
(15,277)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share-based compensation
|
|
3,416
|
|
7,278
|
|
19,295
|
|
3,026
|
|
7,375
|
|
31,947
|
|
5,008
|
|
Change in fair value of warrant liability
|
|
11,976
|
|
-
|
|
-
|
|
-
|
|
17,532
|
|
-
|
|
-
|
|
Others, net
|
|
42
|
|
1,714
|
|
2,291
|
|
359
|
|
(65)
|
|
4,005
|
|
628
|
|
Non-GAAP EBITDA (Loss) Profit
|
|
(24,690)
|
|
(10,124)
|
|
(21,452)
|
|
(3,364)
|
|
(105,936)
|
|
(61,479)
|
|
(9,641)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* For more information on
the Non-GAAP financial measures, please see the section
captioned "About
Non-GAAP Financial Measures" in this
earnings release.
|
|
|
**The amortization expense was
related to advertising license acquired in April 2010. The
amortization of acquired content was not included in Non-GAAP
EBITDA loss financial measures we disclose in our annual report on
Form 20-F that we filed on June 10, 2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Youku.com Inc.