Cheetah Mobile Announces Second Quarter 2017 Unaudited Consolidated Financial Results

Aug 22, 2017

BEIJING, Aug. 22, 2017 /PRNewswire/ -- Cheetah Mobile Inc. (NYSE: CMCM) ("Cheetah Mobile" or the "Company"), a leading mobile internet company that aims to provide leading apps for mobile users worldwide and connect users with personalized content on the mobile platform, today announced its unaudited consolidated financial results for the second quarter ended June 30, 2017.

Second Quarter 2017 Financial Highlights

  • Total revenues increased by 14.8% year over year to RMB1,201.6 million (US$177.2 million), mostly driven by the Company's growth in mobile revenues, which achieved a record high during the second quarter of 2017. 
  • Operating profit increased to RMB66.2 million (US$9.8 million) from an operating loss of RMB63.0 million in the same period last year.  Non-GAAP operating profit increased by 254.3% year over year to RMB90.4 million (US$13.3 million).  In particular, operating profit for the Company's utility products and related services business increased by 50.6% year over year to RMB212.8 million (US$31.4 million) in the second quarter of 2017, primarily driven by the Company's effort in optimizing its utility products' cost and expense structure. 
  • Net income attributable to Cheetah Mobile shareholders increased to RMB70.2 million (US$10.4 million) from a net loss attributable to Cheetah Mobile shareholders of RMB150.5 million in the same period last year.  Non-GAAP net income attributable to Cheetah Mobile shareholders increased to RMB94.4 million (US$13.9 million) from a non-GAAP net loss attributable to Cheetah Mobile shareholders of RMB61.9 million in the same period last year.
  • The Company generated RMB194.7 million (US$28.7 million) of net cash from operating activities and RMB185.1 million (US$27.3 million) of free cash flow1 in the second quarter of 2017.

[1] Free cash flow is defined as net cash generated by operating activities less capital expenditure

Second Quarter 2017 Key Operating Metrics

  • The number of global mobile monthly active users ("Mobile MAUs") was 581.3 million in June 2017. The number of Mobile MAUs from markets outside of China, or overseas markets, accounted for 77.3% of the total number of Mobile MAUs in June 2017.

Mr. Sheng Fu, Cheetah Mobile's Chief Executive Officer, stated, "Our second quarter results remain stable and were in line with management expectations. We have been making adjustments to our utility products and realigning our cost structure.  As a result, we continued to generate robust operating profit and cash flow from our utility product business during the second quarter of 2017. Also during the quarter, our mobile game business grew considerably on both top and bottom lines as we continued to expand our game portfolio with new mobile game introductions in early 2017. In addition, we further increased Live.me's user engagement and user stickiness through continued product improvement and content enrichment. We are confident that we remain on track to build a sustainable growth model for the long term."

Mr. Vincent Jiang, Cheetah Mobile's Chief Financial Officer, commented, "We made a concerted effort in controlling our utility products' cost and expenses in the second quarter of 2017. As a result, our operating profit and net cash generated from operating activities for the quarter grew significantly both year over year and quarter over quarter. For the second half of 2017, we have a clear strategy to maintain our utility products' profitability and at the same time grow our Live.me and mobile game businesses. 

Because our various business lines are in different phases of growth, in the first quarter of 2017, we reported our revenues according to business lines to help investors better understand our businesses. As we increasingly evaluate our utility products and related services separately from the rest of our business lines to assess their performance and allocate resources, in the second quarter of 2017, we will report our utility products and related services as one operating segment and consolidate our remaining businesses, including our content-driven products and mobile game businesses into one segment called the mobile entertainment business."

Second Quarter 2017 Consolidated Financial Results

REVENUES

Total revenues increased by 14.8% year over year and 0.9% quarter over quarter to RMB1,201.6 million (US$177.2 million) in the second quarter of 2017. 

  • Revenues from utility products and related services, which includes mobile utility applications, internet browsers and PC security software, decreased by 13.3% year over year while remaining relatively stable quarter over quarter at RMB820.3 million (US$121.0 million) in the second quarter of 2017.  The year-over-year decrease was primarily due to a decrease in PC revenues as internet traffic in China continuously migrates from PC to mobile devices. Revenues from the Company's mobile utility products remained stable year over year.    
  • Revenues from the mobile entertainment business, which includes Live.me, News Republic, and mobile games, increased by 270.5% year over year and 2.1% quarter over quarter to RMB371.0 million (US$54.7 million). The year-over-year increase was primarily driven by a rapid growth in Live.me's broadcasting revenue and the Company's enriched mobile game portfolio as a result of its continuous new mobile game introductions earlier this year. The quarter-over-quarter increase was primarily driven by the growth in the mobile game business.

By platform, revenues generated from the mobile business increased by 34.5% year over year and 3.0% quarter over quarter to RMB1,038.8 million (US$153.2 million) in the second quarter of 2017, primarily driven by the rapid growth of the Company's Live.me business in overseas markets and the increase in its mobile game revenues.

By region, revenues generated from overseas markets increased by 50.3% year over year and remained relatively flat quarter over quarter at RMB842.9 million (US$124.3 million) in the second quarter of 2017.  

COST OF REVENUES AND GROSS PROFIT

Cost of revenues increased by 30.0% year over year and remained flat quarter over quarter at RMB461.1 million (US$68.0 million) in the second quarter of 2017.  The year-over-year increase was primarily driven by the increased investment in the Company's content-driven products including Live.me and News Republic.

Non-GAAP cost of revenues increased by 29.8% year over year while remaining relatively flat quarter over quarter at RMB460.2 million (US$67.9 million) in the second quarter of 2017.

Gross profit increased by 7.0% year over year and 1.1% quarter over quarter to RMB740.5 million (US$109.2 million) in the second quarter of 2017.  Non-GAAP gross profit increased by 7.1% year over year and 1.0% quarter over quarter to RMB741.3 million (US$109.4 million) in the second quarter of 2017.

OPERATING INCOME AND EXPENSES

Total operating expenses decreased by 10.7% year over year and 4.6% quarter over quarter to RMB674.2 million (US$99.5 million) in the second quarter of 2017.  Total non-GAAP operating expenses decreased by 2.3% year over year and 4.7% quarter over quarter to RMB650.9 million (US$96.0 million) in the second quarter of 2017.

  • Research and development (R&D) expenses decreased by 26.6% year over year and 12.7% quarter over quarter to RMB167.0 million (US$24.6 million) in the second quarter of 2017, primarily due to lower R&D personnel costs of the Company's utility products, partially offset by increased R&D personnel costs of its artificial intelligence technologies and content-driven products. Non-GAAP R&D expenses, which exclude share-based compensation expenses, decreased by 8.4% year over year and 10.2% quarter over quarter to RMB163.2 million (US$24.1 million) in the second quarter of 2017.
  • Selling and marketing expenses remained relatively flat year over year and quarter over quarter at RMB413.1 million (US$60.9 million) in the second quarter of 2017. The Company shifted some of its selling and marketing budget from its utility products to its content-driven products.  Non-GAAP selling and marketing expenses, which exclude share-based compensation expenses, remained relatively flat year over year while decreasing by 1.5% quarter over quarter to RMB408.2 million (US$60.2 million) in the second quarter of 2017.
  • General and administrative expenses decreased by 37.8% year over year and 3.5% quarter over quarter to RMB100.0 million (US$14.8 million) in the second quarter of 2017. The year-over-year decrease was primarily due to high professional service fees recorded in the second quarter of 2016 in connection with certain acquisition activities. Non-GAAP general and administrative expenses, which exclude share-based compensation expenses, decreased by 30.5% year over year and 4.6% quarter over quarter to RMB85.4 million (US$12.6 million) in the second quarter of 2017.

Operating profit increased to RMB66.2 million (US$9.8 million) in the second quarter of 2017 from an operating loss of RMB63.0 million in the same period last year and an operating profit of RMB26.3 million in the previous quarter.

Non-GAAP operating profit increased by 254.3% year over year and 78.4% quarter over quarter to RMB90.4 million (US$13.3 million) in the second quarter of 2017.

Starting from the second quarter of 2017, the Company will report its operating profit along the following segments:

  • ŸOperating profit for utility products and related services increased by 50.6% year over year and 18.8% quarter over quarter to RMB212.8 million (US$31.4 million) in the second quarter of 2017, mainly due to the Company's effort in optimizing its utility products' cost and expense structure. 
  • ŸOperating loss for the mobile entertainment business was RMB122.1 million (US$18.0 million) in the second quarter of 2017, mainly due to the Company's increased investments in its content-driven products. The Company had operating losses of RMB106.2 million in the same period last year and RMB128.5 million in the previous quarter. 

Share-based compensation expenses decreased by 72.7% year over year while remaining relatively flat quarter over quarter at RMB24.2 million (US$3.6 million) in the second quarter of 2017. 

OTHER INCOME, NET

Other income, net was RMB23.7 million (US$3.5 million) in the second quarter of 2017, primarily due to gains from disposals of certain investment assets in the second quarter of 2017.

NET INCOME ATTRIBUTABLE TO CHEETAH MOBILE SHAREHOLDERS

Net income attributable to Cheetah Mobile shareholders was RMB70.2 million (US$10.4 million) in the second quarter of 2017 as compared to a net loss attributable to Cheetah Mobile shareholders of RMB150.5 million in the same period last year and a net income attributable to Cheetah Mobile shareholders of RMB91.2 million in the previous quarter.

Non-GAAP net income attributable to Cheetah Mobile shareholders was RMB94.4 million (US$13.9 million) as compared to a non-GAAP net loss attributable to Cheetah Mobile shareholders of RMB61.9 million in the same period last year and a non-GAAP net income attributable to Cheetah Mobile shareholders of RMB115.6 million in the previous quarter.

NET INCOME PER ADS

Diluted income per ADS in the second quarter of 2017 was RMB0.47 (US$0.07) as compared to diluted loss per ADS of RMB1.08 in the prior year period and diluted income per ADS of RMB0.64 in the previous quarter.

Non-GAAP diluted income per ADS in the second quarter of 2017 was RMB0.64 (US$0.09) as compared to non-GAAP diluted loss per ADS of RMB0.44 in the prior year period and non-GAAP diluted income per ADS of RMB0.81 in the previous quarter.

ADJUSTED EBITDA

Adjusted EBITDA (Non-GAAP) increased by 87.1% year over year and 45.0% quarter over quarter to RMB126.6 million (US$18.7 million) in the second quarter of 2017.

CASH AND CASH EQUIVALENTS, RESTRICTED CASH AND SHORT-TERM INVESTMENTS BALANCE

As of June 30, 2017, the Company had cash and cash equivalents, restricted cash and short-term investments of RMB2,383.3 million (US$351.5 million). 

CASH FLOW FROM OPERATING ACTIVITIES AND FREE CASH FLOW

In the second quarter of 2017, the Company generated RMB194.7 million (US$28.7 million) of net cash from operating activities and RMB185.1 million (US$27.3 million) of free cash flow.

SHARES ISSUED AND OUTSTANDING

As of June 30, 2017, the Company had a total of 1,436,330,950 Class A and Class B ordinary shares issued and outstanding. One ADS represents 10 Class A ordinary shares.

Business Outlook

For the third quarter of 2017, the Company expects its total revenues to be between RMB1,150 million (US$170 million) and RMB1,210 million (US$178 million), representing a year-over-year increase of 2% to 7%. This estimate represents management's preliminary view as of the date of this release, which is subject to change.

Recent Developments

Departure of the Company's Senior Vince President
Cheetah Mobile today announced that Mr. Yong Chen has resigned as Senior Vice President of the Company for personal reasons, effective June 30, 2017.     

Live.me Business's New Financing
On April 28, 2017, Live.me Inc., which operates Live.me, a live video streaming application, raised new funds from a group of investors. The new funding is presented as redeemable non-controlling interests on the Company's balance sheet as of June 30, 2017. 

Conference Call Information

The Company will hold a conference call on Tuesday, August 22, 2017 at 7:00 a.m. Eastern Time or 7:00 p.m. Beijing Time to discuss the financial results. Listeners may access the call by dialing the following numbers:

International:  +1-412-902-4272
United States Toll Free:  +1-888-346-8982
China Toll Free:  4001-201203
Hong Kong Toll Free:  800-905945
Conference ID:  Cheetah Mobile

A live and archived webcast of the conference call will also be available at the Company's investor relations website at http://ir.cmcm.com/.

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 RMB6.7793 to US$1.00, the exchange rate in effect as of June 30, 2017 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.  It aims to provide leading apps for mobile users worldwide and connect users with personalized content on the mobile platform. Cheetah Mobile's products, including its popular utility applications Clean Master, Security Master and Battery Doctor, help make users' mobile internet experience smarter, speedier, and safer. Leveraging the success of its utility applications, Cheetah Mobile has launched its line of mobile content-driven applications, including News Republic and Live.me. 

Cheetah Mobile 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, which are capable of delivering targeted content to hundreds of millions of users.  

Safe Harbor Statement

This press release contains forward-looking statements.  These statements, including management quotes and business outlook, constitute forward-looking statements under the U.S. Private Securities Litigation Reform Act of 1995.  These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Such statements involve inherent risks and uncertainties.  A number of factors could cause actual results to differ materially from those contained in the forward-looking statements, including but are not limited to the following: Cheetah Mobile's growth strategies; Cheetah Mobile's ability to retain and increase its user base and expand its product and service offerings; Cheetah Mobile's ability to monetize its platform; Cheetah Mobile's future business development, financial condition and results of operations; competition with companies in a number of industries including internet companies that provide online marketing services and internet value-added services; expected changes in Cheetah Mobile's revenues and certain cost or expense items; and general economic and business condition globally and in China.  Further information regarding these and other risks is included in Cheetah Mobile's filings with the U.S. Securities and Exchange Commission.  Cheetah Mobile does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

Use of Non-GAAP Financial Measures

To supplement Cheetah Mobile's consolidated financial information presented in accordance with U.S. GAAP, Cheetah Mobile uses the following non-GAAP financial measures:

  • Non-GAAP cost of revenues reflects cost of revenues excluding the portion of share-based compensation expenses allocated to cost of revenues.
  • Non-GAAP gross profit reflects gross profit excluding the portion of share-based compensation expenses allocated to gross profit.
  • Non-GAAP operating income and expenses reflect operating income and expenses excluding the portion of share-based compensation expenses allocated to operating expenses.
  • Non-GAAP operating profit reflects operating profit excluding share-based compensation expenses.
  • Non-GAAP net income attributable to Cheetah Mobile shareholders is net income attributable to Cheetah Mobile shareholders excluding share-based compensation expenses.
  • Non-GAAP diluted earnings per ADS is non-GAAP net income attributable to Cheetah Mobile shareholders excluding net income attributable to redeemable noncontrolling interests, divided by weighted average number of diluted ADSs.
  • ŸAdjusted 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.
Xueli Song
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


31-Dec-16


30-Jun-17


30-Jun-17


 RMB 


RMB


USD

ASSETS






Current assets:






Cash and cash equivalents

1,411,000


1,848,638


272,689

Restricted cash

167,751


94,146


13,887

Short-term investments

361,499


440,472


64,973

Accounts receivable

600,885


576,355


85,017

Prepayments and other current assets

571,306


501,812


74,021

Due from related parities

44,278


92,838


13,694

Deferred tax assets

15,527


-


-

Total current assets

3,172,246


3,554,261


524,281







Non-current assets:






Property and equipment, net

117,439


100,044


14,757

Intangible assets, net 

227,251


174,464


25,735

Goodwill

943,922


925,049


136,452

Investment in equity investees

100,063


95,271


14,053

Other long term investments

877,094


839,934


123,897

Due from related parities

-


3,078


454

Deferred tax assets

74,809


97,423


14,371

Other non-current assets

28,310


28,933


4,268

Total non-current assets

2,368,888


2,264,196


333,987







Total assets

5,541,134


5,818,457


858,268







LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS' EQUITY












Current liabilities: 






Bank loans

379,544


381,565


56,284

Accounts payable

194,882


163,638


24,138

Accrued expenses and other current liabilities

1,359,758


1,203,332


177,501

Deferred revenue

48,661


43,635


6,437

Due to related parties

71,167


74,640


11,010

Income tax payable

12,209


12,929


1,907

Total current liabilities

2,066,221


1,879,739


277,277







Non-current liabilities: 






Bank loans

118,797


96,465


14,229

Deferred revenue

6,001


5,448


804

Deferred tax liabilities

112,438


109,127


16,097

Other non-current liabilities

36,499


30,883


4,555

Total non-current liabilities

273,735


241,923


35,685







Total liabilities

2,339,956


2,121,662


312,962







Mezzanine equity






Redeemable noncontrolling interests

-


309,073


45,591







Shareholders' equity:






Ordinary shares

230


232


34

Treasury stock

(178,991)


(178,991)


(26,403)

Additional paid-in capital

2,725,675


2,785,161


410,832

Retained earnings

237,293


402,620


59,390

Accumulated other comprehensive income

228,145


181,659


26,797

Total Cheetah Mobile shareholders' equity

3,012,352


3,190,681


470,650

Noncontrolling interests

188,826


197,041


29,065







Total equity

3,201,178


3,387,722


499,715







Total liabilities, mezzanine equity and equity

5,541,134


5,818,457


858,268

 

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


30-Jun-16


31-Mar-17


30-Jun-17


30-Jun-17


RMB


RMB


RMB


USD

Revenues

1,046,664


1,190,703


1,201,561


177,239

Utility products and related services 

946,198


827,225


820,342


121,007

Mobile entertainment

100,137


363,468


371,034


54,730

Others

329


10


10,185


1,502









Cost of revenues (a)

(354,710)


(457,953)


(461,089)


(68,014)

Gross profit

691,954


732,750


740,472


109,225









Operating income and expenses: 








Research and development (a)  

(227,496)


(191,367)


(166,983)


(24,631)

Selling and marketing (a) 

(407,206)


(414,264)


(413,116)


(60,938)

General and administrative (a) 

(160,735)


(103,588)


(99,996)


(14,750)

Impairment of goodwill and intangible assets

-


-


(172)


(25)

Other operating income

40,446


2,784


6,022


888

Total operating income and  expenses

(754,991)


(706,435)


(674,245)


(99,456)









Operating (loss) profit

(63,037)


26,315


66,227


9,769

Other income (expense):








Interest income, net

2,715


1,616


3,380


499

Changes in fair value of redemption right and put options granted

(308)


(233)


82


12

Settlement and changes in fair value of contingent consideration

(664)


(790)


(8,224)


(1,213)

Foreign exchange gain (loss), net

486


1,213


(6,627)


(978)

Impairment of investments

(95,206)


-


-


-

Losses from equity method investments, net

(6,070)


(367)


(477)


(70)

Other income, net

17,620


67,708


23,659


3,490









(Loss) Income before taxes

(144,464)


95,462


78,020


11,509

Income tax expenses 

(1,964)


(4,912)


(4,664)


(688)

Net (loss) income

(146,428)


90,550


73,356


10,821

Less: net income (loss) attributable to noncontrolling interests 

4,022


(679)


3,157


466

Net (loss) income attributable to Cheetah Mobile shareholders

(150,450)


91,229


70,199


10,355









(Losses) Earnings per share








Basic 

(0.11)


0.07


0.05


0.01

Diluted 

(0.11)


0.06


0.05


0.01









(Losses) Earnings per ADS








Basic 

(1.08)


0.66


0.48


0.07

Diluted 

(1.08)


0.64


0.47


0.07









Weighted average number of shares outstanding








Basic 

1,391,355,172


1,387,446,596


1,392,558,263


1,392,558,263

Diluted 

1,391,355,172


1,422,443,105


1,430,957,071


1,430,957,071

Weighted average number of ADSs used in computation








Basic 

139,135,517


138,744,660


139,255,826


139,255,826

Diluted 

139,135,517


142,244,310


143,095,707


143,095,707









Other comprehensive income (loss), net of tax








Foreign currency translation adjustments

54,165


(8,517)


(38,948)


(5,745)

Unrealized loss on available-for-sale securities, net

(389)


-


-


-

Other comprehensive income (loss) 

53,776


(8,517)


(38,948)


(5,745)

Total comprehensive (loss) income

(92,652)


82,033


34,408


5,076

Less: Total comprehensive income attributable to
noncontrolling interests

7,117


119


1,380


204

Total comprehensive (loss) income attributable to
Cheetah Mobile shareholders

(99,769)


81,914


33,028


4,872









(a) Share-based compensation expenses








Cost of revenues

140


934


872


129

Research and development

49,410


9,571


3,802


561

Selling and marketing

1,300


(188)


4,956


731

General and administrative

37,707


14,051


14,552


2,147

Total

88,557


24,368


24,182


3,568

 

CHEETAH MOBILE INC.

Reconciliation of GAAP and Non-GAAP Results

(Unaudited, in'000, except for per share data and percentage)



For The Three Months Ended June 30, 2017




GAAP


% of Net


Share-based 


% of Net


Non-GAAP


% of Net


Non-GAAP


Result


Revenues


Compensation


Revenues


Result


Revenues


Result ($)

Revenues

1,201,561








1,201,561




177,239

Cost of revenues

(461,089)


38.4%


872


0.1%


(460,217)


38.3%


(67,886)

Gross profit

740,472


61.6%


872


0.1%


741,344


61.7%


109,353















Research and development 

(166,983)


13.9%


3,802


0.3%


(163,181)


13.6%


(24,070)

Selling and marketing 

(413,116)


34.4%


4,956


0.4%


(408,160)


34.0%


(60,207)

General and administrative 

(99,996)


8.3%


14,552


1.2%


(85,444)


7.1%


(12,604)

Impairment of goodwill and intangible assets

(172)


0.0%


-


0.0%


(172)


0.0%


(25)

Other operating income

6,022


0.5%


-


0.0%


6,022


0.5%


888

Total operating income and expenses

(674,245)


56.1%


23,310


1.9%


(650,935)


54.2%


(96,018)















Operating profit 

66,227


5.5%


24,182


2.0%


90,409


7.5%


13,336

Net income attributable to Cheetah Mobile shareholders

70,199


5.8%


24,182


2.0%


94,381


7.9%


13,922















Diluted earnings per ordinary share (RMB)

0.05




0.01




0.06





Diluted earnings per ADS (RMB)

0.47




0.17




0.64





Diluted earnings per ADS (USD)

0.07




0.02




0.09


































For The Three Months Ended March 31, 2017




GAAP


% of Net


Share-based 


% of Net


Non-GAAP


% of Net




Result


Revenues


Compensation


Revenues


Result


Revenues



Revenues

1,190,703








1,190,703





Cost of revenues

(457,953)


38.5%


934


0.1%


(457,019)


38.4%



Gross profit

732,750


61.5%


934


0.1%


733,684


61.6%

















Research and development 

(191,367)


16.1%


9,571


0.8%


(181,796)


15.3%



Selling and marketing 

(414,264)


34.8%


(188)


0.0%


(414,452)


34.8%



General and administrative 

(103,588)


8.7%


14,051


1.2%


(89,537)


7.5%



Other operating income

2,784


0.2%


-


0.0%


2,784


0.2%



Total operating income and expenses

(706,435)


59.3%


23,434


2.0%


(683,001)


57.4%

















Operating profit

26,315


2.2%


24,368


2.0%


50,683


4.3%



Net income attributable to Cheetah Mobile shareholders

91,229


7.7%


24,368


2.0%


115,597


9.7%

















Diluted earnings per ordinary share (RMB)

0.06




0.02




0.08





Diluted earnings per ADS (RMB)

0.64




0.17




0.81


































For The Three Months Ended June 30, 2016




GAAP


% of Net


Share-based 


% of Net


Non-GAAP


% of Net




Result


Revenues


Compensation


Revenues


Result


Revenues



Revenues

1,046,664








1,046,664





Cost of revenues

(354,710)


33.9%


140


0.0%


(354,570)


33.9%



Gross profit

691,954


66.1%


140


0.0%


692,094


66.1%

















Research and development 

(227,496)


21.7%


49,410


4.7%


(178,086)


17.0%



Selling and marketing 

(407,206)


38.9%


1,300


0.1%


(405,906)


38.8%



General and administrative 

(160,735)


15.4%


37,707


3.6%


(123,028)


11.8%



Other operating income

40,446


3.9%


-


0.0%


40,446


3.9%



Total operating income and expenses

(754,991)


72.1%


88,417


8.4%


(666,574)


63.7%

















Operating (loss) profit

(63,037)


6.0%


88,557


8.5%


25,520


2.4%



Net loss attributable to Cheetah Mobile Shareholders

(150,450)


14.4%


88,557


8.5%


(61,893)


5.9%

















Diluted (losses) earnings per ordinary share (RMB)

(0.11)




0.07




(0.04)





Diluted (losses) earnings per ADS (RMB)

(1.08)




0.64




(0.44)





 

CHEETAH MOBILE INC.

Information about Segment 

(Unaudited, in'000, except for percentage)



For The Three Months Ended June 30, 2017



Utility Products and
Related Services


Mobile Entertainment


Others 


Unallocated*


Consolidated



RMB


RMB


RMB


RMB


RMB

USD


Revenue

820,342


371,034


10,185


-


1,201,561

177,239


Operating profit (loss)

212,849


(122,069)


(371)


(24,182)


66,227

9,769


Operating margin

25.9%


(32.9)%


(3.6)%




5.5%

5.5%

















For The Three Months Ended March 31, 2017




Utility Products and
Related Services


Mobile Entertainment


Others 


Unallocated*


Consolidated




RMB


RMB


RMB


RMB


RMB



Revenue

827,225


363,468


10


-


1,190,703



Operating profit (loss)

179,158


(128,478)


3


(24,368)


26,315



Operating margin

21.7%


(35.3)%


30.0%




2.2%




























For The Three Months Ended June 30, 2016




Utility Products and
Related Services


Mobile Entertainment


Others 


Unallocated*


Consolidated




RMB


RMB


RMB


RMB


RMB



Revenue

946,198


100,137


329


-


1,046,664



Operating profit (loss)

141,368


(106,228)


(9,620)


(88,557)


(63,037)



Operating margin

14.9%


(106.1)%


(2924.0)%




(6.0)%















* Unallocated expenses refer to SBC expenses that are not allocated to individual segments.





 

Cheetah Mobile Inc.

Revenues Generated from PC-based and Mobile-based Applications and Services

(Unaudited, in '000)






For The Three Months Ended


30-Jun-16

31-Mar-17

30-Jun-17

30-Jun-17


RMB

RMB

RMB

USD

PC

274,329

182,337

162,771

24,010

Mobile

772,335

1,008,366

1,038,790

153,229

Total

1,046,664

1,190,703

1,201,561

177,239

 

Cheetah Mobile Inc.

Revenues Generated from Domestic and Overseas Markets

(Unaudited, in '000)






For The Three Months Ended


30-Jun-16

31-Mar-17

30-Jun-17

30-Jun-17


RMB

RMB

RMB

USD

Domestic

485,972

342,383

358,655

52,904

Overseas

560,692

848,320

842,906

124,335

Total

1,046,664

1,190,703

1,201,561

177,239

 

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


30-Jun-16

31-Mar-17

30-Jun-17

30-Jun-17


RMB

RMB

RMB

USD

Net (loss) income attributable to Cheetah Mobile shareholders

(150,450)

91,229

70,199

10,355

Add:





  Income tax expenses

1,964

4,912

4,664

688

  Interest income, net

(2,715)

(1,616)

(3,380)

(499)

  Depreciation and amortization

42,126

36,595

36,166

5,335

  Net income (loss) attributable to noncontrolling interests 

4,022

(679)

3,157

466

  Other non-operating expense (income), net

84,142

(67,531)

(8,413)

(1,241)

  Share-based compensation 

88,557

24,368

24,182

3,568

Adjusted EBITDA

67,646

87,278

126,575

18,672

 

SOURCE Cheetah Mobile


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