First Quarter 2020 Highlights
- Combined average MAUs1 were 138.3 million, representing an increase of 24.2% from 111.4 million in the first quarter of 2019, compared to 137.9 million in the previous quarter.
- Combined average DAUs2 were 45.6 million, representing an increase of 21.5% from 37.5 million in the first quarter of 2019, compared to 45.7 million in the previous quarter.
- Average daily time spent per DAU was 62.4 minutes, compared to 62.1 minutes in the first quarter of 2019 and 59.4 minutes in the previous quarter.
- Net revenues increased 26.2% year-over-year to
RMB1,411.8 million (US$199.4 million ), within the Company’s guided range ofRMB1,400 million andRMB1,420 million . - Net loss was
RMB531.8 million (US$75.1 million ), compared to net loss ofRMB688.2 million in the first quarter of 2019 and net loss ofRMB551.4 million in the fourth quarter of 2019. Net loss margin was 37.7%, compared to 61.5% in the first quarter of 2019 and 33.2% in the fourth quarter of 2019. - Non-GAAP net loss3 was
RMB388.1 million (US$54.8 million ), compared to non-GAAP net loss ofRMB617.7 million in the first quarter of 2019 and non-GAAP net loss ofRMB470.2 million in the fourth quarter of 2019. Non-GAAP net loss margin was 27.5%, compared to 55.2% in the first quarter of 2019 and 28.4% in the fourth quarter of 2019.
Mr.
“We expect to see both revenue and user base expansion in the second half of this year while continuing to improve our operating efficiency by holding a higher bar for capital allocation, especially with regard to user engagement and acquisition,”
Mr.
First Quarter 2020 Financial Results
Net revenues in the first quarter of 2020 were
Advertising and marketing revenues were
Other revenues were
Cost of revenues were
Gross profit was
Research and development expenses were
Sales and marketing expenses were
User engagement expenses were
User acquisition expenses were
Other sales and marketing expenses were
General and administrative expenses were
Loss from operations was
Non-GAAP loss from operations was
Non-operating loss for the first quarter of 2020 was
Net loss was
Non-GAAP net loss was
Net loss attributable to Qutoutiao Inc.’s ordinary shareholders was
Basic and diluted net loss per American Depositary Share (“ADS”) was
Balance Sheet
As of
Our liquidity to meet our future working capital and capital expenditure requirements is based on our ability to enhance user engagement and retention by offering higher quality and diversified contents while closely control the content costs, and optimize the user loyalty programs and the traffic acquisition strategy to efficiently control and reduce these user related costs. We will further preserve liquidity and manage cash flows by reducing discretionary expenditure including advertising expenses and general and administrative expenses. Our liquidity is also based on our ability to obtain capital financing from equity or debt investors. Currently, we believe that we have sufficient cash and other financial resources and liquidity to fund operations for at least the next 12 months.
Impact of the Recently Adopted Accounting Pronouncement
The Company adopted ASC 326, Measurement of Credit Losses on Financial Instruments, effective
Impact of COVID-19
The COVID-19 pandemic has adversely affected the global and Chinese economy as well as the advertising market in
Business Outlook
For the second quarter of 2020, the Company currently expects net revenues to be between
This business outlook is a forward-looking statement that reflects assumptions that we believe to be reasonable as of the date of this announcement and involve inherent risks and uncertainties, many of which we are not able to predict or control. The Company has considered the expected continued impact of the COVID-19 outbreak and resulting contraction of the Chinese economy in developing this forecast, as well as other challenges in the macro environment and the online advertising industry. This forecast represents the Company's current and preliminary view, which is subject to substantial uncertainty, particularly as to the status and impact of the COVID-19 pandemic in
Conference Call
Qutoutiao’s management will host an earnings conference call at
Due to the outbreak of COVID-19, operators to assist conference calls are not available at the moment. To speed up the entry process, all participants who wish to join the call must preregister online prior to the call to receive the dial-in details.
Preregistration Information
Participants can register for the conference call by navigating to https://apac.directeventreg.com/registration/event/4185245 at least 15 minutes prior to the scheduled call start time. Once preregistration has been complete, participants will receive dial-in numbers, Direct Event Passcode, and a unique Registrant ID.
Please dial-in at least 10 minutes before the scheduled start time of the earnings call and enter the Direct Event Passcode and Registrant ID as instructed to connect to the call.
Additionally, a live and archived webcast of the conference call will be available on the Company’s investor relations website at https://ir.qutoutiao.net.
A replay of the conference call will be accessible approximately two hours after the conclusion of the call until
+1-646-254-3697 | |
International: | +61-2-8199-0299 |
+852-3051-2780 | |
Mainland | 400-632-2162 |
Replay Access Code: | 4185245 |
About
For more information, please visit: https://ir.qutoutiao.net.
Use of Non-GAAP Financial Measures
We use non-GAAP loss from operations, non-GAAP operating loss margin, non-GAAP net loss, non-GAAP net loss margin, non-GAAP net loss attributable to Qutoutiao Inc.’s ordinary shareholders and non-GAAP basic and diluted net loss per ADS, which are non-GAAP financial measures, in evaluating our operating results and for financial and operational decision-making purposes. Each of these non-GAAP financial measures represents the corresponding GAAP financial measure before share-based compensation expenses. We believe that such non-GAAP financial measures help identify underlying trends in our business that could otherwise be distorted by the effect of such share-based compensation expenses that we include in cost of revenues, total operating expenses and net loss. We believe that all such non-GAAP financial measures also provide useful information about our operating results, enhance the overall understanding of our past performance and future prospects and allow for greater visibility with respect to key metrics used by our management in its financial and operational decision-making.
The non-GAAP financial measures are not defined under
Exchange Rate Information
This announcement contains translations of certain RMB amounts into
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the United States 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. Statements that are not historical facts, including statements about Qutoutiao’s beliefs, plans and expectations, are forward-looking statements. Among other things, the “Business Outlook” section and quotations from management in this announcement, contain 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: Qutoutiao’s strategies; Qutoutiao’s future business development, financial condition and results of operations; Qutoutiao’s ability to retain and increase the number of users and provide quality content; competition in the mobile content platform industry; Qutoutiao’s ability to manage its costs and expenses; the future developments of the COVID-19 outbreak; general economic and business conditions globally and in
For investor and media inquiries, please contact:
In
Investor Relations
Tel: +86-21-6858-3790
E-mail: ir@qutoutiao.net
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(All amounts in RMB, or otherwise noted)
As of | As of | |||
2019 | 2020 | |||
RMB | RMB | |||
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | 347,817,093 | 189,839,618 | ||
Restricted cash | 27,871,552 | 23,398,701 | ||
Short-term investments | 1,276,830,926 | 938,429,823 | ||
Accounts receivable, net | 526,822,932 | 533,393,481 | ||
Amount due from related parties | 278,155,878 | 318,864,202 | ||
Prepayments and other current assets | 234,728,386 | 166,466,100 | ||
Total current assets | 2,692,226,767 | 2,170,391,925 | ||
Non-current assets: | ||||
Long-term investments | 37,589,200 | 125,057,466 | ||
Property and equipment, net | 24,115,374 | 21,247,121 | ||
Intangible assets | 88,943,679 | 86,074,309 | ||
7,268,330 | 7,268,330 | |||
Right-of-use assets, net | 69,241,754 | 52,859,034 | ||
Other non-current assets | 20,811,791 | 20,936,211 | ||
Total non-current assets | 247,970,128 | 313,442,471 | ||
Total assets | 2,940,196,895 | 2,483,834,396 | ||
LIABILITIES, REDEEMABLE NON-CONTROLLING INTEREST AND SHAREHOLDERS’ DEFICIT | ||||
Current liabilities: | ||||
Accounts payable | 328,268,752 | 413,340,094 | ||
Amount due to a related party | 3,436,586 | 851,361 | ||
Registered users’ loyalty payable | 134,145,439 | 139,031,834 | ||
Advance from customers and deferred revenue | 246,630,128 | 185,624,088 | ||
Salary and welfare payable | 129,169,734 | 110,604,679 | ||
Tax payable | 118,156,494 | 121,837,142 | ||
Lease liabilities, current | 38,210,188 | 32,176,362 | ||
Accrued liabilities related to users’ loyalty programs | 89,184,947 | 86,217,951 | ||
Accrued liabilities and other current liabilities | 788,495,442 | 715,476,556 | ||
Total current liabilities | 1,875,697,710 | 1,805,160,067 | ||
Lease liabilities, non-current | 26,651,446 | 17,541,032 | ||
Convertible loan | 1,218,905,676 | 1,247,226,450 | ||
Deferred tax liabilities | 21,228,656 | 20,627,846 | ||
Other non-current liabilities | 7,212,463 | 6,648,863 | ||
Non-current liabilities | 1,273,998,241 | 1,292,044,191 | ||
Total liabilities | 3,149,695,951 | 3,097,204,258 | ||
Total redeemable non-controlling interests | 495,844,565 | 515,027,971 | ||
Shareholders’ deficit | ||||
Ordinary shares | 44,651 | 45,040 | ||
| (142,228,779 | ) | (142,228,779 | ) |
Additional paid-in capital | 4,321,100,861 | 4,464,851,110 | ||
Accumulated other comprehensive loss | (17,934,525 | ) | (34,165,737 | ) |
Accumulated deficit | (4,862,464,162 | ) | (5,412,830,827 | ) |
(701,481,954 | ) | (1,124,329,193 | ) | |
Non-controlling interests | (3,861,667 | ) | (4,068,640 | ) |
Total deficit | (705,343,621 | ) | (1,128,397,833 | ) |
Total liabilities, redeemable non-controlling interests and shareholders’ deficit | 2,940,196,895 | 2,483,834,396 | ||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(All amounts in RMB, except ADS data, or otherwise noted)
For the three months ended | ||||||
2019 | 2019 | 2020 | ||||
RMB | RMB | RMB | ||||
Advertising and marketing revenues | 1,087,178,223 | 1,588,520,968 | 1,363,999,871 | |||
Other revenues | 31,671,630 | 69,853,793 | 47,796,796 | |||
Net revenues | 1,118,849,853 | 1,658,374,761 | 1,411,796,667 | |||
Cost of revenues | (279,192,974 | ) | (503,910,866 | ) | (460,755,006 | ) |
Gross profit | 839,656,879 | 1,154,463,895 | 951,041,661 | |||
Operating expenses: | ||||||
Research and development expenses | (155,383,992 | ) | (287,929,828 | ) | (280,863,263 | ) |
Sales and marketing expenses | (1,296,951,191 | ) | (1,367,748,322 | ) | (1,074,527,955 | ) |
General and administrative expenses | (84,664,699 | ) | (62,382,900 | ) | (107,495,935 | ) |
Total operating expenses | (1,536,999,882 | ) | (1,718,061,050 | ) | (1,462,887,153 | ) |
Other operating income | 626,110 | 7,820,380 | 7,117,280 | |||
Loss from Operations | (696,716,893 | ) | (555,776,775 | ) | (504,728,212 | ) |
Investment income/ (expenses) | 1,233,031 | 1,963,193 | (16,530,832 | ) | ||
Interest income/ (expense), net | 11,680,509 | 5,056,005 | (3,412,695 | ) | ||
Foreign exchange related gains/ (losses), net | (2,925,080 | ) | (1,720,870 | ) | (2,526,636 | ) |
Other gains/ (losses), net | (2,057,303 | ) | 5,760,906 | (3,519,931 | ) | |
Non-operating income (loss) | 7,931,157 | 11,059,234 | (25,990,094 | ) | ||
Loss before provision for income taxes | (688,785,736 | ) | (544,717,541 | ) | (530,718,306 | ) |
Income tax benefits/ (expenses), net | 600,811 | (6,645,309 | ) | (1,101,528 | ) | |
Net loss | (688,184,925 | ) | (551,362,850 | ) | (531,819,834 | ) |
Net loss attributable to non-controlling interests | 153,826 | 149,190 | 206,973 | |||
Net loss attributable to | (688,031,099 | ) | (551,213,660 | ) | (531,612,861 | ) |
Accretion to convertible redeemable preferred shares redemption value | (2,273,465 | ) | (11,626,847 | ) | (11,865,025 | ) |
Net loss attributable to | (690,304,564 | ) | (562,840,507 | ) | (543,477,886 | ) |
Net loss | (688,184,925 | ) | (551,362,850 | ) | (531,819,834 | ) |
Other comprehensive income/ (loss): | ||||||
Foreign currency translation adjustment, net of nil tax | (37,023,304 | ) | 4,967,592 | (16,231,212 | ) | |
Total comprehensive loss | (725,208,229 | ) | (546,395,258 | ) | (548,051,046 | ) |
Comprehensive loss attributable to non-controlling interests | 153,826 | 149,190 | 206,973 | |||
Comprehensive loss attributable to | (725,054,403 | ) | (546,246,068 | ) | (547,844,073 | ) |
Net loss per ADS (1 Class A ordinary share equals 4 ADSs): | ||||||
— Basic and diluted | (2.59 | ) | (1.98 | ) | (1.90 | ) |
Weighted average number of ADS used in computing basic and diluted earnings per ADS: | ||||||
— Basic | 266,559,004 | 283,795,508 | 285,632,276 | |||
— Diluted | 266,559,004 | 283,795,508 | 285,632,276 | |||
Reconciliation of GAAP And Non-GAAP Results
(All amounts in RMB, except ADS data, or otherwise noted)
For the three months ended | ||||||
2019 | 2019 | 2020 | ||||
RMB | RMB | RMB | ||||
Loss from Operations | (696,716,893 | ) | (555,776,775 | ) | (504,728,212 | ) |
Add: Share-based compensation expenses | ||||||
Cost of revenues | 1,656,985 | 1,790,820 | 3,484,267 | |||
General and administrative | 45,429,920 | 15,708,832 | 52,481,244 | |||
Sales and marketing | 7,090,761 | 14,576,137 | 21,687,394 | |||
Research and development | 16,333,114 | 49,071,905 | 66,097,344 | |||
Non-GAAP Loss from Operations | (626,206,113 | ) | (474,629,081 | ) | (360,977,963 | ) |
Net loss | (688,184,925 | ) | (551,362,850 | ) | (531,819,834 | ) |
Add: Share-based compensation expenses | ||||||
Cost of revenues | 1,656,985 | 1,790,820 | 3,484,267 | |||
General and administrative | 45,429,920 | 15,708,832 | 52,481,244 | |||
Sales and marketing | 7,090,761 | 14,576,137 | 21,687,394 | |||
Research and development | 16,333,114 | 49,071,905 | 66,097,344 | |||
Non-GAAP net loss | (617,674,145 | ) | (470,215,156 | ) | (388,069,585 | ) |
Net loss attributable to | (688,031,099 | ) | (551,213,660 | ) | (531,612,861 | ) |
Add: Share-based compensation expenses | ||||||
Cost of revenues | 1,656,985 | 1,790,820 | 3,484,267 | |||
General and administrative | 45,429,920 | 15,708,832 | 52,481,244 | |||
Sales and marketing | 7,090,761 | 14,576,137 | 21,687,394 | |||
Research and development | 16,333,114 | 49,071,905 | 66,097,344 | |||
Non-GAAP net loss attributable to | (617,520,319 | ) | (470,065,966 | ) | (387,862,612 | ) |
Net loss attributable to Qutoutiao Inc.’s ordinary shareholders | (690,304,564 | ) | (562,840,507 | ) | (543,477,886 | ) |
Add: Share-based compensation expenses | ||||||
Cost of revenues | 1,656,985 | 1,790,820 | 3,484,267 | |||
General and administrative | 45,429,920 | 15,708,832 | 52,481,244 | |||
Sales and marketing | 7,090,761 | 14,576,137 | 21,687,394 | |||
Research and development | 16,333,114 | 49,071,905 | 66,097,344 | |||
Non-GAAP Net loss attributable to Qutoutiao Inc.’s ordinary shareholders | (619,793,784 | ) | (481,692,813 | ) | (399,727,637 | ) |
Non-GAAP net loss per ADS (1 Class A ordinary share equals 4 ADSs): | ||||||
Basic and diluted | (2.33 | ) | (1.70 | ) | (1.40 | ) |
Weighted average number of ADS used in computing basic and diluted earnings per ADS | ||||||
Basic | 266,559,004 | 283,795,508 | 285,632,276 | |||
Diluted | 266,559,004 | 283,795,508 | 285,632,276 | |||
Supplementary Operating Information
(RMB in millions, or otherwise noted)
For the three months ended | |||||
2019 | 2019 | 2019 | 2019 | 2020 | |
Net revenues | 1,118.8 | 1,385.9 | 1,406.9 | 1,658.4 | 1,411.8 |
User engagement expenses5 | 580.8 | 449.5 | 536.1 | 571.4 | 507.5 |
User acquisition expenses6 | 675.3 | 787.9 | 788.3 | 680.9 | 502.0 |
Other sales and marketing expenses | 40.9 | 84.3 | 178.8 | 115.5 | 65.1 |
Total sales and marketing expenses | 1,297.0 | 1,321.8 | 1,503.2 | 1,367.7 | 1,074.5 |
Combined Average MAUs (in millions) | 111.4 | 119.3 | 133.9 | 137.9 | 138.3 |
Combined Average DAUs (in millions) | 37.5 | 38.7 | 42.1 | 45.7 | 45.6 |
New installed users (in millions) | 108.7 | 113.7 | 119.9 | 123.0 | 109.2 |
Average net revenues per DAU per day (RMB) | 0.33 | 0.39 | 0.36 | 0.39 | 0.34 |
User engagement expenses per DAU per day (RMB) | 0.17 | 0.13 | 0.14 | 0.14 | 0.12 |
User acquisition expenses per new installed user (RMB) | 6.21 | 6.93 | 6.58 | 5.54 | 4.60 |
_______________________
1 “MAUs” refers to the number of unique mobile devices that accessed our relevant mobile application in a given month. “Combined average MAUs” for a particular period is the average of the MAUs for all of our mobile applications in each month during that period;
2 “DAUs” refers to the number of unique mobile devices that accessed our relevant mobile application on a given day. “Combined average DAUs” for a particular period is the average of the DAUs for all of our mobile applications on each day during that period;
3 For more information on the non-GAAP financial measures, see the section entitled “Use of Non-GAAP Financial Measures” below and the table captioned “Reconciliation of GAAP And Non-GAAP Results” set forth at the end of this press release.
4 “New installed user” refers to the aggregate number of unique mobile devices that have downloaded and launched our relevant mobile applications at least once.
5 We offer loyalty program for registered users of our mobile applications to enhance user engagement and loyalty and incentivise word-of-mouth referrals. “User engagement expenses” refer to the cost of loyalty points associated with taking specific actions, such as viewing and sharing of content, that encourage engagement and retention on our mobile applications. Such expenses are recognized as part of sales and marketing expenses in the consolidated statements of operations. “User engagement expenses per average DAUs per day” refer to such expenses incurred on an average DAU per day during a particular period.
6 “User acquisition expenses” refer to the sum of the cost of loyalty points associated with referring new users to register on our mobile applications and the cost of third-party advertising and marketing of our mobile applications. Such expenses are recognized as part of sales and marketing expenses in the consolidated statements of operations. “User acquisition expenses per new installed user” refer to the average cost of acquiring a new installed user from both word-of-mouth referrals and third-party channels.
Source:
2020 GlobeNewswire, Inc., source