Qutoutiao Inc. (“Qutoutiao”, the “Company” or “We”) (NASDAQ: QTT),
a leading operator of mobile content platforms in China, today
announced its unaudited financial results in the second quarter
ended June 30, 2019.
Second Quarter 2019
Highlights
- Combined average
MAUs1 reached 119.3 million, representing an increase of
250.2% from 34.1 million in the second quarter of 2018, compared to
111.4 million in the previous quarter.
- Combined average
DAUs2 reached 38.7 million, representing an increase of
207.6% from 12.6 million in the second quarter of 2018, compared to
37.5 million in the previous quarter.
- Average daily time spent
per DAU was 60.0 minutes, representing an increase of
27.5% from 47.0 minutes in the second quarter of 2018, compared to
62.1 minutes in the previous quarter.
- Net revenues
increased 187.9% year-over-year to RMB1,385.9 million (US$201.9
million), within the Company’s guided range between RMB1,380
million and RMB1,420 million.
- Net loss was
RMB561.3 million (US$81.8 million), compared to net loss of
RMB211.8 million in the second quarter of 2018 and net loss of
RMB688.2 million in the first quarter of 2019. Net loss
margin was 40.5%, compared to 44.0% in the second quarter
of 2018 and 61.5% in the first quarter of 2019.
- Non-GAAP
net loss was RMB496.3 million (US$72.3 million),
compared to non-GAAP net loss of RMB112.8 million in the second
quarter of 2018 and non-GAAP net loss of RMB617.7 million in the
first quarter of 2019. Non-GAAP net loss margin
was 35.8%, compared to 23.4% in the second quarter of 2018 and
55.2% in the first quarter of 2019.
Mr. Eric Siliang Tan, Chairman and Chief
Executive Officer of Qutoutiao, commented, “Despite a weak digital
advertising market, we have delivered strong revenue growth driven
by user base expansion across our products. As the pioneer of the
free-to-read model in online literature, Midu Novels has led this
new market segment in both scale and content. Through consistent
investment into people and content, Midu Novels has built the best
coverage of high quality books among the ‘free-to-read’ peers and a
strong editor team that will drive the generation of original
content. On the Qutoutiao side, we continue to improve our content
quality and enhance our compliance standards and capabilities which
are well recognized by regulators.”
“In this quarter, we further improved our
efficiency and internal collaboration through modularizing common
functionalities, building full function teams, and introducing
internal rotation programs for team leaders. I believe this will
lay a solid foundation as we continue to upgrade our content
offerings, bring more social features to our users and further
enhance our monetization in the future,” Mr. Tan added.
Second Quarter 2019 Financial Results
Net revenues in the second
quarter of 2019 were RMB1,385.9 million (US$201.9 million), an
increase of 187.9% from RMB481.4 million in the second quarter of
2018.
Advertising and marketing revenues were
RMB1,358.0 million (US$197.8 million) in the second quarter of
2019, a significant increase of 209.2% from RMB439.2 million in the
second quarter of 2018, primarily due to increases in the Company’s
user base, time spent and ability to monetize user traffic.
Other revenues were RMB27.9 million (US$4.1
million) in the second quarter of 2019, compared to RMB42.2 million
in the second quarter of 2018. Other revenues primarily represent
revenues from providing agent and platform service between the
advertising customers and third-party advertising platforms and
online marketing platform services, and the decrease was primarily
due to the decrease from agent and platform service.
Cost of revenues were RMB361.4
million (US$52.7 million) in the second quarter of 2019, an
increase of 340.6% from RMB82.0 million in the second quarter of
2018, primarily attributable to increases in content procurement
costs, bandwidth and IT infrastructure cost and increases in
salaries and benefits associated with content management
personnel.
Gross profit was RMB1,024.5
million (US$149.2 million) in the second quarter of 2019, an
increase of 156.5% from RMB399.4 million in the second quarter of
2018. Gross margin was 73.9%, compared to 83.0% in
the second quarter of 2018, the decrease of gross margin was mainly
attributable to the growth of our content procurement cost as well
as our bandwidth and IT infrastructure cost, as we are enriching
our product offerings to include more engaging contents such as
short videos, games and live-streaming.
Research and development
expenses were RMB221.3 million (US$32.2 million) in the
second quarter of 2019, increased 412.1% from RMB43.2 million in
the second quarter of 2018, primarily due to an increase in R&D
headcount as the Company continuously invests in enhancing
technology capabilities, more specifically, the Company’s AI-based
content recommendation
technology.
Sales and marketing expenses were RMB1,321.8
million (US$192.5 million) in the second quarter of 2019, an
increase of 178.8% from RMB474.1 million in the second quarter of
2018. Sales and marketing expense as a percentage of net revenues
was 95.4%, compared to 98.5% a year ago and 115.9% a quarter ago,
the decrease was primarily attributable to our continued efforts in
optimizing our loyalty program.
User engagement expenses were RMB449.5 million
(US$65.5 million) in the second quarter of 2019, increased by 82.9%
year-over-year, primarily due to our enlarged user base. User
engagement expenses per DAU per day were RMB0.13 in the second
quarter of 2019, a decrease of 40.6% year-over-year and a decrease
of 25.8% quarter-over-quarter. The decrease of user engagement
expenses per DAU per day was primarily due to the Company’s ongoing
efforts in optimizing user engagement expenses for Qutoutiao and
the absence of such expenses for other products such as Midu
Novels.
User acquisition expenses were RMB787.9 million
(US$114.8 million) in the second quarter of 2019, an increase of
284.9% year-over-year. User acquisition expenses consist of the
costs of both word-of-mouth referrals and third-party marketing,
and the increase was primarily driven by the Company’s continued
strategic investments into building user base. User acquisition
expenses per new installed user3 in the second quarter of 2019 were
RMB6.93, compared to RMB6.21 in the first quarter of 2019 and
RMB5.15 in the second quarter of 2018.
Other sales and marketing expenses were RMB84.3
million (US$12.3 million) in the second quarter of 2019, an
increase of 257.5% year-over-year, mainly due to an increase in
brand campaigns and promotions as we continue to strengthen our
brand recognition.
General and administrative
expenses were RMB64.1 million (US$9.3 million) in the
second quarter of 2019, a decrease of 36.8% from RMB101.5 million
in the second quarter of 2018. The decrease was mainly due to the
decrease in share-based compensation expenses.
Loss from
operations was RMB582.1 million (US$84.8
million) in the second quarter of 2019, compared to RMB219.4
million in the second quarter of 2018. Operating loss
margin was 42.0%, compared to 45.6% in the second quarter
of 2018.
Non-GAAP
loss from operations was RMB517.0 million (US$75.3
million) in the second quarter of 2019, compared to RMB120.4
million in the second quarter of 2018. Non-GAAP operating
loss margin was 37.3%, compared to non-GAAP operating loss
margin of 25.0% in the second quarter of 2018.
Net loss was RMB561.3 million
(US$81.8 million), compared to net loss of RMB211.8 million in the
second quarter of 2018 and net loss of RMB688.2 million in the
first quarter of 2019. Net loss margin was 40.5%,
compared to 44.0% in the second quarter of 2018 and 61.5% in the
first quarter of 2019.
Non-GAAP net loss was RMB496.3
million (US$72.3 million), compared to non-GAAP net loss of
RMB112.8 million in the second quarter of 2018 and non-GAAP net
loss of RMB617.7 million in the first quarter of 2019.
Non-GAAP net loss margin was 35.8%, compared to
23.4% in the second quarter of 2018 and 55.2% in the first quarter
of 2019.
Net loss attributable to Qutoutiao
Inc.'s ordinary shareholders was RMB564.3 million (US$82.2
million) in the second quarter of 2019, compared to RMB255.8
million in the second quarter of 2018. Non-GAAP net loss
attributable to Qutoutiao Inc.'s ordinary
shareholders was RMB499.2 million (US$72.7
million) in the second quarter of 2019, compared to RMB156.8
million in the second quarter of 2018.
Basic and diluted net loss per American
Depositary Share (“ADS”) were RMB2.21 (US$0.32) in the
second quarter of 2019. Non-GAAP basic and diluted net loss
per ADS were RMB1.95 (US$0.28) in the second quarter of
2019. Each four ADSs represent one Class A ordinary share of the
Company.
Balance Sheet
As of June 30, 2019, the Company had cash, cash
equivalents and short-term investments of RMB 2,287.6 million
(US$333.2 million), compared to RMB1,638.3 million as of March 31,
2019. Cash, cash equivalents and short-term investments includes
the US$171 million proceeds from the convertible loan advanced by
Alibaba and the US$31 million net proceeds from issuing new shares
in the follow-on share offering.
Recent Developments
On August 22, 2019, Shanghai Jifen Culture
Communications Co., Ltd., one of the Company’s consolidated
entities, was granted an Internet News License (the "License") by
the Cyberspace Administration of China (the "CAOC").
Business Outlook
Based on the current market conditions, the
Company provides the following outlook reflecting the Company’s
preliminary estimates of market and operating conditions, and
customer demand:
For the third quarter of 2019, the Company
currently expects net revenues to be at a similar level as we have
achieved in the second quarter of 2019.
Conference Call
The Company’s management will host an earnings
conference call at 9:00 p.m. U.S. Eastern Time on September 4, 2019
(9:00 a.m. Beijing/Hong Kong time on September 5, 2019).
Dial-in details for the live conference call are
as follows:
United States: |
+1-845-675-0437 |
United States (toll free): |
+1-866-519-4004 |
Hong Kong: |
+852-3018-6771 |
Hong Kong (toll free): |
800-906-601 |
China: |
400-620-8038 |
International: |
+65-6713-5090 |
Conference ID: |
6847257 |
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 live
call until September 10, 2019, by dialing the following telephone
numbers:
United States: |
+1-646-254-3697 |
Hong Kong : |
+852-3051-2780 |
China: |
400-632-2162 |
International: |
+61-2-8199-0299 |
Replay Access Code: |
6847257 |
About Qutoutiao Inc.
Qutoutiao Inc. operates innovative and
fast-growing mobile content platforms in China with a mission to
bring fun and value to its users. The eponymous flagship mobile
application, Qutoutiao, meaning “fun headlines” in Chinese, applies
artificial intelligence-based algorithms to deliver customized
feeds of articles and short videos to users based on their unique
profiles, interests and behaviors. Qutoutiao has attracted a large
group of loyal users, many of whom are from lower-tier cities in
China. They enjoy Qutoutiao’s fun and entertainment-oriented
content as well as its social-based user loyalty program. Launched
in May 2018, Midu Novels is a pioneer in offering free literature
supported by advertising and has grown rapidly to become a leading
player in the online literature industry. The Company will continue
to bring more exciting products to users through innovation, and
strive towards creating a leading global online content
ecosystem.
For more information, please visit:
https://ir.qutoutiao.net.
Use of Non-GAAP Financial Measures
We use non-GAAP loss from operations, non-GAAP
net loss and non-GAAP net loss attributable to Qutoutiao Inc.’s
ordinary shareholders, which are non-GAAP financial measures, in
evaluating our operating results and for financial and operational
decision-making purposes. Non-GAAP loss from operations represents
loss from operations before share-based compensation expenses;
non-GAAP net loss represents net loss before share-based
compensation expenses; and non-GAAP net loss attributable to
Qutoutiao Inc.’s ordinary shareholders represents net loss
attributable to Qutoutiao Inc.’s ordinary shareholders 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 U.S. GAAP and are not presented in accordance with U.S. GAAP.
They should not be considered in isolation or construed as
alternatives to net loss or any other measure of performance
prepared in accordance with U.S. GAAP or as an indicator of our
operating performance. We mitigate these limitations by reconciling
the non-GAAP financial measures to the most comparable U.S. GAAP
performance measures, all of which should be considered when
evaluating our performance. For more information on these non-GAAP
financial measures, please see the table captioned “Reconciliations
of GAAP and Non-GAAP Results” set forth at the end of this press
release.
Exchange Rate Information
This announcement contains translations of
certain RMB amounts into U.S. dollars at a specified rate solely
for the convenience of the reader. Unless otherwise noted, all
translations from RMB to U.S. dollars are made at a rate of
RMB6.8650 to US$1.00, the rate in effect as of June 28, 2019 as set
forth in the H.10 statistical release of the Federal Reserve Board.
The Company makes no representation that the RMB or US$ amounts
referred could be converted into US$ or RMB, as the case may be, at
any particular rate or at all.
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; general economic and business conditions globally and
in China; and assumptions underlying or related to any of the
foregoing. Further information regarding these and other risks is
included in Qutoutiao's filings with the SEC. All information
provided in this press release is as of the date of this press
release, and Qutoutiao does not undertake any obligation to update
any forward-looking statement, except as required under applicable
law.
For investor and media inquiries, please
contact:
In China:
Qutoutiao Inc.Investor RelationsTel:
+86-21-6858-3790E-mail: ir@qutoutiao.net
The Piacente Group, Inc.Jenny CaiTel:
+86-10-6508-0677E-mail: qutoutiao@tpg-ir.com
In the United States:
Qutoutiao Inc. Oliver Yucheng Chen E-mail:
oliver@qutoutiao.net
The Piacente Group, Inc. Brandi PiacenteTel:
+1-212-481-2050E-mail: qutoutiao@tpg-ir.com
|
QUTOUTIAO INC. |
UNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS |
(All amounts in RMB, or otherwise noted) |
|
|
As of December 31, |
As of June 30, |
|
2018 |
2019 |
|
RMB |
RMB |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash equivalents |
2,186,288,246 |
|
2,103,479,913 |
|
Short-term investments |
115,436,080 |
|
184,088,800 |
|
Accounts receivable, net |
203,984,074 |
|
410,329,309 |
|
Amount due from related parties |
- |
|
104,097,946 |
|
Prepayments and other current assets |
120,365,506 |
|
142,508,846 |
|
Total current
assets |
2,626,073,906 |
|
2,944,504,814 |
|
|
|
|
Non-current assets: |
|
|
Investments |
- |
|
32,498,800 |
|
Property and equipment, net |
13,929,542 |
|
18,799,411 |
|
Intangible assets |
94,527,598 |
|
92,333,723 |
|
Goodwill |
7,268,330 |
|
7,268,330 |
|
Right-of-use assets, net4 |
- |
|
64,171,819 |
|
Other non-current assets |
10,672,141 |
|
27,614,520 |
|
Total non-current
assets |
126,397,611 |
|
242,686,603 |
|
Total
assets |
2,752,471,517 |
|
3,187,191,417 |
|
|
|
|
LIABILITIES,
REDEEMABLE NON-CONTROLLING INTEREST AND SHAREHOLDERS’
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable |
131,249,219 |
|
261,428,799 |
|
Registered users’ loyalty payable |
256,661,934 |
|
178,912,204 |
|
Advance from customer |
155,099,317 |
|
166,090,687 |
|
Salary and welfare payable |
43,422,202 |
|
73,901,862 |
|
Tax payable |
101,286,721 |
|
92,118,427 |
|
Lease liabilities, current5 |
- |
|
32,117,473 |
|
Accrued liabilities related to users’ loyalty programs |
44,133,812 |
|
46,255,061 |
|
Accrued liabilities and other current liabilities |
379,130,559 |
|
487,511,837 |
|
Total current
liabilities |
1,110,983,764 |
|
1,338,336,350 |
|
|
|
|
Lease liabilities, non-current6 |
- |
|
26,586,966 |
|
Convertible loan |
- |
|
1,174,616,692 |
|
Deferred tax liabilities |
23,631,899 |
|
22,430,277 |
|
Other non-current liabilities |
9,686,219 |
|
8,419,246 |
|
Non-current
liabilities |
33,318,118 |
|
1,232,053,181 |
|
Total
liabilities |
1,144,301,882 |
|
2,570,389,531 |
|
|
|
|
Total redeemable
non-controlling interest |
96,936,855 |
|
130,481,205 |
|
|
|
|
Shareholders’
equity |
|
|
Ordinary shares |
41,547 |
|
43,141 |
|
Treasury stock |
- |
|
(102,630,674 |
) |
Additional paid-in capital |
3,684,130,058 |
|
4,031,844,904 |
|
Accumulated other comprehensive loss |
(16,428,875 |
) |
(31,637,042 |
) |
Accumulated deficit |
(2,153,235,425 |
) |
(3,407,814,586 |
) |
Total Qutoutiao Inc.
shareholders’ equity |
1,514,507,305 |
|
489,805,743 |
|
Non-controlling interest |
(3,274,525 |
) |
(3,485,062 |
) |
Total
equity |
1,511,232,780 |
|
486,320,681 |
|
|
|
|
Total liabilities,
redeemable non-controlling interest and shareholders’
equity |
2,752,471,517 |
|
3,187,191,417 |
|
|
|
|
|
|
QUTOUTIAO INC. |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
(All amounts in RMB, except ADS data, or otherwise noted) |
|
|
For the three months ended |
|
For the six months ended |
|
June 30 |
March 31 |
June 30 |
|
June 30 |
June 30 |
|
2018 |
2019 |
2019 |
|
2018 |
2019 |
|
RMB |
RMB |
RMB |
|
RMB |
RMB |
|
|
|
|
|
|
|
Advertising and marketing revenues |
439,206,884 |
|
1,087,178,223 |
|
1,358,002,272 |
|
|
669,870,895 |
|
2,445,180,495 |
|
Other revenue |
42,233,643 |
|
31,671,630 |
|
27,944,539 |
|
|
47,963,837 |
|
59,616,169 |
|
|
|
|
|
|
|
|
Net
revenues |
481,440,527 |
|
1,118,849,853 |
|
1,385,946,811 |
|
|
717,834,732 |
|
2,504,796,664 |
|
|
|
|
|
|
|
|
Cost of revenues |
(82,026,600 |
) |
(279,192,974 |
) |
(361,446,349 |
) |
|
(145,993,211 |
) |
(640,639,323 |
) |
|
|
|
|
|
|
|
Gross
profit |
399,413,927 |
|
839,656,879 |
|
1,024,500,462 |
|
|
571,841,521 |
|
1,864,157,341 |
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
Research and development
expenses |
(43,215,540 |
) |
(155,383,992 |
) |
(221,318,168 |
) |
|
(62,912,378 |
) |
(376,702,160 |
) |
Sales and marketing
expenses |
(474,095,711 |
) |
(1,296,951,191 |
) |
(1,321,768,628 |
) |
|
(836,939,842 |
) |
(2,618,719,819 |
) |
General and administrative
expenses |
(101,542,677 |
) |
(84,664,699 |
) |
(64,147,788 |
) |
|
(193,885,977 |
) |
(148,812,487 |
) |
Total operating expenses |
(618,853,928 |
) |
(1,536,999,882 |
) |
(1,607,234,584 |
) |
|
(1,093,738,197 |
) |
(3,144,234,466 |
) |
|
|
|
|
|
|
|
Other gains-net |
- |
|
626,110 |
|
637,822 |
|
|
- |
|
1,263,932 |
|
|
|
|
|
|
|
|
Loss from
Operations |
(219,440,001 |
) |
(696,716,893 |
) |
(582,096,300 |
) |
|
(521,896,676 |
) |
(1,278,813,193 |
) |
|
|
|
|
|
|
|
Interest income(net of
interest expense) |
4,732,128 |
|
12,913,540 |
|
8,955,594 |
|
|
5,388,699 |
|
21,869,134 |
|
Foreign exchange related
gains, net |
2,889,500 |
|
(2,925,080 |
) |
390,043 |
|
|
2,098,062 |
|
(2,535,037 |
) |
Other gains/(loss), net |
(11,918 |
) |
(2,057,303 |
) |
10,838,665 |
|
|
(25,598 |
) |
8,781,362 |
|
|
|
|
|
|
|
|
Loss before provision for
income taxes |
(211,830,291 |
) |
(688,785,736 |
) |
(561,911,998 |
) |
|
(514,435,513 |
) |
(1,250,697,734 |
) |
Income tax benefits |
- |
|
600,811 |
|
600,811 |
|
|
- |
|
1,201,622 |
|
|
|
|
|
|
|
|
Net loss |
(211,830,291 |
) |
(688,184,925 |
) |
(561,311,187 |
) |
|
(514,435,513 |
) |
(1,249,496,112 |
) |
|
|
|
|
|
|
|
Net loss attributable to
non-controlling interests |
- |
|
153,826 |
|
56,711 |
|
|
- |
|
210,537 |
|
Net loss attributable
to Qutoutiao Inc. |
(211,830,291 |
) |
(688,031,099 |
) |
(561,254,476 |
) |
|
(514,435,513 |
) |
(1,249,285,575 |
) |
|
|
|
|
|
|
|
Accretion to convertible
redeemable preferred shares redemption value |
(44,003,718 |
) |
(2,273,465 |
) |
(3,020,121 |
) |
|
(58,963,543 |
) |
(5,293,586 |
) |
Deemed dividend to preferred
shareholders |
- |
|
- |
|
- |
|
|
(1,916,871 |
) |
- |
|
|
|
|
|
|
|
|
Net loss attributable
to Qutoutiao Inc.'s ordinary shareholders |
(255,834,009 |
) |
(690,304,564 |
) |
(564,274,597 |
) |
|
(575,315,927 |
) |
(1,254,579,161 |
) |
|
|
|
|
|
|
|
Net loss |
(211,830,291 |
) |
(688,184,925 |
) |
(561,311,187 |
) |
|
(514,435,513 |
) |
(1,249,496,112 |
) |
Other comprehensive
loss/(income): |
|
|
|
|
|
|
Foreign currency translation
adjustment, net of nil tax |
(14,062,923 |
) |
(37,023,304 |
) |
21,815,137 |
|
|
(12,562,130 |
) |
(15,208,167 |
) |
Total comprehensive
loss |
(225,893,214 |
) |
(725,208,229 |
) |
(539,496,050 |
) |
|
(526,997,643 |
) |
(1,264,704,279 |
) |
Comprehensive loss
attributable to non-controlling interests |
- |
|
153,826 |
|
56,711 |
|
|
- |
|
210,537 |
|
Comprehensive loss
attributable to Qutoutiao Inc. |
(225,893,214 |
) |
(725,054,403 |
) |
(539,439,339 |
) |
|
(526,997,643 |
) |
(1,264,493,742 |
) |
|
|
|
|
|
|
|
Net loss per ADS (1
Class A ordinary share equals 4 ADSs): |
|
|
|
|
|
|
— Basic and diluted |
(2.62 |
) |
(2.79 |
) |
(2.21 |
) |
|
(5.93 |
) |
(5.00 |
) |
|
|
|
|
|
|
|
Weighted average
number of ADS used in computing basic and diluted earnings per
ADS: |
|
|
|
|
|
|
— Basic |
97,656,592 |
|
247,358,700 |
|
255,563,250 |
|
|
96,953,296 |
|
250,737,044 |
|
— Diluted |
97,656,592 |
|
247,358,700 |
|
255,563,250 |
|
|
96,953,296 |
|
250,737,044 |
|
|
|
|
|
|
|
|
|
|
|
|
|
QUTOUTIAO INC. |
Reconciliation of GAAP And Non-GAAP Results |
(All amounts in RMB, except ADS data, or otherwise noted) |
|
|
For the three months ended |
|
For the six months ended |
|
June 30 |
March 31 |
June 30 |
|
June 30 |
June 30 |
|
2018 |
2019 |
2019 |
|
2018 |
2019 |
|
RMB |
RMB |
RMB |
|
RMB |
RMB |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
|
(Unaudited) |
(Unaudited) |
|
|
|
|
|
|
|
Loss from Operations |
(219,440,001 |
) |
(696,716,893 |
) |
(582,096,300 |
) |
|
(521,896,676 |
) |
(1,278,813,193 |
) |
Add: Share-based compensation
expenses |
|
|
|
|
|
|
Cost of revenue |
851,249 |
|
1,656,985 |
|
1,629,139 |
|
|
1,429,581 |
|
3,286,124 |
|
General and administrative |
90,632,466 |
|
45,429,920 |
|
14,208,730 |
|
|
173,840,923 |
|
59,638,650 |
|
Sales and marketing |
2,166,503 |
|
7,090,761 |
|
11,776,526 |
|
|
3,393,178 |
|
18,867,287 |
|
Research and development |
5,411,653 |
|
16,333,114 |
|
37,446,655 |
|
|
6,719,793 |
|
53,779,769 |
|
|
|
|
|
|
|
|
Non-GAAP Loss from
Operations |
(120,378,130 |
) |
(626,206,113 |
) |
(517,035,250 |
) |
|
(336,513,201 |
) |
(1,143,241,363 |
) |
|
|
|
|
|
|
|
Net loss |
(211,830,291 |
) |
(688,184,925 |
) |
(561,311,187 |
) |
|
(514,435,513 |
) |
(1,249,496,112 |
) |
Add: Share-based compensation
expenses |
|
|
|
|
|
|
Cost of revenue |
851,249 |
|
1,656,985 |
|
1,629,139 |
|
|
1,429,581 |
|
3,286,124 |
|
General and administrative |
90,632,466 |
|
45,429,920 |
|
14,208,730 |
|
|
173,840,923 |
|
59,638,650 |
|
Sales and marketing |
2,166,503 |
|
7,090,761 |
|
11,776,526 |
|
|
3,393,178 |
|
18,867,287 |
|
Research and development |
5,411,653 |
|
16,333,114 |
|
37,446,655 |
|
|
6,719,793 |
|
53,779,769 |
|
|
|
|
|
|
|
|
Non-GAAP net
loss |
(112,768,420 |
) |
(617,674,145 |
) |
(496,250,137 |
) |
|
(329,052,038 |
) |
(1,113,924,282 |
) |
|
|
|
|
|
|
|
Net loss attributable
to Qutoutiao Inc. |
(211,830,291 |
) |
(688,031,099 |
) |
(561,254,476 |
) |
|
(514,435,513 |
) |
(1,249,285,575 |
) |
Add: Share-based compensation
expenses |
|
|
|
|
|
|
Cost of revenue |
851,249 |
|
1,656,985 |
|
1,629,139 |
|
|
1,429,581 |
|
3,286,124 |
|
General and administrative |
90,632,466 |
|
45,429,920 |
|
14,208,730 |
|
|
173,840,923 |
|
59,638,650 |
|
Sales and marketing |
2,166,503 |
|
7,090,761 |
|
11,776,526 |
|
|
3,393,178 |
|
18,867,287 |
|
Research and development |
5,411,653 |
|
16,333,114 |
|
37,446,655 |
|
|
6,719,793 |
|
53,779,769 |
|
|
|
|
|
|
|
|
Non-GAAP net loss
attributable to Qutoutiao Inc. |
(112,768,420 |
) |
(617,520,319 |
) |
(496,193,426 |
) |
|
(329,052,038 |
) |
(1,113,713,745 |
) |
|
|
|
|
|
|
|
Net loss attributable
to Qutoutiao Inc.’s ordinary shareholders |
(255,834,009 |
) |
(690,304,564 |
) |
(564,274,597 |
) |
|
(575,315,927 |
) |
(1,254,579,161 |
) |
Add: Share-based compensation
expenses |
|
|
|
|
|
|
Cost of revenue |
851,249 |
|
1,656,985 |
|
1,629,139 |
|
|
1,429,581 |
|
3,286,124 |
|
General and administrative |
90,632,466 |
|
45,429,920 |
|
14,208,730 |
|
|
173,840,923 |
|
59,638,650 |
|
Sales and marketing |
2,166,503 |
|
7,090,761 |
|
11,776,526 |
|
|
3,393,178 |
|
18,867,287 |
|
Research and development |
5,411,653 |
|
16,333,114 |
|
37,446,655 |
|
|
6,719,793 |
|
53,779,769 |
|
|
|
|
|
|
|
|
Non-GAAP Net loss
attributable to Qutoutiao Inc.’s ordinary
shareholders |
(156,772,138 |
) |
(619,793,784 |
) |
(499,213,547 |
) |
|
(389,932,452 |
) |
(1,119,007,331 |
) |
|
|
|
|
|
|
|
Non-GAAP net loss per
ADS (1 Class A ordinary share equals 4 ADSs): |
|
|
|
|
|
|
Basic and diluted |
(1.61 |
) |
(2.51 |
) |
(1.95 |
) |
|
(4.02 |
) |
(4.46 |
) |
|
|
|
|
|
|
|
Weighted average
number of ADS used in computing basic and diluted earnings per
ADS |
|
|
|
|
|
|
Basic |
97,656,592 |
|
247,358,700 |
|
255,563,250 |
|
|
96,953,296 |
|
250,737,044 |
|
Diluted |
97,656,592 |
|
247,358,700 |
|
255,563,250 |
|
|
96,953,296 |
|
250,737,044 |
|
|
|
|
|
|
|
|
|
|
|
|
|
QUTOUTIAO INC. |
APPENDIX I Non-GAAP
Margin Structure |
(As % of net revenues, or otherwise noted) |
|
|
For the three months ended |
|
June 30 |
September 30 |
December 31 |
March 31 |
June 30 |
|
2018 |
2018 |
2018 |
2019 |
2019 |
Net revenues |
100.0 |
% |
100.0 |
% |
100.0 |
% |
100.0 |
% |
100.0 |
% |
Cost and
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues |
16.9 |
% |
15.5 |
% |
15.2 |
% |
24.8 |
% |
26.0 |
% |
|
|
|
|
|
|
User engagement |
51.1 |
% |
49.2 |
% |
42.5 |
% |
51.9 |
% |
32.4 |
% |
User acquisition |
42.5 |
% |
54.5 |
% |
56.3 |
% |
60.4 |
% |
56.9 |
% |
Other sales and marketing |
4.4 |
% |
2.9 |
% |
4.1 |
% |
3.0 |
% |
5.2 |
% |
Total sales and
marketing expenses |
98.0 |
% |
106.6 |
% |
102.9 |
% |
115.3 |
% |
94.5 |
% |
|
|
|
|
|
|
Research and
development |
7.9 |
% |
7.0 |
% |
8.7 |
% |
12.4 |
% |
13.3 |
% |
General and
administrative |
2.3 |
% |
2.4 |
% |
2.3 |
% |
3.5 |
% |
3.6 |
% |
|
|
|
|
|
|
Non-GAAP operating loss margin |
(25.0 |
%) |
(31.6 |
%) |
(29.0 |
%) |
(56.0 |
%) |
(37.3 |
%) |
|
|
|
|
|
|
QUTOUTIAO INC. |
APPENDIX II Supplementary
Operating Information |
(RMB in millions, or otherwise noted) |
|
|
For the three months ended |
|
June 30 |
September 30 |
December 31 |
March 31 |
June 30 |
|
2018 |
2018 |
2018 |
2019 |
2019 |
Net revenues |
481.4 |
977.3 |
1,327.0 |
1,118.8 |
1,385.9 |
|
|
|
|
|
|
User engagement expenses7 |
245.8 |
481.0 |
563.3 |
580.8 |
449.5 |
User acquisition
expenses8 |
204.7 |
532.2 |
746.9 |
675.3 |
787.9 |
Other sales and marketing
expenses |
23.6 |
31.8 |
57.9 |
40.9 |
84.3 |
|
|
|
|
|
|
Total sales and marketing expenses |
474.1 |
1,045.0 |
1,368.1 |
1,297.0 |
1,321.8 |
|
|
|
|
|
|
Combined Average MAUs (in
millions) |
34.1 |
65.2 |
93.8 |
111.4 |
119.3 |
Combined Average DAUs (in
millions) |
12.6 |
21.3 |
30.9 |
37.5 |
38.7 |
New installed users (in
millions) |
39.7 |
88.6 |
113.6 |
108.7 |
113.7 |
|
|
|
|
|
|
Net Revenues per DAU
per day(RMB) |
0.42 |
0.50 |
0.47 |
0.33 |
0.39 |
User engagement
expenses per DAU per day (RMB) |
0.21 |
0.25 |
0.20 |
0.17 |
0.13 |
User acquisition expenses per new
installed user(RMB) |
5.15 |
6.01 |
6.57 |
6.21 |
6.93 |
|
|
|
|
|
|
|
|
|
|
|
|
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 “New installed users” refers to the aggregate number of unique
mobile devices that have downloaded and launched our relevant
mobile applications at least once |
4.5.6 The Company has adopted ASU No. 2016-02, “Leases,” beginning
January 1, 2019. Under the new provisions, the Company has
recognized right-of-use assets and lease liabilities for all
operating leases (primarily related to office buildings) with terms
more than 12 months. |
7 We offer loyalty program for registered users of our mobile
applications to enhance user engagement and loyalty and incentivize
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. |
8 “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
registered user” refer to the average cost of acquiring a new
installed user from both word-of-mouth referrals and third-party
channels. |
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