Renren Announces Unaudited Third Quarter 2011 Financial Results
BEIJING, Nov. 10, 2011 /PRNewswire via COMTEX/ -- Renren Inc. (RENN) ("Renren" or
the "Company"), the leading real-name social networking internet platform in
China, today announced its unaudited financial results for the third quarter
ended September 30, 2011.
Third Quarter 2011 Highlights
Total net revenues were US$34.2 million, a 57.1% increase from the corresponding
period in 2010.
Online advertising revenues were US$19.6 million, a 91.8% increase from the
corresponding period in 2010.
Gross profit was US$27.5 million, a 55.8% increase from the corresponding period
in 2010.
Net loss attributable to Renren Inc. was US$1.2 million, compared to a net income
of US$7.3 million for the corresponding period in 2010.
Adjusted net income(1) was US$0.3 million, compared to US$6.3 million adjusted
net income in the corresponding period in 2010.
"We are pleased that by the end of the third quarter, we have surpassed our
full-year user growth target set in the beginning of this year, despite
intensified competition in China's social networking and social media sector,"
commented Joseph Chen, Chairman and Chief Executive Officer. "It has been a
quarter of rapid developments for Renren, with a number of new initiatives
launched across all major product lines, contributing to another quarter of solid
user growth. We also made our first post-IPO strategic acquisition, 56.com, a
leading Chinese user-generated-content focused video sharing site, with which we
can now further broaden our video services to our users and customers."
"In particular, we are very excited to see continuous strong momentum in our
mobile initiatives," Mr. Chen continued. "Our mobile penetration has reached over
35% of our unique monthly log-in users with over half of our mobile users
accessing their Renren accounts through smart-phones. In addition, our LBS
(location-based-service) commercial platform is now running 30,000 promotions and
deals from thousands of merchants."
"Looking forward, we want to continue this momentum by further ramping up our
investment in product innovation, particularly in mobile related areas, and
expanding Renren's social networking services into a true technology-driven
communication platform. Given the current development phase of China's dynamic
and evolving internet industry, the timing is right for accelerating the
deployment of our capital resources." Mr. Chen added.
Hui Huang, Renren's Chief Financial Officer, commented, "We are pleased that
revenue growth in the third quarter was in line with our guidance. Looking ahead,
we want to focus on our long-term strategy and beyond short-term financial
results. In the coming quarters we expect to significantly increase the level of
investment to cultivate our growing user base and their engagement with Renren
products and services."
Third Quarter 2011 Results
Net revenues for the third quarter of 2011 were US$34.2 million, representing a
57.1% increase from the corresponding period in 2010.
Online advertising revenues were US$19.6 million, representing an increase of
91.8% from the corresponding period in 2010. The significant increase was a
result of the steady growth of Renren's user base and engagement level,
strengthening its market position as an effective advertising platform for
advertisers in China. The number of Renren's activated users increased from
approximately 103 million as of September 30, 2010 to approximately 137 million
as of September 30, 2011. Monthly unique log-in users increased from
approximately 24 million in September 2010 to approximately 38 million in
September 2011.
Internet Value-Added Services (IVAS) revenues were US$14.6 million, representing
a 26.3% increase from the corresponding period in 2010. Within IVAS revenues,
online game revenues were US$11.0 million for the third quarter of 2011, a 23.6%
increase from the corresponding period in 2010. Other IVAS revenues were US$3.6
million for the third quarter of 2011, a 35.2% increase from the corresponding
period in 2010. Within other IVAS revenues, Renren's social commerce service,
Nuomi, which was launched on June 23, 2010, recorded US$1.7 million of net
revenues for the third quarter of 2011.
Cost of revenues was US$6.7 million, a 62.3% increase from the corresponding
period in 2010. Cost of revenues for the third quarter of 2011 included US$141
thousand for Nuomi.
Gross profit was US$27.5 million, a 55.8% increase from US$17.7 million in the
corresponding period in 2010. Gross margin was 80.4%, compared to 81.0% in the
corresponding period in 2010.
Operating expenses were US$34.0 million, a 145.9% increase from the corresponding
period in 2010. Operating expenses in the third quarter of 2011 included US$8.1
million expenses incurred on Nuomi. Excluding Nuomi, the operating expenses in
the third quarter of 2011 would be US$25.9 million, a 91.5% increase from the
corresponding period in 2010.
Selling and marketing expenses were US$18.9 million, a 274.1% increase from the
corresponding period in 2010, primarily due to the Company's advertising
campaigns for Nuomi, increased promotion expenses for new games launched such as
Plants VS Zombies, and increased personnel related expenses and sales commissions
associated with increased advertising sales.
Research and development expenses were US$10.3 million, a 69.4% increase from the
corresponding period in 2010, primarily due to headcount and personnel related
expense increases.
General and administrative expenses were US$4.7 million, a 76.8% increase from
the corresponding period in 2010, primarily due to the growth of the company size
and business operations.
Share-based compensation expenses, which are all included in the operating
expenses, were US$1.5 million, compared to US$0.7 million in the corresponding
period in 2010.
Net loss attributable to Renren Inc. was US$1.2 million, compared to a net income
of US$7.3 million in the corresponding period of 2010. Excluding results of
operations attributable to Nuomi, net income in the third quarter of 2011 would
be US$6.2 million compared to a net income of US$7.2 million in the corresponding
period of 2010.
Adjusted net income (non-GAAP) was US$0.3 million in the third quarter of 2011,
compared to US$6.3 million in the third quarter of 2010. Excluding results of
operations attributable to Nuomi, adjusted net income in the third quarter of
2011 would be US$7.7 million, a 23.5% increase from the third quarter of 2010.
Adjusted net income (loss) is defined as income (loss) from continuing operations
excluding share-based compensation expenses, change in fair value of our then
outstanding series D warrants (which had been fully exercised by the end of 2010)
and amortization of intangible assets.
(1) Adjusted net income (loss) is a non-GAAP measure, which is defined as income (loss) from continuing operations excluding share-based compensation expenses, change in fair value of our then outstanding series D warrants (which had been fully exercised by the end of 2010) and amortization of intangible assets.
Business Outlook
The Company expects to generate revenues in an amount ranging from US$31 million
to US$33 million in the fourth quarter of 2011, representing 48% to 58%
year-over-year growth. This forecast reflects Renren's current and preliminary
view, which is subject to change.
Conference Call Information
Renren's management will host an earnings conference call at 8:00 p.m. U.S.
Eastern Time on Thursday, November 10, 2011 (beijing/hong kong
time:9)(beijing/hong kong time:Friday)(beijing/hong kong time:November
11)(beijing/hong kong time:2011).
Interested parties may participate in the conference call by dialing the numbers
below and entering passcode 10-15 minutes prior to the initiation of the call.
Dial-in Information: US: +1 718-354-1231 Hong Kong: +852-2475-0994 China: +86
800-819-0121 International: + 65-6723-9381 Passcode: Renren
A replay of the call will be available for one week and dial-in information is as
follows: International: + 61 2-8235-5000 Passcode: 24919216
This call will be webcast live and the replay will be available on Renren's
corporate web site at ir.renren-inc.com for twelve months.
About Renren Inc.
Renren Inc. (RENN) operates the leading real-name social networking internet
platform in China. It enables users to connect and communicate with each other,
share information and user generated content, play online games, listen to music,
shop for deals and enjoy a wide range of other features and services. Renren's
platform includes the main social networking website renren.com, the online games
center game.renren.com, the social commerce website nuomi.com, and the newly
launched professional and business social networking service website jingwei.com.
It had approximately 137 million activated users as of September 30, 2011.
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 for the fourth quarter 2011 and quotations from management in
this announcement, as well as Renren's strategic and operational plans, contain
forward-looking statements. Renren 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 Renren'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 social networking
site 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
registration statement on Form F-1, as amended, 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 Renren does not undertake any obligation to
update any forward-looking statement, except as required under applicable law.
About Non-GAAP Financial Measures
To supplement Renren's consolidated financial results presented in accordance
with United States Generally Accepted Accounting Principles ("GAAP"), Renren uses
"adjusted net income (loss)" which is defined as "a non-GAAP financial measure"
by the SEC, in evaluating its business. We define adjusted net income (loss) as
income (loss) from continuing operations excluding share-based compensation
expenses, change in fair value of warrants and amortization of intangible assets.
We present adjusted net income (loss) because it is used by our management to
evaluate our operating performance. We also believe that this non-GAAP financial
measure 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 this non-GAAP financial measure 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 "Reconciliation of
non-GAAP results of operations measure to the comparable GAAP financial measure"
at the end of this release.
For more information, please contact:
Sam Lawn Investor Relations Director Renren Inc. Tel: (86 10) 8448 1818 ext 1300
Email: ir@renren-inc.com
Caroline Straathof IR Inside Tel: (the Netherlands) +31 6 5462 4301 Tel: (China):
+86 136 9310 5055 Email: info@irinside.com
RENREN INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Amounts in US dollars, in thousands, except shares,December 31,September 30,
per shares, ADS, and per ADS data)
-------------------------------------------------------------------
20102011
-----------------------------------------
ASSETS?EUR EUR
Current assets:
Cash and cash equivalents?EUR EUR$136,063$303,599
Term deposit--801,383
Short-term investments?EUR EUR?EUR EUR62,318?EUR EUR 90,089
Accounts receivable, net12,81521,655
Prepaid expenses and other current assets?EUR EUR?EUR EUR7,274?EUR EUR 26,098
Amounts due from related parties218,456149
Deferred tax assets-current?EUR EUR?EUR EUR593?EUR EUR 474
?EUR EUR?EUR EUR?EUR EUR ?EUR EUR
Total current assets437,5191,243,447
Non-current assets:?EUR EUR ?EUR EUR?EUR EUR?EUR EUR?EUR EUR ?EUR EUR ?EUR EUR
Equipment, net11,30715,406
Intangible assets, net?EUR EUR?EUR EUR2,747?EUR EUR 2,577
Goodwill4,4204,605
Long-term investment?EUR EUR?EUR EUR--?EUR EUR 2,439
Deferred tax assets-noncurrent481--
?EUR EUR?EUR EUR?EUR EUR ?EUR EUR
Total non-current assets?EUR EUR?EUR EUR18,955?EUR EUR 25,027
?EUR EUR?EUR EUR?EUR EUR ?EUR EUR
TOTAL ASSETS$456,474$1,268,474
?EUR EUR?EUR EUR?EUR EUR ?EUR EUR
LIABIILITIES, CONVERTIBLE REDEEMABLE PREFERRED?EUR EUR ?EUR EUR?EUR EUR?EUR EUR?EUR EUR ?EUR EUR ?EUR EUR
SHARES AND EQUITY (DEFICIT)
Current liabilities:
Accounts payable?EUR EUR$6,443$16,483
Accrued expenses and other payables14,40825,099
Amounts due to related parties?EUR EUR ?EUR EUR?EUR EUR--?EUR EUR ?EUR EUR 49
Deferred revenue4,4765,472
Income tax payable?EUR EUR?EUR EUR64?EUR EUR 1,041
?EUR EUR?EUR EUR?EUR EUR ?EUR EUR
Total current liabilities25,39148,144
Non-current liabilities:?EUR EUR ?EUR EUR?EUR EUR?EUR EUR?EUR EUR ?EUR EUR ?EUR EUR
Deferred tax liabilities-noncurrent516525
?EUR EUR?EUR EUR?EUR EUR ?EUR EUR
Commitments
Series C convertible redeemable preferred shares ($0.001 par value;?EUR EUR?EUR EUR28,520?EUR EUR --
215,959,520 shares authorized, issuance price $0.223 per share;
128,048,440 and nil shares issued and outstanding as of December
31, 2010 and September 30, 2011, respectively, liquidation value of
$26,713)
Series D convertible redeemable preferred shares ($0.001 par value;571,439--
434,204,890 shares authorized, redemption and issuance price
$0.993 per share; 434,204,890 and nil shares issued and outstanding
as of December 31, 2010 and September 30, 2011, respectively,
liquidation value of $403,854)
Shareholders' Equity (Deficit):?EUR EUR?EUR EUR?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR ?EUR EUR
Series A convertible preferred share (US$0.001 par value,85--
100,000,000 shares authorized, 85,100,000 and nil issued and
outstanding as of December 31, 2010 and September 30, 2011,
respectively, liquidation value $85 as of December 31, 2010)
Series B convertible preferred share (US$0.001 par value,?EUR EUR?EUR EUR 82?EUR EUR --
100,000,000 shares authorized, 81,501,540 and nil issued and
outstanding as of December 31, 2010 and September 30, 2011,
respectively, liquidation value $82 as of December 31, 2010)
Ordinary Shares (US$0.001 par value, 2,000,000,000 shares2111,181
authorized, 211,383,000 and 1,176,064,999 issued and outstanding
as of December 31, 2010 and September 30, 2011, respectively)
Additional paid-in capital?EUR EUR?EUR EUR 9,470?EUR EUR 1,403,135
Subscription receivable(4,909)--
Accumulated deficit?EUR EUR?EUR EUR?EUR EUR (223,572) ?EUR EUR ?EUR EUR (226,606)
Statutory reserves2,5952,595
Accumulated other comprehensive income?EUR EUR?EUR EUR?EUR EUR 46,646?EUR EUR ?EUR EUR 39,087
?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR
Total Renren's shareholders' equity (deficit)(169,392)1,219,392
?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR
Noncontrolling Interests?EUR EUR?EUR EUR?EUR EUR --?EUR EUR ?EUR EUR 413
Total Equity(Deficit)(169,392)1,219,805
?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR
LIABIILITIES, CONVERTIBLE REDEEMABLE PREFERRED?EUR EUR$456,474$1,268,474
SHARES AND EQUITY (DEFICIT)
?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR
RENREN INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three Months Ended
-------------------------------------------------------------------------------------------------------------------------------
(Amounts in US dollars, in thousands, except shares,?EUR EUR ?EUR EUR September 30,?EUR EUR ?EUR EUR June 30,?EUR EUR ?EUR EUR September 30,?EUR EUR
per shares, ADS, and per ADS data)201020112011
--------------------------------------------------------------
?EUR EUR?EUR EUR?EUR EUR
Net revenues
Online advertising?EUR EUR $10,237?EUR EUR$16,874$19,635
IVAS?EUR EUR 11,547?EUR EUR 13,521?EUR EUR 14,579
-------- ------------------- ------------------- -------------
Total net revenues?EUR EUR ?EUR EUR 21,784?EUR EUR?EUR EUR 30,395?EUR EUR 34,214
Cost of revenues(4,130)(5,775)(6,701)
?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR
Gross profit?EUR EUR ?EUR EUR ?EUR EUR 17,654?EUR EUR?EUR EUR 24,620?EUR EUR 27,513
Operating expenses:
Selling and marketing?EUR EUR ?EUR EUR ?EUR EUR (5,061)?EUR EUR ?EUR EUR ?EUR EUR (13,150)?EUR EUR ?EUR EUR ?EUR EUR (18,935)?EUR EUR
Research and development(6,088)(7,704)(10,314)
General and administrative?EUR EUR ?EUR EUR ?EUR EUR (2,663)?EUR EUR ?EUR EUR ?EUR EUR (3,092)?EUR EUR ?EUR EUR ?EUR EUR (4,708)?EUR EUR
?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR
Total operating expenses?EUR EUR (13,812)?EUR EUR (23,946)?EUR EUR (33,957)
-------- ------------------- ------------------- -------------
?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR
Income (loss) from operations?EUR EUR ?EUR EUR ?EUR EUR 3,842?EUR EUR ?EUR EUR ?EUR EUR 674?EUR EUR ?EUR EUR ?EUR EUR (6,444)?EUR EUR
Other non-operating income--144216
Change in fair value of warrants?EUR EUR ?EUR EUR 2,590?EUR EUR?EUR EUR --?EUR EUR --
Realized exchange gain----2,728
Exchange gain on dual currency deposit?EUR EUR ?EUR EUR ?EUR EUR 1,707?EUR EUR?EUR EUR --?EUR EUR --
Interest income907392,899
?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR
Income (loss) before provision of income tax, non-controlling interests and discontinued operations ?EUR EUR ?EUR EUR ?EUR EUR 8,229?EUR EUR ?EUR EUR ?EUR EUR 1,557?EUR EUR ?EUR EUR ?EUR EUR (601)?EUR EUR
-------- ------------------- ------------------- -------------
Income tax (expense) benefit(175)(814)(713)
?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR
Income (loss) from continuing operations?EUR EUR ?EUR EUR ?EUR EUR 8,054?EUR EUR ?EUR EUR ?EUR EUR 743?EUR EUR ?EUR EUR ?EUR EUR (1,314)?EUR EUR
-------- ------------------- ------------------- -------------
Discontinued operations:
Loss from operation of discontinued operations, net of tax?EUR EUR ?EUR EUR ?EUR EUR (761)?EUR EUR ?EUR EUR ?EUR EUR --?EUR EUR ?EUR EUR ?EUR EUR --?EUR EUR
?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR
Loss on discontinued operations, net of tax?EUR EUR (761)?EUR EUR --?EUR EUR --
-------- ------------------- ------------------- -------------
Net income (loss)?EUR EUR ?EUR EUR ?EUR EUR 7,293?EUR EUR ?EUR EUR ?EUR EUR 743?EUR EUR ?EUR EUR ?EUR EUR (1,314)?EUR EUR
-------- ------------------- ------------------- -------------
Net loss attributable to noncontrolling interests--8129
Net income (loss) attributable to Renren Inc.?EUR EUR ?EUR EUR $7,293?EUR EUR ?EUR EUR $751?EUR EUR ?EUR EUR $(1,185)?EUR EUR
-------- ------------------- ------------------- -------------
?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR
Net income (loss) per share, basic$0.03$0.00$0.00
Net income (loss) per ADS, basic?EUR EUR ?EUR EUR $0.09?EUR EUR ?EUR EUR $0.00?EUR EUR ?EUR EUR $0.00?EUR EUR
Net income (loss) per share, diluted$0.03$0.00$0.00
Net income (loss) per ADS, diluted?EUR EUR ?EUR EUR $0.08?EUR EUR ?EUR EUR $0.00?EUR EUR ?EUR EUR $0.00?EUR EUR
Shares used in computation, basic256,380,440838,350,3021,177,595,401
ADS used in computation, basic?EUR EUR ?EUR EUR 85,460,147?EUR EUR?EUR EUR 279,450,101?EUR EUR 392,531,800
Shares used in computation, diluted276,294,820905,170,1611,177,595,401
ADS used in computation, diluted?EUR EUR ?EUR EUR 92,098,273?EUR EUR?EUR EUR 301,723,387?EUR EUR 392,531,800
Reconciliation of Non-GAAP results of operations measures to the comparable GAAP financial measure
For the Three Months Ended
--------------------------------------------------------------------------------------------------------------------
(Amounts in US dollars, in thousands)?EUR EUR ?EUR EUR September 30,?EUR EUR ?EUR EUR June 30,?EUR EUR ?EUR EUR September 30,?EUR EUR
201020112011
---------------------------------------------------
?EUR EUR?EUR EUR?EUR EUR
Income (loss) from continuing operations?EUR EUR ?EUR EUR $8,054?EUR EUR ?EUR EUR $743?EUR EUR ?EUR EUR $(1,314)?EUR EUR
Add back: Shared-based compensation expenses6771,3901,524
Add back: Change in fair value of warrants?EUR EUR ?EUR EUR ?EUR EUR (2,590)?EUR EUR ?EUR EUR ?EUR EUR --?EUR EUR ?EUR EUR ?EUR EUR --?EUR EUR
Add back: Amortization of intangible assets17618054
?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR
Adjusted net income?EUR EUR ?EUR EUR $6,317?EUR EUR ?EUR EUR $2,313?EUR EUR ?EUR EUR $264?EUR EUR
-------- ---------------- ---------------- --------
?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR?EUR EUR ?EUR EUR |
