Renren Announces Unaudited Second Quarter 2012 Financial Results
BEIJING, Aug. 7, 2012 /PRNewswire via COMTEX/ -- Renren Inc. (RENN) ("Renren" or
the "Company"), a leading real-name social networking internet platform in China,
today announced its unaudited financial results for the second quarter ended June
30, 2012.
Second Quarter 2012 Highlights
Total net revenues were US$44.8 million, a 47.5% increase from the corresponding
period in 2011.
Online game revenues were US$22.5 million, a 122.1% increase from the
corresponding period in 2011.
Gross profit was US$27.9 million, a 13.4% increase from the corresponding period
in 2011.
Operating loss was US$22.2 million, compared to an operating income of US$0.7
million in the corresponding period in 2011.
Net loss attributable to Renren was US$24.9 million, compared to a net income of
US$0.8 million in the corresponding period in 2011.
Adjusted net loss (1) (non-GAAP) was US$21.8 million, compared to an adjusted net
income of US$2.3 million in the corresponding period in 2011.
(1) Adjusted net income (loss) is a non-GAAP measure, which is defined as income (loss) from continuing operations excluding share-based compensation expenses, amortization of intangible assets and impairment of intangible assets.
"We are pleased that our total net revenues this quarter came in above our
guidance, supported by strong gaming growth and a better-than-expected
performance by our group-buying business - Nuomi. On the other hand, brand
advertising remained challenging, due to macro conditions, increased competition
and the continued migration of our user traffic from PC to mobile," commented
Joseph Chen, Chairman and Chief Executive Officer.
"Our user base continues to show healthy growth, as total activated users this
quarter reached over 162 million compared to 124 million at the end of the second
quarter in 2011. Monthly unique log-in users also increased to 45 million in the
month of June, representing 31% of year-over-year growth."
"Looking ahead, our strategy remains focused on mobile opportunities, with
increasing effort to experiment different monetization models, including mobile
gaming, mobile advertising and mobile commerce through Nuomi."
"Our investment strategy in building a mobile eco-system around our real-name
social networking platform remains on course," added Hui Huang, Renren's Chief
Financial Officer. "These investments will enable us to capture more growth
opportunities as our business continues to evolve around mobile services."
Second Quarter 2012 Results
Total net revenues for the second quarter of 2012 were US$44.8 million,
representing a 47.5% increase from the corresponding period in 2011.
Online advertising revenues were US$15.1 million, representing a decrease of
10.5% from the corresponding period of 2011. The decrease was due to lower
advertising spending by brand advertisers amidst a softer macro-environment,
coupled with increased competition and continued migration of Renren's traffic
from PC to mobile. The number of Renren's activated users however continued to
increase from approximately 124 million as of June 30, 2011 to approximately 162
million as of June 30, 2012. Monthly unique log-in users increased from
approximately 34 million in June 2011 to approximately 45 million in June 2012.
Internet Value-Added Services (IVAS) revenues were US$29.7 million, representing
a 119.9% increase from the corresponding period of 2011. Within IVAS revenues,
online game revenues were US$22.5 million for the second quarter of 2012, a
122.1% increase from the corresponding period of 2011. The increase in online
game revenues during this quarter was primarily due to the growing popularity of
several in-house developed games Renren recently launched. Other IVAS revenues
were US$7.2 million for the second quarter of 2012, a 113.2% increase from the
corresponding period of 2011. Within other IVAS revenues, Renren's social
commerce service, Nuomi, recorded US$3.6 million of net revenues for the second
quarter of 2012.
Cost of revenues was US$16.9 million, a 192.6% increase from the corresponding
period of 2011. Cost of revenues for the second quarter of 2012 included US$0.5
million for Nuomi. The increase in cost of revenues for the second quarter was
largely due to increased bandwidth investments and increased costs of Renren's
recently launched games.
Operating expenses were US$50.1 million, a 109.3% increase from the corresponding
period of 2011. Operating expenses in the second quarter of 2012 included US$10.4
million expenses incurred on Nuomi. Excluding Nuomi, the operating expenses in
the second quarter of 2012 would be US$39.7 million, a 116.7% increase from the
corresponding period in 2011.
Selling and marketing expenses were US$21.6 million, a 64.1% increase from the
corresponding period of 2011, primarily due to the increased investments in
Nuomi's sales force and advertising campaigns, along with increased personnel
related expenses and promotions for products on Renren.
Research and development expenses were US$17.8 million, a 131.4% increase from
the corresponding period in 2011, primarily due to headcount and personnel
related expense increases.
General and administrative expenses were US$10.7 million, a 246.9% increase from
the corresponding period in 2011, primarily due to the growth of the company
size, business operations and transactional costs associated with M&A activities.
Share-based compensation expense, which were all included in the operating
expenses, were US$2.5 million, compared to US$1.4 million in the corresponding
period in 2011, due to additional grants issued to directors, executives and
employees.
Operating loss was US$22.2 million, compared to an operating income of US$0.7
million in the corresponding period in 2011.
Net loss attributable to Renren Inc. was US$24.9 million, compared to a net
income of US$0.8 million in the corresponding period in 2011. Excluding results
of operations attributable to Nuomi in both quarters, net loss in the second
quarter of 2012 would be US$17.7 million, compared to a net income of US$5.0
million in the corresponding period of 2011.
Adjusted net loss (non-GAAP) was US$21.8 million, compared to adjusted net income
of US$2.3 million in the corresponding period in 2011. Excluding results of
operations attributable to Nuomi in both quarters, adjusted net loss in the
second quarter of 2012 would be US$14.5 million, compared to the adjusted net
income of US$6.5 million in the corresponding period in 2011. Adjusted net income
(loss) is defined as income (loss) from continuing operations excluding
share-based compensation expenses, amortization of intangible assets and
impairment of intangible assets.
Share Repurchase Program
On September 29, 2011, the Company announced a share repurchase program to
repurchase up to US$150.0 million of its ADSs and shares. During the second
quarter of 2012, Renren repurchased approximately 3.0 million ADSs, bringing the
total share repurchased to 10.9 million ADSs as of June 30, 2012.
Business Outlook
The Company expects to generate revenues in an amount ranging from US$49 million
to US$51 million in the third quarter of 2012, representing 43% to 49%
year-over-year growth. This forecast reflects Renren's current and preliminary
view, which is subject to change.
Conference Call Information
Management will host an earnings conference call at 9:00 p.m. U.S. Eastern Time
on Tuesday, August 7, 2012 (beijing/hong kong time:9)(beijing/hong kong
time:Wednesday)(beijing/hong kong time:August 8)(beijing/hong kong time:2012).
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: 13421725
This call will be webcast live and the replay will be available on Renren's
corporate web site at ir.renren-inc.com for 12 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
video-sharing website 56.com. Renren's American depositary shares, each of which
represents three Class A ordinary shares, currently trade on NYSE under the
symbol "RENN". Renren had approximately 162 million activated users as of June
30, 2012.
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 third quarter of 2012 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 annual
report on Form 20-F and other documents filed with the SEC. All information
provided in this press release 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, amortization of intangible assets and impairment 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 measures to the comparable GAAP financial
measures" 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
RENREN INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Amounts in US dollars, in thousands, except shares,December 31,June 30,
per shares, ADS, and per ADS data)20112012
ASSETS
Current assets:
Cash and cash equivalents$284,643$294,213
Term deposits702,680551,428
Short-term investments53,39376,474
Accounts receivable, net14,91116,757
Prepaid expenses and other current assets59,389121,444
Amounts due from related parties57393
Deferred tax assets-current1,3811,369
Total current assets1,116,9701,061,778
Non-current assets:
Equipment, net22,30127,971
Intangible assets, net28,08627,258
Goodwill58,99858,514
Long-term investments50,30042,985
Other non-current assets1,35320,050
Total non-current assets161,038176,778
TOTAL ASSETS$1,278,008$1,238,556
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable$20,381$28,286
Accrued expenses and other payables31,10830,322
Amounts due to a related party5151
Deferred revenue7,44110,452
Income tax payable1,5061,972
Total current liabilities60,48771,083
Non-current liabilities:
Deferred tax liabilities-noncurrent6,9766,657
Total non-current liabilities6,9766,657
TOTAL LIABILITIES67,46377,740
Commitments
Shareholders' Equity:
Class A ordinary shares (US$0.001 par value, 3,000,000,000 shares authorized, 770,912,350 and 762,814,479 issued and outstanding as of December 31, 2011 and June 30, 2012, respectively)771763
Class B ordinary shares (US$0.001 par value, 500,000,000 shares authorized, 398,763,450 and 401,055,117 issued and outstanding as of December 31, 2011 and June 30, 2012, respectively)399401
Treasury stocks, at cost(25,597)(46,661)
Additional paid-in capital1,407,0591,417,544
Statutory reserves3,5073,507
Accumulated deficit(183,228)(221,770)
Accumulated other comprehensive income7,3347,032
Total shareholders' equity1,210,2451,160,816
Noncontrolling Interests300--
Total equity1,210,5451,160,816
LIABILITIES AND EQUITY$1,278,008$1,238,556
RENREN INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three Months Ended
(Amounts in US dollars, in thousands, except shares,June 30,March 31,June 30,
per shares, ADS, and per ADS data)201120122012
Net revenues
Online advertising$16,874$ 9,330$ 15,096
IVAS13,52122,74929,728
Total net revenues30,39532,07944,824
Cost of revenues(5,775)(12,475)(16,899)
Gross profit24,62019,60427,925
Operating expenses:
Selling and marketing(13,150)(17,418)(21,578)
Research and development(7,704)(15,332)(17,826)
General and administrative(3,092)(7,413)(10,726)
Total operating expenses(23,946)(40,163)(50,130)
Income (loss) from operations674(20,559)(22,205)
Other income14491013
Exchange gain (loss) on dual currency deposit and offshore bank accounts--373(3,114)
Interest income7395,8545,101
Realized gain on available-for-sale investments--2172,460
Income (loss) before provision of income tax, loss in equity method investment and noncontrolling interests, net of income taxes1,557(13,205)(17,745)
Income tax expenses(814)(132)(177)
Income (loss) before loss in equity method investments and noncontrolling interests, net of income taxes743(13,337)(17,922)
Loss in equity method investments, net of income taxes--(279)(7,017)
Net income (loss)743(13,616)(24,939)
Add: Net loss attributable to noncontrolling interests, net of income taxes813--
Net income (loss) attributable to Renren Inc.$751$ (13,603)$ (24,939)
Net income (loss) per share, basic$0.00$ (0.01)$ (0.02)
Net income (loss) per ADS, basic$0.00$ (0.03)$ (0.06)
Net income (loss) per share, diluted$0.00$ (0.01)$ (0.02)
Net income (loss) per ADS, diluted$0.00$ (0.03)$ (0.06)
Shares used in computation, basic838,350,3021,166,834,6831,167,959,726
ADS used in computation, basic279,450,101388,944,894389,319,909
Shares used in computation, diluted905,170,1611,166,834,6831,167,959,726
ADS used in computation, diluted301,723,387388,944,894389,319,909
Reconciliation of Non-GAAP results of operations measures to the comparable GAAP financial measures
Adjusted net income (loss)
For the Three Months Ended
(Amounts in US dollars, in thousands)June 30,March 31,June 30,
201120122012
Income (loss) from continuing operations$743$ (13,616)$ (24,939)
Add back: Shared-based compensation expenses1,3901,7702,537
Add back: Amortization of intangible assets180565604
Adjusted net income (loss)$2,313$ (11,281)$ (21,798) |
