UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of June 2020

Commission File Number: 001-36427

 

 

CHEETAH MOBILE INC.

 

 

Building No. 8

Hui Tong Times Square

Yaojiayuan South Road

Beijing 100123

People’s Republic of China

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒            Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

 

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

CHEETAH MOBILE INC.
By   :     /s/ Thomas Jintao Ren
Name   :   Thomas Jintao Ren
Title   :   Chief Financial Officer

Date: June 10, 2020


Exhibit Index

Exhibit 99.1 — Press Release

EX-99.1

Exhibit 99.1

Cheetah Mobile Announces First Quarter 2020

Unaudited Consolidated Financial Results

BEIJING, June 10, 2020 — Cheetah Mobile Inc. (NYSE: CMCM) (“Cheetah Mobile” or the “Company”), a leading mobile internet company with global market coverage, today announced its unaudited consolidated financial results for the first quarter ended March 31, 2020.

Management Commentary

Mr. Sheng Fu, Cheetah Mobile’s Chairman and Chief Executive Officer, stated, “In the first quarter of 2020, we continued to streamline our operations in the mobile Internet business and implement strict cost and expense controls to reduce our losses from the previous quarter. Total cost and expenses decreased by 38.4% year over year and 20.2% sequentially in the quarter. Gross margin grew to 72.0% in the quarter from 66.2% in the same period last year and from 70.2% in the previous quarter. Non-GAAP operating loss was RMB141 million in the quarter, decreasing from RMB203 million in the previous quarter. Notably, non-GAAP operating profit for our mobile Internet business, namely our utility products and related services and our mobile games businesses, increased to RMB7.8 million in the quarter from a non-GAAP operating loss of RMB91.7 million in the previous quarter. In addition, we continued to execute our AI strategy to rejuvenate our long-term growth. The recent outbreak of COVID-19 has led to increased number of use cases for our robotics products and solutions in hospitals and public transit while increasing customer awareness for the service at the same time. However, we do not expect our robotics business to generate significant revenues in the near term.”

Mr. Thomas Ren, Cheetah Mobile’s Chief Financial Officer, commented, “In addition to our improved operating results, we continued to review our investment portfolio and selectively liquidate some of our investments. Recently, we disposed of our remaining equity ownership in Bytedance Ltd., which will result in a gain on investment of approximately US$66 million in the second quarter of 2020. We also continued to return cash to our shareholders. Recently, our Board approved a special cash dividend of US$1.44 per ADS. The aggregate amount of the cash dividends was approximately US$200 million. Importantly, Cheetah Mobile’s cash position remains strong, even after paying out this special cash dividend.”

First Quarter 2020 Consolidated Financial Results

REVENUES

Total revenues were RMB528.1 million (US$74.6 million) in the first quarter of 2020, representing a decrease of 51.4% year over year. Excluding the impact resulting from the deconsolidation of LiveMe’s revenues, total revenues decreased by 36.4% year over year in the first quarter of 2020.

 

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Revenues from utility products and related services decreased by 57.7% year over year to RMB210.8 million (US$29.8 million) in the first quarter of 2020. The year-over-over decrease was primarily due to (i) a decline in the Company’s mobile utility product business in overseas markets, (ii) a decline in the Company’s mobile utility product business in the domestic market, and (iii) a decline in PC-related revenues. In the first quarter of 2020, approximately 71.0% of the Company’s revenues from its utility products and related services business were generated from advertising while the remaining portion of revenues were generated from other sources, such as anti-virus software sales and office software sales.

Revenues from the Company’s mobile utility product business in overseas markets decreased by 62.6% year over year to RMB54.3 million in first quarter of 2020. This decrease was mainly due to the suspension of the Company’s advertising collaborations with Google since February 2020. On February 21, 2020, the Company announced that the Company’s Google Play Store, Google AdMob, and Google AdManager accounts had been disabled, which adversely affected its ability to attract new users and generate revenue from Google. Revenues from the Company’s mobile utility product business in the domestic market decreased by 75.4% year over year to RMB62.1 million in the first quarter of 2020 as a result of the headwinds in the domestic online advertising market. Our advertising customers that were negatively impacted by the outbreak of COVID-19 reduced their budgets on online advertising and marketing, which materially adversely impacted our revenue from online marketing services. PC-related revenues decreased by 5.8% year over year to RMB94.5 million in the first quarter of 2020 as internet traffic in China continued to migrate from PCs to mobile devices.

Revenues from the mobile games business decreased by 5.3% year over year to RMB285.5 million (US$40.3 million) in the first quarter of 2020. This decrease was primarily attributable to the suspension of the Company’s advertising collaborations with Google since February 2020. In the first quarter of 2020, approximately 69.9% of the Company’s revenues from its mobile games business were generated from advertising while the remaining portion of revenues were generated from in-game purchases.

COST OF REVENUES AND GROSS PROFIT

Cost of revenues decreased by 59.7% year over year to RMB147.7 million (US$20.9 million) in the first quarter of 2020. The decrease was primarily due to the deconsolidation of LiveMe. Non-GAAP cost of revenues decreased by 59.7% year over year to RMB147.6 million (US$20.9 million) in the first quarter of 2020.

Gross profit decreased by 47.1% year over year to RMB380.4 million (US$53.7 million) in the first quarter of 2020. Non-GAAP gross profit decreased by 47.1% year over year to RMB380.4 million (US$53.7 million) in the first quarter of 2020.

 

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Gross margin was 72.0% in the first quarter of 2020, compared to 66.2% in the same period last year. Non-GAAP gross margin was 72.0% in the first quarter of 2020, compared to 66.2% in the same period last year.

OPERATING INCOME/LOSS AND EXPENSES

Total operating expenses decreased by 28.2% year over year to RMB528.4 million (US$74.6 million) in the first quarter of 2020. Total non-GAAP operating expenses decreased by 26.5% year over year to RMB521.6 million (US$73.7 million) in the first quarter of 2020.

 

   

Research and development expenses decreased by 27.6% year over year to RMB142.6 million (US$20.1 million) in the first quarter of 2020. This decrease was primarily attributable to a reduction in the personnel for the Company’s utility products and related services business in overseas markets as well as the deconsolidation of LiveMe. Non-GAAP research and development expenses decreased by 24.7% year over year to RMB135.9 million (US$19.2 million) in the first quarter of 2020.

 

   

Selling and marketing expenses decreased by 30.7% year over year to RMB302.8 million (US$42.8 million) in the first quarter of 2020. This decrease was mainly due to the reduction in promotional activities for the Company’s utility products and related services business in the domestic market as well as the deconsolidation of LiveMe. Non-GAAP selling and marketing expenses decreased by 29.9% year over year to RMB304.0 million (US$42.9 million) in the first quarter of 2020.

 

   

General and administrative expenses decreased by 16.3% year over year to RMB88.6 million (US$12.5 million) in the first quarter of 2020. This decrease was primarily due to decreased professional fees and share based compensation. Non-GAAP general and administrative expenses decreased by 11.5% year over year to RMB87.3 million (US$12.3 million) in the first quarter of 2020.

Operating loss was RMB148.0 million (US$20.9 million) in the first quarter of 2020, compared to an operating loss of RMB17.7 million in the same period last year. Non-GAAP operating loss was RMB141.1 million (US$19.9 million) in the first quarter of 2020, compared to an operating profit of RMB9.0 million in the same period last year.

The Company has reported its operating profit (loss) along the following segments since the second quarter of 2017:

 

   

Operating profit for utility products and related services was RMB44.2 million (US$6.2 million) in the first quarter of 2020, compared to RMB123.2 million in the same period last year, which was mainly due to the decrease in revenues.

 

   

Operating loss for the mobile entertainment business was RMB36.4 million (US$5.1 million) in the first quarter of 2020, compared to RMB44.1 million in the same period last year, which was mainly attributable to the deconsolidation of LiveMe.

 

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Operating loss for AI and other business was RMB148.9 million (US$21.0 million) in the first quarter of 2020, compared to RMB70.1 million in the same period last year, mainly due to the increased investments in the Company’s AI-related business.

Share-based compensation expenses were RMB6.9 million (US$1.0 million) in the first quarter of 2020, compared to RMB26.7 million in the same period last year.

OTHER INCOME, NET

Other income, net was RMB42.9 million (US$6.1 million) in the first quarter of 2020, which was primarily due to increases in fair value of certain long-term investments.

NET INCOME/LOSS ATTRIBUTABLE TO CHEETAH MOBILE SHAREHOLDERS

Net loss attributable to Cheetah Mobile shareholders was RMB104.6 million (US$14.8 million) in the first quarter of 2020, compared to a net income attributable to Cheetah Mobile shareholders of RMB7.1 million in the same period last year.

Non-GAAP net loss attributable to Cheetah Mobile shareholders was RMB97.7 million (US$13.8 million) in the first quarter of 2020, compared to a net income attributable to Cheetah Mobile shareholders of RMB33.8 million in the same period last year.

NET INCOME/LOSS PER ADS

Diluted loss per ADS was RMB0.76 (US$0.11) in the first quarter of 2020, compared to RMB0.02 in the same period last year. Non-GAAP diluted loss per ADS was RMB0.71 (US$0.10) in first quarter of 2020, compared to diluted earnings per ADS of RMB0.17 in the same period last year.

BALANCE SHEET

As of March 31, 2020, the Company had cash and cash equivalents, restricted cash, and short-term investments of RMB2,345.1 million (US$331.2 million).

SHARES ISSUED AND OUTSTANDING

As of March 31, 2020, the Company had a total of 1,393,070,159 Class A and Class B ordinary shares issued and outstanding. One ADS represents 10 Class A ordinary shares.

 

4 / 13


Business Outlook

For the second quarter of 2020, the Company expects its total revenues to be between RMB340 million (US$48 million) and RMB390 million (US$55 million). This amount reflects the fact that LiveMe’s revenues will no longer be included in the Company’s revenues. This forecast reflects Cheetah Mobile’s current and preliminary expectation, which assumes the COVID-19 situation would not have any significant unexpected disruption to our operations in the remainder of the second quarter.

Conference Call Information

The Company will hold a conference call on Wednesday, June 10 2020, at 8:00 a.m. Eastern Time (or 8:00 p.m. Beijing Time) to discuss its 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

Mainland China Toll Free: 4001-201-203

Hong Kong Toll Free: 800-905-945

Conference ID: Cheetah Mobile

The replay will be accessible June 17, 2020, by dialing the following numbers:

International: +1-412-317-0088

United States Toll Free: +1-877-344-7529

Access Code: 10144811

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 RMB7.0808 to US$1.00, the exchange rate in effect as of March 31, 2020, 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 with global market coverage. It has attracted hundreds of millions of monthly active users through its mobile utility products such as Clean Master, casual games such as Piano Tiles 2, and Bricks n Balls. The Company 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. The Company also provides value-added services to its mobile application users through the sale of in-app virtual items on selected mobile products and games. Cheetah Mobile is committed to leveraging its cutting-edge artificial intelligence technologies to power its products and make the world smarter. It has been listed on the New York Stock Exchange since May 2014.

 

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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

This release contains the following non-GAAP financial measures:

 

   

Non-GAAP cost of revenues excludes share-based compensation expenses

 

   

Non-GAAP gross profit excludes share-based compensation expenses

 

   

Non-GAAP gross margin excludes share-based compensation expense

 

   

Total non-GAAP operating expenses exclude share-based compensation expenses and impairment of goodwill

 

   

Non-GAAP research and development expenses exclude share-based compensation expenses

 

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Non-GAAP selling and marketing expenses exclude share-based compensation expenses

 

   

Non-GAAP general and administrative expenses exclude share-based compensation expenses

 

   

Non-GAAP operating profit/loss excludes share-based compensation expenses and impairment of goodwill

 

   

Non-GAAP net income/loss attributable to Cheetah Mobile shareholders excludes share-based compensation expenses and impairment of goodwill

 

   

Non-GAAP diluted income/loss per ADS excludes share-based compensation expenses and impairment of goodwill

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”.

Investor Relations Contact

Cheetah Mobile Inc.

Helen Jing Zhu

Tel: +86 10 6292 7779 ext. 1600

Email: helenjingzhu@cmcm.com

ICR Inc.

Xinran Rao

Tel: +1 (646) 417-5395

Email: IR@cmcm.com

 

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CHEETAH MOBILE INC.

Condensed Consolidated Balance Sheets

(Unaudited, amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”)

 

     As of  
     December 31, 2019      March 31, 2020      March 31, 2020  
     RMB      RMB      USD  

ASSETS

        

Current assets:

        

Cash and cash equivalents

     983,004        876,845        123,834  

Restricted cash

     2,638        2,673        377  

Short-term investments

     1,369,118        1,465,580        206,979  

Accounts receivable

     469,276        387,026        54,659  

Prepayments and other current assets

     936,109        908,212        128,264  

Due from related parties

     233,255        232,205        32,794  
  

 

 

    

 

 

    

 

 

 

Total current assets

     3,993,400        3,872,541        546,907  
  

 

 

    

 

 

    

 

 

 

Non-current assets:

        

Property and equipment, net

     103,397        94,972        13,413  

Right-of-use assets, net

     183,563        169,586        23,950  

Intangible assets, net

     44,476        47,113        6,654  

Investment in equity investees

     194,473        192,782        27,226  

Other long term investments

     2,322,251        2,363,828        333,836  

Due from related parties

     25,533        18,749        2,648  

Deferred tax assets

     31,951        41,148        5,811  

Other non-current assets

     112,700        116,505        16,454  
  

 

 

    

 

 

    

 

 

 

Total non-current assets

     3,018,344        3,044,683        429,992  
  

 

 

    

 

 

    

 

 

 

Total assets

     7,011,744        6,917,224        976,899  
  

 

 

    

 

 

    

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

        

Current liabilities:

        

Bank loans

     —          70,851        10,006  

Accounts payable

     87,524        75,732        11,485  

Accrued expenses and other current liabilities

     1,446,225        1,458,512        205,191  

Due to related parties

     92,210        64,919        9,168  

Income tax payable

     60,657        54,400        7,683  
  

 

 

    

 

 

    

 

 

 

Total current liabilities

     1,686,616        1,724,414        243,533  
  

 

 

    

 

 

    

 

 

 

Non-current liabilities:

        

Deferred tax liabilities

     82,847        93,699        13,233  

Other non-current liabilities

     247,734        182,586        25,787  
  

 

 

    

 

 

    

 

 

 

Total non-current liabilities

     330,581        276,285        39,020  
  

 

 

    

 

 

    

 

 

 

Total liabilities

     2,017,197        2,000,699        282,553  
  

 

 

    

 

 

    

 

 

 

Shareholders’ equity:

        

Ordinary shares

     225        226        32  

Additional paid-in capital

     2,649,342        2,656,081        375,110  

Retained earnings

     1,944,938        1,811,086        255,774  

Accumulated other comprehensive income

     337,773        389,437        54,999  
  

 

 

    

 

 

    

 

 

 

Total Cheetah Mobile shareholders’ equity

     4,932,278        4,856,830        685,915  

Noncontrolling interests

     62,269        59,695        8,431  
  

 

 

    

 

 

    

 

 

 

Total equity

     4,994,547        4,916,525        694,346  
  

 

 

    

 

 

    

 

 

 

Total liabilities and equity

     7,011,744        6,917,224        976,899  
  

 

 

    

 

 

    

 

 

 

 

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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  
     March 31, 2019     December 31, 2019     March 31, 2020     March 31, 2020  
     RMB     RMB     RMB     USD  

Revenues

     1,085,628       612,003       528,088       74,580  

Utility products and related services

     497,933       298,640       210,838       29,776  

Mobile entertainment

     556,230       285,058       285,492       40,319  

AI and others

     31,465       28,305       31,758       4,485  

Cost of revenues (a)

     (366,931     (182,271     (147,736     (20,864
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     718,697       429,732       380,352       53,716  

Operating income and expenses:

        

Research and development (a)

     (196,938     (153,530     (142,588     (20,137

Selling and marketing (a)

     (436,629     (343,993     (302,753     (42,757

General and administrative (a)

     (105,829     (174,899     (88,621     (12,516

Impairment of goodwill

     —         (545,665     —         —    

Other operating income

     3,002       7,910       5,596       790  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating income and expenses

     (736,394     (1,210,177     (528,366     (74,620

Operating loss

     (17,697     (780,445     (148,014     (20,904

Other income (expenses):

        

Interest income, net

     31,617       18,849       17,854       2,521  

Foreign exchange (loss) gain, net

     (5,373     5,478       (12,091     (1,708

Gain (loss) from equity method investments, net

     6,141       (322     (2,463     (348

Other income (loss), net

     432       (151,665     42,868       6,054  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before taxes

     15,120       (908,105     (101,846     (14,385

Income tax (expenses) benefits

     (12,434     36,927       (6,539     (923
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     2,686       (871,178     (108,385     (15,308

Less: net loss attributable to noncontrolling interests

     (4,428     (50,020     (3,796     (536
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Cheetah Mobile shareholders

     7,114       (821,158     (104,589     (14,772
  

 

 

   

 

 

   

 

 

   

 

 

 

(Losses) Earnings per share

        

Basic

     0.00       (0.60     (0.08     (0.01

Diluted

     0.00       (0.60     (0.08     (0.01

(Losses) Earnings per ADS

        

Basic

     (0.02     (5.98     (0.76     (0.11

Diluted

     (0.02     (5.98     (0.76     (0.11

Weighted average number of shares outstanding

        

Basic

     1,365,622,524       1,374,016,957       1,378,171,071       1,378,171,071  

Diluted

     1,392,184,524       1,374,016,957       1,378,171,071       1,378,171,071  

Weighted average number of ADSs outstanding

        

Basic

     136,562,252       137,401,696       137,817,107       137,817,107  

Diluted

     139,218,452       137,401,696       137,817,107       137,817,107  

Other comprehensive (loss) income, net of tax of nil

        

Foreign currency translation adjustments

     (82,541     (60,937     59,974       8,470  

Unrealized gain (loss) on available-for-sale securities, net

     3,498       4,241       (7,250     (1,024
  

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive (loss) income

     (79,043     (56,696     52,724       7,446  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive loss

     (76,357     (927,874     (55,661     (7,862

Less: Total comprehensive loss attributable to noncontrolling interests

     (4,271     (52,056     (2,735     (386
  

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive loss attributable to Cheetah Mobile shareholders

     (72,086     (875,818     (52,925     (7,476
  

 

 

   

 

 

   

 

 

   

 

 

 

 

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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  
     March 31, 2019      December 31, 2019      March 31, 2020     March 31, 2020  
(a) Share-based compensation expenses    RMB      RMB      RMB     USD  

Cost of revenues

     159        108        96       14  

Research and development

     16,512        15,995        6,737       951  

Selling and marketing

     2,827        1,058        (1,222     (173

General and administrative

     7,153        14,155        1,292       182  
  

 

 

    

 

 

    

 

 

   

 

 

 

Total

     26,651        31,316        6,903       974  
  

 

 

    

 

 

    

 

 

   

 

 

 

 

10 / 13


CHEETAH MOBILE INC.

Reconciliation of GAAP and Non-GAAP Results

(Unaudited, amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for per share data )

 

     For The Three Months Ended March 31, 2020  
     GAAP
Result
    Share-based
Compensation
    Non-GAAP
Result
    Non-GAAP
Result
 
     RMB     RMB     RMB     USD  

Revenues

     528,088       —         528,088       74,580  

Cost of revenues

     (147,736     96       (147,640     (20,850
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     380,352       96       380,448       53,730  

Research and development

     (142,588     6,737       (135,851     (19,186

Selling and marketing

     (302,753     (1,222     (303,975     (42,930

General and administrative

     (88,621     1,292       (87,329     (12,334

Other operating income

     5,596       —         5,596       790  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating income and expenses

     (528,366     6,807       (521,559     (73,660

Operating loss

     (148,014     6,903       (141,111     (19,930

Net loss attributable to Cheetah Mobile shareholders

     (104,589     6,903       (97,686     (13,796

Diluted losses per ordinary share (RMB)

     (0.08     0.01       (0.07  

Diluted losses per ADS (RMB)

     (0.76     0.05       (0.71  

Diluted losses per ADS (USD)

     (0.11     0.01       (0.10  

 

     For The Three Months Ended December 31, 2019  
     GAAP
Result
    Share-based
Compensation
     Non-GAAP
Result
 
     RMB     RMB      RMB  

Revenues

     612,003       —          612,003  

Cost of revenues

     (182,271     108        (182,163
  

 

 

   

 

 

    

 

 

 

Gross profit

     429,732       108        429,840  

Research and development

     (153,530     15,995        (137,535

Selling and marketing

     (343,993     1,058        (342,935

General and administrative

     (174,899     14,155        (160,744

Impairment of goodwill

     (545,665     545,665        —    

Other operating income

     7,910       —          7,910  
  

 

 

   

 

 

    

 

 

 

Total operating income and expenses

     (1,210,177     576,873        (633,304

Operating loss

     (780,445     576,981        (203,464

Net loss attributable to Cheetah Mobile shareholders

     (821,158     576,981        (244,177

Diluted losses per ordinary share (RMB)

     (0.60     0.42        (0.18

Diluted losses per ADS (RMB)

     (5.98     4.20        (1.78

 

     For The Three Months Ended March 31, 2019  
     GAAP
Result
    Share-based
Compensation
     Non-GAAP
Result
 
     RMB     RMB      RMB  

Revenues

     1,085,628       —          1,085,628  

Cost of revenues

     (366,931     159        (366,772
  

 

 

   

 

 

    

 

 

 

Gross profit

     718,697       159        718,856  

Research and development

     (196,938     16,512        (180,426

Selling and marketing

     (436,629     2,827        (433,802

General and administrative

     (105,829     7,153        (98,676

Other operating income

     3,002       —          3,002  
  

 

 

   

 

 

    

 

 

 

Total operating income and expenses

     (736,394     26,492        (709,902

Operating (loss) profit

     (17,697     26,651        8,954  

Net income attributable to Cheetah Mobile shareholders

     7,114       26,651        33,765  

Diluted (losses) earnings per ordinary share (RMB)

     0.00       0.02        0.02  

Diluted (losses) earnings per ADS (RMB)

     (0.02     0.19        0.17  

 

11 / 13


CHEETAH MOBILE INC.

Information about Segment

(Unaudited, amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”), except for percentage)

 

     For The Three Months Ended March 31, 2020  
     Utility Products
and
Related Services
    Mobile
Entertainment
    AI and
others
    Unallocated*     Consolidated  
     RMB     RMB     RMB     RMB     RMB     USD  

Revenue

     210,838       285,492       31,758       —         528,088       74,580  

Operating profit (loss)

     44,169       (36,359     (148,921     (6,903     (148,014     (20,904

Operating margin

     20.9     (12.7 )%      (468.9 )%      —         (28.0 )%      (28.0 )% 

 

     For The Three Months Ended December 31, 2019  
     Utility Products
and
Related Services
    Mobile
Entertainment
    AI and
others
    Unallocated*     Consolidated  
     RMB     RMB     RMB     RMB     RMB  

Revenue

     298,640       285,058       28,305       —         612,003  

Operating profit (loss)

     28,596       (120,310     (111,750     (576,981     (780,445

Operating margin

     9.6     (42.2 )%      (394.8 )%      —         (127.5 )% 

 

     For The Three Months Ended March 31, 2019  
     Utility Products
and
Related Services
    Mobile
Entertainment
    AI and
others
    Unallocated*     Consolidated  
     RMB     RMB     RMB     RMB     RMB  

Revenue

     497,933       556,230       31,465             1,085,628  

Operating profit (loss)

     123,175       (44,148     (70,073     (26,651     (17,697

Operating margin

     24.7     (7.9 )%      (222.7 )%        (1.6 )% 

 

*

Unallocated expenses refer to SBC expenses and goodwill impairment that are not allocated to individual segments.

CHEETAH MOBILE INC.

Reconciliation from Net Income Attributable to Cheetah Mobile Shareholders to Adjusted EBITDA (Non-GAAP)

(Unaudited, amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”))

 

     For The Three Months Ended  
     March 31, 2019     December 31, 2019     March 31, 2020     March 31, 2020  
     RMB     RMB     RMB     USD  

Net income (loss) attributable to Cheetah Mobile shareholders

     7,114       (821,158     (104,589     (14,772

Add:

        

Income tax expenses (benefits)

     12,434       (36,927     6,539       923  

Interest income, net

     (31,617     (18,849     (17,854     (2,521

Depreciation and amortization

     16,351       16,108       18,548       2,619  

Net loss attributable to noncontrolling interests

     (4,428     (50,020     (3,796     (536

Other (income) loss, net

     (1,200     146,509       (28,314     (3,998

Share-based compensation

     26,651       31,316       6,903       974  

Impairment of goodwill

     —         545,665       —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

     25,305       (187,356     (122,563     (17,311
  

 

 

   

 

 

   

 

 

   

 

 

 

CHEETAH MOBILE INC.

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

(Unaudited, amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”))

 

     For The Three Months Ended  
     March 31, 2019      31-Dec-19      March 31, 2020      March 31, 2020  
     RMB      RMB      RMB      USD  

PC

     120,278        123,842        117,502        16,594  

Mobile

     965,350        488,161        410,586        57,986  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     1,085,628        612,003        528,088        74,580  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

12 / 13


CHEETAH MOBILE INC.

Revenues Generated from Domestic and Overseas Markets

(Unaudited, amounts in thousands of Renminbi (“RMB”) and US dollars (“US$”))

 

     For The Three Months Ended  
     March 31, 2019      December 31, 2019      March 31, 2020      March 31, 2020  
     RMB      RMB      RMB      USD  

Domestic

     424,323        282,049        234,335        33,094  

Overseas

     661,305        329,954        293,753        41,486  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     1,085,628        612,003        528,088        74,580  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

13 / 13