Gridsum Reports Unaudited First Quarter 2017 Financial Results
First Quarter 2017 Financial Highlights
- Net revenues increased by 57.3% to
RMB100.6 million (US$14.6 million ) fromRMB64.0 million in the comparable period in 2016, driven by 51.5% growth in Enterprise revenues and a 112.4% increase in e-Government and other revenues. - Gross profit increased by 64.6% to
RMB90.0 million (US$13.1 million ) fromRMB54.7 million in the comparable period in 2016.
“The first quarter of 2017 was another solid quarter with robust financial and operating results,” stated Mr.
Mr. Qi continued, “We have also strengthened our partnership with
Mr.
First Quarter 2017 Financial Results
REVENUES: Net revenues for the first quarter of 2017 increased by 57.3% to
Enterprise revenues increased by 51.5% to
COST OF REVENUES: Cost of revenues were
GROSS PROFIT AND GROSS MARGIN: Gross profit for the first quarter of 2017 increased by 64.6% to
OPERATING EXPENSES: Total operating expenses for the first quarter of 2017 were
- Sales and marketing expenses were
RMB51.3 million (US$7.5 million ) in the first quarter of 2017, as compared withRMB24.1 million in the comparable period in 2016. The increase was primarily due to aRMB20.8 million increase in marketing expenses and professional fees, aRMB3.8 million increase in personnel costs and aRMB2.6 million increase in overhead allocation, reflecting the Company’s strategy to drive long-term topline growth through sustainable investment in marketing and promotion activities by leveraging the existing high sales efficiency of the Company’s business. - Research and development expenses were
RMB51.9 million (US$7.5 million ) in the first quarter of 2017, as compared withRMB32.4 million in the comparable period in 2016, including aRMB13.1 million increase in personnel costs and aRMB8.0 million increase in overhead allocation, which was partially offset by aRMB1.6 million reduction of outsourcing costs. The increase primarily reflected the Company’s strong commitment to enhance its technology competency and innovation capabilities. - General and administrative expenses were
RMB35.8 million (US$5.2 million ) in the first quarter of 2017, as compared withRMB19.7 million in the comparable period in 2016. The increase was primarily due to aRMB15.3 million increase in allowance for doubtful accounts and aRMB1.8 million increase in personnel cost, and partially offset by aRMB1.0 million reduction in overhead allocation. The increase in allowance for doubtful accounts was a result of relatively slow collection in the first quarter of 2017.
LOSS FROM OPERATIONS: Loss from operations for the first quarter of 2017 was
NET LOSS ATTRIBUTABLE TO GRIDSUM’S ORDINARY SHAREHOLDERS: Net loss attributable to Gridsum’s ordinary shareholders for the first quarter of 2017 was
NON-GAAP NET LOSS ATTRIBUTABLE TO GRIDSUM’S ORDINARY SHAREHOLDERS: Non-GAAP net loss attributable to Gridsum’s ordinary shareholders, which is defined as net loss attributable to Gridsum’s ordinary shareholders before share-based compensation expense, for the first quarter of 2017 was
EBITDA: Loss before interest, income tax, depreciation and amortization for the first quarter of 2017 was
ADJUSTED EBITDA: Adjusted loss before interest, income tax, depreciation and amortization, which excludes share-based compensation expenses, was
NET LOSS PER ADS ATTRIBUTABLE TO GRIDSUM’S ORDINARY SHAREHOLDERS: Net loss per ADS attributable to Gridsum’s ordinary shareholders for the first quarter of 2017 narrowed by 38.3% to
NON-GAAP NET LOSS PER ADS ATTRIBUTABLE TO GRIDSUM’S ORDINARY SHAREHOLDERS: Non-GAAP net loss per ADS attributable to Gridsum’s ordinary shareholders for the first quarter of 2017 narrowed by 38.4% to
Each ADS represents one Class B ordinary share. For purposes of determining net loss per ADS attributable to Gridsum’s ordinary shareholders, the weighted average number of ordinary shares for the first quarter of 2017 was 29,735,166. As of
Balance Sheet
As of
The Company has recently consolidated all of its AI activities, technically, organizationally and strategically, into a new division called Gridsum Prophet. Gridsum Prophet is directly headed by the Company’s Chief Technology Officer,
Financial Outlook
For the full year of 2017, the Company retains its previous outlook that net revenues are expected to be in the range of
Conference Call
The Company will hold a conference call on
Participants may access the call by dialing the following numbers: | ||
United States: | +1-845-675-0437 | |
International Toll Free: | +1-866-519-4004 | |
Hong Kong: | +852-3018-6771 | |
China Domestic: | 400-620-8038 | |
Conference ID: | 22860602 | |
The replay will be accessible through June 2, 2017 by dialing the following numbers: | ||
United States Toll Free: | +1-855-452-5696 | |
International: | +61-2-8199-0299 | |
Conference ID: | 22860602 |
A live and archived webcast of the conference call will be available through the Company's investor relations website at http://ir.gridsum.com.
Exchange Rate
This announcement contains translations of certain RMB amounts into U.S. dollars ("USD") at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of
Statement Regarding Unaudited Condensed Financial Information
The unaudited financial information set forth above is preliminary and subject to potential adjustments. Adjustments to the consolidated financial statements may be identified when audit work has been performed for the Company's year-end audit, which could result in significant differences from this preliminary unaudited condensed financial information.
Use of Non-GAAP Financial Measures
In evaluating the Company’s business, the Company considers and uses the following non-GAAP financial measures as supplemental measures to review and assess the Company’s operating performance: non-GAAP net loss attributable to Gridsum’s ordinary shareholders, non-GAAP net loss per share attributable to Gridsum’s ordinary shareholders, EBITDA and adjusted EBITDA. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared in accordance with U.S. GAAP. Non-GAAP net loss attributable to Gridsum’s ordinary shareholders is net loss attributable to
The Company presents these non-GAAP financial measures because they are used by the Company’s management to evaluate the Company’s operating performance and formulate the Company’s business plans. These non-GAAP financial measures enable the Company’s management to assess the Company’s operating results without considering the impact of non-cash charges, including depreciation expenses and share-based compensation, and without considering the impact of non-operating items such as interest income and expenses and income tax expenses. The Company also believes that the use of these non-GAAP measures facilitates investors' assessment of the Company’s operating performance.
These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using these non-GAAP financial measures is that they do not reflect all items of income and expense that affect the Company’s operations. Interest income and expenses, income tax expenses, depreciation expenses and share-based compensation have been and may continue to be incurred in the Company’s business and are not reflected in the presentation of adjusted EBITDA. Further, these non-GAAP financial measures may differ from the non-GAAP financial measures used by other companies, including Gridsum’s peer companies, so their utility for comparison purposes may be limited.
The Company compensates for these limitations by reconciling the Company’s non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures, which should be considered when evaluating the Company’s performance.
About
For more information, please visit http://www.gridsum.com/.
Safe Harbor Statement
This announcement contains forward-looking statements. These forward-looking statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by terminology such as “may,” "will," "expects," "anticipates," “aims,” "future," "intends," "plans," "believes," "estimates," “likely to” and similar statements. Among other things, quotations from management in this announcement, Gridsum’s financial outlook as well as
GRIDSUM HOLDING INC. | |||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(All amounts in thousands) | |||||
As of | |||||
December 31, 2016 |
March 31, 2017 |
March 31, 2017 |
|||
RMB | RMB | US $ | |||
ASSETS | |||||
Current assets: | |||||
Cash and cash equivalents | 524,454 | 183,446 | 26,651 | ||
Time deposit | 69,430 | 68,832 | 10,000 | ||
Restricted cash | - | 258,120 | 37,500 | ||
Accounts receivable, net | 412,301 | 492,253 | 71,515 | ||
Prepayments and other current assets | 160,087 | 178,869 | 25,986 | ||
Total current assets | 1,166,272 | 1,181,520 | 171,652 | ||
Non-current assets: | |||||
Property, equipment and software, net | 56,107 | 65,327 | 9,491 | ||
Other non-current assets | 3,947 | 1,323 | 192 | ||
Total non-current assets | 60,054 | 66,650 | 9,683 | ||
Total assets | 1,226,326 | 1,248,170 | 181,335 | ||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||
Current liabilities: | |||||
Short-term bank loans | 65,093 | 164,000 | 23,826 | ||
Accounts payable | 12,150 | 7,214 | 1,048 | ||
Salary and welfare payables | 54,779 | 32,834 | 4,769 | ||
Taxes payable | 66,589 | 75,687 | 10,996 | ||
Deferred revenues | 50,110 | 39,945 | 5,803 | ||
Advances from customers | 106,570 | 93,092 | 13,525 | ||
Accrued expenses and other current liabilities | 58,473 | 78,217 | 11,363 | ||
Total current liabilities | 413,764 | 490,989 | 71,330 | ||
Total liabilities | 413,764 | 490,989 | 71,330 | ||
Shareholders' equity: | |||||
Total Gridsum shareholders' equity | 812,231 | 756,866 | 109,959 | ||
Non-controlling interests | 331 | 315 | 46 | ||
Total shareholders' equity | 812,562 | 757,181 | 110,005 | ||
Total liabilities and shareholders’ equity | 1,226,326 | 1,248,170 | 181,335 | ||
GRIDSUM HOLDING INC. | |||||||||||
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | |||||||||||
(All amounts in thousands, except for shares, per share and per ADS data) | |||||||||||
For the Three Months Ended | |||||||||||
March 31, 2016 | December 31, 2016 |
March 31, 2017 | March 31, 2017 | ||||||||
RMB | RMB | RMB | US$ | ||||||||
Revenues: | |||||||||||
Enterprise | 58,701 | 128,408 | 88,912 | 12,917 | |||||||
e-Government and other | 6,482 | 30,008 | 13,766 | 2,000 | |||||||
Less: Business tax and surcharges | (1,222) | (4,942) | (2,094) | (304) | |||||||
Net revenues | 63,961 | 153,474 | 100,584 | 14,613 | |||||||
Cost of revenues | (9,267) | (21,794) | (10,584) | (1,538) | |||||||
Gross profit | 54,694 | 131,680 | 90,000 | 13,075 | |||||||
Operating expenses: | |||||||||||
Sales and marketing expenses | (24,141) | (50,942) | (51,323) | (7,456) | |||||||
Research and development expenses | (32,434) | (47,508) | (51,930) | (7,544) | |||||||
General and administrative expenses | (19,734) | (25,959) | (35,768) | (5,196) | |||||||
Total operating expenses | (76,309) | (124,409) | (139,021) | (20,196) | |||||||
Income/(Loss) from operations | (21,615) | 7,271 | (49,021) | (7,121) | |||||||
Other income/(expense): | |||||||||||
Foreign currency exchange gain/(loss) | 127 | 279 | (1,229) | (179) | |||||||
Interest income/(expense), net | 106 | (1,460) | (1,978) | (287) | |||||||
Other income/(expense), net | 115 | (1,117) | (339) | (49) | |||||||
Income/(Loss) before income tax | (21,267) | 4,973 | (52,567) | (7,636) | |||||||
Income tax expense | - | (28,387) | (4,621) | (671) | |||||||
Net loss | (21,267) | (23,414) | (57,188) | (8,307) | |||||||
Less: Net loss attributable to non-controlling interests | (13) | (10) | (16) | (2) | |||||||
Net loss attributable to Gridsum Holding Inc. | (21,254) | (23,404) | (57,172) | (8,305) | |||||||
Accretion to preferred shares redemption value | (5,494) | - | - | - | |||||||
Cumulative dividend to preferred shareholders | (4,332) | - | - | - | |||||||
Net loss attributable to Gridsum's ordinary shareholders | (31,080) | (23,404) | (57,172) | (8,305) | |||||||
Net loss | (21,267) | (23,414) | (57,188) | (8,307) | |||||||
Foreign currency translation adjustment, net of nil tax | 2,081 | 21,574 | (3,205) | (466) | |||||||
Comprehensive loss | (19,186) | (1,840) | (60,393) | (8,773) | |||||||
Less: Comprehensive loss attributable to non-controlling interests | (13) | (10) | (16) | (2) | |||||||
Comprehensive loss attributable to Gridsum Holding Inc. | (19,173) | (1,830) | (60,377) | (8,771) | |||||||
Weighted average number of ordinary shares used in net loss per share attributable to Gridsum’s ordinary shareholders calculations: | |||||||||||
Basic and diluted | 10,000,000 | 29,702,394 | 29,735,166 | 29,735,166 | |||||||
Net Loss per ordinary share attributable to Gridsum’s ordinary shareholders: | |||||||||||
Basic and diluted | (3.11) | (0.79) | (1.92) | (0.28) | |||||||
Net Loss per ADS attributable to Gridsum’s ordinary shareholders: | |||||||||||
Basic and diluted | (3.11) | (0.79) | (1.92) | (0.28) |
GRIDSUM HOLDING INC. | |||||||||||
RECONCILIATION OF GAAP AND NON-GAAP RESULTS | |||||||||||
(All amounts in thousands, except for shares, per share and per ADS data) | |||||||||||
For the Three Months Ended | |||||||||||
March 31, 2016 | December 31, 2016 |
March 31, 2017 | March 31, 2017 | ||||||||
RMB | RMB | RMB | US$ | ||||||||
Reconciliation of net loss attributable to Gridsum’s ordinary shareholders to non-GAAP net loss attributable to Gridsum’s ordinary shareholders | |||||||||||
Net loss attributable to Gridsum's ordinary shareholders | (31,080) | (23,404) | (57,172) | (8,305) | |||||||
Share-based compensation | 2,663 | 2,648 | 5,012 | 728 | |||||||
Non-GAAP net loss attributable to Gridsum's ordinary shareholders | (28,417) | (20,756) | (52,160) | (7,577) | |||||||
Weighted average number of ordinary shares used in net loss per share attributable to Gridsum’s ordinary shareholders and non-GAAP net loss per share attributable to Gridsum’s ordinary shareholders calculations: | |||||||||||
Basic and diluted | 10,000,000 | 29,702,394 | 29,735,166 | 29,735,166 | |||||||
Net loss per ordinary share attributable to Gridsum’s ordinary shareholders: | |||||||||||
Basic and diluted | (3.11) | (0.79) | (1.92) | (0.28) | |||||||
Net loss per ADS attributable to Gridsum’s ordinary shareholders: | |||||||||||
Basic and diluted | (3.11) | (0.79) | (1.92) | (0.28) | |||||||
Non-GAAP net loss per ordinary share attributable to Gridsum’s ordinary shareholders: | |||||||||||
Basic and diluted | (2.84) | (0.70) | (1.75) | (0.25) | |||||||
Non-GAAP net loss per ADS attributable to Gridsum’s ordinary shareholders: | |||||||||||
Basic and diluted | (2.84) | (0.70) | (1.75) | (0.25) | |||||||
Reconciliation of net loss to EBITDA and adjusted EBITDA | |||||||||||
Net loss | (21,267) | (23,414) | (57,188) | (8,307) | |||||||
Interest (income)/expense, net | (106) | 1,460 | 1,978 | 287 | |||||||
Income tax expenses | - | 28,387 | 4,621 | 671 | |||||||
Depreciation and amortization expenses | 5,280 | 7,496 | 7,603 | 1,105 | |||||||
EBITDA | (16,093) | 13,929 | (42,986) | (6,244) | |||||||
Share-based compensation | 2,663 | 2,648 | 5,012 | 728 | |||||||
Adjusted EBITDA | (13,430) | 16,577 | (37,974) | (5,516) |
Investor Relation Contact:ICR, Inc. Xueli Song Tel: +1 (646) 328-2510 Email: IR@gridsum.com