Tudou Holdings Q2 earnings: net revenues up 47.3%

6 August 2012 15 h 25 min Comments Off

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Tudou Holdings Limited (NASDAQ:TUDO) (“Tudou” or the “Company”), a leading Internet video company in China, today announced its unaudited financial results for the second quarter ended June 30, 2012.

Second Quarter 2012 Revenue Highlights
Net revenues increased to RMB171.9 million (US$27.1 million), up 47.3% year-over-year.
Online advertising service revenues increased to RMB150.7 million (US$23.7 million), up 47.4% year-over-year.
Mobile video service revenues increased to RMB16.7 million (US$2.6 million), up 50.6% year-over-year.
Other (sub-licensing) revenues increased to RMB4.5 million (US$0.7 million), up 34.2% year-over-year.

Second Quarter 2012 Financial Results
. Revenues: Net revenues for the second quarter 2012 increased by 47.3% to RMB171.9 million (US$27.1 million) from RMB116.7 million in the corresponding period in 2011, driven by increases in online advertising service revenues, mobile video service revenues and other (sub-licensing) revenues.[1] Online advertising service revenues for the second quarter 2012 increased by 47.4% to RMB150.7 million (US$23.7 million) from RMB102.2 million in the corresponding period in 2011. Mobile video service revenues for the second quarter 2012 increased by 50.6% to RMB16.7 million (US$2.6 million) from RMB11.1 million in the corresponding period in 2011. Other (sub-licensing) revenues increased by 34.2% to RMB4.5 million (US$0.7 million) from RMB3.4 million in the corresponding period in 2011.
. Cost of Revenues: Cost of revenues for the second quarter 2012 increased by 123.2% to RMB191.0 million (US$30.1 million) from RMB85.6 million in the corresponding period in 2011, partially offset by a RMB12.7 million decrease in share-based compensation expenses. The increase in cost of revenues was primarily attributable to increased Internet bandwidth costs, content costs and mobile video services costs. Internet bandwidth costs for the second quarter 2012 totaled RMB65.1 million (US$10.2 million), compared to RMB34.5 million in the corresponding period in 2011. The increase in Internet bandwidth costs was primarily due to increased traffic on the Company’s website and its continued focus on enhancing users’ experience. Content costs for the second quarter 2012 totaled RMB100.5 million (US$15.8 million), compared to RMB35.7 million in the corresponding period in 2011. Content costs consist of amortization of premium licensed content, salaries and benefits for staff and production costs for content produced in-house. The increase in content costs was primarily due to the increase in amortization of premium licensed content and content produced in-house as a result of an increase in the amount of content purchased and produced. Mobile video service costs for the second quarter 2012 totaled RMB12.3 million (US$1.9 million), compared to RMB5.8 million, in the corresponding period in 2011. The increase in mobile video services costs was primarily attributable to the increase in mobile video services revenues.
. Gross Loss: For the second quarter 2012, gross loss totaled RMB19.2 million (US$3.0 million), compared to gross profit of RMB31.1 million in the corresponding period in 2011.
. Operating Expenses: Operating expenses for the second quarter 2012 were RMB135.8 million (US$21.4 million), compared to RMB86.7 million in the corresponding period in 2011. The increase was primarily due to merger related expenses of RMB23.7 million (US $3.7 million) resulting from the Company’s pending transaction with Youku, Inc. (NYSE: YOKU) (“Youku”) and an increase in sales and marketing expenses, mainly as a result of the Company’s hiring of additional sales professionals and enhanced promotion and marketing efforts.
. Net Loss: Net loss for the second quarter 2012 increased to RMB154.7 million (US$24.4 million) from a net loss of RMB78.9 million in the corresponding period in 2011.
. Adjusted Net Loss: Adjusted net loss for the second quarter 2012, which excluded share-based compensation expenses, was RMB144.8 million (US$22.8 million), compared to an adjusted net loss of RMB37.2 million in the corresponding period in 2011, which excluded share-based compensation expenses and fair value changes in warrant liabilities.

Recent Developments
. In July 2012, Tudou announced it will hold its 2012 annual general meeting of shareholders on the 18th Floor, One Exchange Square, 8 Connaught Place, Central, Hong Kong on Monday, August 20, 2012 at 10:00 a.m. (Hong Kong time), to consider and vote on, among other things, the proposal to approve the pending merger with Youku announced on March 11, 2012.
. In July 2012, Tudou announced that Ms. Evelyn Wang tendered resignation from her position as Chief Operating Officer due to personal reasons. Ms. Wang will continue to assist the Company throughout the ongoing merger process with Youku, which remains on track to close during the third quarter of 2012, subject to closing conditions including approvals by Youku’s and Tudou’s shareholders.
. In June 2012, Tudou held the awards ceremony for the 2012 Tudou Video Festival in Chengde, China. This was Tudou’s 5th annual video festival and was co-hosted with the China Film Group Corporation, the largest film enterprise in China. With the slogan Be Creative and Live, this year’s festival attracted over 15,000 video submissions, including submissions from a talented group of 200 video finalists that competed for 15 grand prizes. Over 1,500 producers, directors, writers, studio representatives and advertisers attended the event in anticipation of the opportunity to work with the creators of the winning submissions.
Conference Call

About Tudou
Tudou Holdings Limited (NASDAQ: TUDO) is a leading Internet video company in China providing premium licensed content, user generated content (“UGC”) and original in-house produced content. Founded in 2005, Tudou was the first UGC video sharing website launched in China. The “Tudou” brand is one of the most recognized Internet brands in China, and the annual Tudou Video Festival has become a signature event in the online video industry.
SOURCE: Tudou

[1] The Company records revenues on a net basis and presents net revenues net of third party advertising agency fees and sales tax as a reduction of revenues. For the second quarter 2012, third party advertising agency fees were RMB32.3 million (US$5.1 million) and sales tax was RMB7.4 million (US$1.2 million), compared to third party advertising agency fees of RMB23.6 million and sales tax of RMB14.6 million in the corresponding period in 2011.

Full release

SOURCE Tudou Holdings Limited (05/08/2012)

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