Cheetah Mobile Announces Third Quarter 2024 Unaudited Consolidated Financial Results
PR Newswire
BEIJING, Dec. 17, 2024
BEIJING, Dec. 17, 2024 /PRNewswire/ -- Cheetah Mobile Inc. $(CMCM)$ ("Cheetah Mobile" or the "Company"), a China-based IT company, today announced its unaudited consolidated financial results for the third quarter ended September 30, 2024.
Management Commentary
Mr. Sheng Fu, Cheetah Mobile's Chairman and Chief Executive Officer, remarked, "Our third-quarter results demonstrate strong momentum, with accelerated revenue growth fueled by robust performance in our service robotics and internet businesses. We're seeing rising demand for service robots as a supplement to human labor, particularly in hospitality, manufacturing, and logistics sectors. Drawing on our extensive experience delivering service robots worldwide, we continue to innovate by refining product experiences and introducing targeted solutions to address specific industry needs. Looking ahead, the integration of large language models represents a pivotal opportunity to enhance our robots' intelligence and deployment efficiency, unlocking new avenues for growth. With a clear strategy and a focus on innovation, we're well-positioned to capitalize on the immense potential of the trillion-dollar robotics market."
Mr. Thomas Ren, Chief Financial Officer of Cheetah Mobile, commented: "In the third quarter, we continued to make meaningful progress in reducing our operating losses. This marks the second consecutive quarter of sequential improvement, driven by ongoing efforts to enhance operational efficiency. Notably, the operating margin for our internet business, excluding share-based compensation, improved to 10.3%--an increase of 4 percentage points compared to 6.2% in the same period last year "
Third Quarter 2024 Financial Highlight
-- Total revenues grew by 16.6% year-over-year, accelerating to RMB192.1
million (US$27.4 million) in the third quarter of 2024.
-- Gross profit increased by 13.9% year-over-year and 7.3%
quarter-over-quarter, to RMB130.4 million (US$18.6 million) in the third
quarter of 2024. On a non-GAAP basis, gross profit rose by 13.9%
year-over-year and 7.0% quarter-over-quarter to RMB130.5 million (US$18.6
million).
-- Operating loss narrowed to RMB72.0 million (US$10.3 million) in the third
quarter of 2024, improving from RMB77.5 in the previous quarter. However,
the number was RMB41.0 million in the same period of last year. On a
non-GAAP basis, operating loss in the third quarter of 2024 improved from
RMB62.5 million in the previous quarter to RMB60.5 million (US$8.6
million). However, the number was RMB33.0 million in the same period of
last year.
-- Net loss attributable to Cheetah Mobile shareholders was RMB46.9 million
(US$6.7 million), a significant improvement from RMB123.8 million in the
previous quarter. However, the number was RMB24.3 million in the same
period of last year. On a non-GAAP basis, net loss attributable to
Cheetah Mobile shareholders was RMB35.4 million (US$5.0 million), a
significant improvement from RMB108.8 million in the previous quarter.
However, the number was RMB16.3 million in the same period of last year.
-- As of September 30, 2024, the Company had cash and cash equivalents of
RMB1,530.5 million (US$218.1 million), ensuring strong liquidity.
-- As of September 30, 2024, the Company had long-term investments of
RMB885.9 million (US$126.2 million).
Third Quarter 2024 Consolidated Financial Results
Total revenues grew by 16.6% year over year to RMB192.1 million (US$27.4 million) in the third quarter of 2024.
-- Revenues from internet business increased by 25.8% year over year to
RMB134.3 million (US$19.1 million) in the third quarter of 2024, as our
legacy business remained resilient.
-- Revenues from AI and others remained relatively flat year over year to
RMB57.8 million (US$8.2 million) in the third quarter of 2024. This
stability was achieved despite an approximately 68% year-over-year
decline in revenue from the overseas advertising agency business, which
was offset by an increase in revenue from sale of service robots
following the acquisition of Beijing OrionStar in November 2023.
Cost of revenues increased by 22.6% year over year to RMB61.7 million (US$8.8 million) in the third quarter of 2024. The increases were primarily attributable to the increase in the hardware-related costs for the Company's service robots. Non-GAAP cost of revenues increased by 22.6% year over year to RMB61.6 million (US$8.8 million) in the third quarter of 2024.
Gross profit increased by 13.9% year over year to RMB130.4 million (US$18.6 million) in the third quarter of 2024. Non-GAAP gross profit increased by 13.9% year over year to RMB130.5 million (US$18.6 million) in the third quarter of 2024.
Total operating expenses increased by 30.2% year over year to RMB202.4 million (US$28.8 million) in the third quarter of 2024. Total non-GAAP operating expenses increased by 29.4% year over year to RMB190.9 million (US$27.2 million) in the third quarter of 2024.
-- Research and development expenses increased by 44.8% year over year to
RMB66.3 million (US$9.4 million) in the third quarter of 2024, primarily
due to: 1) increased amortization of intangible assets resulting from the
acquisition of a controlling stake in Beijing OrionStar; and 2) higher
R&D personnel-related expenses following the acquisition of Beijing
OrionStar. Non-GAAP research and development expenses increased by 31.2%
year over year to RMB59.9 million (US$8.5 million) in the third quarter
of 2024.
-- Selling and marketing expenses increased by 62.1% year over year to
RMB89.0 million (US$12.7 million) in the third quarter of 2024, primarily
due to: 1) increased marketing and promotion expenses related to our user
acquisition for certain products of our internet business; and 2)
increased personnel-related expenses following the acquisition of in
Beijing OrionStar. Non-GAAP selling and marketing expenses increased by
61.9% year over year to RMB88.8 million (US$12.7 million) in the third
quarter of 2024.
-- General and administrative expenses decreased by 14.8% year over year to
RMB47.3 million (US$6.7 million) in the third quarter of 2024, primarily
due to: 1) reduced stock-based compensation expenses, 2) reduced
professional and legal service fees, 3) a reduction in the provision for
credit losses. Non-GAAP general and administrative expenses decreased by
11.2% year over year to RMB42.5 million (US$6.1 million) in the third
quarter of 2024.
Operating loss narrowed to RMB72.0 million (US$10.3 million) in the third quarter of 2024, improving from RMB77.5 in the previous quarter. However, the number was RMB41.0 million in the same period of last year. Non-GAAP operating loss improved to RMB60.5 million (US$8.6 million) in the third quarter of 2024, from RMB62.5 million in the previous quarter. However, the number was RMB33.0 million in the same period of last year.
By segment, operating margin excluding share-based compensation expense for internet business improved to 10.3% in the third quarter of 2024, from 6.2% in the same period of last year.
Net loss attributable to Cheetah Mobile shareholders was RMB46.9 million (US$6.7 million), a significant improvement from RMB123.8 million in the previous quarter. However, the number was RMB24.3 million in the same period of last year. Non-GAAP net loss attributable to Cheetah Mobile shareholders was RMB35.4 million (US$5.0 million), a significant improvement from RMB108.8 million in the previous quarter. However, the number was RMB16.3 million in the same period of last year.
Balance Sheet
As of September 30, 2024, the Company had cash and cash equivalents of RMB1,530.5 million (US$218.1 million), ensuring strong liquidity.
As of September 30, 2024, the Company had long-term investments of RMB885.9 million (US$126.2 million).
Conference Call Information
The Company will hold a conference call on December 17th, 2024, at 6:00 a.m. Eastern Time (or 7:00 p.m. Beijing Time) to discuss its financial results. Listeners may access the call by dialing the following numbers:
Main Line:
International: 1-412-317-6061
United States Toll Free: 1-888-317-6003
Mainland China Toll Free: 4001-206115
Hong Kong Toll Free: 800-963976
Conference ID: 7464171
English Translation:
International: 1-412-317-6061
United States Toll Free: 1-888-317-6003
Mainland China Toll Free: 4001-206115
Hong Kong Toll Free: 800-963976
Conference ID: 0402119
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 RMB7.0176 to US$1.00, the exchange rate in effect as of September 30, 2024, 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").
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