Cheetah Mobile, Inc.
Fourth Quarter and Full Year 2018 Results
March 25, 2019
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Cheetah Mobile, Inc. Fourth Quarter and Full Year 2018 Results - - PowerPoint PPT Presentation
Cheetah Mobile, Inc. Fourth Quarter and Full Year 2018 Results March 25, 2019 1 Disclaimer This presentation contains forward-looking statements. These statements are made under the safe harbor provisions of the U.S. Private Securities
March 25, 2019
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This presentation 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 and quotations from management in this presentation, as well as Cheetah Mobile’s strategic and operational plans, contain forward-looking statements. Cheetah Mobile may also make written or oral forward-looking statements in its periodic reports to 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 Cheetah Mobile’s beliefs and expectations, are forward-looking
actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Cheetah Mobile’s goals and 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 from companies in a number
expected changes in Cheetah Mobile’s revenues and certain cost or expense items; fluctuations in general economic and business conditions in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Cheetah Mobile’s filings with the SEC. All information provided in this presentation is as of the date of this presentation, and Cheetah Mobile does not undertake any
Disclaimer
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FY2018 Financial Results Were in Line w/ Our Expectations
*Non-GAAP = GAAP + share-based compensation expenses
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342 277
Net Cash Generated from Operating Activities Free Cash Flow
Our Core Business Continued to Generate Strong Cash
million, RMB
RMB, million FY2018 As A % of Total Revenues YoY Total Revenues 4,982 2% Mobile Entertainment 1,779 36% 19% Content-driven Product 854 17%
Mobile Game 925 19% 48% Others 83 2% 123% Gross Profit 3,441 69% 8% Operating Profit 467 9% 5% Non-GAAP* Gross Profit 3,441 69% 8% Operating Profit 552 11% 6%
3 Driving Forces for Our Revenue Growth in 2018
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Mobile Games Operation Mobile Utility Products In China AI-Powered Business
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Mobile Games: Revenues from Our Mobile Games Operation
7 RMB million
623 925
400 600 800 1,000 2017 2018
Mobile Games Revenue
Mobile Games
Mobile Games: Contined to Introduced New Games
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Launched Bricks n Balls, a casual elimination game Remained a top mobile casual games in the US on Google Play, and a top board games on Apple’s App Store in terms of user downloads Discovered the right combination of tactics to grow our average revenue per mobile gamer Bricks n Ball’s ARPU was much higher than those of Piano Tiles 2, Rolling Sky and Dancing Line, respectively in 2H18 Almost half of the revenues from Bricks n Balls were generated through sales of in-game virtual items
2017 2018
Combined Operating Profits For Our 3 Flagship Titles
Mobile Games: Increased Operating Profits for Gaming Business
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10% 25%
2017 2018
Non-GAAP Operating Margin For Our 3 Flagship Titles
Mobile Utility Products in China: Introduced New Utility Products
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Personalized Experience
AI-Driven
We Continued to Enrich Our Utility Product Portfolio by Introducing New Utility Apps
to appeal young users in China
voice input, and thousands of themes
loyalty program
CM Show Qu Keyboard
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designed to appeal to generation Z in China
induce users subscription Many users are happy to pay a small amount to gain access to the premium content
RMB, million
Our Utility Product Business Continued to Earn Healthy Revenue and Profits in 2018
3,119 1,035
1,000 1,500 2,000 2,500 3,000 3,500 Revenues Non-GAAP Operating Profits
Utility Product Business
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We Began Offering AI-Powered Hardware in China
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Offering AI-powered hardware allows us to serve more users and customers in the era of human-computer interaction Our hardware business is a joint effort with Beijing OrionStar. As of today, Cheetah Mobile holds about ~40% of equity in Beijing OrionStar
Cheetah Translator: An AI-based Interpretation Device – Developed by Cheetah Mobile
revenues from other business segment in 2018
VIPKid, an online educational company, purchased a large quantity of Cheetah Translators to help its young students learn English Uroaming, an overseas WiFi service rental platform, also bought a number of Cheetah Translators to enrich its product offerings. Cheetah Translator marks an important milestone of our expansion into AI-based products and solutions
solutions to customers and businesses
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in various work locations
GreetBot: A Commercially Launched Receptionist Robot Focusing on the Business to Business Market - Developed by OrionStar
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diverse verticals in China, including as guides in museums, receptionists in hospitals or schools, and salespersons in convenience stores
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399 498 556
4Q17 3Q18 4Q18
Revenues from Mobile Entertainment Business
Revenues from Mobile Entertainment Business
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RMB, million
Bricks n Balls, a casual elimination game that started ramping up in the middle of July 2018
Increased by 91% YoY and 14% QoQ to RMB326 million in 4Q18; accounted for 24% of total revenues in 4Q18 Increased by 48% to RMB925 million in FY2018; accounted for 19% of total revenues in FY2018
RMB, million
1,495 1,779
2017 2018
Revenues from Mobile Entertainment Business
Revenues from Utility Products and Related Services
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RMB, million
mainly due to the discontinuation of certain ad formats, i.e. ads on mobile phone lock screens, by the Company’s
partners
mainly due to the disruption of our business as a result of certain allegations made by a third-party in November 2018, about which the company made a number of public statements to clarify
RMB, million
938 836 783
4Q17 3Q18 4Q18
Revenues from Utility Products and Related Services
3,343 3,119
2017 2018
Revenues from Utility Products and Related Services
Gross Profit and Gross Margin Increased Year Over Year
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4Q18 FY2018
RMB, million RMB, million
3,195 3,441
2017 2018
Gross Profit
926 965
4Q17 4Q18
Gross Profit
68% 70%
4Q17 4Q18
Gross Margin
66% 69%
2017 2018
Gross Margin
We Grew Our Operating Profit in 2018 Despite Our Continued Investments in New Initiatives
20 RMB, million
447 467
2017 2018
Operating Profit
Our Mobile Entertainment Business Continued to Narrow Its Loss
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The reduced losses were a result of:
the mobile game operation
the News Republic business
RMB, million
2017 2018
Losses for the Mobile Entertainment Business
We Sold A Certain Portion of Our Equity Ownership in Bytedance - Boosted Our Earnings and Balance Sheet
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How Cheetah Mobile became a shareholder of Bytedance?
Bytedance for a total consideration of US$85.8 million.
consideration in shares of Bytedance.
Dispose of certain portion of Bytedance shares in 4Q18
million in 4Q18 for the remaining portion of the equity ownership which the Company still holds, in accordance with ASC 321, adopted
and short-term investments were US$541 million.
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1Q19 Revenue Guidance
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Share Repurchase
Share Repurchase Program
September 13, 2019
repurchased ~4.5 million ADSs for approximately US$32 million under this program
IR Contact:
Helen Jing Zhu Phone: +86 10 6292 7779 Email: helenjingzhu@cmcm.com
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