{"id":387332,"date":"2020-11-24T03:24:17","date_gmt":"2020-11-24T08:24:17","guid":{"rendered":"http:\/\/www.marketnewsdesk.com\/?p=387332"},"modified":"2020-11-24T03:24:17","modified_gmt":"2020-11-24T08:24:17","slug":"cheetah-mobile-announces-third-quarter-2020-unaudited-consolidated-financial-results","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/cheetah-mobile-announces-third-quarter-2020-unaudited-consolidated-financial-results\/","title":{"rendered":"Cheetah Mobile Announces Third Quarter 2020 Unaudited Consolidated Financial Results"},"content":{"rendered":"
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PR Newswire<\/p>\n<\/p><\/div>\n

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\n BEIJING<\/span>, Nov. 24, 2020<\/span> \/PRNewswire\/ — 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 third quarter ended September 30, 2020<\/span>. <\/p>\n

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\n Management Commentary<\/u>
\n <\/b>\n <\/p>\n

Mr. Sheng Fu<\/span>, Cheetah Mobile’s Chairman and Chief Executive Officer, stated, “In the third quarter of 2020, our revenue came in ahead of management’s revenue guidance. However, we still face challenges in growing our total revenues in the coming quarters due to the unfavorable environment in overseas markets. On the other hand, we don’t expect our AI-related robotics business to generate significant revenues in the foreseeable future. During the third quarter of 2020, we continued to streamline our operations and cut our costs and expenses. In the quarter, our gross margin expanded to 69% from 60% in the same period last year. Our operating loss narrowed to RMB126 million<\/span> from RMB257 million<\/span> in the same period last year. By segment, both the operating profits for our utility products and related services and our mobile entertainment business improved year-over-year in the quarter. Looking ahead, we will continue to streamline our mobile Internet business, focus on the domestic market, and invest in our AI-related robotic business to create a long-term growth engine.”<\/p>\n

Mr. Thomas Ren<\/span>, Cheetah Mobile’s Chief Financial Officer, commented, “We continued to create shareholder value. During the third quarter of 2020, the Company disposed certain business and assets, which boosted our earnings. Our net income attributable to Cheetah Mobile shareholders was RMB259 million<\/span> in the third quarter of 2020. More importantly, Cheetah Mobile’s balance sheet remains strong. As of September 30, 2020<\/span>, we had cash, cash equivalents, restricted cash, short-term investments of US$235 million<\/span>. Additionally, we had long-term investments of US$332 million<\/span>.”<\/p>\n

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\n Third Quarter 2020 Consolidated Financial Results<\/u>
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\n REVENUES <\/b>\n <\/p>\n

Total revenues were RMB365.1 million<\/span> (US$53.8 million<\/span>) in the third quarter of 2020, representing a decrease of 60.3% year over year. Excluding the impact resulting from the deconsolidation of LiveMe, total revenues decreased by 46.7% year over year in the third quarter of 2020. <\/p>\n

\n Revenues from utility products and related services<\/b> decreased by 47.3% year over year to RMB186.1 million<\/span> (US$27.4 million<\/span>) in the third quarter of 2020. The year-over-year 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 third quarter of 2020, approximately 65.4% 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 user subscription services, anti-virus software sales and office software sales.<\/p>\n

Revenues from the Company’s mobile utility product business in overseas markets decreased by 72% year over year to RMB39 million<\/span> in third quarter of 2020. This decrease was mainly due to the suspension of the Company’s advertising collaborations with Google since February 2020<\/span>. On February 21, 2020<\/span>, 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. <\/p>\n

Revenues from the Company’s mobile utility product business in the domestic market decreased by 52% year over year to RMB58 million<\/span> in the third quarter of 2020. This year-over-year decrease was primarily as a result of the headwinds in the domestic online advertising market. <\/p>\n

PC-related revenues decreased by 10% year over year to RMB90 million<\/span> in the third quarter of 2020 as internet traffic continued to migrate from PCs to mobile devices.<\/p>\n

\n Revenues from the mobile entertainment business <\/b>decrease by 70.4% year over year to RMB157.7 million<\/span> (US$23.2 million<\/span>) in the third quarter of 2020. Excluding the impact resulting from the deconsolidation of LiveMe, revenues from the mobile games business<\/b> decreased by 47.0% year over year to RMB157.7 million<\/span> (US$23.2 million<\/span>) in the third quarter of 2020. This decrease was primarily attributable to the suspension of the Company’s advertising collaborations with Google since February 2020<\/span>. In the third quarter of 2020, approximately 48.1% 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. <\/p>\n

\n COST OF REVENUES AND GROSS PROFIT <\/b>\n <\/p>\n

\n Cost of revenues <\/b>decreased by 68.9% year over year to RMB113.6 million<\/span> (US$16.7 million<\/span>) in the third quarter of 2020. The decrease was primarily due to the deconsolidation of LiveMe and reduced bandwidth and cloud service costs, in particular, in overseas markets. Non-GAAP cost of revenues<\/b> decreased by 69.0% year over year to RMB113.2 million<\/span> (US$16.7 million<\/span>) in the third quarter of 2020. <\/p>\n

\n Gross profit <\/b>decreased by 54.6% year over year to RMB251.5 million<\/span> (US$37.0 million<\/span>) in the third quarter of 2020. Non-GAAP gross profit<\/b> decreased by 54.6% year over year to RMB251.9 million<\/span> (US$37.1 million<\/span>) in the third quarter of 2020. <\/p>\n

\n Gross margin <\/b>was 68.9% in the third quarter of 2020, compared to 60.2% in the same period last year. Non-GAAP gross margin<\/b> was 69.0% in the third quarter of 2020, compared to 60.3% in the same period last year. <\/p>\n

\n OPERATING INCOME\/LOSS AND EXPENSES <\/b>\n <\/p>\n

\n Total operating expenses<\/b> decreased by 53.5% year over year to RMB377.5 million<\/span> (US$55.6 million<\/span>) in the third quarter of 2020. Total non-GAAP operating expenses<\/b> decreased by 52.2% year over year to RMB370.8 million<\/span> (US$54.6 million<\/span>) in the third quarter of 2020. <\/p>\n