Welcome!

Microsoft Cloud Authors: Janakiram MSV, Yeshim Deniz, David H Deans, Andreas Grabner, Stackify Blog

News Feed Item

Renren Announces Unaudited Third Quarter 2012 Financial Results

 

BEIJING, Nov. 13, 2012 /PRNewswire/ -- Renren Inc. (NYSE: RENN) ("Renren" or the "Company"), a leading real-name social networking internet platform in China, today announced its unaudited financial results for the third quarter ended September 30, 2012.

Third Quarter 2012 Highlights

  • Total net revenues were US$50.4 million, a 47.2% increase from the corresponding period in 2011.
  • Online game revenues were US$24.2 million, a 120.2% increase from the corresponding period in 2011.
  • Gross profit was US$30.9 million, a 12.4% increase from the corresponding period in 2011.
  • Operating loss was US$20.6 million, compared to an operating loss of US$6.4 million in the corresponding period in 2011.
  • Net loss attributable to Renren was US$15.4 million, compared to a net loss of US$1.2 million in the corresponding period in 2011.
  • Adjusted net loss (1) (non-GAAP) was US$12.1 million, compared to an adjusted net income of US$0.3 million in the corresponding period in 2011.

"We had another solid quarter of user growth. Our real-name user base continued to show healthy year-over-year expansion of 25%, as total activated users this quarter reached over 172 million, an increase of 35 million users from the same period a year ago.  Monthly unique log-in users also reached 48 million in the month of September, representing a 27% growth year-over-year," commented Joseph Chen, Chairman and Chief Executive Officer.

"Net revenues came in at the midpoint of our guidance and in-line with our expectations. Our gaming business continues to show a very strong momentum, driven by our cross-platform games. Nuomi, our group-buying business, also continues to show encouraging trends across all major metrics, particularly in transactions through mobile. However, our brand advertising business, despite a sequential increase, continues to face challenges in the midst of a weak economy coupled by intensifying competition and continued migration of Renren's traffic from PC to mobile."

"Meanwhile, we also realize that the competitive landscape in the mobile world is quite different from before. Therefore, our focus and investments will continue to shift towards the mobile opportunities and challenges ahead of us.  We want to further deepen and expand upon our core competency in social network services, particularly in the mobile world," said Mr. Chen.

"Our different businesses are at different stages of investment and transformation.  While we expect our investments will continue to outpace the monetization progress in the near-term, we remain committed to building the long-term value for our company and our shareholders." added Hui Huang, Renren's Chief Financial Officer.

(1)

Adjusted net income (loss) is a non-GAAP measure, which is defined as income (loss) from continuing operations excluding share-based compensation expenses, amortization of intangible assets and impairment of intangible assets.

Third Quarter 2012 Results

Total net revenues for the third quarter of 2012 were US$50.4 million, representing a 47.2% increase from the corresponding period in 2011.

Online advertising revenues were US$17.0 million, representing a decrease of 13.7% from the corresponding period of 2011. The decrease was due to lower advertising spending by brand advertisers in a softer macro-environment, coupled by intensifying competition and continued migration of Renren's traffic from PC to mobile.  The number of Renren's activated users, however, continued to increase from approximately 137 million as of September 30, 2011 to approximately 172 million as of September 30, 2012. Monthly unique log-in users increased from approximately 38 million in September 2011 to approximately 48 million in September 2012.

Internet Value-Added Services (IVAS) revenues were US$33.4 million, representing a 129.3% increase from the corresponding period of 2011. Within IVAS revenues, online game revenues were US$24.2 million for the third quarter of 2012, a 120.2% increase from the corresponding period of 2011. The increase in online game revenues during this quarter was due to the growing popularity of several new in-house developed games recently launched. Other IVAS revenues were US$9.2 million for the third quarter of 2012, a 157.1% increase from the corresponding period of 2011. Within other IVAS revenues, Renren's social commerce service, Nuomi, recorded US$4.6 million of net revenues for the third quarter of 2012.

Cost of revenues was US$19.5 million, a 190.2% increase from the corresponding period of 2011. Cost of revenues for the third quarter of 2012 included US$0.4 million for Nuomi. The increase in cost of revenues for the third quarter was largely due to increased bandwidth investments and increased development costs of Renren's recently launched games.

Operating expenses were US$51.5 million, a 51.8% increase from the corresponding period of 2011. Operating expenses in the third quarter of 2012 included US$10.6 million expenses incurred on Nuomi. Excluding Nuomi, the operating expenses in the third quarter of 2012 would be US$40.9 million, a 58.1% increase from the corresponding period in 2011.

Selling and marketing expenses were US$21.4 million, a 12.9% increase from the corresponding period of 2011. The increase was primarily due to the increased investments in Nuomi's sales force and advertising campaigns, along with increased personnel related expenses and promotions for products on Renren.

Research and development expenses were US$20.8 million, a 102.1% increase from the corresponding period in 2011. The increase was primarily due to headcount and personnel related expense increases.

General and administrative expenses were US$9.3 million, a 98.4% increase from the corresponding period in 2011.  The increase was primarily due to the growth of the company size and business operations.

Share-based compensation expense, which were all included in the operating expenses, were US$2.6 million, compared to US$1.5 million in the corresponding period in 2011.  The increase was mainly due to additional share-based incentive awards granted to directors, executives and employees.

Operating loss was US$20.6 million, compared to an operating loss of US$6.4 million in the corresponding period in 2011.

Net loss attributable to Renren Inc. was US$15.4 million, compared to a net loss of US$1.2 million in the corresponding period in 2011. Excluding results of operations attributable to Nuomi in both quarters, net loss in the third quarter of 2012 would be US$9.1 million, compared to a net income of US$6.2 million in the corresponding period of 2011.

Adjusted net loss (non-GAAP) was US$12.1 million, compared to a net income of US$0.3 million in the corresponding period in 2011. Excluding results of operations attributable to Nuomi in both quarters, adjusted net loss in the third quarter of 2012 would be US$5.9 million, compared to the adjusted net income of US$7.7 million in the corresponding period in 2011. Adjusted net income (loss) is defined as income (loss) from continuing operations excluding share-based compensation expenses, amortization of intangible assets and impairment of intangible assets.

Completion of the Share Repurchase Program

The Company's Share Repurchase Program, which was approved by its Board of Directors on September 29, 2011 to repurchase up to US$150 million of its ADSs, was completed as of September 28, 2012. During the third quarter of 2012, Renren repurchased approximately 13.3 million ADSs, bringing the total share repurchase to 24.2 million ADS and an aggregate consideration of $101.8 million at the end of the program.

Business Outlook

The Company expects to generate revenues in an amount ranging from US$45 million to US$47 million in the fourth quarter of 2012, representing 37% to 43% year-over-year growth. This forecast reflects Renren's current and preliminary view, which is subject to change.

Conference Call Information

Management will host an earnings conference call at 8:00 p.m. U.S. Eastern Time on Tuesday, November 13, 2012 (Beijing/Hong Kong Time: 9:00 a.m., Wednesday, November 14, 2012).

Interested parties may participate in the conference call by dialing the numbers below and entering passcode 10-15 minutes prior to the initiation of the call.

Dial-in Information:
US: +1 718-354-1231
Hong Kong: +852-2475-0994
China: +86 800-819-0121
International: + 65-6723-9381
Passcode: Renren

A replay of the call will be available for one week and dial-in information is as follows:
International: + 61 2-8199-0299
Passcode: 64321273

This call will be webcast live and the replay will be available on Renren's corporate web site at http://ir.renren-inc.com for 12 months.

About Renren Inc.

Renren Inc. (NYSE: RENN) operates a leading real name social networking internet platform in China. It enables users to connect and communicate with each other, share information and user generated content, play online games, listen to music, shop for deals and enjoy a wide range of other features and services. Renren's platform includes the main social networking website Renren.com, the online games center game.Renren.com, the social commerce website Nuomi.com, and the video-sharing website 56.com. Renren's American depositary shares, each of which represents three Class A ordinary shares, trade on NYSE under the symbol "RENN". Renren had approximately 172 million activated users as of September 30, 2012.

Safe Harbor Statement

This announcement 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 for the fourth quarter of 2012 and quotations from management in this announcement, as well as Renren's strategic and operational plans, contain forward-looking statements. Renren may also make written or oral forward-looking statements in its filings with 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 Renren's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: our goals and strategies; our future business development, financial condition and results of operations; the expected growth of the social networking site market in China; our expectations regarding demand for and market acceptance of our services; our expectations regarding the retention and strengthening of our relationships with key advertisers and customers; our plans to enhance user experience, infrastructure and service offerings; competition in our industry in China; and relevant government policies and regulations relating to our industry. Further information regarding these and other risks is included in our annual report on Form 20-F and other documents filed with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Renren does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement Renren's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Renren uses "adjusted net income (loss)" which is defined as "a non-GAAP financial measure" by the SEC, in evaluating its business. We define adjusted net income (loss) as income (loss) from continuing operations excluding share-based compensation expenses, amortization of intangible assets and impairment of intangible assets. We present adjusted net income (loss) because it is used by our management to evaluate our operating performance. We also believe that this non-GAAP financial measure provide useful information to investors and others in understanding and evaluating our consolidated results of operations in the same manner as our management and in comparing financial results across accounting periods and to those of our peer companies.

The presentation of this non-GAAP financial measure is not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliation of non-GAAP results of operations measures to the comparable GAAP financial measures" at the end of this release.

For more information, please contact:

Sam Lawn
Investor Relations Director
Renren Inc.
Tel: (86 10) 8448 1818 ext 1300
Email: [email protected]

 

RENREN INC.








CONSOLIDATED BALANCE SHEETS (UNAUDITED)
























(Amounts in US dollars, in thousands, except shares,



December 31,


September 30,

per shares, ADS, and per ADS data)

2011


2012








 ASSETS 
















 Current assets: 








 Cash and cash equivalents 



$

284,643


$

456,655

 Term deposits 




702,680



350,000

 Short-term investments 




53,393



85,833

 Accounts receivable, net 




14,911



20,629

 Prepaid expenses and other current assets 




59,389



32,191

 Amounts due from related parties 




573



82

 Deferred tax assets-current 




1,381



1,384









 Total current assets 




1,116,970



946,774









 Non-current assets: 








 Equipment, net 




22,301



29,542

 Intangible assets, net 




28,086



26,967

 Goodwill 




58,998



59,149

 Long-term investments 




50,300



88,425

 Other non-current assets 




1,353



31,445









 Total non-current assets 




161,038



235,528









 TOTAL ASSETS 



$

1,278,008


$

1,182,302









 LIABILITIES AND EQUITY 
















 Current liabilities: 








 Accounts payable 



$

20,381


$

33,435

 Accrued expenses and other payables 




31,108



31,629

 Amounts due to a related party 




51



-

 Deferred revenue and advance from customers  




7,441



10,978

 Income tax payable 




1,506



2,225

 Total current liabilities 




60,487



78,267









 Non-current liabilities: 








 Deferred tax liabilities-noncurrent 




6,976



6,597









 Total non-current liabilities 




6,976



6,597









 TOTAL LIABILITIES 




67,463



84,864









 Commitments 
















 Shareholders' Equity: 








 Class A ordinary shares (US$0.001 par value, 3,000,000,000 shares authorized, 770,912,350 and 726,924,519 issued and outstanding as of December 31, 2011 and September 30, 2012, respectively) 




771



727

 Class B ordinary shares (US$0.001 par value, 500,000,000 shares authorized, 398,763,450 and 401,867,617 issued and outstanding as of December 31, 2011 and September 30, 2012, respectively) 




399



402

 Treasury stocks, at cost 




(25,597)



(101,728)

 Additional paid-in capital 




1,407,059



1,417,863

 Statutory reserves 




3,507



3,507

 Accumulated deficit 




(183,228)



(237,170)

 Accumulated other comprehensive income  




7,334



13,837









 Total shareholders' equity 




1,210,245



1,097,438









 Noncontrolling Interests 




300



-









 Total equity 




1,210,545



1,097,438









 LIABILITIES AND EQUITY 



$

1,278,008


$

1,182,302

 

RENREN INC.









CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

















For the Three Months Ended

(Amounts in US dollars, in thousands, except shares,

September 30,


 June 30,


 September 30,

per shares, ADS, and per ADS data)

2011


2012


2012









 Net revenues 









 Online advertising 

$

19,635


$

15,096


$

16,938

 IVAS 


14,579



29,728



33,428

 Total net revenues 


34,214



44,824



50,366










 Cost of revenues  


(6,701)



(16,899)



(19,444)










 Gross profit 


27,513



27,925



30,922










 Operating expenses: 









 Selling and marketing 


(18,935)



(21,578)



(21,371)

 Research and development 


(10,314)



(17,826)



(20,844)

 General and administrative 


(4,708)



(10,726)



(9,341)










 Total operating expenses 


(33,957)



(50,130)



(51,556)










 Loss  from operations 


(6,444)



(22,205)



(20,634)










 Other income 


216



13



1,362

 Exchange gain (loss) on dual currency deposit and offshore bank accounts 


2,728



(3,114)



972

 Interest income 


2,899



5,101



5,733

 Realized gain on available-for-sale investments 


-



2,460



870










 Loss  before provision of income tax, loss in equity method investment and noncontrolling interests, net of income taxes 


(601)



(17,745)



(11,697)

 Income tax expenses 


(713)



(177)



(117)










 Loss  before loss in equity method investments and noncontrolling interests, net of income taxes 


(1,314)



(17,922)



(11,814)

 Loss in equity method investments, net of income taxes 


-



(7,017)



(3,586)










 Net loss 


(1,314)



(24,939)



(15,400)

 Add: Net loss attributable to noncontrolling interests, net of income taxes 


129



-



-










 Net loss attributable to Renren Inc. 

$

(1,185)


$

(24,939)


$

(15,400)










 Net loss per share, basic 

$

0.00


$

(0.02)


$

(0.01)

 Net loss per ADS, basic 

$

0.00


$

(0.06)


$

(0.04)

 Net loss per share, diluted 

$

0.00


$

(0.02)


$

(0.01)

 Net loss per ADS, diluted 

$

0.00


$

(0.06)


$

(0.04)

 Shares used in computation, basic 


1,177,595,401



1,167,959,726



1,141,783,844

 ADS used in computation, basic 


392,531,800



389,319,909



380,594,615

 Shares used in computation, diluted 


1,177,595,401



1,167,959,726



1,141,783,844

 ADS used in computation, diluted 


392,531,800



389,319,909



380,594,615

 

 

Reconciliation of Non-GAAP results of operations measures to the comparable GAAP financial measures 













 Adjusted net income (loss) 



















 For the Three Months Ended 

 (Amounts in US dollars, in thousands)                                    

 September 30, 


 June 30, 


 September 30, 

2011


2012


2012









 Loss from continuing operations 

$

(1,314)


$

(24,939)


$

(15,400)

 Add back: Shared-based compensation expenses 


1,524



2,537



2,585

        Add back: Amortization of intangible assets 


54



604



673










 Adjusted net income (loss) 

$

264


$

(21,798)


$

(12,142)

SOURCE Renren Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
The Internet giants are fully embracing AI. All the services they offer to their customers are aimed at drawing a map of the world with the data they get. The AIs from these companies are used to build disruptive approaches that cannot be used by established enterprises, which are threatened by these disruptions. However, most leaders underestimate the effect this will have on their businesses. In his session at 21st Cloud Expo, Rene Buest, Director Market Research & Technology Evangelism at Ara...
WebRTC is great technology to build your own communication tools. It will be even more exciting experience it with advanced devices, such as a 360 Camera, 360 microphone, and a depth sensor camera. In his session at @ThingsExpo, Masashi Ganeko, a manager at INFOCOM Corporation, will introduce two experimental projects from his team and what they learned from them. "Shotoku Tamago" uses the robot audition software HARK to track speakers in 360 video of a remote party. "Virtual Teleport" uses a mu...
Internet of @ThingsExpo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal and enterprise IT since the creation of the Worldwide Web more than 20 years ago. All major researchers estimate there will be tens of billions devic...
Mobile device usage has increased exponentially during the past several years, as consumers rely on handhelds for everything from news and weather to banking and purchases. What can we expect in the next few years? The way in which we interact with our devices will fundamentally change, as businesses leverage Artificial Intelligence. We already see this taking shape as businesses leverage AI for cost savings and customer responsiveness. This trend will continue, as AI is used for more sophistica...
"When we talk about cloud without compromise what we're talking about is that when people think about 'I need the flexibility of the cloud' - it's the ability to create applications and run them in a cloud environment that's far more flexible,” explained Matthew Finnie, CTO of Interoute, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
SYS-CON Events announced today that SourceForge has been named “Media Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. SourceForge is the largest, most trusted destination for Open Source Software development, collaboration, discovery and download on the web serving over 32 million viewers, 150 million downloads and over 460,000 active development projects each and every month.
SYS-CON Events announced today that DXWorldExpo has been named “Global Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Digital Transformation is the key issue driving the global enterprise IT business. Digital Transformation is most prominent among Global 2000 enterprises and government institutions.
SYS-CON Events announced today that Nihon Micron will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Nihon Micron Co., Ltd. strives for technological innovation to establish high-density, high-precision processing technology for providing printed circuit board and metal mount RFID tags used for communication devices. For more inf...
SYS-CON Events announced today that Ryobi Systems will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Ryobi Systems Co., Ltd., as an information service company, specialized in business support for local governments and medical industry. We are challenging to achive the precision farming with AI. For more information, visit http:...
SYS-CON Events announced today that mruby Forum will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. mruby is the lightweight implementation of the Ruby language. We introduce mruby and the mruby IoT framework that enhances development productivity. For more information, visit http://forum.mruby.org/.
SYS-CON Events announced today that Mobile Create USA will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Mobile Create USA Inc. is an MVNO-based business model that uses portable communication devices and cellular-based infrastructure in the development, sales, operation and mobile communications systems incorporating GPS capabi...
SYS-CON Events announced today that Keisoku Research Consultant Co. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Keisoku Research Consultant, Co. offers research and consulting in a wide range of civil engineering-related fields from information construction to preservation of cultural properties. For more information, vi...
SYS-CON Events announced today that MIRAI Inc. will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. MIRAI Inc. are IT consultants from the public sector whose mission is to solve social issues by technology and innovation and to create a meaningful future for people.
SYS-CON Events announced today that Daiya Industry will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Daiya Industry specializes in orthotic support systems and assistive devices with pneumatic artificial muscles in order to contribute to an extended healthy life expectancy. For more information, please visit https://www.daiyak...
SYS-CON Events announced today that Fusic will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Fusic Co. provides mocks as virtual IoT devices. You can customize mocks, and get any amount of data at any time in your test. For more information, visit https://fusic.co.jp/english/.
SYS-CON Events announced today that Interface Corporation will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Interface Corporation is a company developing, manufacturing and marketing high quality and wide variety of industrial computers and interface modules such as PCIs and PCI express. For more information, visit http://www.i...
Elon Musk is among the notable industry figures who worries about the power of AI to destroy rather than help society. Mark Zuckerberg, on the other hand, embraces all that is going on. AI is most powerful when deployed across the vast networks being built for Internets of Things in the manufacturing, transportation and logistics, retail, healthcare, government and other sectors. Is AI transforming IoT for the good or the bad? Do we need to worry about its potential destructive power? Or will we...
SYS-CON Events announced today that Enroute Lab will exhibit at the Japan External Trade Organization (JETRO) Pavilion at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Enroute Lab is an industrial design, research and development company of unmanned robotic vehicle system. For more information, please visit http://elab.co.jp/.
In his session at @ThingsExpo, Greg Gorman is the Director, IoT Developer Ecosystem, Watson IoT, will provide a short tutorial on Node-RED, a Node.js-based programming tool for wiring together hardware devices, APIs and online services in new and interesting ways. It provides a browser-based editor that makes it easy to wire together flows using a wide range of nodes in the palette that can be deployed to its runtime in a single-click. There is a large library of contributed nodes that help so...
DevOps at Cloud Expo – being held October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA – announces that its Call for Papers is open. Born out of proven success in agile development, cloud computing, and process automation, DevOps is a macro trend you cannot afford to miss. From showcase success stories from early adopters and web-scale businesses, DevOps is expanding to organizations of all sizes, including the world's largest enterprises – and delivering real r...