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You On Demand slumps; Q1 report reveals $748K gross loss

  • You On Demand's (YOD -7.7%) Q1 cost of revenue was $876K, more than 6x revenue of $138K. That translates into a gross loss of $738K.
  • Opex fell 22% Y/Y to $1.98M; You attributes this to overhead expense control and its revenue-sharing strategy with content partners.
  • The Chinese VOD services firm ended Q1 with $18M in cash on its balance sheet. Liabilities included a $3M convertible promissory note.
  • Q1 results, PR
Comments (5)
  • USAPaul
    , contributor
    Comments (3) | Send Message
     
    Q1 2014 results compared with Q1 2013 results

     

    - Revenues are up. (Good)

     

    - Gross loss is down. (Good)

     

    - Total operating expenses down. (Good)

     

    - New agreements up. (Good)

     

    - Reduced loss from operations. (Good)

     

    - Net loss from continuable operations "attributable" to shareholders "not" due to operations themselves.

     

    This is a summary of the report:

     

    http://bit.ly/RIDBHu

     

    Would be better is the title said "You On Demand slumps; Q1 2014 report reveals $748K gross loss; improvement from Q1 2013".

     

    The important things to remember about YOD are the following:

     

    - YOD is doing better in 2014 than in 2013.

     

    - YOD is a start-up so it is normal that it is running in the red.

     

    - As a start-up it is running less and less in the red if Q1 2014 is compared to Q1 2013.

     

    - YOD is the Netflix of China.

     

    - If YOD is compared to Netflix. Netflix also runs in the red but everybody doesn't worry about it for Netflix. So why worry about YOD running in the red.

     

    - The "most important number" to look at that is missing from the Q1 2014 report is the "customer base". That is the determining number. If the customer base is growing, then YOD is on it's way up; not down.

     

    - The other important factors are is management doing a good job and are there any competitors. Management is reducing expenses and there are no competitors because YOD has the only such license.

     

    -

     

    -
    16 May, 02:42 PM Reply Like
  • Scot1and
    , contributor
    Comments (15) | Send Message
     
    I don't see as you do.

     

    - YOD is doing better in 2014 than in 2013.

     

    Not true. They actually made 1.4 M last 2013 q1. Now 138k. You're looking probably looking at a pro forma since they are now out of broadband. Compare last quarter revs = 163k, to q1 2014 138k. Revenues are decreasing. (Not Good)

     

    - YOD is a start-up so it is normal that it is running in the red.

     

    Not exactly. YOD has been around (under the China Broadband name) since 2009. The Warner Brother Deal (the first content deal) was signed in July 2011. Yet even if its normal to run in the red because companies heavily spend on marketing to grab market share and revenues but it is not normal for revenues to decrease. Notably, Yod has made substantially less revenues trying to become a VOD provider than with its failed broadband operations. (Not Good)

     

    - As a start-up it is running less and less in the red if Q1 2014 is compared to Q1 2013.

     

    - YOD is the Netflix of China.

     

    Not even close. Revenues were 138k. There are numerous competitors that have billions of dollars behind them. Per the CC:

     

    "The market for video entertainment is subject to continuous change and aggressive competition. Our primary competitors include companies that operate online video voice type in China, such as iQiyi, Youku, Tencent and Sohu. They all carry a very large amount of the video content, including Hollywood and domestic movies and they compete on the variety and freshness of the content, in order to drive Internet traffic to their websites."

     

    - If YOD is compared to Netflix. Netflix also runs in the red but everybody doesn't worry about it for Netflix. So why worry about YOD running in the red.

     

    Netflix doesn't run in the red. It earned 2.86 a share. It has never traded 133x sales.

     

    - The "most important number" to look at that is missing from the Q1 2014 report is the "customer base". That is the determining number. If the customer base is growing, then YOD is on it's way up; not down.

     

    Revs were 160 last quarter and 138 this quarter. What does that say about the customer base?

     

    - The other important factors are is management doing a good job and are there any competitors. Management is reducing expenses and there are no competitors because YOD has the only such license.

     

    At the conference call, management advised that there was "aggressive competition" and specifically listed a number of competitors. Apparently management does not share the belief that they are the only game in town.

     

    Management advised $3M a quarter is necessary to break even. It expects a total of $3 million on the year. In other words, it expects a loss of $9 Mill on the year--over half the remaining cash on hand.
    16 May, 03:28 PM Reply Like
  • USAPaul
    , contributor
    Comments (3) | Send Message
     
    Please reade the following from http://bit.ly/RIDBHu

     

    "2014 Q1 Operating Results

     

    Revenue for the quarter ended March 31, 2014 increased to $138,000 from $938 in the quarter ended March 31, 2013. Gross loss for the quarter ended March 31, 2014 declined to $738,000, from $848,000 in the quarter ended March 31, 2013. Total operating expenses for the quarter ended March 31, 2014 declined 21.8% from the quarter ended March 31, 2013, which reflects the success of our strategy of forging revenue-sharing agreements with content partners while keeping corporate overhead at manageable levels. We reported a reduced loss from operations of $2.7 million for the quarter ended March 31, 2014, down from $3.4 million in the prior year period. Our net loss from continuing operations for the quarter ended March 31, 2014 increased to $7.5 million from $3.5 million in the prior year period. Our net loss attributable to YOU on Demand common shareholders was $23.6 million (compared to $3.3 million in the prior year period), which was impacted by several one-time, non-cash items. These one-time, non-cash items include a $16.4 million non-cash beneficial conversion feature incurred as part of our Preferred Series E share sale, as well as changes in the fair value of warrant liabilities of $2.4 million and contingent consideration of $0.7 million. The reported per share loss from continuing operations for the quarter ended March 31, 2014 was $1.48 as compared to $0.21 per share loss from continuing operations in the prior year period."

     

    I unfortunately don't see what you are talking about in any of your comments.
    17 May, 10:06 AM Reply Like
  • Scot1and
    , contributor
    Comments (15) | Send Message
     
    My comments are reflective of the decrease in revenues from Q4, 2013 to q1 2014. Comparing q1s in 2013 to q1 2014 is of little value. After all don't we want to see constant growth. YOD's growth is shrinking.
    19 May, 03:55 PM Reply Like
  • hahaha48
    , contributor
    Comments (1095) | Send Message
     
    YOD is a pump and dump scam .
    I posted that in the first article on 2/8 and they deleted my comment (the author?)
    How many companies that was created by a reverse merger has a real business?
    (if it is a real business it does not have to do a reverse merger. there are plenty of money out there to get started. I personally know enough people just in one small city of China that can finance its operation if it is legitimate. Many of my friends in the US or Hong Kong can do that also)
    How many companies that takes 4 months to publish its annual report do not have a lot of things to hide?
    No one I know of in China ever heard of YOD.
    Its income (assuming it is true) are like one multi screen cinema.
    The current price of YOD is lower than when they pump this stock in 2/8/2014. It went up to over $7 in a few days.
    19 May, 08:23 PM Reply Like
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