Seeking Alpha

Youku -7.7% AH on Q2 miss, guidance, revenue deferral

  • In addition to missing Q2 estimates, Youku (NYSE:YOKU) is guiding for Q3 revenue of RMB1.09B-RMB1.13B ($177.2M-$183.7M), below an RMB1.15B consensus.
  • Youku says it was "still in the process" of renewing a service agreement with a major mobile carrier of the end of Q2, and thus opted to defer the recognition of ~RMB40M in revenue until the renewal is in place. That contributed to the Q2 miss, and also a slowdown in Y/Y revenue growth to 27% from Q1's 36%.
  • Content costs rose to 42% of revenue from 38% a year ago; bandwidth costs were steady at 22%. Opex rose 20% Y/Y to $50.5M (33% of revenue).
  • Youku now has 500M+ monthly users. Mobile has grown to account for over 30% of revenue. Subscription service revenue rose 379% Y/Y, but over 95% of revenue still comes from advertising.
  • The company's cash balance totaled $1.6B at the end of Q2, or nearly half its current market cap.
  • Q2 results, PR
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