Cheetah Mobile: Back On The Prowl
Mon, Aug. 22, 10:22 AM
- Morgan Stanley analyst David Sun notes that although Cheetah Mobile's (CMCM +7.7%) Q3 guidance is positive, higher cost structure and pressure resulting from a revenue shift to lower margin products has him concerned on near-term profitability. Cheetah Mobile exceeded Q2 consensus revenue estimates by 6%.
- Morgan Stanley raises its price target to $9 (current price $12.55).
Fri, Aug. 19, 9:53 AM
- Cheetah Mobile (CMCM -7.9%) posted 18.1% Y/Y total revenue ($157.5M) growth, coming in higher than company guidance. App-product refreshes, improved ad layouts and direct sales programs were attributed to the growth.
- Mobile revenue ($116.2M) grew 36.7% Y/Y and accounted for 73.8% of total revenue. Overseas revenue ($84.4M) grew 25.3% Y/Y and accounted for 53.6% of total revenue and 72.6% of mobile revenue.
- Mobile MAUs of 623M in June. Overseas market mobile MAUs accounted for 79.4% of the total. Total global mobile user installations of 3,099 as of June 30.
- Cost of revenue ($53.4M) increased 58.4% Y/Y, total operating expenses ($100.3M) increased 15.6% Y/Y, R&D expense ($26.8M) increased 37.5% Y/Y, selling and marketing expenses ($24.2M) increased 16.9% Y/Y, general and administrative expenses ($18.5M) increased 43% Y/Y and share-based compensation expenses ($13.3M) increased 57.8% Y/Y.
- Operating profit of $3.8M vs. $12.99M Y/Y.
- Projects Q3 total revenue of $166M-$173M (+7%-12% Y/Y, 5%-10% Q/Q).
- Conference call
- Press release
Fri, Aug. 19, 5:44 AM
Thu, Aug. 18, 5:30 PM
Mon, May 23, 6:31 PM
- Cheetah Mobile (NYSE:CMCM) fell another 3.6% today, as the brutal selloff seen in response to the company's weak Q2 guidance (issued with Q1 results on Thursday morning) refused to end. Possibly contributing: Morgan Stanley joined the ranks of firms downgrading the Chinese mobile app developer. Credit Suisse and Macquarie downgraded on Friday.
- Facebook (NASDAQ:FB) algorithm changes contributed to Cheetah's outlook. The company derives a large portion of its ad revenue (Credit Suisse estimates 25%-30%) from Facebook - it runs ads delivered by Facebook's mobile app ad network (the Audience Network), and also sells ads for clients on Facebook. Last fall, Facebook adjusted its algorithms to help advertisers know how ads are performing on 3rd-party apps, and it turned out ads on Cheetah's apps didn't perform well. The company has also implemented ad policy changes affecting Cheetah's ability to sell ads on Facebook.
- After the bell, Cheetah announced a study done with Google's AdMob mobile ad unit (competes with Facebook's Audience Network) found the deployment of AdMob native ads provided a 400% revenue boost for Cheetah's Battery Doctor app during a test. In addition to AdMob, Cheetah is also counting on an ad partnership with Tencent to lower its Facebook dependence.
Fri, May 20, 12:48 PM
Thu, May 19, 12:46 PM
Thu, May 19, 11:15 AM
- Though Cheetah Mobile (CMCM -20.5%) beat Q1 estimates, the Chinese app developer is guiding for Q2 revenue of RMB975M-RMB1B ($151M-$155M), soundly below a 3-analyst RMB1.33B consensus. The guidance implies 10%-13% Y/Y RMB-based sales growth, a major slowdown from Q1's 63%.
- CEO Sheng Fu blames recent sales weakness on lower ad prices (CPMs) from certain ad platform partners in international markets, slower-than-expected progress in expanding Cheetah's direct sales force, and the fact it's taking longer than expected for Cheetah to execute on its content product strategy. The company has hired former Yahoo sales exec Todd Miller to be its VP of sales, and is investing in "new content products" to boost engagement.
- Top-line performance: Mobile revenue rose 110.5% Y/Y in Q1 and made up 74.1% of total revenue. Overseas (non-Chinese) revenue rose 115.6% and made up 56.8% of revenue. Mobile monthly active users rose by 16M Q/Q to 651M (less than the 68M added in Q4), and cumulative app installs rose by 421M Q/Q to 2.76B.
- Financials: Cost of revenue rose 96.7% Y/Y (outpacing revenue growth) due to higher traffic acquisition costs related to third-party ad sales, as well as higher bandwidth and data center costs. "Operating income and expenses" rose 57.7% to RMB771.7M ($119.7M). Cheetah ended Q1 with $258M in cash and $22M in bank loans.
- Cheetah's Q1 results, earnings release
Thu, May 19, 9:18 AM
Thu, May 19, 8:14 AM
Wed, May 18, 5:30 PM
Wed, Mar. 16, 11:53 AM
- In addition to slightly missing Q4 revenue estimates (while beating on EPS), Cheetah Mobile (CMCM -2.2%) has guided for Q1 revenue of RMB1.08B-RMB1.1B (+61%-64% Y/Y and equal to $167M-$170M), below an RMB1.18B consensus.
- The Chinese app developer has also announced a $100M, 12-month, buyback. At current levels, it's good for repurchasing 4.7% of shares.
Top-line performance/metrics: Mobile revenue rose 14.4% Q/Q and 261.8% Y/Y in Q4 to $124M (compares with 92.3% Y/Y total revenue growth), and made up 70.9% of total revenue. Non-Chinese revenue (including mobile) rose 14.6% Q/Q and 343.1% Y/Y, and made up 54.4% of total revenue.
Online ad revenue rose 131.2% Y/Y to $159.2M, while value-added service revenue fell 34.8% to $13.8M. Security/other revenue rose 106.3% to $1.8M. Mobile MAUs rose by 68M Q/Q to 635M. Cumulative mobile installations rose by 399M to 2.34B.
- Financials: Cost of revenue rose 110.7% Y/Y to $45.8M (outpacing revenue growth). R&D spend rose 73.5% Y/Y to $32.2M, sales/marketing rose 174.67% to $78.1M, and G&A 14.1% to $14.2M. Cheetah ended 2015 with $308M in cash and $22M in bank loans.
- Cheetah's Q4 results, earnings release
Wed, Mar. 16, 8:30 AM
- Cheetah Mobile (NYSE:CMCM): Q4 EPS of RMB1.09 beats by RMB0.22.
- Revenue of RMB1.13B (+91.9% Y/Y) misses by RMB10M.
- Shares +4.1% PM.
Tue, Mar. 15, 5:30 PM
Mon, Feb. 29, 11:37 AM
- In a report (.pdf) titled "Cheeting the Investment Community," Alecto Research accuses Cheetah Mobile (CMCM -4.4%) of "illegally collecting user data with a useless utility app that infiltrates users’ phones and downloads their location and browsing history."
- The firm also asserts lab tests found Cheetah's Clean Master, Battery Doctor, and Mobile Security apps delivered a tiny portion of the storage and battery life improvements they claimed to deliver, with major inconsistencies in test results.
- Alecto also highlights declining usage/engagement rates (as reflected by MAU engagement and app download activity),questions Chhetah's reported mobile revenue, argues Cheetah's data-collection practices could draw the attention of U.S. regulators, believes Google will follow Apple's lead in banning Cheetah apps, notes auditor Ernst & Young has identified material weaknesses in internal controls, and raises concerns about heavy marketing spend and major related transaction fees to top shareholder Kingsoft (OTCPK:KSFTF), which owns 47% of Cheetah's shares and 59% of its voting rights.
- Cheetah is less than $1.50 removed from a 52-week low of $13.33. The company hasn't yet posted its Q4 report.
Tue, Feb. 16, 11:10 AM
- Many beaten-up Chinese tech names are up strongly on a morning the Nasdaq is up 1%. The gains comes after the Shanghai and Shenzhen exchanges respectively rose 3.3% and 4.1% overnight; strong new loan data and PBOC cash-removal efforts helped.
- Alibaba (BABA +6.7%) is one today's standouts, and that naturally means Yahoo (YHOO +5.8%), which (for now) is still pursuing a reverse spinoff of its core business to better monetize its 384M-share Alibaba stake, is also posting big gains. Fellow Chinese e-commerce firms JD.com (JD +7.6%), Vipshop (VIPS +7.9%), LightInTheBox (LITB +6.7%), and Dangdang (DANG +8.3%) are also doing well.
- Other big gainers include Weibo (WB +9.5%), Momo (MOMO +16.8%), Leju (LEJU +9.4%), NetEase (NTES +6.7%), Changyou (CYOU +6.5%), Bitauto (BITA +8.9%), 58.com (WUBA +6.8%), Cheetah Mobile (CMCM +5.8%), NQ Mobile (NQ +5.4%), 500.com (WBAI +5.6%), Baozun (BZUN +6.7%), and Xunlei (XNET +6.8%).
- ETFs: CQQQ, KWEB, QQQC, EMQQ