Fri, Mar. 20, 6:11 PM
- Down only modestly in AH trading yesterday after posting mixed Q4 results, offering above-consensus Q1 sales guidance, and disclosing SEC inquiries, Youku (NYSE:YOKU) gradually sold off to new 52-week lows today.
- Deutsche's Vivian Hao downgraded to Sell, and cut her target to $10.90 from $18.60. "We believe Youku is facing increasing pressure from the content arms race and market share challenges following a year of 'conservative progression.'"
- Hao notes Youku, which already saw content spend rise to 47% of revenue in Q4 from 38% a year earlier, plans to spend aggressively in 2015 to halt share losses to Baidu (iQiyi) and Tencent - research firm EnfoDesk estimates Youku's Chinese online video share has fallen to 22% from 25% in early 2014.
- Brean's Fawne Jiang (Buy) remains bullish, but has cut her target by $4 to $20. "We are positive on the growth momentum of the company as YOKU continues to transform its business model ... The recent partnership with Alibaba could help the company to expand its user base, thereby improving content production and exploring new revenue streams." However, she doesn't see competitive and margin pressures abating near-term.
- Nearly half of Youku's market cap ($2.9B) is now covered by its cash balance ($1.4B). After backing out the cash, shares trade for 1.7x 2015E sales; the 2015 revenue growth consensus is at 37.5%.
Thu, Mar. 19, 7:01 PM
- On top of beating Q4 revenue estimates (while missing EPS estimates), Youku (NYSE:YOKU) is guiding for Q1 revenue of RMB1.01B-RMB1.03B ($163.2M-$166.4M), above an RMB996.5M consensus. Ad revenue is expected to total RMB870M-RMB890M.
- Youku also discloses it has received "comments and queries" from the SEC staff about its past accounting. Specifically, questions have been asked about revenue recognition for multi-part deals, the accounting of "non-monetary exchanges of licensed content," and the classification of licensed content as long-lived assets. Youku is "evaluating the impact to its 2014 and historical financial statements that may result from the resolution" of the issues.
- Ad revenue rose 37% Y/Y in Q4 to $177.1M, and consumer revenue (subscription/pay-per-view) 649% to $11.2M.
- Hurting EPS: Content costs (non-GAAP) rose to 47% of revenue from 38% a year ago, and bandwidth costs to 22% from 20%. In addition, operating expenses rose 69% to $76M, outpacing revenue growth of 40%. Sales/marketing spend totaled $50.1M, R&D $16.9M, and G&A $9.1M.
- Youku ended 2014 with $1.4B in cash. Its market cap is currently near $3B.
- YOKU -0.7% AH to $15.05.
- Q4 results, PR
Thu, Mar. 19, 6:23 PM
Wed, Mar. 18, 5:35 PM
Nov. 14, 2014, 3:44 PM
- With shares well below their early-2014 highs going into earnings, Youku (NYSE:YOKU) has shrugged off its light Q4 sales guidance and CFO resignation announcement. An HSBC downgrade to Underweight has also been brushed aside.
- Deutsche's Vivian Hao (Hold, $18 target) is still cautious: "Despite the encouraging subscription revenues (+473 percent YoY/+47 percent QoQ), we believe Youku is still struggling in mobile monetization with a stagnating ~30 percent of total revenues."
- Hao notes management is doubling its original content budget to RMB600M (11% of revenue) as it continues battling with Baidu/Sohu/Tencent, and forecasts R&D spend will rise to 8% of revenue next year (above Deutsche's 6.7% forecast). However, she's upping her 2015/2016 revenue estimates by 4% to "reflect the potential stronger ads growth from heavier content spending."
- Healthy traffic numbers could be giving Youku a lift: On the CC (transcript), CEO Cheung Koo Wing stated Youku had 500M+ monthly unique visitors in Q3, and 170M daily unique visitors. Daily video views rose by ~140M Q/Q to nearly 700M.
Nov. 13, 2014, 5:04 PM
Nov. 12, 2014, 5:35 PM
Aug. 19, 2014, 8:08 PM
- 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
Aug. 19, 2014, 6:07 PM
Aug. 18, 2014, 5:35 PM
May. 23, 2014, 1:00 PM
- Though Youku (YOKU -6.2%) beat Q1 EPS estimates, revenue of $112.7M missed a $114.2M consensus. Moreover, the company is guiding for Q2 revenue of RMB940M-RMB1B ($150.6M-$160.3M), below a $163.5M consensus.
- Maxim Group (PT cut to $16) blames the growth slowdown on Youku's attempts to lower purchases of long-form content preferred by advertisers.
- It believes a "weak content portfolio" led Youku to lose its Chinese online/mobile video leadership positions in Q1 to Baidu's (BIDU +1.7%) iQiyi and PPS platforms. Baidu has been busy promoting iQiyi/PPS throughout its Web empire.
- "Top-line growth seems to be on a deceleration trend," writes Deutsche (PT cut to $21) in response to Youku's numbers. The firm and thinks the Q2 guidance points to weaker advertiser budget hikes.
- Cost controls helped EPS beat estimates: Youku's content spend fell to 44% of revenue in Q1 from 49% a year ago. Bandwidth costs fell to 29% of revenue from 31%, and opex only grew 9% Y/Y (compares with 36% rev. growth).
- On the CC (transcript), Youku mentioned mobile daily video views have topped 400M (they were only at 200M last June), and that mobile now accounts for 1/3 of revenue.
- Q1 results, PR
May. 22, 2014, 6:16 PM
May. 21, 2014, 5:35 PM
May. 7, 2014, 10:50 AM
- Has irrational exuberance given way to panic selling? Internet stocks are off again today, as the Street registers disappointment with earnings reports from AOL, Groupon, Zulily, SouFun, 500.com, and King.
- Yahoo (YHOO -6.2%) has fallen below $35 as the Street digests Alibaba's IPO filing. Twitter (TWTR -4.4%), crushed yesterday following its lockup expiration, briefly cracked $30 before rebounding a bit.
- Other decliners: QIHU -8.9%. BITA -7.2%. GOMO -7%. TRLA -5.2%. MELI -4.7%. ANGI -4.6%. Z -4%. YOKU -5.5%. CTRP -5.3%. WUBA -5.3%. JOBS -5.1%. GRUB -4%.
- Internet/social media ETFs: PNQI, SOCL, FDN
Apr. 24, 2014, 4:50 PM
- Baidu (BIDU) expects Q2 revenue of RMB11.82B-RMB-12.11B ($1.901B-$1.948B), above a consensus of RMB11.55B.
- Revenue growth accelerated to 59.1% in Q1 from 50.4% in Q4. Online ad customers fell 1.1% Q/Q to 446K after falling 2.8% in Q4, but revenue per ad customer remained steady Q/Q and rose 44.1% Y/Y to RMB20.9K ($3,362).
- As promised, Baidu continues to invest aggressively: SG&A spend soared 136.9% Y/Y to $323.2M, thanks in large to mobile promotional efforts. R&D spend rose 57.5% to $205.4M.
- Traffic acquisition costs rose to 12.4% of revenue from 12.3% in Q4 and 10.2% a year ago. Content costs (fueled by online video licensing) rose to 4.1% of revenue from 3.8% in Q4 and 1.6% a year ago.
- Up in sympathy: SINA +1.6%. SOHU +1%. QIHU +2.6%. YY +1.1%. WB +1.5%. YOKU +1.7%.
- Q1 results, PR
Feb. 27, 2014, 5:53 PM
- Youku (YOKU) expects Q1 revenue of RMB680M-RMB720M, in-line with a consensus of RMB702.2M ($114.5M)
- Content spend (closely watched) equaled 38% of revenue in Q4, down from 39% in Q3 and 41% a year ago. Likewise, bandwidth costs fell to 20% of revenue from 21% in Q3 and 26% a year ago, and Y/Y opex growth of 35% trailed revenue growth of 42%.
- Youku chalks up its strong Q4 top-line performance to rising brand advertiser spend, something that fueled an increase averaging spending per customer.
- Q4 results, PR
YOKU vs. ETF Alternatives
Youku Tudou Inc is an Internet television company in china. Its internet television platform enables consumers to search, view and share high-quality video content quickly and easily across multiple devices.
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