Leju Reports Second Quarter and Half Year 2018 Results

    BEIJING, Aug. 23, 2018 /PRNewswire/ -- Leju Holdings Limited ("Leju" or the "Company") (NYSE: LEJU), a leading online-to-offline ("O2O") real estate services provider in China, today announced its unaudited financial results for the fiscal quarter and half year ended June 30, 2018.

    Second Quarter 2018 Financial Highlights

    • Total revenues increased by 32% year-on-year to $122.7 million.
      - Revenues from e-commerce services increased by 37% year-on-year to $87.6 million.
      - Revenues from online advertising services increased by 39% year-on-year to $34.4 million.
    • Income from operations was $10.0 million, compared to loss from operations of $83.0 million for the same quarter of 2017. Non-GAAP[1] income from operations was $14.3 million, compared to non-GAAP loss from operations of $37.4 million for the same quarter of 2017.
    • Net loss attributable to Leju Holdings Limited shareholders was $0.9 million, or $0.01 loss per diluted American depositary share ("ADS"), a decrease of 99% from $87.3 million, or $0.64 loss per diluted ADS, for the same quarter of 2017. Non-GAAP net income attributable to Leju Holdings Limited shareholders was $2.5 million, or $0.02 per diluted ADS, compared to non-GAAP net loss attributable to Leju Holdings Limited shareholders of $42.3 million, or $0.31 loss per diluted ADS, for the same quarter of 2017.

    First Half 2018 Financial Highlights

    • Total revenues increased by 27% year-on-year to $204.2 million.
      - Revenues from e-commerce services increased by 39% year-on-year to $141.0 million.
      - Revenues from online advertising services increased by 22% year-on-year to $61.5 million.
    • Loss from operations was $21.5 million, a decrease of 83% from $129.2 million for the same period of 2017. Non-GAAP loss from operations was $12.8 million, a decrease of 84% from $79.2 million for the same period of 2017.
    • Net loss attributable to Leju Holdings Limited shareholders was $21.7 million, or $0.16 loss per diluted ADS, a decrease of 81% from $115.5 million, or $0.85 loss per diluted ADS for the same period of 2017. Non-GAAP net loss attributable to Leju Holdings Limited shareholders was $14.7 million, or $0.11 loss per diluted ADS, a decrease of 78% from $66.5 million, or $0.49 loss per diluted ADS for the same period of 2017.

    "Our online advertising and e-commerce businesses both continued their growth momentum in the second quarter of 2018," said Mr. Geoffrey He, Leju's Chief Executive Officer. "We're encouraged by our second quarter performance, especially the return to profitability as a result of both revenue growth and effective cost control. Despite continued policy tightening in China's real estate market, our strategy will remain focused on deepening penetration in lower-tier cities, improving operational efficiency and enhancing our media influence, with the aim to maintain profitability in the second half of this year."

    [1] Leju uses in this press release the following non-GAAP financial measures: (1) income (loss) from operations, (2) net income (loss), (3) net income (loss) attributable to Leju shareholders, (4) net income (loss) attributable to Leju shareholders per basic ADS, and (5) net income (loss) attributable to Leju shareholders per diluted ADS, each of which excludes share-based compensation expense, amortization of intangible assets resulting from business acquisitions and goodwill impairment. See "About Non-GAAP Financial Measures" and "Unaudited Reconciliation of GAAP and Non-GAAP Results" below for more information about the non-GAAP financial measures included in this press release.

    Second Quarter 2018 Results

    Total revenues were $122.7 million, an increase of 32% from $92.7 million for the same quarter of 2017, mainly due to an increase in revenues from e-commerce services and online advertising services.

    Revenues from e-commerce services were $87.6 million, an increase of 37% from $63.7 million for the same quarter of 2017, primarily due to an increase in the average price per discount coupon redeemed, partially offset by a decrease in the number of discount coupons redeemed.

    Revenues from online advertising services were $34.4 million, an increase of 39% from $24.8 million for the same quarter of 2017, primarily due to an increase in property developers' demand for online advertising.

    Revenues from listing services were $0.7 million, a decrease of 82% from $4.2 million for the same quarter of 2017, primarily due to a decrease in secondary real estate brokers' demand.

    Cost of revenues was $18.4 million, a decrease of 4% from $19.2 million for the same quarter of 2017, primarily due to decreased staff cost as a result of headcount change, partially offset by increased cost of advertising resources purchased from media platforms.

    Selling, general and administrative expenses were $94.7 million, a decrease of 20% from $117.9 million for the same quarter of 2017, primarily due to decreased staff cost as a result of headcount change, and decreased marketing expenses related to the Company's e-commerce business.

    Income from operations was $10.0 million, compared to loss from operations of $83.0 million for the same quarter of 2017. Non-GAAP income from operations was $14.3 million, compared to non-GAAP loss from operations of $37.4 million for the same quarter of 2017.

    Other loss, net was $5.2 million, compared to $0.4 million for the same quarter of 2017, primarily due to $4.8 million foreign exchange loss recognized for the second quarter of 2018.

    Net loss was $1.0 million, a decrease of 99% from $87.5 million for the same quarter of 2017. Non-GAAP net income was $2.4 million, compared to non-GAAP net loss of $42.5 million for the same quarter of 2017.

    Net loss attributable to Leju Holdings Limited shareholders was $0.9 million, or $0.01 loss per diluted ADS, a decrease of 99% from $87.3 million, or $0.64 loss per diluted ADS, for the same quarter of 2017. Non-GAAP net income attributable to Leju Holdings Limited shareholders was $2.5 million, or $0.02 per diluted ADS, compared to non-GAAP net loss attributable to Leju Holdings Limited shareholders of $42.3 million, or $0.31 loss per diluted ADS, for the same quarter of 2017.

    First Half 2018 Results

    Total revenues were $204.2 million, an increase of 27% from $161.0 million for the same period of 2017, mainly due to an increase in revenues from e-commerce services and online advertising services.

    Revenues from e-commerce services were $141.0 million, an increase of 39% from $101.8 million for the same period of 2017, primarily due to an increase in the average price per discount coupon redeemed, partially offset by a decrease in the number of discount coupons redeemed.

    Revenues from online advertising services were $61.5 million, an increase of 22% from $50.6 million for the same period of 2017, primarily due to an increase in property developers' demand for online advertising.

    Revenues from listing services were $1.7 million, a decrease of 81% from $8.6 million for the same period of 2017, primarily due to a decrease in secondary real estate brokers' demand.

    Cost of revenues was $37.1 million, an increase of 11% from $33.3 million for the same period of 2017, primarily due to increased cost of advertising resources purchased from media platforms, partially offset by decreased staff costs as a result of headcount change.

    Selling, general and administrative expenses were $189.9 million, a decrease of 13% from $218.5 million for the same period of 2017, primarily due to decreased staff costs as a result of headcount change, and decreased marketing expenses related to the Company's e-commerce business.

    Loss from operations was $21.5 million, a decrease of 83% from $129.2 million for the same period of 2017. Non-GAAP loss from operations was $12.8 million, a decrease of 84% from $79.2 million for the same period of 2017.

    Other loss, net was $2.4 million, compared to $0.3 million for the same period of 2017, primarily due to $2.0 million foreign exchange loss recognized for the first half 2018.

    Net loss was $22.3 million, a decrease of 81% from $116.2 million for the same period of 2017. Non-GAAP net loss was $15.2 million, a decrease of 77% from $67.2 million for the same period of 2017.

    Net loss attributable to Leju Holdings Limited shareholders was $21.7 million, or $0.16 loss per diluted ADS, a decrease of 81% from $115.5 million, or $0.85 loss per diluted ADS for the same period of 2017. Non-GAAP net loss attributable to Leju Holdings Limited shareholders was $14.7 million, or $0.11 loss per diluted ADS, a decrease of 78% from $66.5 million, or $0.49 loss per diluted ADS for the same period of 2017.

    Cash Flow

    As of June 30, 2018, the Company's cash and cash equivalents balance was $174.3 million.

    Second quarter 2018 net cash provided by operating activities was $25.1 million, primarily comprised of non-GAAP net income of $2.4 million and an increase in advance from customers and deferred revenue of $22.4 million.

    Business Outlook

    The Company estimates that its total revenues for the third quarter of 2018 will be approximately $120 million to $130 million, which would represent an increase of approximately 26% to 37% from $95.2 million in the same quarter in 2017. This forecast reflects the Company's current and preliminary view, which is subject to change.

    Conference Call Information

    Leju's management will host an earnings conference call on August 23, 2018 at 7 a.m. U.S. Eastern Time (7 p.m. Beijing/Hong Kong time).

    Dial-in details for the earnings conference call are as follows:

    U.S./International:

    +1-845-675-0437

    Hong Kong:

    +852-3018-6771

    Mainland China:    

    400-620-8038

    Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call. The passcode is "Leju earnings call".

    A replay of the conference call may be accessed by phone at the following number until August 31, 2018:

    U.S./International:

    +1-855-452-5696

    Hong Kong:          

    800-963-117

    Mainland China:   

    400-632-2162

    Passcode:             

    1686109

    Additionally, a live and archived webcast will be available at http://ir.leju.com.

    About Leju

    Leju Holdings Limited ("Leju") (NYSE: LEJU) is a leading online-to-offline, or O2O, real estate services provider in China, offering real estate e-commerce, online advertising and online listing services. Leju's integrated online platform comprises various mobile applications along with local websites covering more than 370 cities, enhanced by complementary offline services to facilitate residential property transactions. In addition to the Company's own websites, Leju operates the real estate and home furnishing websites of SINA Corporation, and maintains a strategic partnership with Tencent Holdings Limited. For more information about Leju, please visit http://ir.leju.com.

    Safe Harbor: Forward-Looking Statements

    This announcement contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in 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," "target," "going forward," "outlook" and similar statements. Leju may also make written or oral forward-looking statements in its reports filed or furnished with the U.S. Securities and Exchange Commission, 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 Leju's beliefs and expectations, are forward-looking statements that involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained, either expressly or impliedly, in any of the forward-looking statements. Such factors include, but are not limited to, fluctuations in China's real estate market; the highly regulated nature of, and government measures affecting, the real estate and internet industries in China; Leju's ability to compete successfully against current and future competitors; its ability to continue to develop and expand its content, service offerings and features, and to develop or incorporate the technologies that support them; its limited operating history and lack of experience as a stand-alone public company, given its carve-out from E-House and prior reliance on E-House for various corporate services; its reliance on SINA and others with which it has developed, or may develop in the future, strategic partnerships; substantial revenue contribution from a limited number of real estate markets; complexities resulting from its ongoing relationships with E-House, due to E-House's status as a principal shareholder of Leju; and relevant government policies and regulations relating to the corporate structure, business and industry of Leju. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and the Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.

    About Non-GAAP Financial Measures

    To supplement Leju's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Leju uses in this press release the following non-GAAP financial measures: (1) income (loss) from operations, (2) net income (loss), (3) net income (loss) attributable to Leju shareholders, (4) net income (loss) attributable to Leju shareholders per basic ADS, and (5) net income (loss) attributable to Leju shareholders per diluted ADS, each of which excludes share-based compensation expense, amortization of intangible assets resulting from business acquisitions and goodwill impairment. The presentation of these non-GAAP financial measures is not intended to be considered in isolation 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 "Unaudited Reconciliation of GAAP and Non-GAAP Results" set forth at the end of this press release.

    Leju believes that these non-GAAP financial measures provide meaningful supplemental information to investors regarding its operating performance by excluding share-based compensation expense, amortization of intangible assets resulting from business acquisitions, and goodwill impairment, which may not be indicative of Leju's operating performance. These non-GAAP financial measures also facilitate management's internal comparisons to Leju's historical performance and assist its financial and operational decision making. A limitation of using these non-GAAP financial measures is that share-based compensation expense, amortization of intangible assets resulting from business acquisitions, and goodwill impairment may continue to exist in Leju's business for the foreseeable future. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables provide more details on the reconciliation between non-GAAP financial measures and their most comparable GAAP financial measures.

    For investor and media inquiries please contact:

    Ms. Christina Wu
    Leju Holdings Limited
    Phone: +86 (10) 5895-1062
    E-mail: [email protected]

    Philip Lisio
    Foote Group
    Phone: +86 135-0116-6560
    E-mail: [email protected]

     

    LEJU HOLDINGS LIMITED

    UNAUDITED CONSOLIDATED BALANCE SHEETS

    (In thousands of U.S. dollars)



    December 31,


    June 30,


    2017


    2018

    ASSETS




    Current assets




    Cash and cash equivalents 

    150,968


    174,318

    Restricted cash 

    337


    332

    Accounts receivable, net 

    79,196


    81,986

    Contract assets 

    1,410


    2,366

    Marketable securities 

    3,077


    2,521

    Prepaid expenses and other current assets 

    9,945


    8,529

    Customer deposits 

    35,823


    9,406

    Amounts due from related parties 

    4,077


    3,352

    Total current assets 

    284,833


    282,810

    Property and equipment, net 

    14,240


    13,690

    Intangible assets, net 

    70,631


    63,899

    Investment in affiliates 

    146


    94

    Deferred tax assets 

    67,084


    66,248

    Other non-current assets 

    2,010


    1,608

    Total assets 

    438,944


    428,349





    LIABILITIES AND EQUITY




    Current liabilities




    Accounts payable 

    2,950


    1,476

    Accrued payroll and welfare expenses 

    37,082


    27,699

    Income tax payable 

    63,380


    58,380

    Other tax payable 

    11,654


    12,639

    Amounts due to related parties 

    3,093


    6,900

    Advance from customers and deferred revenue 

    10,565


    34,221

    Accrued marketing and advertising expenses 

    18,852


    18,712

    Other current liabilities 

    16,315


    14,501

    Total current liabilities 

    163,891


    174,528

    Deferred tax liabilities 

    18,016


    17,792

    Total liabilities 

    181,907


    192,320

    Shareholders' Equity




    Ordinary shares ($0.001 par value): 1,000,000,000 shares
       authorized, 135,763,962 and 135,763,962 shares issued and
       outstanding, as of December 31, 2017 and June 30, 2018,
       respectively 

    136


    136





    Additional paid-in capital 

    788,589


    790,650

    Accumulated deficit 

    (515,344)


    (537,133)

    Accumulated other comprehensive loss 

    (13,078)


    (13,895)

    Total Leju Holdings Limited shareholders' equity 

    260,303


    239,758

    Non-controlling interests 

    (3,266)


    (3,729)

    Total equity 

    257,037


    236,029

    TOTAL LIABILITIES AND EQUITY 

    438,944


    428,349

     

     

    LEJU HOLDINGS LIMITED

    UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

    (In thousands of U.S. dollars, except share data and per share data)



    Three months ended


    Six months ended


    June 30,


    June 30,


    2017


    2018


    2017


    2018









    Revenues








         E-commerce

    63,719


    87,571


    101,810


    141,041

         Online advertising services

    24,760


    34,361


    50,553


    61,491

         Listing services

    4,210


    744


    8,634


    1,667

    Total revenues

    92,689


    122,676


    160,997


    204,199

    Cost of revenues

    (19,163)


    (18,405)


    (33,293)


    (37,080)

    Selling, general and administrative expenses

    (117,931)


    (94,749)


    (218,452)


    (189,927)

    Goodwill impairment

    (41,223)


    -


    (41,223)


    -

    Other operating income

    2,671


    478


    2,742


    1,308

    Income (loss) from operations

    (82,957)


    10,000


    (129,229)


    (21,500)

    Interest income

    294


    272


    577


    559

    Other loss, net

    (435)


    (5,209)


    (307)


    (2,372)

    Income (loss) before taxes and loss from equity
         in affiliates

    (83,098)


    5,063


    (128,959)


    (23,313)

    Income tax benefits/(expenses)

    (4,368)


    (6,024)


    12,925


    1,093

    Loss before loss from equity in affiliates

    (87,466)


    (961)


    (116,034)


    (22,220)

    Loss from equity in affiliates

    (56)


    (32)


    (132)


    (51)

    Net loss

    (87,522)


    (993)


    (116,166)


    (22,271)

    Less: net loss attributable to non-controlling
         interests

    (219)


    (109)


    (690)


    (525)

    Loss attributable to Leju Holdings Limited
           shareholders

    (87,303)


    (884)


    (115,476)


    (21,746)









    Loss per ADS:








    Basic/ Diluted

    (0.64)


    (0.01)


    (0.85)


    (0.16)

    Shares used in computation of loss per ADS:








    Basic/ Diluted

    135,763,962


    135,763,962


    135,652,738


    135,763,962



    Note 1

    The conversion of functional currency Renminbi ("RMB") amounts into reporting
    currency USD amounts is based on the rate of USD1 = RMB6.6166 on June 30, 2018
    and USD1 = RMB6.4284 for the six months ended June 30, 2018

     

     

    LEJU HOLDINGS LIMITED

    UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

    (In thousands of U.S. dollars)



    Three months ended


    Six months ended


    June 30,


    June 30,


    2017


    2018


    2017


    2018









    Net loss

    (87,522)


    (993)


    (116,166)


    (22,271)

    Other comprehensive income (loss), net of tax of nil








    Foreign currency translation adjustment

    3,025


    (2,982)


    4,268


    (773)









    Comprehensive loss

    (84,497)


    (3,975)


    (111,898)


    (23,044)









    Less: Comprehensive income (loss) attributable to
        non-controlling interest

    (251)


    38


    (729)


    (480)









    Comprehensive loss attributable to Leju Holdings
    Limited shareholders

    (84,246)


    (4,013)


    (111,169)


    (22,564)

     

     

    LEJU HOLDINGS LIMITED

    Unaudited Reconciliation of GAAP and Non-GAAP Results

    (In thousands of U.S. dollars, except share data and per ADS data)



    Three months ended


    Six months ended


    June 30,


    June 30,


    2017


    2018


    2017


    2018









    GAAP income (loss) from operations 

    (82,957)


    10,000


    (129,229)


    (21,500)

    Share-based compensation expense

    976


    1,056


    2,398


    2,035

    Amortization of intangible assets resulting from business
        acquisitions

    3,332


    3,205


    6,363


    6,655

    Goodwill impairment

    41,223


    -


    41,223


    -

    Non-GAAP income (loss) from operations

    (37,426)


    14,261


    (79,245)


    (12,810)









    GAAP net loss

    (87,522)


    (993)


    (116,166)


    (22,271)

    Share-based compensation expense (net of tax)

    976


    1,056


    2,398


    2,035

    Amortization of intangible assets resulting from 








        business acquisitions (net of tax)

    2,797


    2,358


    5,367


    4,991

    Goodwill impairment (net of tax)

    41,223


    -


    41,223


    -

    Non-GAAP net income (loss)

    (42,526)


    2,421


    (67,178)


    (15,245)









    Net loss attributable to Leju Holdings Limited
        shareholder

    (87,303)


    (884)


    (115,476)


    (21,746)

    Share-based compensation expense 








        (net of tax and non-controlling interests)

    968


    1,048


    2,382


    2,019

    Amortization of intangible assets resulting from business
        acquisitions (net of tax and non-controlling interests)

    2,797


    2,358


    5,367


    4,991

    Goodwill impairment (net of tax and non-controlling
        interests)

    41,223


    -


    41,223


    -

    Non-GAAP net income (loss) attributable to Leju
        Holdings Limited shareholders

    (42,315)


    2,522


    (66,504)


    (14,736)









    GAAP net loss per ADS - basic/diluted

    (0.64)


    (0.01)


    (0.85)


    (0.16)









    Non-GAAP net income (loss) per ADS - basic/diluted

    (0.31)


    0.02


    (0.49)


    (0.11)









    Shares used in calculating basic GAAP/non-GAAP net
        income (loss) attributable to shareholders per ADS

    135,763,962


    135,763,962


    135,652,738


    135,763,962

     

     

    LEJU HOLDINGS LIMITED

    SELECTED OPERATING DATA




    Three months ended


    Six months ended



    June 30,


    June 30,



    2017


    2018


    2017


    2018










    Operating data for e-commerce services









    Number of discount coupons issued to
         prospective purchasers (number of
         transactions)


    97,282


    58,252


    140,731


    77,930

    Number of discount coupons redeemed (number
         of transactions)


    32,670


    20,888


    51,657


    34,687

     

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