Opinion And Analysis

China’s Leju Holdings Limited reports first quarter 2018 results

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Leju Holdings Limited (LEJU) ("Leju (LEJO)" or the "Company"), a leading online-to-offline ("O2O") real estate services provider in China, announced its unaudited financial results for the fiscal quarter ended March 31, 2018.

First Quarter 2018 Financial Highlights

  • Total revenues increased by 19% year-on-year to $81.5 million
    - Revenues from e-commerce services increased by 40% year-on-year to $53.5 million
    - Revenues from online advertising services increased by 5% year-on-year to $27.1 million
  • Loss from operations was $31.5 million, a decrease of 32% from $46.3 million for the same quarter of 2017. Non-GAAP[1] loss from operations was $27.1 million, a decrease of 35% from $41.8 million for the same quarter of 2017
  • Net loss attributable to Leju Holdings Limited shareholders was $20.9 million, or $0.15 loss per diluted American depositary share ("ADS"), a decrease of 26% from $28.2 million, or $0.21 loss per diluted ADS, for the same quarter of 2017. Non-GAAP net loss attributable to Leju Holdings Limited shareholders was $17.3 million, or $0.13 loss per diluted ADS, a decrease of 29% from $24.2 million, or $0.18 loss per diluted ADS, for the same quarter of 2017
[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 and amortization of intangible assets resulting from business acquisitions. 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.

"I'm pleased that our businesses returned to a growth trajectory in the first quarter of 2018 despite the overall market environment not showing signs of major improvement," said Mr. Geoffrey He, Leju's Chief Executive Officer. "Our e-commerce business had a strong recovery, benefitting from larger contribution from lower-tier cities and higher value per coupon. We also entered into annual framework contracts with many leading real estate developers. Our online advertising business achieved steady growth in the first quarter as a result of our big-data based suite of targeted advertising products, which continued to be well received by the market. Meanwhile, we further enhanced our media influence and content productivity through enhancing 'Leju Finance', our recently launched real estate vertical media platform, which helped lay a solid foundation for future growth. In addition, our efforts to streamline our cost structure began to show results in the first quarter. We will continue to improve our operational efficiency and aim to return to profitability. "

First Quarter 2018 Results

Total revenues were $81.5 million, an increase of 19% from $68.3 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 $53.5 million, an increase of 40% from $38.1 million for the same quarter of 2017, primarily due to increases in the average price per discount coupon redeemed.

Revenues from online advertising services were $27.1 million, an increase of 5% from $25.8 million for the same quarter of 2017, primarily due to an increase in property developers' demand for online advertising.

Revenues from listing services were $0.9 million, a decrease of 79% from $4.4 million for the same quarter of 2017, primarily due to a decrease in secondary real estate brokers' demand.

Cost of revenues was $18.7 million, an increase of 32% from $14.1 million for the same quarter of 2017, primarily due to increased cost of advertising resources purchased from media platforms, partially offset by decreased staff cost as a result of headcount change.

Selling, general and administrative expenses were $95.2 million, a decrease of 5% from $100.5 million for the same quarter of 2017, primarily due to lower staff cost as a result of headcount change.

Loss from operations was $31.5 million, a decrease of 32% from $46.3 million for the same quarter of 2017. Non-GAAP loss from operations was $27.1 million, a decrease of 35% from $41.8 million for the same quarter of 2017.

Net loss was $21.3 million, a decrease of 26% from $28.6 million for the same quarter of 2017. Non-GAAP net loss was $17.7 million, a decrease of 28% from $24.7 million for the same quarter of 2017.

Net loss attributable to Leju Holdings Limited shareholders was $20.9 million, or $0.15 loss per diluted ADS, a decrease of 26% from $28.2 million, or $0.21 loss per diluted ADS, for the same quarter of 2017. Non-GAAP net loss attributable to Leju Holdings Limited shareholders was $17.3 million, or $0.13 loss per diluted ADS, a decrease of 29% from $24.2 million, or $0.18 loss per diluted ADS, for the same quarter of 2017.

Cash Flow

As of March 31, 2018, the Company's cash and cash equivalents balance was $157.2 million.

First quarter 2018 net cash provided by operating activities was $1.0 million, primarily comprised of non-GAAP net loss of $17.7 million, partially offset by a decrease in customer deposit of $17.5 million.

Business Outlook

The Company estimates that its total revenues for the second quarter of 2018 will be approximately $106 million to $111 million, which would represent an increase of approximately 15% to 20% from $92.7 million in the same quarter in 2017. This forecast reflects the Company's current and preliminary view, which is subject to change.

SOURCE Leju Holdings Limited

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