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Youku Announces Unaudited Third Quarter 2011 Financial Results
Nov 16, 2011 (03:11 PM EST)


Net Revenues Increased by 129% Year-over-Year; Video Views Increased by 22% Quarter-over-Quarter

BEIJING, Nov. 16, 2011 /PRNewswire-Asia/ -- Youku Inc. (NYSE: YOKU), China's leading Internet television company ("Youku" or the "Company"), today announced its unaudited financial results for the third quarter ended September 30, 2011.

Third Quarter 2011 Highlights (1)

  • Net revenues were RMB262.5 million (US$41.2 million), a 129% increase from the corresponding period in 2010, exceeding the high end of the Company's guidance by 4%.
  • Gross profit was RMB67.8 million (US$10.6 million), a 330% increase from the corresponding period in 2010.
  • Operating expenses were RMB120.1 million (US$18.8 million), a 120% increase from the corresponding period in 2010.
  • Net loss was RMB47.5 million (US$7.4 million) in the third quarter of 2011, an 11% decrease relative to the corresponding period in 2010.
  • Non-GAAP net loss was RMB28.2 million (US$4.4 million) in the third quarter of 2011, a 25% decrease relative to the corresponding period in 2010.
  • Basic and diluted loss per ADS, each representing 18 of our Class A ordinary shares, for the third quarter of 2011 amounted to RMB0.42 (US$0.07) and RMB0.42 (US$0.07), respectively.

(1) The reporting currency of the Company is Renminbi ("RMB"), but for the convenience of the reader, the amounts presented throughout the release are in US dollars ("US$"). Unless otherwise noted, all conversions from RMB to US$ are made at a rate of RMB6.3780 to US$1.00, the effective noon buying rate as of September 30, 2011 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. No representation is made that the RMB amounts could have been, or could be, converted into US$ at such rate.



"We had another quarter of solid growth in both traffic and revenues, and our gap with competitors both in terms of traffic and revenues is clearly expanding as a result of network effect," said Victor Koo, Chairman and Chief Executive Officer of Youku. "Internet television is a young and evolving space with tremendous opportunities. We are in an aggressive investment cycle and we will continue to invest proactively to expand and leverage our user base and client base, brand, team and infrastructure as we move to establish one of the largest Internet franchises in China."

Dele Liu, Senior Vice President and Chief Financial Officer of Youku, commented, "We are happy to continue to realize another quarter of triple digit growth year-on-year. We are committed to creating shareholder value through long-term market leadership."

Third Quarter 2011 Results

Net revenues were RMB262.5 million (US$41.2 million) in the third quarter of 2011, representing a 129% increase from the corresponding period in 2010 and exceeding the high end of the revenue guidance previously announced by the Company by 4%. This year-over-year growth was primarily attributable to the increased average revenue per advertiser and the increased number of advertisers on top of a base that grew 139% year-over-year in the previous year partially due to the 2010 World Cup.

Bandwidth costs as a component of cost of revenues were RMB92.4 million (US$14.5 million) in the third quarter of 2011, representing 35% of net revenues, down from 44% in the corresponding period in 2010. The increase of bandwidth costs was primarily due to increased bandwidth capacity to support the growth of traffic to our website and further enhance our user experience.

Content costs as a component of cost of revenues were RMB67.0 million (US$10.5 million) in the third quarter of 2011, representing 26% of net revenues in the same period, compared to 26% in the corresponding period in 2010 despite our change in accounting estimate to accelerate amortization of content costs starting in fiscal year 2011. If the Company had continued using straight-line amortization for content costs as in the corresponding period in 2010, the total content costs would have been RMB52.1 million (US$8.2 million), representing 20% of net revenues in the third quarter of 2011.

Non-GAAP gross profit, which is herein defined as gross profit excluding share-based compensation expenses, was RMB69.2 million (US$10.8 million) in the third quarter of 2011, an increase of 332% compared to the non-GAAP gross profit of RMB16.0 million (US$2.5 million) in the corresponding period in 2010.

Non-GAAP operating expenses, which is herein defined as operating expenses excluding share-based compensation expenses, were RMB102.3 million (US$16.0 million) in the third quarter of 2011, compared to the non-GAAP operating expenses of RMB51.4 million (US$8.1 million) for the same period in 2010. The increase was primarily due to increases in sales and marketing expenses, product development expenses and general and administrative expenses as a result of the substantial growth of our business. The detailed discussion of each component of operating expenses are as follows:

Non-GAAP sales and marketing expenses, which is herein defined as sales and marketing expenses excluding share-based compensation expenses, were RMB68.2 million (US$10.7 million) in the third quarter of 2011, an increase of 85% compared to the non-GAAP sales and marketing expenses of RMB36.7 million (US$5.8 million) in the corresponding period in 2010. This increase was primarily due to increases in marketing expenses and commission expenses paid to our sales force in line with our revenue growth.

Non-GAAP product development expenses, which is herein defined as product development expenses excluding share-based compensation expenses, were RMB18.5 million (US$2.9 million) in the third quarter of 2011, an increase of 134% compared to the non-GAAP product development expenses of RMB8.0 million (US$1.3 million) in the corresponding period in 2010. This increase was primarily due to an increase in salaries and benefits for product and development personnel resulting from increased headcount.

Non-GAAP general and administrative expenses, which is herein defined as general and administrative expenses excluding share-based compensation expenses, were RMB15.6 million (US$2.4 million) in the third quarter of 2011, an increase of 131% compared to the non-GAAP general and administrative expenses of RMB6.7 million (US$1.1 million) in the corresponding period in 2010. This increase was primarily due to an increase in salaries and benefits for our general and administrative personnel primarily resulting from headcount increase and the substantial growth of our business.

Non-GAAP net loss, which is herein defined as net loss excluding share-based compensation expenses and change in fair value of warrant liability, was RMB28.2 million (US$4.4 million) in the third quarter of 2011, or a decrease of 25% relative to the non-GAAP net loss in the corresponding period in 2010. If we had continued using straight-line amortization for content costs as in the corresponding period in 2010, our non-GAAP net loss in the third quarter of 2011 would be RMB13.3 million (US$2.1 million), or a decrease of 65% relative to the corresponding period in 2010.

Non-GAAP EBITDA loss, which is herein defined as net loss before income taxes, interest expenses, interest income, depreciation and amortization (excluding amortization of acquired content), further adjusted for change in fair value of warrant liability, share-based compensation expenses and other non-operating items, was RMB21.4 million (US$3.4 million) for the third quarter of 2011, or an improvement of 13% relative to the non-GAAP EBITDA loss in the corresponding period in 2010.

Business Outlook

For the fourth quarter of 2011, the Company expects year-on-year growth of 90% to 100% in net revenues. This forecast reflects the Company's current and preliminary view, which is subject to change.

Conference Call Information

Youku's management will host an earnings conference call at 8:00 p.m. U.S. Eastern Time on November 16, 2011 (9:00 a.m. Beijing/Hong Kong Time on November 17, 2011).

Interested parties may participate in the conference call by dialing one of the following numbers below and entering passcode Youku# (i.e., 96858#) starting 10-15 minutes prior to the beginning of the call.

US Toll Free Dial In:

1-866-519-4004

International Dial In:

1-718-354-1231

Mainland China Toll Free Dial In:

86-4006208038 / 86-8008190121

Hong Kong Dial In:

852-2475-0994



A replay of the call will be available by dialing 1-866-214-5335 (international 1-718-354-1232), and entering passcode 24935949#. The replay will be available through November 24, 2011.

This call will be webcast live and the replay will be available for 12 months. Both will be available on the Investor Relations section of Youku's corporate website at http://ir.youku.com.

About Youku

Youku Inc. is China's leading Internet television company. Our Internet television platform enables users to search, view and share high-quality video content quickly and easily across multiple devices. Youku, which stands for "what's best and what's cool" in Chinese, is the most recognized online video brand in China. Youku's American depositary shares, each representing 18 of our Class A ordinary shares, are traded on NYSE under the symbol "YOKU."

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of 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" and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as Youku's strategic and operational plans, contain forward-looking statements. Youku may also make written or oral forward-looking statements in its filings with the U.S. Securities and Exchange Commission ("SEC"), 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 Youku's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: our goals and strategies; our future business development, financial condition and results of operations; the expected growth of the online video market in China; our expectations regarding demand for and market acceptance of our services; our expectations regarding the retention and strengthening of our relationships with key advertisers and customers; our plans to enhance user experience, infrastructure and service offerings; competition in our industry in China; and relevant government policies and regulations relating to our industry. Further information regarding these and other risks is included in our annual report on Form 20-F and other documents filed with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Youku does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement Youku's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Youku uses the following measures defined as non-GAAP financial measures by the SEC in evaluating its business: non-GAAP gross profit, non-GAAP operating expenses, non-GAAP sales and marketing expense, non-GAAP product development expenses, non-GAAP general and administrative expenses, non-GAAP loss from operations, non-GAAP net loss and non-GAAP EBITDA loss.  We define non-GAAP gross profit, non-GAAP operating expenses, non-GAAP sales and marketing expense, non-GAAP product development expenses, non-GAAP general and administrative expenses, and non-GAAP loss from operations as the respective nearest comparable GAAP financial measure to exclude share-based compensation expenses. We define non-GAAP net loss as net loss excluding share-based compensation expenses and change in fair value of warrant liability. We define non-GAAP EBITDA loss as net income or loss before income taxes, interest expenses, interest income, depreciation and amortization (excluding amortization of acquired content), further adjusted for change in fair value of warrant liability, share-based compensation expenses and other non-operating items. We present non-GAAP financial measures because they are used by our management to evaluate our operating performance. We also believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our consolidated results of operations in the same manner as our management and in comparing financial results across accounting periods and to those of our peer companies.

The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, 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 "Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP financial measures" at the end of this release.

For more information, please contact:

Investor Relations:

Ryan Cheung
Corporate Finance Director
Youku Inc.
Tel: (+8610) 5885-1881 x6090
Email: ryan.cheung@youku.com

Caroline Straathof
IR Inside
Tel: (+31) 6-54624301
Email: caroline.straathof@irinside.com

YOUKU  INC.

CONSOLIDATED BALANCE SHEETS









(Amounts in thousands, except for number of shares)


December 31,


September 30


September 30




2010


2011


2011




RMB


RMB


US$

ASSETS




(Unaudited)


(Unaudited)









Current assets:








Cash and cash equivalents


1,811,423


2,387,847


374,388


Short-term investments


-


1,405,619


220,386


Accounts receivable, net


216,245


412,886


64,736


Intangible assets


10,230


19,329


3,031


Prepayments and other assets


25,187


11,716


1,837

Total current assets


2,063,085


4,237,397


664,378









Non-current assets:








Property and equipment, net


64,177


92,217


14,459


Long-term investment


-


1,707


268


Intangible assets


57,550


156,386


24,520


Capitalized content production costs


-


1,805


283


Prepayments and other assets


5,356


223,926


35,109

Total non-current assets


127,083


476,041


74,639









TOTAL ASSETS


2,190,168


4,713,438


739,017









LIABIILITIES AND SHAREHOLDERS' EQUITY















Current liabilities:








Accounts payable


35,641


97,678


15,315


Advances from customers


1,304


5,168


810


Accrued expenses and other liabilities


201,100


336,156


52,706


Current portion of long-term debt


22,180


10,554


1,655

Total current liabilities


260,225


449,556


70,486









Non-current liabilities:








Long-term debt


18,455


10,270


1,610

Total non-current liabilities


18,455


10,270


1,610









Total liabilities


278,680


459,826


72,096









Commitments and contingencies















Shareholders' equity:








Class A Ordinary Shares (US$0.00001 par value, 9,340,238,793 authorized, 1,235,761,996 and 1,393,791,561 issued and outstanding as of December 31, 2010 and September 30, 2011, respectively)


82


93


15


Class B Ordinary Shares (US$0.00001 par value, 659,761,207 authorized, 659,761,207 issued and outstanding as of December 31, 2010 and September 30, 2011)


49


49


8


Additional paid-in capital


2,625,250


5,168,461


810,358


Accumulated deficit


(699,540)


(822,030)


(128,885)


Accumulated other comprehensive loss


(14,353)


(92,961)


(14,575)

Total shareholders' equity


1,911,488


4,253,612


666,921









TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


2,190,168


4,713,438


739,017



YOUKU INC.

CONSOLIDATED STATEMENTS OF OPERATIONS  


















 For the Three Months Ended, 


For the Nine Months Ended, 

(Amounts in thousands, except for number of 
shares and ADS and per share and per ADS data)


September 30,


June 30,


September 30,


September 30,


September 30,


September 30,


September 30,



2010


2011


2011


2011


2010


2011


2011



RMB


RMB


RMB


US$


RMB


RMB


US$



(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)
















Net revenues 


114,807


197,853


262,471


41,152


234,623


588,315


92,241
















Cost of revenues (Note 1)


(99,054)


(144,945)


(194,686)


(30,525)


(248,719)


(453,602)


(71,120)
















Gross profit (loss)


15,753


52,908


67,785


10,627


(14,096)


134,713


21,121
















Operating expenses:















        Product development


(8,824)


(14,192)


(24,053)


(3,771)


(21,260)


(48,839)


(7,657)

        Sales and marketing


(38,539)


(52,732)


(74,205)


(11,635)


(91,527)


(163,606)


(25,652)

        General and administrative


(7,242)


(13,759)


(21,845)


(3,425)


(18,716)


(48,178)


(7,554)

Total operating expenses


(54,605)


(80,683)


(120,103)


(18,831)


(131,503)


(260,623)


(40,863)
















(Loss) profit from operations


(38,852)


(27,775)


(52,318)


(8,204)


(145,599)


(125,910)


(19,742)
















Interest income


265


3,190


8,677


1,360


1,068


12,923


2,026

Interest expenses


(2,517)


(1,801)


(1,542)


(242)


(4,963)


(5,498)


(862)

Change in fair value of warrant liability


(11,976)


-


-


-


(17,532)


-


-

Other, net


(42)


(1,714)


(2,291)


(359)


65


(4,005)


(628)

Total other income (expenses), net


(14,270)


(325)


4,844


759


(21,362)


3,420


536
















(Loss) profit before income taxes


(53,122)


(28,100)


(47,474)


(7,445)


(166,961)


(122,490)


(19,206)

Income taxes


-


-


-


-


-


-


-
















Net (loss) profit


(53,122)


(28,100)


(47,474)


(7,445)


(166,961)


(122,490)


(19,206)
















Net loss per share, basic and diluted


(0.15)


(0.01)


(0.02)


*


(0.46)


(0.06)


(0.01)

Net loss per ADS, basic and diluted


(2.61)


(0.26)


(0.42)


(0.07)


(8.22)


(1.12)


(0.18)

Shares used in computation, basic and diluted


365,699,281


1,966,651,063


2,051,993,011


2,051,993,011


365,675,115


1,972,240,249


1,972,240,249

ADS used in computation, basic and diluted


20,316,627


109,258,392


113,999,611


113,999,611


20,315,284


109,568,902


109,568,902

* represents per share amount which is less than (0.01)



The accompanying notes are an integral part of the press release































Note 1. Cost of Revenues


 For the Three Months Ended, 


For the Nine Months Ended, 



September 30,


June 30,


September 30,


September 30,


September 30,


September 30,


September 30,



2010


2011


2011


2011


2010


2011


2011



RMB


RMB


RMB


US$


RMB


RMB


US$

(Amounts in thousands)


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)

 Cost of revenues: 















 Business tax and surcharges 


9,800


20,241


25,420


3,986


23,241


58,053


9,102

 Bandwidth costs 


50,211


66,251


92,388


14,485


139,994


214,964


33,704

 Depreciation of servers and other equipment 


9,316


8,919


9,855


1,546


29,008


27,886


4,372

 Content costs 


29,727


49,534


67,023


10,508


56,476


152,699


23,942

 Total Cost of Revenues 


99,054


144,945


194,686


30,525


248,719


453,602


71,120



YOUKU INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS














 For the Three Months Ended, 




September 30,


June 30,


September 30,


September 30,


(Amounts in thousands)


2010


2011


2011


2011




RMB


RMB


RMB


US$




(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)

Cash flows from operating activities:









Net loss


(53,122)


(28,100)


(47,474)


(7,445)

Adjustments to reconcile net loss to net cash used in operating activities:










Depreciation


10,741


10,358


11,557


1,812


Bad debt expense


285


(279)


1,066


167


Amortization of intangible assets and self produced contents


18,135


35,390


43,111


6,759


Accretion of long-term debt discounts


919


923


839


132


Gain on disposal of  property and equipment


-


(7)


-


-


Foreign exchange loss


-


1,644


1,971


309


Share-based compensation


3,416


7,278


19,295


3,026


Change in fair value of warrant liability


11,976


-


-


-


Change in operating assets and liabilities:










       Accounts receivable


(67,541)


(86,113)


(135,309)


(21,215)


       Prepayments and other assets


9,203


(4,776)


(6,911)


(1,084)


       Capitalized content production costs


(1,750)


(1,745)


(5,384)


(844)


       Accounts payable


(6,980)


(502)


-


-


       Advances from customers


(12)


(1,455)


4,444


697


       Accrued expenses and other liabilities


35,684


62,204


111,676


17,511

Net cash used in operating activities


(39,046)


(5,180)


(1,119)


(175)











Cash flows from investing activities:










Acquisition of property and equipment


(11,496)


(18,878)


(11,797)


(1,850)


Proceeds from (purchase of) short-term investments


34,000


(1,164,888)


(168,131)


(26,361)


Proceeds from disposal of property and equipment


-


8


-


-


Acquisition of intangible assets


(15,258)


(144,156)


(189,884)


(29,772)

Net cash provided by (used in) investing activities


7,246


(1,327,914)


(369,812)


(57,983)











Cash flows from financing activities:










Exercise of employee stock options


48


1,025


2,390


375


Proceeds from issuance of Series F Preferred Shares


334,985


-


-


-


Drawdown of long-term debt


33,875


-


-


-


Principal repayments on long-term debt


(7,054)


(7,406)


(5,594)


(877)


Debt commitment fee received


136


-


-


-


Proceeds from follow-on offering & IPO activity, net of issuance costs


(566)


2,508,974


(539)


(85)


Payment of convertible redeemable preferred shares issuance costs


(648)


-


-


-

Net cash (used in) provided by financing activities


360,776


2,502,593


(3,743)


(587)

Effect of exchange rate changes on cash and cash equivalents


254


(22,802)


(44,041)


(6,905)

Net (decrease) increase in cash and cash equivalents


329,230


1,146,697


(418,715)


(65,650)

Cash and cash equivalents at the beginning of the period


111,324


1,659,865


2,806,562


440,038

Cash and cash equivalents at the end of the period


440,554


2,806,562


2,387,847


374,388



Reconciliations of Non-GAAP results of operations measures to the nearest comparable GAAP financial measures (*) (Amounts in thousands of Renminbi ("RMB") and U.S.dollars ("US$"),unaudited)































 1. Non-GAAP Gross Profit (Loss)


 For the Three Months Ended, 


For the Nine Months Ended, 



September 30,


June 30,


September 30,


September 30,


September 30,


September 30,


September 30,



2010


2011


2011


2011


2010


2011


2011



RMB


RMB


RMB


US$


RMB


RMB


US$

Gross profit (loss)


15,753


52,908


67,785


10,627


(14,096)


134,713


21,121

 Add back: share-based compensation  


258


701


1,459


229


550


2,592


406

Non-GAAP gross profit (loss)


16,011


53,609


69,244


10,856


(13,546)


137,305


21,527































 2. Non-GAAP Operating Expenses


 For the Three Months Ended, 


For the Nine Months Ended, 



September 30,


June 30,


September 30,


September 30,


September 30,


September 30,


September 30,



2010


2011


2011


2011


2010


2011


2011



RMB


RMB


RMB


US$


RMB


RMB


US$

Operating expenses


54,605


80,683


120,103


18,831


131,503


260,623


40,863

 Deduct: share-based compensation  


3,158


6,577


17,836


2,797


6,825


29,355


4,602

Non-GAAP operating expenses


51,447


74,106


102,267


16,034


124,678


231,268


36,261































 3. Non-GAAP Sales and Marketing Expenses


 For the Three Months Ended, 


For the Nine Months Ended, 



September 30,


June 30,


September 30,


September 30,


September 30,


September 30,


September 30,



2010


2011


2011


2011


2010


2011


2011



RMB


RMB


RMB


US$


RMB


RMB


US$

Sales and marketing expenses


38,539


52,732


74,205


11,635


91,527


163,606


25,652

 Deduct: share-based compensation  


1,750


3,045


6,047


948


3,645


11,756


1,843

Non-GAAP  sales and marketing expenses


36,789


49,687


68,158


10,687


87,882


151,850


23,809































4. Non-GAAP Product Development Expenses


 For the Three Months Ended, 


For the Nine Months Ended, 



September 30,


June 30,


September 30,


September 30,


September 30,


September 30,


September 30,



2010


2011


2011


2011


2010


2011


2011



RMB


RMB


RMB


US$


RMB


RMB


US$

Product development expenses


8,824


14,192


24,053


3,771


21,260


48,839


7,657

 Deduct: share-based compensation  


903


1,737


5,534


868


2,038


8,361


1,311

Non-GAAP  product development expenses


7,921


12,455


18,519


2,903


19,222


40,478


6,346































5. Non-GAAP General and Administrative Expenses


For the Three Months Ended,


For the Nine Months Ended,



September 30,


June 30,


September 30,


September 30,


September 30,


September 30,


September 30,



2010


2011


2011


2011


2010


2011


2011



RMB


RMB


RMB


US$


RMB


RMB


US$

General and administrative expenses


7,242


13,759


21,845


3,425


18,716


48,178


7,554

 Deduct: share-based compensation  


505


1,795


6,255


981


1,142


9,238


1,448

Non-GAAP  general and administrative expenses


6,737


11,964


15,590


2,444


17,574


38,940


6,106































 6. Non-GAAP  (Loss) Profit from Operations


 For the Three Months Ended, 


For the Nine Months Ended, 



September 30,


June 30,


September 30,


September 30,


September 30,


September 30,


September 30,



2010


2011


2011


2011


2010


2011


2011



RMB


RMB


RMB


US$


RMB


RMB


US$

(Loss) profit from operations


(38,852)


(27,775)


(52,318)


(8,204)


(145,599)


(125,910)


(19,742)

 Add back: share-based compensation  


3,416


7,278


19,295


3,026


7,375


31,947


5,008

Non-GAAP  (loss) profit from operations


(35,436)


(20,497)


(33,023)


(5,178)


(138,224)


(93,963)


(14,734)































7. Non-GAAP  Net (Loss) Profit


 For the Three Months Ended, 


For the Nine Months Ended, 



September 30,


June 30,


September 30,


September 30,


September 30,


September 30,


September 30,



2010


2011


2011


2011


2010


2011


2011



RMB


RMB


RMB


US$


RMB


RMB


US$

 Net (loss) profit 


(53,122)


(28,100)


(47,474)


(7,445)


(166,961)


(122,490)


(19,206)

 Add back: share-based compensation  


3,416


7,278


19,295


3,026


7,375


31,947


5,008

 Add back: change in fair value of warrant liability
   


11,976


-


-


-


17,532


-


-

 Non-GAAP net (loss) profit 


(37,730)


(20,822)


(28,179)


(4,419)


(142,054)


(90,543)


(14,198)































8.  Non-GAAP EBITDA (Loss) Profit


 For the Three Months Ended, 


For the Nine Months Ended, 



September 30,


June 30,


September 30,


September 30,


September 30,


September 30,


September 30,



2010


2011


2011


2011


2010


2011


2011



RMB


RMB


RMB


US$


RMB


RMB


US$

 Net (loss) profit 


(53,122)


(28,100)


(47,474)


(7,445)


(166,961)


(122,490)


(19,206)

 Add back: 















 Depreciation and amortization (excluding amortization 















       of acquired content )** 


10,746


10,373


11,571


1,814


32,288


32,484


5,093

 Interest income 


(265)


(3,190)


(8,677)


(1,360)


(1,068)


(12,923)


(2,026)

 Interest expenses 


2,517


1,801


1,542


242


4,963


5,498


862

 Income taxes 


-


-


-


-


-


-


-

 EBITDA (Loss) Profit 


(40,124)


(19,116)


(43,038)


(6,749)


(130,778)


(97,431)


(15,277)
















 Adjustments: 















 Share-based compensation  


3,416


7,278


19,295


3,026


7,375


31,947


5,008

 Change in fair value of warrant liability 


11,976


-


-


-


17,532


-


-

 Others, net 


42


1,714


2,291


359


(65)


4,005


628

Non-GAAP EBITDA (Loss) Profit


(24,690)


(10,124)


(21,452)


(3,364)


(105,936)


(61,479)


(9,641)














































*  For more information on the Non-GAAP financial measures, please see the section captioned "About Non-GAAP Financial Measures" in this earnings release.


**The amortization expense was related to advertising license acquired in April 2010. The amortization of acquired content was not included in Non-GAAP EBITDA loss financial measures we disclose in our annual report on Form 20-F that we filed on June 10, 2011.



SOURCE Youku.com Inc.