Autohome Inc. Announces Unaudited Second Quarter Ended June 30, 2019 Financial Results

BEIJING, Aug. 7, 2019 /PRNewswire/ -- Autohome Inc. (NYSE: ATHM) ("Autohome" or the "Company"), the leading online destination for automobile consumers in China, today announced its unaudited financial results for the second quarter ended June 30, 2019.

Second Quarter 2019 Highlights^[1]

• Net Revenues in the second quarter of 2019 were RMB2,309.0 million ($336.3 million), exceeding the high end of the Company's original guidance of RMB2,305.0 million ($335.8 million).
• Net Income attributable to Autohome Inc. in the second quarter of 2019 was RMB801.9 million ($116.8 million), compared to RMB691.6 million for the corresponding period of 2018.
• Mobile Traffic Leadership Continues: In June 2019, the total number of average daily active users who accessed the Company's mobile websites, primary application and mini-apps reached 37.8 million, representing an increase of 48% compared to June 2018, and further solidifying the Company's dominant position in the auto vertical sector in China.
• 818 Global Super Auto Show: In an effort to support OEMs and dealers and maintain long- term partnership with them, starting this August, the Company has launched various offline activities and online auto show events for car owners, auto fans and industry experts in China. In particular, the Company worked with top producers from Hunan TV to launch the first-ever auto-themed gala on August 18, 2019 (the "818 Global Super Auto Show"). By the end of July, more than 80 auto brands and over 2,400 dealers have signed up for the event.

Mr. Min Lu, Chairman of the Board of Directors and Chief Executive Officer of Autohome, stated, "I'm pleased to report a solid quarter with total revenue managing to increase by 23.5% year-over-year, despite the continuous decline in new car sales. During the quarter, we strove to expand content offerings while continuing to improve the user experience through a major upgrade of the Autohome App. On the product front, we plan to extend our data services to serve the R&D department of OEMs, and further enable dealer partners through AI-powered new data products. With all the aforementioned progress, we are confident to continue to drive our growth and generate returns for our shareholders over the long-term."

Mr. Jun Zou, Chief Financial Officer of Autohome, added, "In the second quarter, we maintained the solid growth momentum in our core business. Our new initiatives once again picked up steam and gained positive market recognition. In response to the prolonged sales decline in the auto sector, we proactively stepped up our efforts in supporting OEMs/dealers through initiatives such as the "818 Global Super Auto Show". We believe such efforts will bode well with our strategy and benefit to the long-term relationship with our partners."

Overview of Key Financial Results for the Second Quarter 2019

Key Financial Results

Unaudited Second Quarter 2019 Financial Results

Net Revenues

Net revenues in the second quarter of 2019 were RMB2,309.0 million ($336.3 million) compared to RMB1,868.9 million in the corresponding period of 2018.

• Media services revenues increased by 10.5% to RMB1,028.3 million ($149.8 million) from RMB930.2 million in the corresponding period of 2018. The increase was mainly attributable to an increase in average revenue per automaker advertiser as automakers continued to allocate a greater portion of their advertising budgets to Autohome, which provides an increasingly diversified and optimized product portfolio. 
• Leads generation services revenues increased by 20.1% to RMB888.8 million ($129.5 million) from RMB740.0 million in the corresponding period of 2018. The increase was primarily attributable to the increase in average revenue per paying dealer.
• Online marketplace and others revenues increased by 97.2% to RMB391.9 million ($57.1 million) from RMB198.7 million in the corresponding period of 2018. This increase was primarily attributable to the increased contribution from data products and auto-financing businesses.

Cost of Revenues

Cost of revenues were RMB263.6 million ($38.4 million) compared to RMB208.7 million in the corresponding period of 2018. In addition, cost of revenues included share-based compensation expenses of RMB4.1 million ($0.6 million) during the second quarter of 2019, compared to RMB7.1 million for the corresponding period of 2018.

Operating Expenses

Operating expenses were RMB1,335.3 million ($194.5 million) in the second quarter of 2019, compared to RMB987.5 million in the corresponding period of 2018. The increase was mainly due to increases in sales and marketing expenses and product development expenses, as the Company continued to invest in future growth opportunities.

• Sales and marketing expenses were RMB892.9 million ($130.1 million) in the second quarter of 2019, compared to RMB588.0 million in the corresponding period of 2018. The increase was primarily due to the increased offline execution expenses to support automakers and dealers. Sales and marketing expenses for the second quarter of 2019 included share-based compensation expenses of RMB12.9 million ($1.9 million), compared to RMB13.9 million in the corresponding period of 2018.
• General and administrative expenses were RMB81.8 million ($11.9 million) in the second quarter of 2019, compared to RMB86.4 million in the corresponding period of 2018. General and administrative expenses for the second quarter of 2019 included share-based compensation expenses of RMB15.2 million ($2.2 million), compared to RMB15.7 million in the corresponding period of 2018.
• Product development expenses were RMB360.6 million ($52.5 million) in the second quarter of 2019 compared to RMB313.1 million in the corresponding period of 2018. The increase was primarily due to an increase in staff cost related to product development. Product development expenses for the second quarter of 2019 included share-based compensation expenses of RMB20.2 million ($2.9 million), compared to RMB14.9 million in the corresponding period of 2018.

Operating Profit

Operating profit was RMB835.3 million ($121.7million) in the second quarter of 2019, compared to RMB748.4 million in the corresponding period of 2018.

Income tax expense

Income tax expense was RMB147.3 million ($21.5 million) in the second quarter of 2019, compared to RMB145.1 million in the corresponding period of 2018.

Net Income attributable to Autohome Inc. and EPS

Net income attributable to Autohome Inc. was RMB801.9 million ($116.8 million) in the second quarter of 2019, compared to RMB691.6 million in the corresponding period of 2018. Basic and diluted earnings per share/per ADS or "EPS" were RMB6.77 ($0.99) and RMB6.70 ($0.98), respectively, compared to basic and diluted EPS of RMB5.89 and RMB5.79, respectively, in the corresponding period of 2018.

Adjusted Net Income attributable to Autohome Inc. (Non-GAAP) and Non-GAAP EPS

Adjusted net income attributable to Autohome Inc. (Non-GAAP), defined as net income attributable to Autohome Inc., excluding share-based compensation expenses and amortization expenses of intangible assets related to acquisitions, was RMB855.4 million ($124.6 million) in the second quarter of 2019, compared to RMB744.3 million in the corresponding period of 2018. Non-GAAP basic and diluted EPS were RMB7.22 ($1.05) and RMB7.15 ($1.04), respectively, compared to non-GAAP basic and diluted EPS of RMB6.33 and RMB6.23, respectively, in the corresponding period of 2018.

Balance Sheet and Cash Flow

As of June 30, 2019, the Company had cash and cash equivalents and short-term investments of RMB10.83 billion ($1,577.8 million). Net cash provided by operating activities in the second quarter of 2019 was RMB372.0 million ($54.2 million).

Employees

The Company had 4,223 employees as of June 30, 2019.

Business Outlook

Autohome currently expects to generate net revenues in the range of RMB2,160.0 million ($314.6 million) to RMB2,190.0 million ($319.0 million) in the third quarter of fiscal year 2019, representing a 14.4% to 16.0% year-over-year increase. This forecast reflects the Company's current and preliminary view on the market and its operating conditions, which are subject to change.

Conference Call Information

The Company will host an earnings conference call at 8:00 AM U.S. Eastern Time on Wednesday, August 7, 2019 (8:00 PM Beijing Time on the same day).

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

Please dial in ten minutes before the call is scheduled to begin and provide the passcode to join the call.

A replay of the conference call may be accessed by phone at the following numbers until August 13, 2019:

Additionally, a live and archived webcast of the conference call will be available at http://ir.autohome.com.cn.

About Autohome Inc.

Autohome Inc. (NYSE: ATHM) is the leading online destination for automobile consumers in China.  Its mission is to enhance the car-buying and ownership experience for auto consumers in China. Autohome provides professionally produced and user-generated content, a comprehensive automobile library, and extensive automobile listing information to automobile consumers, covering the entire car purchase and ownership cycle. The ability to reach a large and engaged user base of automobile consumers has made Autohome a preferred platform for automakers and dealers to conduct their advertising campaigns. Further, the Company's dealer subscription and advertising services allow dealers to market their inventory and services through Autohome's platform, extending the reach of their physical showrooms to potentially millions of internet users in China and generating sales leads for them. The Company offers sales leads, data analysis, and marketing services to assist automakers and dealers with improving their efficiency and facilitating transactions. As a transaction-centric company, Autohome operates its "Autohome Mall," a full-service online transaction platform, to facilitate transactions for automakers and dealers.  Further, through its websites and mobile applications, it also provides other value-added services, including auto financing, auto insurance, used car transactions, and aftermarket services. For further information, please visit www.autohome.com.cn.

Safe Harbor Statement

This press release contains statements that may constitute "forward-looking" statements pursuant to 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, Autohome's business outlook, Autohome's strategic and operational plans and quotations from management in this announcement contain forward-looking statements. Autohome may also make written or oral forward-looking statements in its periodic reports to the 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 Autohome'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: Autohome's goals and strategies; Autohome's future business development, results of operations and financial condition; the expected growth of the online automobile advertising market in China; Autohome's ability to attract and retain users and advertisers and further enhance its brand recognition; Autohome's expectations regarding demand for and market acceptance of its products and services; competition in the online automobile advertising industry; fluctuations in general economic and business conditions in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in Autohome's filings with the SEC. All information provided in this press release is as of the date of this press release, and Autohome does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Use of Non-GAAP Financial Measures

To supplement net income presented in accordance with U.S. GAAP, we use Adjusted Net Income attributable to Autohome Inc., Non-GAAP basic and diluted EPS and Adjusted EBITDA as non-GAAP financial measures. We define Adjusted Net Income attributable to Autohome Inc. as net income attributable to Autohome Inc. excluding share-based compensation expenses and amortization expenses of intangible assets related to acquisitions. We define Non-GAAP basic and diluted EPS as Adjusted Net Income attributable to Autohome Inc. divided by the basic and diluted weighted average number of ordinary shares. We define Adjusted EBITDA as net income attributable to Autohome Inc. before income tax expense/(benefit), depreciation expenses of property and equipment and amortization expenses of intangible assets and share-based compensation expenses. We present these non-GAAP financial measures because they are used by our management to evaluate our operating performance, in addition to net income prepared in accordance with U.S. GAAP. We believe these non-GAAP financial measures are important to help investors understand our operating and financial performance, compare business trends among different reporting periods on a consistent basis and assess our core operating results, as they exclude certain expenses that are not expected to result in cash payments. The use of the above non-GAAP financial measures has certain limitations. Share-based compensation expenses have been and will continue to be incurred in the future and are not reflected in the presentation of the non-GAAP financial measures, but should be considered in the overall evaluation of our results. These non-GAAP financial measures should be considered in addition to financial measures prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliation of non-GAAP and GAAP Results" set forth at the end of this press release.

For investor and media inquiries, please contact:

In China:

Autohome Inc.
Investor Relations
Anita Chen
Tel: +86-10-5985-7483
Email: [email protected]

The Piacente Group, Inc.
Xi Zhang
Tel: +86-10-6508-0677
E-mail: [email protected]

In the United States:

The Piacente Group, Inc.
Brandi Piacente
Tel: +1-212-481-2050
E-mail: [email protected]

SOURCE Autohome Inc.