Renren Announces Unaudited First Quarter 2016 Financial Results

BEIJING, June 8, 2016 /PRNewswire/ -- Renren Inc. (NYSE: RENN) ("Renren" or the "Company"), a leading real-name social networking internet platform in China, today announced its unaudited financial results for the first quarter ended March 31, 2016. 

First Quarter 2016 Highlights

• Total net revenues were US$10.8 million, a 29.2% increase from the corresponding period in 2015.
  • Advertising and IVAS net revenues were US$6.1 million, a 24.8% decrease from the corresponding period in 2015.
  • Financing income was US$4.7 million, compared to US$0.2 million in the corresponding period of 2015.
• Gross profit was US$2.4 million.
• Operating loss was US$19.2 million, compared to an operating loss of US$27.8 million in the corresponding period in 2015.
• Net loss attributable to the Company was US$23.2 million, compared to a net loss of US$23.8 million in the corresponding period in 2015.
• Adjusted net loss⁽¹⁾ (non-GAAP) was US$15.9 million, compared to an adjusted net loss of US$17.6 million in the corresponding period in 2015.

First Quarter 2016 Results⁽²⁾ 

Total net revenues for the first quarter of 2016 were US$10.8 million, representing a 29.2% increase from the corresponding period in 2015.

Advertising and IVAS net revenues were US$6.1 million, representing a 24.8% decrease from the corresponding period of 2015. Advertising revenues were US$0.7 million for the first quarter of 2016, a 72.2% decrease from the corresponding period of 2015. The decrease was due to increasing competition and the continuing migration of our traffic to mobile. Internet Value-Added Services (IVAS) revenues were US$5.4 million, representing a 5.6% decrease from the corresponding period in 2015. The decrease was mainly due to decreased revenue from VIP memberships and third party application developer revenues on the Renren platform. Monthly unique log-in users decreased from approximately 46 million in March 2015 to approximately 37 million in March 2016.

Financing income was US$4.7 million for the first quarter of 2016, compared to US$0.2 million in the corresponding period of 2015. The increase was in line with the increase of financing receivable from US$12.7 million as of March 31, 2015 to US$170.6 million as of March 31, 2016.

Cost of revenues was US$8.4 million, a 7.7% increase from the corresponding period of 2015.

Operating expenses were US$21.5 million, a 23.9% decrease from the corresponding period of 2015.

Selling and marketing expenses were US$4.6 million, a 39.1% decrease from the corresponding period of 2015. The decrease was primarily due to a decrease in advertising expenses, headcount reductions, and a decrease in personnel related expense.  

Research and development expenses were US$5.3 million, a 39.0% decrease from the corresponding period in 2015. The decrease was primarily due to headcount reductions and a decrease in personnel related expense.

General and administrative expenses were US$11.6 million, a 3.2% decrease from the corresponding period in 2015. 

Share-based compensation expenses, which were all included in operating expenses, were US$7.2 million, compared to US$6.2 million in the corresponding period in 2015. 

Operating loss was US$19.2 million, compared to an operating loss of US$27.8 million in the corresponding period in 2015.

Realized loss on short-term investments was US$0.1 million, compared to a gain of US$1.1 million in the corresponding period in 2015.

Loss in equity method investments was US$11.9 million, compared to earnings of US$0.5 million in the corresponding period in 2015.

Net loss attributable to the Company was US$23.2 million, compared to a net loss of US$23.8 million in the corresponding period in 2015.

Adjusted net loss (non-GAAP) was US$15.9 million, compared to an adjusted net loss of US$17.6 million in the corresponding period in 2015. Adjusted net loss is defined as loss excluding share-based compensation expenses and amortization of intangible assets.

Business Outlook

The Company expects to generate revenues in an amount ranging from US$13 million to US$15 million in the second quarter of 2016, representing a 25.2% to 44.5% year-over-year increase. This forecast reflects Renren's current and preliminary view, which is subject to change.

Conference Call Information

Due to the receipt of a non-binding proposal to acquire the Company, the Company will not host a conference call. Please contact our Investor Relations Department if you have any questions.

About Renren Inc.

Renren Inc. (NYSE: RENN) operates a leading real name social networking service (SNS) and an internet finance business in China. Our SNS enables users to connect and communicate with each other, share photos and access mobile live streaming. Our internet finance business includes primarily consumer financing and auto financing. Renren.com and our renren mobile application had approximately 232 million activated users as of March 31, 2016. Renren's American depositary shares, each of which represents three Class A ordinary shares, trade on NYSE under the symbol "RENN".

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 for the second quarter of 2016 and quotations from management in this announcement, as well as Renren's strategic and operational plans, contain forward-looking statements. Renren 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 Renren'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 social networking site 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 Renren does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

About Non-GAAP Financial Measures

To supplement Renren's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Renren uses "adjusted net income (loss)" which is defined as "a non-GAAP financial measure" by the SEC, in evaluating its business. We define adjusted net income (loss) as net income (loss) excluding share-based compensation expenses, amortization of intangible assets and impairment of intangible assets and goodwill. We present adjusted net income (loss) because it is used by our management to evaluate our operating performance. We also believe that this non-GAAP financial measure 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 this non-GAAP financial measure 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 "Reconciliation of non-GAAP results of operations measures to the comparable GAAP financial measures" at the end of this release.

For more information, please contact:

Cynthia Liu
Investor Relations Department
Renren Inc.
Tel: (86 10) 8448 1818 ext. 1300
Email: [email protected]

SOURCE Renren Inc.