Taomee Reports Second Quarter 2012 Unaudited Financial Results

Posted on 2012-08-20 10:29:01 BJT, by TaoMee

Taomee Reports Second Quarter 2012 Unaudited Financial Results

SHANGHAI, Aug. 16, 2012 /PRNewswire-Asia/ -- Taomee Holdings Limited (NYSE: TAOM) ("Taomee" or the "Company"), one of the leading children's entertainment and media companies in China, today reported its unaudited financial results for the second quarter ended June 30, 2012.

Second Quarter 2012 Financial Highlights

  • Total net revenues were US$10.5 million, a slight increase of 0.4% from US$10.4 million in the first quarter 2012 and a decrease of 10.9% from US$11.8 million in the second quarter 2011.
  • Gross margin was 77.7% compared to 79.6% in the first quarter 2012 and 85.1% in the second quarter 2011.
  • Net income attributable to the holders of ordinary shares was US$3.2 million, compared with US$1.6 million in the first quarter of 2012 and US$4.3 million in the second quarter of 2011.    
  • Basic and diluted earnings per ADS[1] were US$0.09 and US$0.08, respectively, compared with US$0.04 and US$0.04, respectively, in the first quarter 2012 and US$0.14 and US$0.13 respectively, in the second quarter 2011.
  • Non-GAAP net income attributable to holders of ordinary shares was US$3.8 million, compared with US$2.2 million in the first quarter 2012 and US$4.7 million in the second quarter of 2011.
  • Non-GAAP basic and diluted earnings per ADS were US$0.10 and US$0.10, respectively, compared with US$0.06 and US$0.06, respectively, in the first quarter 2012 and US$0.15 and US$0.14, respectively, in the second quarter 2011.

[1] Each American Depositary Share ("ADS") represents twenty ordinary shares

"For the second quarter of 2012, we delivered revenue results that exceeded our expectations, and achieved a new high of 43.7 million active users." said Mr. Benson Wang, co-founder and chief executive officer of Taomee. "Our strategy to drive user growth by decelerating monetization activities and by introducing new online products is contributing to our overall brand influence as well as offline growth. In fact, offline revenues increased 78.2% year-on-year, due to strong performance of our merchandise licensing, publishing and film business."  

Mr. Wang continued, "We continue to invest in our brands and business lines to foster long term sustainable growth. In 2012, we have committed significant resources towards mobile, online video services and animation and we are encouraged by the early results. As of today, total downloads of our mobile application have exceeded 10 million and we are excited about the upcoming pipeline. Meanwhile, we believe we successfully expanded our brand influence though TV animations, which have been broadcasted on over 130 channels throughout Mainland China and Taiwan. Our Seer TV animation has been viewed over 100 million times on our online video site v.61.com. Looking ahead, we are extremely excited by the opportunities that lie ahead as we continue to build Taomee into a leading entertainment company in China."

Operational Results for Second Quarter 2012

  • For the second quarter of 2012, the number of active accounts for the Company's virtual worlds under operation in mainland China increased 3.1% to approximately 43.6 million from 42.3 million in the first quarter of 2012 and increased 81.6% from 24.0 million in the second quarter of 2011. Although the Company experienced typical downward seasonality in older Mole's World and Seer virtual worlds, total active accounts still increased sequentially due to strong growth and contribution from other newer online products. The year-over-year increases were mainly driven by the demonetization strategy and the launch of new online products such as SeerII.
  • Active paying accounts for the Company's virtual worlds under operation in mainland China slightly decreased to 1.8 million from 1.9 million in the first quarter of 2012 and down from 2.2 million in the second quarter of 2011.
  • The ARPU for the Company's virtual worlds under operation in mainland China was RMB 30 (US$4.8) compared with RMB 31 (US$4.9) in the first quarter of 2012 compared to RMB 33 (US$5.1) for the second quarter 2011.
  • The number of downloads for the mobile applications operated by the Company was approximately 4.0 million in the second quarter of 2012 compared to approximately 3.0 million in the first quarter of 2012.

Unaudited Financial Results for Second Quarter 2012

Total Net Revenues

 

Total net revenues were US$10.5 million, compared with US$10.4 million in the first quarter 2012 and US$11.8 million in the second quarter 2011. 

Net online business revenues were US$8.6 million, compared with US$9.3 million in the first quarter 2012 and US$10.7 million in the second quarter 2011. The quarter-over-quarter decrease was primarily due to seasonality as the second quarter has less non-school days compared to the first quarter. The year-over-year decrease was as a result of the Company's continued strategy to temporarily decelerate monetization to attract new users and increase user stickiness.

Net offline business revenues were US$1.9 million, compared with US$1.1 million in the first quarter 2012 and US$1.1 million in the second quarter 2011. The sequential and year-over-year increase was mainly due to film revenues and expansion in interactive toys. The increases were also due to the sequential and year over year rise in revenue from merchandise and book licensing.

Total Cost of Services

 

Total cost of services was US$2.3 million, compared with US$2.1 million in the first quarter 2012 and US$1.8 million in the second quarter 2011. 

Online business related costs were US$1.7 million, compared with US$1.7 million in the first quarter 2012 and US$1.5 million in the second quarter 2011.  The slight sequential decrease was primarily due to the decrease of payroll expenses and hosting costs partially offset by the increase in bandwidth cost, the year-over-year increase was mainly due to an increase in both headcount costs and hosting costs partially offset by the decrease of rental expenses and prepaid card production costs.

Offline business related costs were US$0.6 million, compared with US$0.4 million in the first quarter 2012 and US$0.2 million in the second quarter 2011. The sequential and year-over-year cost increases were mainly due to expansion in interactive toys business.

ShareThis