Leju Releases Q3 Results – Shares Down 8.9%

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November 18, 2014

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LejuLeju Holdings Limited (LEJU) has released its unaudited financial results for the fiscal quarter ended September 30, 2014.  The shares traded down 8.9% as the company missed on revenue expectations.

Third Quarter 2014 Financial Highlights

  • Total revenues increased by 32% year-on-year to $128.3 million
  • Revenues from e-commerce services increased by 63% year-on-year to $84.2 million
  • Revenues from online advertising services increased by 4% year-on-year to $41.8 million
  • Non-GAAP income from operations increased by 28% year-on-year to $37.7 million
  • Non-GAAP net income attributable to Leju shareholders increased by 12% year-on-year to $31.3 million or $0.23 per diluted American depositary share (“ADS”)

First Nine Months 2014 Financial Highlights

  • Total revenues increased by 55% year-on-year to $324.2 million
  • Revenues from e-commerce services increased by 118% year-on-year to $202.2 million
  • Revenues from online advertising services increased by 9% year-on-year to $111.2 million
  • Non-GAAP income from operations increased by 75% year-on-year to $70.2 million
  • Non-GAAP net income attributable to Leju shareholders increased by 69% year-on-year to $59.4 million, or $0.45 per diluted ADS

“We are pleased to deliver strong operating and financial results, especially in our e-commerce services business, despite extended soft market conditions during the third quarter,” said Mr. Geoffrey He, Leju’s chief executive officer. “Leju continued to focus on e-commerce services execution with the help of ongoing product innovations. In addition to further deepening our penetration of the e-commerce market during the third quarter, we were also able to construct an integrated mobile marketing eco-system leveraging all of our mobile resources. We received overwhelming responses from both mobile users and developer clients for our mobile market solutions and believe that the online and mobile resources at our disposal uniquely position Leju to be a leading product innovator in the real estate services area.”

“The secondary market has experienced significant challenges this year, which has had a negative impact on our listing services revenue,” Mr. He continued. “However, these market dynamics have afforded us an opportunity to expand our national network for listing services. We remain committed to building an online informational platform featuring authentic secondary housing information, and will continue to work with our partners in the secondary market to promote the long-term development of the industry through further innovations.”

“We delivered another quarter of strong top line growth as a result of our increasing scale, brand awareness and product innovation,” said Ms. Min Chen, Leju’s chief financial officer. “We also maintained steady profitability and healthy operating cash flow due to our improved operating efficiency and solid execution.”

Third Quarter 2014 Results

Total revenues were $128.3 million, an increase of 32% from $97.4 million for the same quarter of 2013, mainly driven by growth of revenues from e-commerce services.

Revenues from e-commerce services were $84.2 million, an increase of 63% from $51.7 million for the same quarter of 2013, primarily due to a 51% increase in discount coupons redeemed, as a result of the expansion of the Company’s e-commerce business through partnerships with property developers.

Revenues from online advertising services were $41.8 million, an increase of 4% from $40.0 million for the same quarter of 2013, primarily due to revenue growth in both the Company’s new home and home furnishing channels.

Revenues from listing services were $2.3 million, a decrease of 60% from $5.7 million for the same quarter of 2013, primarily due to the slowdown in secondary home sales.

Cost of revenues was $12.9 million, a decrease of 20% from $16.1 million for the same quarter of 2013, primarily due to decreased fees paid to third parties for services in connection with the Company’s listing business and decreased amortization expenses of intangible assets as the Company’s exclusive rights with Baidu were extended to March 2015 at no additional cost and the Company’s advertising agency agreement with SINA was extended to March 2024 at no additional cost.

Selling, general and administrative expenses were $84.6 million, an increase of 42% from $59.6 million for the same quarter of 2013, primarily due to increased marketing expenses related to the growth of the Company’s e-commerce business, along with increased staff costs and bonuses resulting from increased headcount and improved profit.

Income from operations was $31.5 million in the third quarter of 2014, an increase of 44% from $21.9 million for the same quarter of 2013. Non-GAAP income from operations was $37.7 million, an increase of 28% from $29.5 million for the same quarter of 2013.

Net income was $26.4 million, an increase of 19% from $22.1 million for the same quarter of 2013. Non-GAAP net income was $32.0 million, an increase of 13% from $28.2 million for the same quarter of 2013.

Net income attributable to Leju shareholders was $25.7 million, or $0.19 per diluted ADS, an increase of 17% from $21.9 million, or $0.18 per diluted ADS, for the same quarter of 2013. Non-GAAP net income attributable to Leju shareholders was $31.3 million, or $0.23 per diluted ADS, an increase of 12% from $28.0 million, or $0.23 per diluted ADS, for the same quarter of 2013.

First Nine Months 2014 Results

Total revenues were $324.2 million, an increase of 55% from $209.1 million for the same period of 2013, mainly driven by growth of revenues from e-commerce services.

Revenues from e-commerce services were $202.2 million, an increase of 118% from $92.7 million for the same period of 2013, primarily due to an 88% increase in discount coupons redeemed, as a result of the expansion of the Company’s e-commerce business through partnerships with property developers.

Revenues from online advertising services were $111.2 million, an increase of 9% from $102.2 million for the same period of 2013, primarily due to revenue growth in both the Company’s new home and home furnishing channels.

Revenues from listing services were $10.8 million, a decrease of 24% from $14.1 million for the same period of 2013, primarily due to the slowdown in secondary home sales.

Cost of revenues was $36.8 million, a decrease of 26% from $49.9 million for the same period of 2013, primarily due to decreased fees paid to third parties for services in connection with the Company’s listing business and decreased amortization expenses of intangible assets as the Company’s exclusive rights with Baidu were extended to March 2015 at no additional cost and the Company’s advertising agency agreement with SINA was extended to March 2024 at no additional cost.

Selling, general and administrative expenses were $237.5 million, an increase of 68% from $141.3 million for the same period of 2013, primarily due to increased marketing expenses related to the growth of the Company’s e-commerce business, along with increased staff costs and bonuses resulting from increased headcount and improved profit.

Income from operations was $52.0 million in the first nine months of 2014, an increase of 184% from $18.3 million for the same period of 2013. Non-GAAP income from operations was $70.2 million, an increase of 75% from $40.0 million for the same period of 2013.

Net income was $43.7 million, an increase of 142% from $18.1 million for the same period of 2013. Non-GAAP net income was $59.9 million, an increase of 68% from $35.7 million for the same period of 2013.

Net income attributable to Leju shareholders was $43.3 million, or $0.33 per diluted ADS, an increase of 143% from $17.8 million, or $0.15 per diluted ADS, for the same period of 2013. Non-GAAP net income attributable to Leju shareholders was $59.4 million, or $0.45 per diluted ADS, an increase of 69% from $35.2 million, or $0.29 per diluted ADS, for the same period of 2013.

Cash Flow

As of September 30, 2014, the Company’s cash and cash equivalents balance was $263.4 million.

Third quarter 2014 net cash provided by operating activities was $40.2 million, mainly attributable to non-GAAP net income of $32.0 million. Net cash used in investing activities was $1.1 million, mainly comprised of a payment of $1.1 million for property and equipment. Net cash used in financing activities was $4.1 million, and mainly comprised of a payment of $4.1 million to acquire non-controlling interests.

Business Outlook

The Company revises its fiscal year 2014 total revenue guidance to $470 million to $490 million from the previous range of $500 million to $520 million, primarily as a result of the lower-than-expected listing services revenue. The revised revenue guidance represents an increase of approximately 40% to 46% from $335.4 million in 2013. This forecast reflects the Company’s current and preliminary view, which is subject to change.

Source: PR Newswire

Editor

November 18, 2014

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Acerca de Lucas Vargas:

  • Empezó en Grupo ZAP como el VP de Sales y en 2016 cuando la empresa tenía 60 empleados. Fue nombrado COO de VivaReal tomando el mando de Brian Requarth el Co-Fundador. VivaReal lanzó en Colombia y se trasladó a Brasil. En 2017 se hizo CEO del Grupo ZAP.
  • Ha trabajado en Mexico en PWC y en el Banco Santander
  • Tiene un Master de Business Administration de Harvard
  • En noviembre este año después de la fusión de OLX Brasil y Grupo ZAP fue nombrado el CEO del OLX Business Unit. Lidera la empresa junto con Andries Oudshoorn y Marcos Leite
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Simon Baker is the Founder and Executive Chairman of Online Marketplaces and Property Portal Watch. Involved with property portals for 15 years, he’s a well-recognized expert and industry consultant.
As former CEO/MD of the REA Group for 8 years, Simon led the group to its current market-leading position. When he joined REA Group in 2001, it had $4m in revenues, $6m in losses and an $8m market cap.
By 2008, the company presided over $155m in revenues, $35m in EBITDA and enjoyed a peak market cap of $1b. Simon is currently Chairman of the Mitula Group and Real Estate Investar and a serial portal founder and, investor.