PR Newswire Asia, 5/06/11
Chinese online video site Youku (NYSE: YOKU) today announced its unaudited financial results for the first quarter ended March 31, 2011. Net revenues increased 163% YoY to RMB 128.0 mln, exceeding the high end of the company's guidance by 22%.
The significant increase in net revenues was mainly due to the strong performance of brand advertising revenues, which amounted to RMB 119.8 mln in Q1 2011, representing a 165% increase from Q1 2010. This growth was primarily attributable to the increased number of advertisers and increased average revenue per advertiser.
Youku reported a net loss of RMB 46.9 mln for Q1 2011, compared to a net loss of RMB 51.2 mln in the same period last year.
Bandwidth costs as a component of cost of revenues were RMB 56.3 mln (USD 8.6 mln) in Q1 2011, representing 44% of net revenues, down from 90% in the corresponding period in 2010.
Content costs as a component of cost of revenues were RMB 36.1 mln (USD 5.5 mln), representing 28% of net revenues, compared to 17% in the corresponding period in 2010. Youku has changed its accounting estimate regarding the pattern of the benefits that derived from licensed content, resulting in amortization of costs on an accelerated basis. Of the RMB 36.1 mln (USD 5.5 mln) in content costs, RMB 28.2 mln (USD 4.3 mln), or 22% of net revenues, was incurred in the first quarter of 2011 using the newly adopted accelerated method and RMB 7.9 mln (USD 1.2 mln), or 6% of net revenues, relates to the adjustment to the accumulated amortization of licensed content acquired prior to 2011 using the accelerated method instead of straight-line method. If Youku had continued using a straight-line amortization method for content costs, RMB 24.6 mln (USD 3.8 mln), or 19% of net revenues, would have been recorded in the first quarter of 2011. Prior to 2011, Youku's licensed content was amortized using a straight-line method over the estimated useful life, which was generally the license period. The change of estimate was effective in the first quarter of 2011 and will be applied prospectively.
For the second quarter of 2011, Youku expects year-on-year growth in net revenues of 125% to 135%.
To view Youku's complete fiscal report, please click here.