Technology
AudioCodes Reports Third Quarter 2024 Results
Published
4 hours agoon
By
OR YEHUDA, Israel, Nov. 6, 2024 /PRNewswire/ —
Third Quarter Highlights
Quarterly revenues decreased by 2.2% year-over-year to $60.2 million;Quarterly service revenues increased by 6.4% year-over-year to $32.5 million;GAAP results:
– Quarterly GAAP gross margin was 65.2%;
– Quarterly GAAP operating margin was 8.1%;
– Quarterly GAAP EBITDA was $5.9 million;
– Quarterly GAAP net income was $2.7 million, or $0.09 per diluted share. Non-GAAP results:
– Quarterly Non-GAAP gross margin was 65.6%;
– Quarterly Non-GAAP operating margin was 11.7%;
– Quarterly Non-GAAP EBITDA was $7.9 million;
– Quarterly Non-GAAP net income was $4.9 million, or $0.16 per diluted share.Net cash provided by operating activities was $7.9 million for the quarter.AudioCodes repurchased 332,709 of its ordinary shares during the quarter at an aggregate cost of $3.6 million.
Details
AudioCodes (NASDAQ: AUDC), a leading provider of unified communications voice, contact center and conversational AI applications and services for enterprises, today announced its financial results for the third quarter ended September 30, 2024.
Revenues for the third quarter of 2024 were $60.2 million compared to $61.6 million for the third quarter of 2023.
EBITDA for the third quarter of 2024 was $5.9 million compared to $6.4 million for the third quarter of 2023.
On a Non-GAAP basis, EBITDA for the third quarter of 2024 was $7.9 million compared to $10.1 million for the third quarter of 2023.
Net income was $2.7 million, or $0.09 per diluted share, for the third quarter of 2024 compared to net income of $4.3 million, or $0.14 per diluted share, for the third quarter of 2023.
On a Non-GAAP basis, net income was $4.9 million, or $0.16 per diluted share, for the third quarter of 2024 compared to $8.3 million, or $0.25 per diluted share, for the third quarter of 2023.
Non-GAAP net income excludes: (i) share-based compensation expenses; (ii) amortization expenses related to intangible assets; (iii) expenses related to deferred payments in connection with the acquisition of Callverso Ltd; (iv) financial income (expenses) related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies; (v) tax impact which relates to our Non-GAAP adjustments; and (vi) in Q1 2024 non-cash lease expense which is required to be recorded during the quarter even though this is a free rent period under the lease for the Company’s new headquarters. A reconciliation of net income on a GAAP basis to a non-GAAP basis is provided in the tables that accompany the condensed consolidated financial statements contained in this press release.
Net cash provided by operating activities was $7.9 million for the third quarter of 2024. Cash and cash equivalents, short-term bank deposits, long and short-term marketable securities and long-term financial investments were $88.4 million as of September 30, 2024 compared to $106.7 million as of December 31, 2023. The decrease in cash and cash equivalents, short-term bank deposits, long and short-term marketable securities and long-term financial investments was the result of the use of cash for the continued repurchasing of the Company’s ordinary shares pursuant to its share repurchase program and the payment of a cash dividend during each of the first and third quarters of 2024 and purchase of property and equipment related to leasehold improvements of our new corporate headquarter in Israel, offset, in part, by cash from operating activities.
“I am pleased to report we have successfully executed against our strategic priorities this quarter, as we continue to make progress in our long-term goal of leading the voice services market for the UCaaS and CX markets. We continued our transformation to become a cloud software and services company with a higher proportion of recurring revenue vs. legacy perpetual revenues,” said Shabtai Adlersberg, President and Chief Executive Officer of AudioCodes.
Third quarter services revenues grew 6.4% year-over-year and accounted for 53.9% of revenues, the highest on record for us. Fueling the strength of our services revenue stream as our primary growth engines were Live managed services (consisting of Live Teams and Live CX) and conversational AI. Specifically, Live Teams business grew 21% year over year and accounted for 44% of total Microsoft business compared to 37% a year ago. On conversational AI, third quarter dollar value of contracts signed increased roughly 50% vs the year ago period.
Our success in building Live managed services and recurring revenue stream has translated to strong year-over-year ARR growth of 40%, ending 3Q at $60 million ARR, up from $48 million exiting 2023. This success is owed to the trust we have built throughout the years with partners and enterprise customers in the voice services space. There is no better proof than our long-standing multi-year partnership with AT&T in North America, leveraging our expertise in providing secure voice connectivity to help their business customers onboard to Microsoft Teams. This fruitful partnership has contributed multi-millions of annual recurring revenues over the last several years.
Speaking of conversational AI, strong operational momentum continues, driven by long-term tailwind of infusing AI into UC and CX workflows in customers’ inexorable demand to drive ongoing productivity gains. Accordingly, we have seen significant pick-up in pipeline activities across our entire conversational AI suite, including Voca CIC, our AI first CX solution for Microsoft Teams, SaaS Recording solutions such as Meeting Insights and interaction recording, and Voice AI Connect.
Overall, we delivered on our business priorities in the quarter, with the strength in our Live recurring businesses buttressing the healthy overall pipeline for our major practices such as Microsoft business, CX and Conversational AI. We believe this bodes well for seeing improved top-line growth performance as we head into 2025 and beyond,” concluded Mr. Adlersberg.
Share Buy Back Program and Cash Dividend
In July 2024, the Company received court approval in Israel to purchase up to an aggregate amount of $20 million of additional ordinary shares. The court approval also permits AudioCodes to declare a dividend out of any part of this amount. The approval is valid through January 1, 2025.
On July 30, 2024, the Company declared a cash dividend of 18 cents per share. The dividend, in the aggregate amount of approximately $5.4 million, was paid on August 29, 2024, to all of the Company’s shareholders of record on August 15, 2024.
During the quarter ended September 30, 2024, the Company acquired 332,709 of its ordinary shares under its share repurchase program for a total consideration of $3.6 million.
As of September 30, 2024, the Company had $11 million available under this approval for the repurchase of shares and/or declaration of cash dividends.
Conference Call & Web Cast Information
AudioCodes will conduct a conference call at 8:30 A.M., Eastern Time today to discuss the Company’s third quarter of 2024 operating performance, financial results and outlook. Interested parties may participate in the conference call by dialing one the following numbers:
United States Participants: 888-506-0062
International Participants: +1 (973) 528-0011
The conference call will also be simultaneously webcast. Investors are invited to listen to the call live via webcast at the AudioCodes investor website at http://www.audiocodes.com/investors-lobby.
About AudioCodes
AudioCodes (NASDAQ, TASE: AUDC) is a leading innovator of intelligent cloud communications solutions. AudioCodes empowers enterprises and service providers to build and operate state-of-the-art voice networks, unified communications platforms, and AI-driven productivity tools. The cutting-edge portfolio includes cloud-native applications, advanced voice AI technologies, and comprehensive communication solutions tailored for the modern digital workplace. Trusted by global Fortune 500 companies and tier-1 operators worldwide, AudioCodes drives digital transformation through seamless integration, enhanced collaboration, and unparalleled communication experiences.
For more information, visit http://www.audiocodes.com.
Follow AudioCodes’ social media channels:
AudioCodes invites you to join our online community and follow us on: AudioCodes Voice Blog, LinkedIn, Twitter, Facebook, and YouTube.
Statements concerning AudioCodes’ business outlook or future economic performance; product introductions and plans and objectives related thereto; and statements concerning assumptions made or expectations as to any future events, conditions, performance or other matters, are “forward-looking statements” as that term is defined under U.S. Federal securities laws. Forward-looking statements are subject to various risks, uncertainties and other factors that could cause actual results to differ materially from those stated in such statements. These risks, uncertainties and factors include, but are not limited to: the effect of global economic conditions in general and conditions in AudioCodes’ industry and target markets in particular; shifts in supply and demand; market acceptance of new products and the demand for existing products; the impact of competitive products and pricing on AudioCodes’ and its customers’ products and markets; timely product and technology development, upgrades and the ability to manage changes in market conditions as needed; possible need for additional financing; the ability to satisfy covenants in the Company’s loan agreements; possible disruptions from acquisitions; the ability of AudioCodes to successfully integrate the products and operations of acquired companies into AudioCodes’ business; possible adverse impact of the COVID-19 pandemic on our business and results of operations; the effects of the current terrorist attacks by Hamas in Israel, and the war and hostilities between Israel and Hamas, and Israel and Hezbollah as well as the possibility that this could develop into a broader regional conflict involving Israel with other parties, may affect our operations and may limit our ability to produce and sell our solutions; any disruption in our operations by the obligations of our personnel to perform military service as a result of current or future military actions involving Israel; and other factors detailed in AudioCodes’ filings with the U.S. Securities and Exchange Commission. AudioCodes assumes no obligation to update the information in this release.
©2024 AudioCodes Ltd. All rights reserved. AudioCodes, AC, HD VoIP, HD VoIP Sounds Better, IPmedia, Mediant, MediaPack, What’s Inside Matters, OSN, SmartTAP, User Management Pack, VMAS, VoIPerfect, VoIPerfectHD, Your Gateway To VoIP, 3GX, VocaNom, AudioCodes One Voice, AudioCodes Meeting Insights, AudioCodes Room Experience are trademarks or registered trademarks of AudioCodes Limited. All other products or trademarks are property of their respective owners. Product specifications are subject to change without notice.
Summary financial data follows
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
U.S. dollars in thousands
September 30,
December 31,
2024
2023
(Unaudited)
(Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$ 23,522
$ 30,546
Short-term and restricted bank deposits
202
212
Short-term marketable securities
24,245
7,438
Trade receivables, net
58,081
51,125
Other receivables and prepaid expenses
12,085
9,381
Inventories
33,677
43,959
Total current assets
151,812
142,661
LONG-TERM ASSETS:
Long-term Trade receivables
$ 15,856
$ 16,798
Long-term marketable securities
37,308
65,732
Long-term financial investments
3,123
2,730
Deferred tax assets
4,577
6,208
Operating lease right-of-use assets
33,207
36,712
Severance pay funds
17,132
17,202
Total long-term assets
111,203
145,382
PROPERTY AND EQUIPMENT, NET
25,236
10,893
GOODWILL, INTANGIBLE ASSETS AND OTHER, NET
38,182
38,581
Total assets
$ 326,433
$ 337,517
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade payables
5,479
7,556
Other payables and accrued expenses
24,066
29,943
Deferred revenues
39,390
38,820
Short-term operating lease liabilities
5,859
7,878
Total current liabilities
74,794
84,197
LONG-TERM LIABILITIES:
Accrued severance pay
$ 15,893
$ 16,662
Deferred revenues and other liabilities
18,110
17,142
Long-term operating lease liabilities
30,742
31,404
Total long-term liabilities
64,745
65,208
Total shareholders’ equity
186,894
188,112
Total liabilities and shareholders’ equity
$ 326,433
$ 337,517
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
U.S. dollars in thousands, except per share data
Nine months ended
Three months ended
September 30,
September 30,
2024
2023
2024
2023
(Unaudited)
(Unaudited)
Revenues:
Products
$ 84,647
$ 91,299
$ 27,750
$ 31,039
Services
95,975
89,525
32,493
30,552
Total Revenues
180,622
180,824
60,243
61,591
Cost of revenues:
Products
34,123
36,568
11,380
11,347
Services
29,057
28,299
9,563
9,307
Total Cost of revenues
63,180
64,867
20,943
20,654
Gross profit
117,442
115,957
39,300
40,937
Operating expenses:
Research and development, net
39,780
43,363
12,666
13,960
Selling and marketing
52,427
52,747
17,607
17,221
General and administrative
12,146
12,657
4,155
3,977
Total operating expenses
104,353
108,767
34,428
35,158
Operating income
13,089
7,190
4,872
5,779
Financial income (expenses), net
(195)
1,688
(614)
492
Income before taxes on income
12,894
8,878
4,258
6,271
Taxes on income, net
(4,358)
(3,753)
(1,579)
(2,019)
Net income
$ 8,536
$ 5,125
$ 2,679
$ 4,252
Basic net earnings per share
$ 0.28
$ 0.16
$ 0.09
$ 0.14
Diluted net earnings per share
$ 0.28
$ 0.16
$ 0.09
$ 0.14
Weighted average number of shares used in computing basic
net earnings per share (in thousands)
30,239
31,642
30,218
31,390
Weighted average number of shares used in computing diluted
net earnings per share (in thousands)
30,769
31,807
30,778
31,374
AUDIOCODES LTD. AND ITS SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
U.S. dollars in thousands, except per share data
Nine months ended
Three months ended
September 30,
September 30,
2024
2023
2024
2023
(Unaudited)
(Unaudited)
GAAP net income
$ 8,536
$ 5,125
$ 2,679
$ 4,252
GAAP net earnings per share
$ 0.28
$ 0.16
$ 0.09
$ 0.14
Cost of revenues:
Share-based compensation (1)
274
304
99
94
Amortization expenses (2)
366
379
122
122
Lease expenses (6)
304
322
–
322
944
1,005
221
538
Research and development, net:
Share-based compensation (1)
1,642
2,090
471
649
Deferred payments expenses (3)
–
375
–
125
Lease expenses (6)
342
362
–
362
1,984
2,827
471
1,136
Selling and marketing:
Share-based compensation (1)
2,255
3,380
783
1,050
Amortization expenses (2)
33
33
11
11
Deferred payments expenses (3)
–
375
–
125
Lease expenses (6)
38
40
–
40
2,326
3,828
794
1,226
General and administrative:
Share-based compensation (1)
2,113
3,242
679
814
Lease expenses (6)
76
80
–
80
2,189
3,322
679
894
Financial expenses (income):
Exchange rate differences (4)
(754)
(1,237)
55
(767)
Income taxes:
Taxes on income, net (5)
422
1,247
–
1,023
Non-GAAP net income
$ 15,647
$ 16,117
$ 4,899
$ 8,302
Non-GAAP diluted net earnings per share
$ 0.50
$ 0.49
$ 0.16
$ 0.25
Weighted average number of shares used in computing Non-GAAP
diluted net earnings per share (in thousands)
31,534
32,870
31,480
32,576
(1) Share-based compensation expenses related to options and restricted share units granted to employees and others.
(2) Amortization expenses related to intangible assets.
(3) Expenses related to deferred payments in connection with the acquisition of Callverso Ltd.
(4) Financial income (expenses) related to exchange rate differences in connection with revaluation of assets and liabilities in non-dollar denominated currencies.
(5) Tax impact which relates to our non-GAAP adjustments.
(6) In Q1 2024, non-cash lease expense which is required to be recorded during the quarter even though this is a free rent period under the lease for the Company’s new headquarters.
Note: Non-GAAP measures should be considered in addition to, and not as a substitute for, the results prepared in accordance with GAAP. The Company believes that non-GAAP information is useful because it can enhance the understanding of its ongoing economic performance and therefore uses internally this non-GAAP information to evaluate and manage its operations. The Company has chosen to provide this information to investors to enable them to perform comparisons of operating results in a manner similar to how the Company analyzes its operating results and because many comparable companies report this type of information.
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
U.S. dollars in thousands
Nine months ended
Three months ended
September 30,
September 30,
2024
2023
2024
2023
(Unaudited)
(Unaudited)
Cash flows from operating activities:
Net income
$ 8,536
$ 5,125
$ 2,679
$ 4,252
Adjustments required to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
2,788
1,972
1,004
652
Amortization of marketable securities premiums and
accretion of discounts, net
885
1,027
270
315
Decrease in accrued severance pay, net
(699)
(493)
(220)
(221)
Share-based compensation expenses
6,284
9,016
2,032
2,607
Decrease in deferred tax assets, net
826
1,164
762
996
Cash financial loss (income), net
137
(397)
(17)
(65)
Decrease in operating lease right-of-use assets
4,755
6,688
1,198
2,406
Decrease in operating lease liabilities
(3,931)
(8,411)
(496)
(4,056)
Decrease (increase) in trade receivables, net
(6,014)
4,645
(2,247)
(2,294)
Decrease (increase) in other receivables and prepaid
expenses
(2,704)
1,572
(2,939)
(339)
Decrease (increase) in inventories
10,119
(8,605)
4,172
907
Increase (decrease in trade payables
(2,077)
(4,700)
377
(482)
Increase (decrease) in other payables and accrued
expenses
(594)
(6,414)
1,011
(1,480)
Increase (decrease) in deferred revenues
1,631
3,423
266
(3,020)
Net cash provided by operating activities
19,942
5,612
7,852
178
Cash flows from investing activities:
Proceeds from short-term deposits
10
5,008
4
2
Proceeds of marketable securities
9,991
3,846
9,991
3,846
Proceeds from financial investment
76
–
29
–
Proceeds from redemption of marketable securities
3,450
3,084
–
1,084
Proceeds from redemption of financial investments
–
14,094
–
3,051
Purchase of financial investments
(675)
(81)
(675)
(81)
Purchase of property and equipment
(20,768)
(5,301)
(5,505)
(2,038)
Net cash provided by (used in) investing activities
(7,916)
20,650
3,844
5,864
AUDIOCODES LTD. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
U.S. dollars in thousands
Nine months ended
Three months ended
September 30,
September 30,
2024
2023
2024
2023
(Unaudited)
(Unaudited)
Cash flows from financing activities:
Purchase of treasury shares
(8,340)
(11,973)
(3,586)
(9,047)
Cash dividends paid to shareholders
(10,896)
(11,399)
(5,443)
(5,681)
Proceeds from issuance of shares upon exercise of options
186
254
6
140
Net cash used in financing activities
(19,050)
(23,118)
(9,023)
(14,588)
Net increase (decrease) in cash, cash equivalents, and restricted cash
(7,025)
3,144
2,672
(8,546)
Cash, cash equivalents and restricted cash at beginning of period
30,546
24,535
20,849
36,225
Cash, cash equivalents and restricted cash at end of period
$ 23,522
$ 27,679
$ 23,522
$ 27,679
Company Contacts
Niran Baruch,
Chief Financial Officer
AudioCodes
Tel: +972-3-976-4000
Roger L. Chuchen,
VP, Investor Relations
AudioCodes
Tel: 732-764-2552
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SOURCE AudioCodes
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Third Quarter 2024 Highlights:
GMV for the third quarter of 2024 increased by 28.3% year over year to RMB7,267.0 million (US$1,035.5 million) from RMB5,665.4 million in the same quarter of 2023. All regions experienced positive year-over-year growth in scale for the third quarter of 2024. GMV for the third quarter of 2024 increased on a year-over-year basis for three straight quarters, also, reached new quarterly high.Non-GAAP net income for the third quarter of 2024 increased by 942.0% year over year to RMB161.6 million (US$23.0 million), the eighth consecutive quarter of non-GAAP profitability, compared with non-GAAP net income of RMB15.5 million in the same quarter of 2023.Net income for the third quarter of 2024 increased by 6,240.6% year over year to RMB133.4 million (US$19.0 million), compared with net income of RMB2.1 million in the same quarter of 2023. Both non-GAAP and GAAP net income this quarter made record highs in the Company’s history.Net cash provided by operating activities for the third quarter of 2024 was RMB397.6 million (US$56.7 million), the fifth consecutive quarter of net operating cash inflow.
Mr. Changlin Liang, Founder and Chief Executive Officer of Dingdong, stated, “As of the third quarter of 2024, Dingdong has achieved non-GAAP profitability for the eighth consecutive quarter and GAAP profitability for the third consecutive quarter. Revenue also increased on a year-over-year basis for three straight quarters. Both GMV and net profit also reached new quarterly highs. For the outlook for fourth quarter and full year of 2024, we are increasing our full-year targets based on our current performance. We expect non-GAAP and GAAP net profit and the overall scale of our business to continue growing significantly on a year-over-year basis next quarter and for the year. We are confident in the rapid development potential of our business throughout the remainder of the year and going forward.”
Mr. Song Wang, Chief Financial Officer of Dingdong, stated, “In the third quarter of 2024, we generated revenue of RMB6.54 billion, a year-over-year increase of 27.2%. This significant growth also allowed us to achieve a new historic high in profitability with a non-GAAP net profit of RMB162 million, over nine times higher than the same period last year. Non-GAAP net profit margin was 2.5%, an increase of 2.2 percentage points from the same period last year. GAAP net profit was RMB133 million, an increase of RMB131 million year-over-year with net profit margin expanding 2.0 percentage points from the same period last year to 2%. Operating net cash inflow reached RMB400 million, an increase of RMB270 million compared to the same period last year. This marks the fifth consecutive quarter of net cash inflow from operating activities.”
Third Quarter 2024 Financial Results
Total revenues were RMB6,538.2 million (US$931.7 million) compared with total revenues of RMB5,139.7 million in the same quarter of 2023, increased by 27.2% year over year, primarily attributed to the accelerating increased numbers of transacting users and frequency of monthly purchases and expanding our station network in Jiangsu, Zhejiang, and Shanghai this year.
Product Revenues were RMB6,458.4 million (US$920.3 million) compared with product revenues of RMB5,082.5 million in the same quarter of 2023.Service Revenues were RMB79.8 million (US$11.4 million) compared with service revenues of RMB57.2 million in the same quarter of 2023, primarily driven by the increase of customers subscribing to Dingdong’s membership program.
Total operating costs and expenses were RMB6,438.5 million (US$917.5 million) compared with RMB5,163.7 million in the same quarter of 2023, with a detailed breakdown as below:
Cost of goods sold was RMB4,591.4 million (US$654.3 million), an increase of 28.3% from RMB3,577.5 million in the same quarter of 2023. Cost of goods sold as a percentage of revenues increased slightly to 70.2% from 69.6% in the same quarter of 2023.Fulfillment expenses were RMB1,397.8 million (US$199.2 million), an increase of 17.1% from RMB1,193.4 million in the same quarter of 2023. Fulfillment expenses as a percentage of total revenues decreased to 21.4% from 23.2% in the same quarter of 2023. This was mainly due to the increased order volume that boosted operational efficiency. In addition, we optimized the layout of the regional processing centers in the second half of 2023, which will continue to improve their operation efficiency this year.Sales and marketing expenses were RMB144.9 million (US$20.6 million), an increase of 39.1% from RMB104.2 million in the same quarter of 2023. Sales and marketing expenses as a percentage of total revenues increased to 2.2% from 2.0% in the same quarter of 2023, mainly due to the increased spending on sales and marketing activities to acquire new customers.General and administrative expenses were RMB102.0 million (US$14.5 million), an increase of 14.2% from RMB89.3 million in the same quarter of 2023, mainly due to the increase of staff cost.Product development expenses were RMB202.4 million (US$28.8 million), a slightly increase of 1.6% from RMB199.3 million in the same quarter of 2023. While advocating for energy and resource saving, we will continue to invest in our product development capabilities, agricultural technology, data algorithms, and other technology infrastructure, to further enhance our competitiveness.
Income from operations was RMB110.5 million (US$15.8 million), compared with operating loss of RMB8.6 million in the same quarter of 2023.
Non-GAAP income from operations, which is a non-GAAP measure for income from operations that excludes share-based compensation expenses, was RMB138.8 million (US$19.8 million), increased by 2,804.1% year over year, compared with non-GAAP income from operations of RMB4.8 million in the same quarter of 2023.
Net income was RMB133.4 million (US$19.0 million), increased by 6,240.6% year over year, compared with net income of RMB2.1 million in the same quarter of 2023. Net income margin was 2.04% compared with 0.04% in the same quarter of 2023.
Non-GAAP net income, which is a non-GAAP measure that excludes share-based compensation expenses, was RMB161.6 million (US$23.0 million), increased by 942.0% year over year, compared with non-GAAP net income of RMB15.5 million in the same quarter of 2023. In addition, non-GAAP net income margin, which is the Company’s non-GAAP net income as a percentage of total revenues, was 2.4% compared with 0.3% in the same quarter of 2023.
Basic and diluted net income per share was RMB0.40 (US$0.06), compared with net loss per share of RMB0.00 in the same quarter of 2023. Non-GAAP net income per share, basic and diluted, was RMB0.49 (US$0.07), compared with RMB0.04 in the same quarter of 2023.
Cash and cash equivalents, restricted cash and short-term investments were RMB4,296.9 million (US$612.3 million) as of September 30, 2024, compared with RMB4,157.6 million as of June 30, 2024. We have been working diligently to optimize our capital usage and financing structure. The total balance of cash and cash equivalents, restricted cash and short-term investments deducting the balance of short-term borrowings, is RMB2.64 billion, a net increase for the fifth consecutive quarter.
Guidance
The Company has raised its expectations for both net profit and scale compared to that in last quarter, and is anticipating considerable year-over-year growth for the fourth quarter and this year. The Company is looking to achieve both non-GAAP and GAAP profits in the fourth quarter and for the entire year of 2024.
Management change
As part of the Company’s ongoing efforts to optimize our organizational structure and enhance operational efficiency, the Company has re-evaluated certain executive roles. Ms. Hongli Gong, previously the CHRO, has been reassigned to other management positions in the Company. The responsibilities previously overseen by CHRO will be redistributed to other existing leadership team member to ensure seamless continuity in the Company’s human resources functions. This change reflects the Company’s commitment to agile and effective management, aligning the Company’s resources with strategic priorities to better serve the stakeholders.
On behalf of the Company and the Board, Mr. Changlin Liang, Chairman and CEO of Dingdong, expressed, “We would like to give our warmest and heartfelt thanks to Ms. Hongli Gong for her remarkable stewardship and contributions service as Chief Human Resources Officer. We wish her the best of success in her new roles within the Company.”
Conference Call
The Company’s management will hold an earnings conference call at 7:00 A.M. Eastern Time on Wednesday, November 6, 2024 (8:00 P.M. Beijing Time on the same day) to discuss the financial results. The presentation and question and answer session will be presented in both Mandarin and English. Listeners may access the call by dialing the following numbers:
International:
1-412-317-6061
United States Toll Free:
1-888-317-6003
Mainland China Toll Free:
4001-206115
Hong Kong Toll Free:
800-963976
Conference ID:
6835527
The replay will be accessible through November 13, 2024 by dialing the following numbers:
International:
1-412-317-0088
United States:
1-877-344-7529
Access Code:
1452469
A live and archived webcast of the conference call will also be available at the Company’s investor relations website at https://ir.100.me.
About Dingdong (Cayman) Limited
We are a leading fresh grocery e-commerce company in mainland China, with sustainable long-term growth. We directly provide users and households with fresh groceries, prepared food, and other food products through delivering a convenient and excellent shopping experience supported by an extensive self-operated frontline fulfillment grid. Leveraging our deep insights into consumers’ evolving needs and our strong food innovation capabilities, we have successfully launched a series of private label products spanning a variety of food categories. Many of our private label products are produced at our Dingdong production plants, allowing us to more efficiently produce and offer safe and high-quality food products. We aim to be the first choice for fresh and food shopping.
For more information, please visit: https://ir.100.me.
Use of Non-GAAP Financial Measures
The Company uses non-GAAP measures, such as non-GAAP net income, non-GAAP net income margin, non-GAAP net income attributable to ordinary shareholders and non-GAAP net income per share, basic and diluted, in evaluating its operating results and for financial and operational decision-making purposes. The Company believes that the non-GAAP financial measures help identify underlying trends in its business by excluding the impact of share-based compensation expenses, which are non-cash charges and do not correlate to any operating activity trends. The Company believes that the non-GAAP financial measures provide useful information about the Company’s results of operations, enhance the overall understanding of the Company’s past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company’s management in its financial and operational decision-making.
The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools, and when assessing the Company’s operating performance, cash flows or liquidity, investors should not consider them in isolation, or as a substitute for net loss, cash flows provided by operating activities or other consolidated statements of operations and cash flows data prepared in accordance with U.S. GAAP. The Company’s definition of non-GAAP financial measures may differ from those of industry peers and may not be comparable with their non-GAAP financial measures.
The Company mitigates these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measures, all of which should be considered when evaluating the Company’s performance.
For more information on the non-GAAP financial measures, please see the table captioned “Unaudited Reconciliation of GAAP and Non-GAAP Results” set forth at the end of this announcement.
Exchange Rate Information
This announcement contains translations of certain RMB amounts into U.S. dollars (“US$”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB7.0176 to US$1.00, the exchange rate on September 30, 2024 set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all.
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,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident,” “potential,” “continue,” or other similar expressions. Among other things, business outlook and quotations from management in this announcement, as well as Dingdong’s strategic and operational plans, contain forward-looking statements. Dingdong may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its interim and annual reports 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 but not limited to statements about Dingdong’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: Dingdong’s goals and strategies; Dingdong’s future business development, financial conditions, and results of operations; the expected outlook of the fresh grocery ecommerce market in China; Dingdong’s expectations regarding demand for and market acceptance of its products and services; Dingdong’s expectations regarding its relationships with its users, clients, business partners, and other stakeholders; competition in Dingdong’s industry; and relevant government policies and regulations relating to Dingdong’s industry, and general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company’s filings with the SEC. All information provided in this announcement and in the attachments is as of the date of the announcement, and the Company undertakes no duty to update such information, except as required under applicable law.
DINGDONG (CAYMAN) LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands of RMB and US$)
As of
December 31,
2023
September 30,
2024
September 30,
2024
RMB
RMB
US$
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
1,209,225
899,769
128,216
Restricted cash
480
4,673
666
Short-term investments
4,099,977
3,392,420
483,416
Accounts receivable, net
107,879
136,089
19,393
Inventories, net
471,872
593,436
84,564
Advance to suppliers
73,732
100,633
14,340
Prepayments and other current assets
187,486
136,345
19,429
Total current assets
6,150,651
5,263,365
750,024
Non-current assets:
Property and equipment, net
189,084
171,619
24,456
Operating lease right-of-use assets
1,262,134
1,323,093
188,539
Other non-current assets
96,687
115,109
16,403
Total non-current assets
1,547,905
1,609,821
229,398
TOTAL ASSETS
7,698,556
6,873,186
979,422
LIABILITIES, MEZZANINE EQUITY AND
SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable
1,422,183
1,735,794
247,349
Customer advances and deferred revenue
240,280
269,109
38,348
Accrued expenses and other current
liabilities
656,408
775,869
110,560
Salary and welfare payable
233,073
268,815
38,306
Operating lease liabilities, current
653,529
578,411
82,423
Short-term borrowings
3,300,214
1,656,477
236,046
Total current liabilities
6,505,687
5,284,475
753,032
Non-current liabilities:
Operating lease liabilities, non-current
568,039
701,812
100,007
Other non-current liabilities
126,206
135,612
19,325
Total non-current liabilities
694,245
837,424
119,332
TOTAL LIABILITIES
7,199,932
6,121,899
872,364
DINGDONG (CAYMAN) LIMITED
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)
(Amounts in thousands of RMB and US$)
As of
December 31,
2023
September 30,
2024
September 30,
2024
RMB
RMB
US$
(Unaudited)
LIABILITIES, MEZZANINE EQUITY AND
SHAREHOLDERS’ EQUITY (CONTINUED)
Mezzanine Equity:
Redeemable noncontrolling interests
116,090
122,994
17,527
TOTAL MEZZANINE EQUITY
116,090
122,994
17,527
Shareholders’ equity:
Ordinary shares
4
4
1
Additional paid-in capital
14,061,992
14,155,411
2,017,130
Treasury stock
(20,666)
(51,176)
(7,293)
Accumulated deficit
(13,679,965)
(13,474,064)
(1,920,039)
Accumulated other comprehensive
income/(loss)
21,169
(1,882)
(268)
TOTAL SHAREHOLDERS’ EQUITY
382,534
628,293
89,531
TOTAL LIABILITIES, MEZZANINE EQUITY
AND SHAREHOLDERS’ EQUITY
7,698,556
6,873,186
979,422
DINGDONG (CAYMAN) LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Amounts in thousands of RMB and US$, except for number of shares and per share data)
For the three months ended
September 30,
2023
2024
2024
RMB
RMB
US$
(Unaudited)
Revenues:
Product revenues
5,082,513
6,458,447
920,321
Service revenues
57,168
79,788
11,370
Total revenues
5,139,681
6,538,235
931,691
Operating costs and expenses:
Cost of goods sold
(3,577,451)
(4,591,429)
(654,273)
Fulfillment expenses
(1,193,391)
(1,397,785)
(199,183)
Sales and marketing expenses
(104,176)
(144,868)
(20,644)
Product development expenses
(199,313)
(202,412)
(28,843)
General and administrative expenses
(89,337)
(101,988)
(14,533)
Total operating costs and expenses
(5,163,668)
(6,438,482)
(917,476)
Other operating income, net
15,359
10,796
1,538
(Loss) /income from operations
(8,628)
110,549
15,753
Interest income
40,103
38,446
5,479
Interest expenses
(24,412)
(9,650)
(1,375)
Other loss, net
(1,463)
(2,865)
(408)
Income before income tax
5,600
136,480
19,449
Income tax expenses
(3,496)
(3,074)
(438)
Net income
2,104
133,406
19,011
Accretion of redeemable noncontrolling interests
(2,187)
(2,363)
(337)
Net (loss) /income attributable to ordinary
shareholders
(83)
131,043
18,674
DINGDONG (CAYMAN) LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(CONTINUED)
(Amounts in thousands of RMB and US$, except for number of shares and per share data)
For the three months ended
September 30,
2023
2024
2024
RMB
RMB
US$
(Unaudited)
Net (loss) /income per Class A and Class B ordinary
share:
Basic and diluted
(0.00)
0.40
0.06
Shares used in net (loss) /income per Class A and
Class B ordinary share computation:
Basic
325,139,721
324,194,950
324,194,950
Diluted
325,139,721
330,928,010
330,928,010
Other comprehensive income, net of tax of nil:
Foreign currency translation adjustments
(12,481)
(36,009)
(5,131)
Comprehensive (loss) /income
(10,377)
97,397
13,880
Accretion of redeemable noncontrolling interests
(2,187)
(2,363)
(337)
Comprehensive (loss) /income attributable to
ordinary shareholders
(12,564)
95,034
13,543
DINGDONG (CAYMAN) LIMITED
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands of RMB and US$)
For the three months ended
September 30,
2023
2024
2024
RMB
RMB
US$
(Unaudited)
Net cash generated from operating activities
130,111
397,639
56,663
Net cash used in investing activities
(380,246)
(352,490)
(50,229)
Net cash generated from/ (used in) financing activities
18,448
(200,107)
(28,515)
Effect of exchange rate changes on cash and cash
equivalents and restricted cash
(785)
(2,267)
(323)
Net decrease in cash and cash equivalents and
restricted cash
(232,472)
(157,225)
(22,404)
Cash and cash equivalents and restricted cash at the
beginning of the period
1,530,180
1,061,667
151,286
Cash and cash equivalents and restricted cash at the
end of the period
1,297,708
904,442
128,882
DINGDONG (CAYMAN) LIMITED
UNAUDITED RECONCILIATION OF GAAP AND NON-GAAP RESULTS
(Amounts in thousands of RMB and US$, except for number of shares and per share data)
For the three months ended
September 30,
2023
2024
2024
RMB
RMB
US$
(Unaudited)
(Loss) /income from operations
(8,628)
110,549
15,753
Add: share-based compensation expenses (1)
13,406
28,210
4,020
Non-GAAP income from operations
4,778
138,759
19,773
Operating margin
(0.2 %)
1.6 %
1.6 %
Add: share-based compensation expenses
0.3 %
0.5 %
0.5 %
Non-GAAP operating margin
0.1 %
2.1 %
2.1 %
Net income
2,104
133,406
19,011
Add: share-based compensation expenses (1)
13,406
28,210
4,020
Non-GAAP net income
15,510
161,616
23,031
Net income margin
0.0 %
2.0 %
2.0 %
Add: share-based compensation expenses
0.3 %
0.5 %
0.5 %
Non-GAAP net income margin
0.3 %
2.5 %
2.5 %
Net (loss) /income attributable to ordinary shareholders
(83)
131,043
18,674
Add: share-based compensation expenses (1)
13,406
28,210
4,020
Non-GAAP net income attributable to ordinary
shareholders
13,323
159,253
22,694
Net (loss) /income per Class A and Class B ordinary share:
Basic and diluted
(0.00)
0.40
0.06
Add: share-based compensation expenses
0.04
0.09
0.01
Non-GAAP net income per Class A and Class B
ordinary share:
Basic and diluted
0.04
0.49
0.07
(1) Share-based compensation expenses are recognized as follows:
For the three months ended
September 30,
2023
2024
2024
RMB
RMB
US$
(Unaudited)
Fulfillment expenses
5,335
4,707
671
Sales and marketing expenses
332
1,057
151
Product development expenses
6,881
13,288
1,893
General and administrative expenses
858
9,158
1,305
Total
13,406
28,210
4,020
View original content:https://www.prnewswire.com/news-releases/dingdong-cayman-limited-announces-third-quarter-2024-financial-results-302297367.html
SOURCE Dingdong (Cayman) Limited
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