Leju(LEJU) - 2022 Q3 - Quarterly Report

Leju Reports First Half Year 2022 Results Financial Performance Leju's H1 2022 financial performance significantly declined due to real estate market downturns and the pandemic, resulting in substantial losses and negative cash flow Financial Highlights Financial Highlights: Revenue Performance | Financial Metric | H1 2022 | YoY Change | | :--- | :--- | :--- | | Total Revenues | $169.4 million | -44% | | E-commerce Services Revenue | $132.7 million | -43% | | Online Advertising Services Revenue | $36.8 million | -47% | Financial Highlights: Loss Metrics | Metric | H1 2022 | H1 2021 | | :--- | :--- | :--- | | Loss from Operations (GAAP) | $64.8 million | $49.9 million | | Loss from Operations (Non-GAAP) | $58.6 million | $43.4 million | | Net Loss to Shareholders (GAAP) | $52.9 million | $47.8 million | | Net Loss to Shareholders (Non-GAAP) | $48.0 million | $42.6 million | | Loss per Diluted ADS (GAAP) | $3.86 | $3.50 | | Loss per Diluted ADS (Non-GAAP) | $3.50 | $3.12 | Detailed Financial Results - The significant revenue decline was attributed to operational challenges faced by China's real estate developers and the resurgence of the COVID-19 pandemic. Due to uncertainty in collecting payments, the company has not recognized revenue from certain customers since January 1, 2022, until cash is received[3][4] - E-commerce revenue decreased due to a lower number of discount coupons redeemed, while online advertising revenue fell because of reduced demand from property developers[7] - Selling, general and administrative (SG&A) expenses decreased by 31% YoY to $219.8 million, primarily due to a $33.9 million decrease in bad debt provisions compared to H1 2021 and lower marketing expenses[8] - Effective May 20, 2022, Leju changed its ADS to ordinary share ratio from 1:1 to 1:10, which is equivalent to a one-for-ten reverse ADS split. Loss per ADS for H1 2021 was retrospectively adjusted[6] Cash Flow - As of June 30, 2022, the company's cash, cash equivalents, and restricted cash balance was $182.6 million[10] - Net cash used in operating activities for the first half of 2022 was $60.6 million. This was primarily driven by a non-GAAP net loss of $47.9 million and decreases in other current liabilities and income tax payable[10] Financial Statements This section presents Leju's unaudited condensed consolidated financial statements for H1 2022, detailing balance sheets, income statements, and GAAP to non-GAAP reconciliations Unaudited Condensed Consolidated Balance Sheets Balance Sheet Summary (in thousands) | Balance Sheet Items (in thousands) | Dec 31, 2021 | June 30, 2022 | | :--- | :--- | :--- | | Total Assets | $437,248 | $308,970 | | Cash and cash equivalents | $250,314 | $178,202 | | Accounts receivable, net | $36,071 | $5,318 | | Total Liabilities | $286,189 | $215,128 | | Advances from customers | $82,788 | $55,905 | | Total Equity | $151,059 | $93,842 | Unaudited Condensed Consolidated Statements of Operations Statements of Operations (in thousands) | Income Statement (in thousands) | H1 2021 | H1 2022 | | :--- | :--- | :--- | | Total net revenues | $301,092 | $169,448 | | E-commerce | $231,401 | $132,654 | | Online advertising | $69,290 | $36,783 | | Loss from operations | ($49,852) | ($64,763) | | Net loss | ($46,887) | ($52,805) | | Net loss attributable to Leju shareholders | ($47,772) | ($52,852) | Unaudited Condensed Consolidated Statement of Comprehensive Income (Loss) Statement of Comprehensive Income (Loss) (in thousands) | Comprehensive Income (Loss) (in thousands) | H1 2021 | H1 2022 | | :--- | :--- | :--- | | Net loss | ($46,887) | ($52,805) | | Foreign currency translation adjustment | $2,400 | ($5,341) | | Comprehensive loss | ($44,487) | ($58,146) | Unaudited Reconciliation of GAAP and Non-GAAP Results Reconciliation of GAAP to Non-GAAP Loss from Operations (in thousands) | Reconciliation (in thousands) | H1 2021 | H1 2022 | | :--- | :--- | :--- | | GAAP loss from operations | ($49,852) | ($64,763) | | Share-based compensation | $1,194 | $929 | | Amortization of intangible assets | $5,279 | $5,279 | | Non-GAAP loss from operations | ($43,379) | ($58,555) | Reconciliation of GAAP to Non-GAAP Net Loss to Shareholders (in thousands) | Reconciliation (in thousands) | H1 2021 | H1 2022 | | :--- | :--- | :--- | | GAAP net loss to shareholders | ($47,772) | ($52,852) | | Adjustments (net) | $5,153 | $4,888 | | Non-GAAP net loss to shareholders | ($42,619) | ($47,964) | Selected Operating Data E-commerce Operating Data | E-commerce Operating Data | H1 2021 | H1 2022 | | :--- | :--- | :--- | | Number of discount coupons issued | 92,058 | 31,456 | | Number of discount coupons redeemed | 77,378 | 35,262 | Supplementary Information This section offers supplementary details on Leju's business, forward-looking statements, and explanations of non-GAAP financial measures About Leju - Leju is a leading e-commerce and online media platform for real estate and home furnishing in China, offering services like e-commerce, online advertising, and listings across more than 380 cities. The company operates its own platforms and the real estate websites for SINA Corporation, and has a strategic partnership with Tencent[11] Forward-Looking Statements - The company identifies several risk factors that could cause actual results to differ from projections, including: fluctuations in China's real estate market, the highly regulated nature of the industry, competition, ability to expand service offerings, and reliance on strategic partners like SINA[12] About Non-GAAP Financial Measures - Leju uses non-GAAP financial measures to supplement its GAAP results. These measures exclude share-based compensation expense, amortization of intangible assets from business acquisitions, and related income tax impacts[5][13] - The company believes these non-GAAP measures provide meaningful supplemental information to investors by excluding items that may not be indicative of operating performance, thereby facilitating historical comparisons and decision-making[14]