Cheetah Mobile, the Chinese mobile internet company, just released a Q1 2016 statement with results significantly below expectations. Earnings in the first quarter dropped 65%.
Cheetah Mobile announces quarter results
However, mobile revenues increased by 110.5% the year-over to $128.2m, driven by solid growth in mobile advertising revenues overseas and in the home market. Mobile accounted for 74.1% of total revenues.
For its apps such as Clean Master and File Manager, mobile monthly active users (MAU) grew 16m from the previous quarter to 651m. Overseas MAUs jumped even higher at 79.5%. The company said that total installations were up by 421m quarter-on-quarter to 2,762m.
For the second quarter, Cheetah expects revenue of around $149m to $153m.
Cheetah Mobile’s Executive Officer Sheng Fu explained that 2016 had begun on a solid note, but revenue wasn’t increasing as expected. As a key driver for its lack of growth, he added that mobile revenues saw a drop in eCPMs from third-party ad platform partners internationally and the company has yet to catch up on expanding its direct sales team. In addition, he blamed the weak results on a longer than expected content product strategy implementation.
To combat these problems, Cheetah announced a series of commitments. Andy Yeung, Chief Financial Officer, Cheetah Mobile, said in a statement:
“Driven by our solid mobile and overseas performance, we continued to make progress both operationally and financially in the first quarter of 2016. For 2016, we have a very clear strategy to reaccelerate revenue growth. While our content products and direct sales initiatives are beginning to take hold, it will take more time for these initiatives to show meaningful results. However, over the years, we have successfully evolved our operational direction and strategy to address the rapid changes in the internet space. With that in mind, we remain confident that our business strategy is on the right track and we will continue to aggressively execute that strategy, managing user acquisition, user engagement, revenue growth and profitability for the long-term sustainable growth.”