58.com (WUBA) beats Q3 guidance, with revenue increasing by more than 30%
Nov 15, 2018 (China Knowledge) - 58.com has released its unaudited financial results, today, for the third quarter ending on 30th September 2018. The company continues to outperform its guidance with revenues hitting RMB 3.62 billion (USD 527.2 million) increasing by 33.2% from last year's RMB 2.72 billion.
The high end of the company’s guidance for the quarter was set at RMB 3.55 billion.
Operating income of the company increased to RMB 670.6 million (USD 97.5 million) from RMB 522.4 million the same quarter last year, a 28.4% increase; while basic and diluted earnings per ADS attributable to ordinary shareholders increased to RMB 4.92 (USD 0.72) and RMB 4.84 (USD 0.70) respectively, a 103.3% and 103.2% increase from RMB 2.42 and RMB 2.38 the same quarter last year.
Each ADS represents two Class A ordinary shares.
The increase in revenue was primarily driven by an increase in membership revenues from the company's subscription-based paid membership accounts on its listing platforms such as its namesake 58.com, Ganji.com and Anjuke.com. These platforms saw a 13.7% increase in the number of paid subscription accounts from Q3 2017.
In addition, the company's revenues from its online marketing services also surged by more than 40% to RMB 2.32 billion (USD 338.5 million) from RMB 1.66 billion in Q3 2017. The increase was driven by greater adoption and effectiveness of its services which include, real-time bidding and priority listings.
At the same time however, the company also saw its gross margins narrow from 91.6% in the third quarter of 2017 to 89.5% in the third quarter this year. The fall in margins is attributed to an increase in its cost of revenues due to its marketing and promotional campaign for its Zhuan Zhuan used goods platform to acquire greater traffic. The company’s Zhuan Zhuan platform will gain more effectiveness as traffic increases and will be an important growth avenue for the company in the future.
With its current operations, it expects revenues for the fourth quarter to be between RMB 3.5 billion and RMB 3.6 billion increasing by between 26.6% to 30.2%.
58.com will be hosting an earnings conference call on November 15, 2018 at 8:00 a.m. U.S. Eastern Time (9:00 p.m. Beijing / Hong Kong time on the same day).
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