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Ctrip.com: Ctrip Reports Unaudited Third Quarter Of 2015 Financial Results

The following excerpt is from the company's SEC filing.

Shanghai, China, November 18, 2015 - Ctrip.com International, Ltd. (Nasdaq: CTRP), a leading travel service provider of accommodation reservation, transportation ticketing, packaged tours and corporate travel management in China (Ctrip or the Company), today announced its unaudited financial results for the third quarter ended September 30, 2015.

Highlights for the Third Quarter of 2015

Net revenues were RMB3.2 billion (US$501 million) for the third quarter of 2015, up 49% year-on-year.

Net commission earned (non-GAAP) was RMB3.1 billion for the third quarter, up 47% year-on-year. Net comm ission earned (non-GAAP) is calculated by deducting from the revenues the cost of transactions in which the Company undertakes majority of the business risks, including the inventory risks*. The Company accounts for discounts offered to customers as reduction to its revenues, and certain significant discounts may result in selling prices lower than their corresponding costs.

Accommodation reservation volume increased 50% year-on-year, and accommodation reservation revenues increased 45% year-on-year, reaching RMB1.4 billion (US$216 million) for the third quarter of 2015.

Transportation ticketing volume increased 150% year-on-year, and transportation ticketing revenues increased 51% year-on-year, reaching RMB1.2 billion (US$190 million) for the third quarter of 2015.

Gross margin was 73% for the third quarter of 2015, compared to 72% in the same period in 2014, and 71% in the previous quarter.

Net income attributable to Ctrips shareholders was RMB2.4 billion (US$380 million) for the third quarter of 2015, compared to RMB217 million (US$35 million) in the same period in 2014. Excluding share-based compensation charges (non-GAAP), net income attributable to Ctrips shareholders was RMB2.5 billion (US$401 million), compared to RMB354 million (US$58 million) in the same period in 2014.

Diluted earnings per ADS were RMB13.26 (US$2.09) for the third quarter of 2015. Excluding share-based compensation charges (non-GAAP), diluted earnings per ADS were RMB13.97 (US$2.20) for the third quarter of 2015.

Share-based compensation charges were RMB134 million (US$21 million), accounting for 4% of the net revenues, or RMB0.71 (US$0.11) per ADS for the third quarter of 2015.

Ctrip maintained strong momentum and delivered great results in the third quarter of 2015, said James Liang, Chairman of the Board and Chief Executive Officer of Ctrip. Both hotel and air ticketing businesses reached 50% year-over-year growth in volume. Outbound travel continued to grow at triple digit in the core business segments due to the booming demand this quarter. Meanwhile, the Ctrip team has demonstrated its strong execution through significant improvement in operational efficiency.

We are also very excited about the transaction between Baidu and Ctrip announced on October 26th. Ctrip and Qunar are committed to building a healthier ecosystem in Chinas travel industry together. We are confident that both teams will further strengthen their fundamental capabilities and create better value for travelers, suppliers and shareholders. James added.

* The Company presents the revenue on a net basis. Revenues are recognized at gross basis when the Company undertakes the majority of the business risks and acts as principal. In the third quarter of 2015, the Company recognized the revenue on gross basis of RMB 0.07 billion and associated cost of RMB0.07 billion. Should all of these transactions be presented on net basis, the net commission earned was RMB3.1 billion.

Third Quarter of 2015 Financial Results and Business Updates

For the

third quarter of 2015, Ctrip reported total revenues of RMB3.4 billion (US$528 million), representing a 49% increase from the same period in 2014. Total revenues for the third quarter of 2015 increased by 26% from the previous quarter.

Accommodation reservation revenues amounted to RMB

1.4 billion (US$216 million) for the third quarter of 2015, representing a 45% increase year-on-year, primarily driven by an increase of 50% in accommodation reservation volume. Accommodation reservation revenues increased by 24% quarter-on-quarter.

Transportation ticketing revenues for the

third quarter of 2015 were RMB1.2 billion (US$190 million), representing a 51% increase year-on-year, primarily driven by an increase of 150% in ticketing volume. Transportation ticketing revenues increased by 15% quarter-on-quarter.

Packaged-tour revenues for the

third quarter of 2015 were RMB593 million (US$93 million), representing a 66% increase year-on-year, primarily driven by an increase in volume growth of organized tours and self-guided tours. Packaged-tour revenues increased by 80% quarter-on-quarter, primarily due to seasonality.

Corporate travel revenues for the

third quarter of 2015 were RMB124 million (US$20 million), representing a 19% increase year-on-year, primarily driven by the increased corporate travel demand from business activities. Corporate travel revenues increased by 3% quarter-on-quarter.

For the third quarter of 2015, n

et revenues were RMB3.2 billion (US$501 million), representing a 49% increase from the same period in 2014. Net revenues for the third quarter of 2015 increased by 26% from the previous quarter.

73% for the third quarter of 2015, compared to 72% in the same period in 2014 and 71% in the previous quarter.

Product development expenses for the

third quarter of 2015 increased by 36% to RMB831 million (US$131 million) from the same period in 2014, primarily due to an increase in product development personnel related expenses. Product development expenses for the third quarter of 2015 increased by 4% from the previous quarter. Excluding share-based compensation charges (non-GAAP), product development expenses accounted for 24% of the net revenues, decreasing from 26% in the same period in 2014 and 29% in the previous quarter.

Sales and marketing expenses for the

third quarter of 2015 increased by 40% to RMB838 million (US$132 million) from the same period in 2014 and increased by 23% from the previous quarter, primarily due to an increase in sales and marketing related activities. Excluding share-based compensation charges (non-GAAP), sales and marketing expenses accounted for 26% of the net revenues, decreasing from 27% in the same period in 2014 and remained consistent with the previous quarter.

General and administrative expenses for the

third quarter of 2015 increased by 8% to RMB261 million (US$41 million) from the same period in 2014 primarily due to an increase in amortization expenses for intangible assets of newly acquired entities. General and administrative expenses for the third quarter of 2015 remained consistent with the previous quarter. Excluding share-based compensation charges (non-GAAP), general and administrative expenses accounted for 6% of the net revenues, decreasing from 8% in the same period in 2014 and the previous quarter.

Income from operations for the

third quarter of 2015 was RMB405 million (US$64 million), compared to RMB88 million (US$14 million) in the same period in 2014 and RMB61 million (US$10 million) in the previous quarter. Excluding share-based compensation charges (non-GAAP), income from operations was RMB539 million (US$85 million), compared to RMB225 million (US$37 million) in the same period in 2014 and RMB214 million (US$35 million) in the previous quarter.

Operating...


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