Renren announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2014. Total Q4 net revenues were $17.2 million, representing a 38.5% decrease from the corresponding period in 2013.
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Renren net revenues were $10.7 million, representing a 13.4% decrease from the corresponding period of 2013. Within Renren net revenues, online advertising revenues were $4.2 million for the fourth quarter of 2014, a 44.1% decrease from the corresponding period of 2013.
The decrease was due to increasing competition and the continuing migration of our traffic to mobile. Internet Value-Added Services (IVAS) revenues were $6.5 million, representing a 33.6% increase from the corresponding period in 2013, primarily due to the increase in revenue from the social video platform "Woxiu".
Monthly unique log-in users increased from approximately 45 million in December 2013 to approximately 46 million in December 2014.
Games net revenues were $6.5 million for the fourth quarter of 2014, a 58.4% decrease from the corresponding period of 2013. The decrease was due to the lack of new titles and previously launched games having reached their mature stages.
Cost of revenues was $12.3 million, a 10.8% decrease from the corresponding period of 2013.
Operating expenses were $37.3 million, a 29.1% decrease from the corresponding period of 2013.
Selling and marketing expenses were $8.5 million, a 52.6% decrease from the corresponding period of 2013. The decrease was primarily due to the decrease in advertising and promotions for online games and a significant decrease in expenses incurred for Renren branding campaigns.
Research and development expenses were $10.6 million, a 38.2% decrease from the corresponding period in 2013. The decrease was primarily due to headcount reduction and the resulting decrease in personnel related expense.
General and administrative expenses were $14 million, a 0.7% increase from the corresponding period in 2013.
Restructuring costs were $4.2 million, representing the gaming business restructuring cost that occurred during the reporting quarter.
Share-based compensation expenses, all of which were included in operating expenses, were $8.3 million, compared to $3.2 million in the corresponding period in 2013.
Operating loss was $32.4 million, compared to an operating loss of $38.5 million in the corresponding period in 2013.
Fiscal Year 2014 Results
Total net revenues in 2014 were $83 million, a 43.9% decrease from 2013.
Renren net revenues in 2014 were $45.9 million, representing a 26.6% decrease from 2013. Within Renren net revenues, online advertising revenues were $26.9 million in 2014, a 35.3% decrease from 2013. The decrease in advertising revenues was due to the continuing migration of our traffic from PC to mobile coupled with increasing competition. Internet Value-Added Services (IVAS) revenues were $19 million for 2014, representing a 9.3% decrease from 2013.
The decrease was mainly due to decreased revenue from VIP memberships and third party application developer revenues on renren.com.
Games net revenues in 2014 were $37.1 million, a 56.6% decrease from 2013. The decrease was due to our previously launched games having reached mature stages and the fact that the restructuring of our gaming business since late 2013 has yet to result in the launch of successful new titles.
Cost of revenues in 2014 was $48 million, an 11.6% decrease from 2013.
Gross profit in 2014 was $35 million, a 62.7% decrease from $93.7 million in 2013. Gross margin in 2014 was 42.2%, compared to 63.3% in 2013.
Operating expenses in 2014 were $194.4 million, a 0.7% increase from 2013.
Selling and marketing expenses in 2014 were $38.3 million, a 38.4% decrease from 2013, primarily due to decreased promotional expenses for our games and Renren branding.
Research and development expenses in 2014 were $50.7 million, a 35.0% decrease from 2013, primarily due to headcount reduction and the resulting decrease in personnel related expenses.
General and administrative expenses in 2014 were $51.4 million, a 4.4% increase from 2013.
Impairment of intangible assets and goodwill were $0.7 million and $46.9 million respectively. The fair value of the goodwill of the Renren platform reporting unit, which included 56.com, were reviewed and estimated in September 2014 based on the operating results and market conditions at time of the review, and the Company determined that such impairments were required.
Restructuring costs in 2014 were $6.4 million, compared to $3.5 million in 2013.
Share-based compensation expenses in 2014, all of which were included in the operating expenses, were $23.6 million, compared to $16.1 million in 2013. The increase was mainly due to additional share-based incentive awards granted to employees and directors.
Operating loss in 2014 was $159.4 million, compared to $99.4 million operating loss in 2013. ■