"I am pleased to report solid financial and operational results once again, with revenue totaling RMB4.26 billion and exceeding the high end of our previous guidance despite challenging market conditions," commented Mr. Michael Yao, Chairman and Chief Executive Officer of 58.com. "On a non-GAAP basis, operating income and net income grew 21.3% and 20.7% year over year, respectively. We continue to solidify and expand our leading market position in all our core categories, especially for primary housing and other local services.  Secondary housing and jobs continue to show substantial resilience despite challenging market conditions. We are confident in our horizontal platform and the diversified product and services it offers. We are also optimistic about the massive market opportunity and tremendous growth potential that China offers and will continue to invest in innovation and user engagement to further enhance our leading market position." 

Cost of revenues was RMB501.1 million (US$70.8 million), an increase of 31.7% from RMB380.6 million in the same quarter of 2018. The year-over-year increase was primarily driven by increases in the costs of services provided on other platforms, expenses associated with the operations of all the Company's platforms, and salaries and benefits relating to web operation and information quality control teams.

Research and development expenses in the third quarter of 2019 were RMB520.9 million (US$73.7 million), an increase of 11.1% from RMB468.8 million in the same quarter of 2018. The increase was primarily due to increases in salaries and benefits for the Company's research and development personnel for the development of new features and services.

General and administrative expenses in the third quarter of 2019 were RMB196.6 million (US$27.8 million), an increase of 5.3% from RMB186.7 million in the same quarter of 2018. The increase was primarily driven by increases in salaries and benefits and share-based compensation expenses for administrative personnel.

Net other income in the third quarter of 2019 was mainly attributable to RMB60.7 million income from short-term commercial bank investment products the Company purchased with its surplus cash, RMB53.8 million in tax refunds and other government subsidies, RMB24.7 million dividend income, and a fair value gain of RMB14.2 million due to the revaluation of certain convertible notes the Company invested in the second quarter of 2019, which were partially offset by a fair value loss of RMB83.9 million primarily as a result of a decline in the share price of 5I5J Holding Group Co., Ltd., a publicly traded company in which the Company invested in the third quarter of 2018 and holds a minority stake.

Net Income Attributable to 58.com Inc. Ordinary Shareholders

Basic and diluted earnings per ADS attributable to ordinary shareholders in the third quarter of 2019 were RMB5.31 (US$0.75) and RMB5.26 (US$0.74), respectively, representing 7.9% and 8.6% increases from RMB4.92 and RMB4.84, respectively, in the same quarter of 2018.

Non-GAAP basic and diluted earnings per ADS attributable to ordinary shareholders in the third quarter of 2019 were RMB6.83 (US$0.97) and RMB6.76 (US$0.96), respectively, representing 19.4% and 20.2% increases from RMB5.72 and RMB5.63, respectively, in the same quarter of 2018.

Based on the Company's current operations, total revenues for the fourth quarter of 2019 are expected to be between RMB4.05 billion and RMB4.15 billion. This represents a year-over-year increase of 12% to 15% in Renminbi. These estimates reflect the Company's current and preliminary view, which is subject to change.

To supplement the financial measures prepared in accordance with generally accepted accounting principles in the United States, or GAAP, this press release presents non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income attributable to 58.com Inc. ordinary shareholders, non-GAAP net margin and non-GAAP basic and diluted earnings per share and per ADS attributable to ordinary shareholders by excluding share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, change in fair value of long-term investments, share-based compensation expenses included in share of results of equity investees, income tax effects of above GAAP to non-GAAP reconciling items. The Company believes these non-GAAP financial measures are important to help investors understand the Company's operating and financial performance, compare business trends among different reporting periods on a consistent basis and assess the Company's core operating results, as they exclude certain expenses that are not expected to result in cash payments. The use of the above non-GAAP financial measures has certain limitations. Share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, non-cash gain or loss and income tax effects resulting from GAAP to non-GAAP reconciling items have been and will continue to be incurred in the future and are not reflected in the presentation of the non-GAAP financial measures, but should be considered in the overall evaluation of the Company's results. The Company compensates for these limitations by providing the relevant disclosure of its share-based compensation expenses, amortization of intangible assets resulting from business acquisitions, change in fair value of long-term investments, share-based compensation expenses included in share of results of equity investees, income tax effects of above GAAP to non-GAAP reconciling items, all of which should be considered when evaluating the Company's performance. These non-GAAP financial measures should be considered in addition to financial measures prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, financial measures prepared in accordance with GAAP. Reconciliation of each of these non-GAAP financial measures to the most directly comparable GAAP financial measure is set forth at the end of this release.

58.com Inc. (NYSE:WUBA) operates China's largest online market place for classifieds, as measured by monthly unique visitors on both its www.58.com website and mobile applications. The Company's online marketplace enables local business users and consumer users to connect, share information and conduct business. 58.com's broad, in-depth and high-quality local information, combined with its easy-to-use website and mobile applications, has made it a trusted marketplace for consumers. 58.com's strong brand recognition, large and growing user base, merchant network and massive database of local information create a powerful network effect. For more information on 58.com, please visit http://www.58.com.

This press release contains forward-looking statements made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. 58.com may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about 58.com's beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: 58.com's goals and strategies; its future business development, financial condition and results of operations; its ability to retain and grow its user base and network of local merchants for its online marketplace; the growth of, and trends in, the markets for its services in China; the demand for and market acceptance of its brand and services; competition in its industry in China; its ability to maintain the network infrastructure necessary to operate its website and mobile applications; relevant government policies and regulations relating to the corporate structure, business and industry; and its ability to protect its users' information and adequately address privacy concerns. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and 58.com does not undertake any obligation to update such information, except as required under applicable law.

In China
Mr. Christian Arnell
Phone: +86-10-5900-1548
E-mail: [email protected]