Tuniu Announces Unaudited Fourth Quarter and Fiscal Year 2019 Financial Results

NANJING,China,April 9,2020 --Tuniu Corporation (NASDAQ:TOUR) ("Tuniu" or the "Company"),a leading online leisure travel company in China,today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31,2019.

Mr. Donald Dunde Yu,Tuniu's founder,Chairman and Chief Executive Officer,said,"The outbreak and spread of the COVID-19 has brought an unprecedented challenge to the travel industry and the business operation of Tuniu. Although we expect short-term turbulence within the industry,we remain confident that the economy and travel industry of China will be able to gradually recover as the COVID-19 has been largely contained within China. Since the initial outbreak in January 2020,we have been helping customers refund or alter trips that were impacted by the COVID-19. On the business operation side,we are focusing on developing high-quality products and services for our customers in anticipation of an increase in demand for domestic travel. We believe Tuniu will be well-positioned to better capture market opportunities when the travel industry begins to recover."

Ms. Maria Yi Xin,Tuniu's Chief Financial Officer,"Since the fourth quarter of 2019,we have been making various adjustments to our business operation and corporate structure. After the outbreak of the COVID-19,we have implemented a number of cost-saving adjustments that will manifest starting from the second half of 2020. Due to the COVID-19 outbreak in early 2020,the Chinese government has announced bans prohibiting the sale of packaged tour products. As China's leading online leisure travel company,we have a high social responsibility and will continue prioritizing the safety of our customers."

Fourth Quarter 2019 Results

Net revenues were RMB451.3 million (US$64.8 million[1]) in the fourth quarter of 2019,representing a year-over-year decrease of 4.2% from the corresponding period in 2018.

Revenues from packaged tours were RMB344.3 million (US$49.5 million) in the fourth quarter of 2019,representing a year-over-year decrease of 3.7% from the corresponding period in 2018. The decrease was primarily due to the decline in demand for travel to certain destinations.

Other revenues were RMB107.0 million (US$15.4 million) in the fourth quarter of 2019,representing a year-over-year decrease of 5.9% from the corresponding period in 2018. The decrease was primarily due to the decline in revenues generated from financial services.

Cost of revenues was RMB234.6 million (US$33.7 million) in the fourth quarter of 2019,representing a year-over-year increase of 16.7% from the corresponding period in 2018. As a percentage of net revenues,cost of revenues was 52.0% in the fourth quarter of 2019 compared to 42.7% in the corresponding period in 2018.

Gross profit was RMB216.7 million (US$31.1 million) in the fourth quarter of 2019,representing a year-over-year decrease of 19.8% from the corresponding period in 2018.

Operating expenses were RMB650.9 million (US$93.5 million) in the fourth quarter of 2019,representing a year-over-year increase of 74.3% from the corresponding period in 2018. Share-based compensation expenses,amortization of acquired intangible assets and impairment of acquired intangible assets,which were allocated to operating expenses,were RMB74.8 million (US$10.7 million) in the fourth quarter of 2019. Non-GAAP[2] operating expenses,which excluded share-based compensation expenses,amortization of acquired intangible assets and impairment of acquired intangible assets,were RMB576.1 million (US$82.8 million) in the fourth quarter of 2019,representing a year-over-year increase of 76.5%.

Research and product development expenses were RMB79.0 million (US$11.4 million) in the fourth quarter of 2019,representing a year-over-year increase of 4.2%. Non-GAAP research and product development expenses,which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB1.6 million (US$0.2 million),were RMB77.4 million (US$11.1 million) in the fourth quarter of 2019,representing a year-over-year increase of 5.9% from the corresponding period in 2018. The increase was primarily due to the increase in research and product development personnel related expenses.

Sales and marketing expenses were RMB239.9 million (US$34.5 million) in the fourth quarter of 2019,representing a year-over-year increase of 14.7%. The increase was primarily due to the increase in impairment of acquired intangible assets. Non-GAAP sales and marketing expenses,amortization of acquired intangible assets and impairment of acquired intangible assets of RMB66.9 million (US$9.6 million),were RMB173.0 million (US$24.8 million) in the fourth quarter of 2019,representing a year-over-year decrease of 0.9% from the corresponding period in 2018.

General and administrative expenses were RMB341.5 million (US$49.1 million) in the fourth quarter of 2019,representing a year-over-year increase of 183.4%. Non-GAAP general and administrative expenses,which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB6.2 million (US$0.9 million),were RMB335.3 million (US$48.2 million) in the fourth quarter of 2019,representing a year-over-year increase of 202.5% from the corresponding period in 2018. The increase was primarily due to the increase in some one-time impairment charges and general and administrative personnel related expenses.

Loss from operationswas RMB434.2 million (US$62.4 million) in the fourth quarter of 2019,compared to a loss from operations of RMB103.1 million in the fourth quarter of 2018. Non-GAAP loss from operations,was RMB359.2 million (US$51.6 million) in the fourth quarter of 2019.

Net loss was RMB401.4 million (US$57.7 million) in the fourth quarter of 2019,compared to a net loss of RMB72.9 million in the fourth quarter of 2018. Non-GAAP net loss,was RMB326.4 million (US$46.9 million) in the fourth quarter of 2019.

Net loss attributable to ordinary shareholderswas RMB367.1 million (US$52.7 million) in the fourth quarter of 2019,compared to a net loss attributable to ordinary shareholders of RMB64.7 million in the fourth quarter of 2018. Non-GAAP net loss attributable to ordinary shareholders,was RMB292.1 million (US$42.0 million) in the fourth quarter of 2019.

As of December 31,2019,the Company had cash and cash equivalents,restricted cash and short-term investments of RMB1.9 billion (US$276.9 million).

[1] The conversion of Renminbi ("RMB") into United States dollars ("US$") is based on the exchange rate of US$1.00=RMB6.9618 on December 31,2019 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at https://www.federalreserve.gov/releases/h10/default.htm.

[2] The section below entitled "About Non-GAAP Financial Measures" provides information about the use of Non-GAAP financial measures in this press release,and the table captioned "Reconciliations of GAAP and Non-GAAP Results" set forth at the end of this press release reconciles Non-GAAP financial information with the Company's financial results under GAAP.

Fiscal Year 2019 Results

Net revenues were RMB2.3 billion (US$327.6 million) in 2019,representing a year-over-year increase of 1.8% from 2018.

Revenues from packaged tours were RMB1.9 billion (US$271.0 million) in 2019,representing a year-over-year increase of 3.1% from 2018. The increase was primarily due to the growth of organized tours.

Other revenues were RMB394.2 million (US$56.6 million) in 2019,representing a year-over-year decrease of 3.7% from 2018. The decrease was primarily due to the decline in revenues generated from financial services and service fees received from insurance companies.

Cost of revenues was RMB1.2 billion (US$172.4 million) in 2019,representing a year-over-year increase of 12.7% from 2018. As a percentage of net revenues,cost of revenues was 52.6% in 2019 compared to 47.5% in 2018.

Gross profit was RMB1.1 billion (US$155.3 million) in 2019,representing a year-over-year decrease of 8.0% from 2018.

Operating expenses were RMB2.0 billion (US$280.4 million) in 2019,representing a year-over-year increase of 28.1% from 2018. Share-based compensation expenses,were RMB232.8 million (US$33.4 million) in 2019. Non-GAAP operating expenses,were RMB1.7 billion (US$246.9 million) in 2019,representing a year-over-year increase of 30.7%.

Research and product development expenses were RMB303.6 million (US$43.6 million) in 2019,representing a year-over-year decrease of 3.7%. Non-GAAP research and product development expenses,which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB14.4 million (US$2.1 million),were RMB289.2 million (US$41.5 million) in 2019,representing a year-over-year decrease of 5.0% from 2018. The decrease was primarily due to the increase in efficiency resulting from the increased level of automation applied in research and product development activities,and optimization of research and product development personnel.

Sales and marketing expenses were RMB923.3 million (US$132.6 million) in 2019,representing a year-over-year increase of 18.7%.The increase was primarily due to the increase in sales and marketing personnel and offline retail stores related expenses,as well as the impairment of acquired intangible assets.Non-GAAP sales and marketing expenses,amortization of acquired intangible assets and impairment of acquired intangible assets of RMB173.2 million (US$24.9 million),were RMB750.1 million (US$107.7 million) in 2019,representing a year-over-year increase of 17.2% from 2018. The increase was primarily due to the increase in sales and marketing personnel and offline retail stores relatedexpenses.

General and administrative expenses were RMB749.4 million (US$107.6 million) in 2019,representing a year-over-year increase of 53.8%. Non-GAAP general and administrative expenses,which excluded share-based compensation expenses and amortization of acquired intangible assets of RMB45.2 million (US$6.5 million),were RMB704.2 million (US$101.2 million) in 2019,representing a year-over-year increase of 64.8% from 2018. The increase was primarily due to the increase in some one-time impairment charges and general and administrative personnel related expenses.

Loss from operationswas RMB870.8 million (US$125.1 million) in 2019,compared to a loss from operations of RMB349.0 million in 2018. Non-GAAP loss from operations,was RMB634.1 million (US$91.1 million) in 2019.

Net loss was RMB729.4 million (US$104.8 million) in 2019,compared to a net loss of RMB199.4 million in 2018. Non-GAAP net loss,was RMB492.6 million (US$70.8 million) in 2019.

Net loss attributable to ordinary shareholderswas RMB699.2 million (US$100.4 million) in 2019,compared to a net loss attributable to ordinary shareholders of RMB187.9 million in 2018. Non-GAAP net loss attributable to ordinary shareholders,was RMB462.4 million (US$66.4 million) in 2019.

Business Outlook

Tuniu's business has been significantly impacted by the outbreak and spread of COVID-19 since January 2020. The current circumstances are dynamic and the impact of COVID-19 on our business operations cannot be reasonably estimated at this time,and we anticipate this willhave material adverse impact on our business,financial position,results of operations and cash flows in 2020. As a result,for the first quarter of 2020,the Company expects to generate RMB114.2 million to RMB159.9 million of net revenues,which represents 65% to 75% decrease year-over-year. This forecast reflects Tuniu's current and preliminary view on the industry and its operations,which is subject to change.

Conference Call Information

Tuniu's management will hold an earnings conference call at 8:00 am U.S. Eastern Time,on April 9,2020,(8:00 pm,Beijing/Hong Kong Time,2020) to discuss the fourth quarter and fiscal year 2019 financial results.

To participate in the conference call,please dial the following numbers:

US:

+1-888-346-8982

Hong Kong:

+852-301-84992

Mainland China:

4001-201203

International:

+1-412-902-4272

Conference ID: Tuniu 4Q 2019 Earnings Call

A telephone replay will be available one hour after the end of the conference through April 16,2020. The dial-in details are as follows:

US:

+1-877-344-7529

International:

+1-412-317-0088

Replay Access Code:

10140657

Additionally,a live and archived webcast of the conference call will also be available on the Company's investor relations website at http://ir.tuniu.com.

AboutTuniu

Tuniu (Nasdaq:TOUR) is a leading online leisure travel company in China that offers a large selection of packaged tours,including organized and self-guided tours,as well as travel-related services for leisure travelers through its website tuniu.com and mobile platform. Tuniu coversover 420 departing cities throughout China and all popular destinations worldwide. Tuniu provides one-stop leisure travel solutions and a compelling customer experience through its online platform and offline service network,including a dedicated team of professional customer service representatives,24/7 call centers,extensive networks of offline retail stores and self-operated local tour operators. For more information,please visit http://ir.tuniu.com.

Safe Harbor Statement

This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934,as amended,and 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. Tuniu 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 Tuniu'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 are not limited to the following: Tuniu's goals and strategies; the growth of the online leisure travel market in China; the demand for Tuniu's products and services; its relationships with customers and travel suppliers; the Company's ability to offer competitive travel products and services; Tuniu's future business development,results of operations and financial condition; competition in the online travel industry in China; relevant government policies and regulations relating to the Company's structure,business and industry; the impact of the COVID-19 on Tuniu's business operations,the travel industry and the economy of China and elsewhere generally; and the general economic and business condition in China and elsewhere. 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 Tuniu does not undertake any obligation to update such information,except as required under applicable law.

About Non-GAAP Financial Measures

To supplement the Company's unaudited consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"),the Company has provided non-GAAP information related to cost of revenues,research and product development expenses,sales and marketing expenses,general and administrative expenses,other operating income,total operating expenses,loss from operations,net loss,net loss attributable to ordinary shareholders,net loss per ordinary share attributable to ordinary shareholders-basic and diluted and net loss per ADS-basic and diluted,which excludes share-based compensation expenses,amortization of acquired intangible assets and impairment of acquired intangible assets. We believe that the non-GAAP financial measures used in this press release are useful for understanding and assessing underlying business performance and operating trends,and management and investors benefit from referring to these non-GAAP financial measures in assessing our financial performance and when planning and forecasting future periods. For more information on these non-GAAP financial measures,please see the table captioned "Reconciliations of GAAP and non-GAAP Results" set forth at the end of this press release.

A limitation of using non-GAAP financial measures excluding share-based compensation expenses,amortization of acquired intangible assets and impairment of acquired intangible assets is that share-based compensation expenses,amortization of acquired intangible assets and impairment of acquired intangible assets have been – and will continue to be – significant recurring expenses in the Company's business. You should not view non-GAAP results on a stand-alone basis or as a substitute for results under GAAP,or as being comparable to results reported or forecasted by other companies.

For investor and media inquiries,please contact:

China

Mary Chen

Investor Relations Director

Tuniu Corporation

Phone: +86-25-6960-9988

E-mail: ir@tuniu.com

(Financial Tables Follow)

Tuniu Corporation

Unaudited Condensed Consolidated Balance Sheets

(All amounts in thousands,except per share information)

December 31,2018

December 31,2019

December 31,2019

RMB

RMB

US$

ASSETS

Current assets

Cash and cash equivalents

560,356

295,463

42,441

Restricted cash

270,670

327,052

46,978

Short-term investments

859,211

1,305,386

187,507

Accounts receivable,net

347,547

529,983

76,127

Amounts due from related parties

696,520

65,108

9,352

Prepayments and other current assets

1,673,584

1,300,284

186,774

Total current assets

4,407,888

3,823,276

549,179

Non-current assets

Long-term investments

1,302,506

1,612

187,539

Property and equipment,net

187,360

223,340

32,081

Intangible assets,net

317,885

166,267

23,883

Land use right,net

100,836

98,774

14,188

Operating lease right-of-use assets,net*

-

105,839

15,203

Goodwill

159,409

232,007

33,325

Other non-current assets

81,039

83,923

12,055

Long-term amounts due from related parties

-

557,582

80,092

Total non-current assets

2,149,035

2,773,344

398,366

Total assets

6,556,923

6,596,620

947,545

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities

Short-term borrowings

49,312

203,845

29,281

Accounts and notes payable

1,610

1,311,963

188,452

Amounts due to related parties

77,159

29,755

4,274

Salary and welfare payable

104,480

112,511

16,162

Taxes payable

23,316

12,207

1,753

Advances from customers

1,058,946

1,113,879

159,999

Operating lease liabilities,current*

-

57,490

8,258

Accrued expenses and other current liabilities

483,832

907,119

130,299

Total current liabilities

3,102,655

3,748,769

538,478

Non-current liabilities

Operating lease liabilities,non-current*

-

54,718

7,860

Deferred tax liabilities

19,855

23,658

3,398

Long-term borrowings

4,492

9,689

1,392

Other non-current liabilities

16,069

10,947

1,572

Total non-current liabilities

40,416

99,012

14,222

Total liabilities

3,143,071

3,847,781

552,700

Mezzanine equity

Redeemable noncontrolling interests

69,319

37,200

5,343

Shareholders' equity

Ordinary shares

249

249

36

Less: Treasury stock

(304,535)

(310,942)

(44,664)

Additional paid-in capital

9,061,979

9,512

1,309,074

Accumulated other comprehensive income

284,079

293,784

42,199

Accumulated deficit

(5,691,409)

(6,385,974)

(917,288)

Total Tuniu's shareholders' equity

3,350,363

2,710,629

389,357

Noncontrolling interests

(5,830)

1,010

145

Total Shareholders' equity

3,344,533

2,711,639

389,502

Total liabilities and shareholders' equity

6,545

*On 1 January 2019,the Company adopted ASC 842,Leases and used the optional transition method to initially apply this new lease standard at

the adoption date. Right-of-use assets and lease liabilities were recognized on the Company's consolidated financial statements.

Tuniu Corporation

Unaudited Condensed Consolidated Statements of Comprehensive Loss

(All amounts in thousands,except per share information)

QuarterEnded

QuarterEnded

QuarterEnded

QuarterEnded

December 31,2018

September 30,2019

RMB

RMB

RMB

US$

Revenues

Packaged tours

357,619

747,122

344,325

49,459

Others

113,616

105,395

106,958

15,364

Net revenues

471,235

852,517

451,283

64,823

Cost of revenues

(201,018)

(472,040)

(234,623)

(33,701)

Gross profit

270,217

380,477

216,660

31,122

Operating expenses

Research and product development

(75,854)

(64,310)

(79,038)

(11,353)

Sales and marketing

(209,094)

(239,973)

(239,898)

(34,459)

General and administrative

(120,510)

(138,456)

(341,487)

(49,052)

Other operating income

32,130

5,406

9,545

1,371

Total operating expenses

(373,328)

(437,333)

(650,878)

(93,493)

Loss from operations

(103,111)

(56,856)

(434,218)

(62,371)

Other income/(expenses)

Interest and investment income

30,696

42,780

38,766

5,568

Interest expense

(6,158)

(8,900)

(11,372)

(1,633)

Foreign exchange (losses)/gains,net

(2,043)

(5,190)

3,272

470

Other income,net

5,653

14,847

2,808

403

Loss before income tax expense

(74,963)

(13,319)

(400,744)

(57,563)

Income tax benefit/(expense)

2,025

698

(2,910)

(418)

Equity in income of affiliates

-

-

2,223

320

Net loss

(72,938)

(12,621)

(401,431)

(57,661)

Net loss attributable to noncontrolling interests

(9,511)

(565)

(35,957)

(5,165)

Net (loss)/income attributable to redeemable noncontrolling

interests

(1,848)

(102)

123

18

Net loss attributable to Tuniu Corporation

(61,579)

(11,954)

(365,597)

(52,514)

Accretion on redeemable noncontrolling interests

(3,082)

(1,518)

(1,540)

(221)

Net loss attributable to ordinary shareholders

(64,661)

(13,472)

(367,137)

(52,735)

Net loss

(72,661)

Other comprehensive income/(loss):

Foreign currency translation adjustment,net of nil tax

1

12,276

(4,939)

(709)

Comprehensive loss

(72,937)

(345)

(406,370)

(58,370)

Net loss per ordinary share attributable to ordinary

shareholders - basic and diluted

(0.17)

(0.04)

(0.99)

(0.14)

Net loss per ADS - basic and diluted*

(0.51)

(0.12)

(2.97)

(0.42)

Weighted average number of ordinary shares used in

computing basic and diluted loss per share

370,486,502

369,559,765

369,797,249

369,249

Share-based compensation expenses included are as follows:

Cost of revenues

392

52

258

37

Research and product development

2,173

2,065

839

121

Sales and marketing

333

119

267

38

General and administrative

8,901

13,294

5,500

790

Total

11,799

15,530

6,864

986

*Each ADS represents three of the Company's ordinary shares.

Tuniu Corporation

Unaudited Condensed Consolidated Statements of Comprehensive Loss

(All amounts in thousands,except per share information)

YearEnded

YearEnded

YearEnded

December 31,2019

RMB

RMB

US$

Revenues

Packaged tours

1,830,630

1,886,822

271,025

Others

409,519

394,165

56,618

Net revenues

2,240,149

2,280,987

327,643

Cost of revenues

(1,065,022)

(1,200,012)

(172,371)

Gross profit

1,175,127

1,080,975

155,272

Operating expenses

Research and product development

(315,222)

(303,561)

(43,604)

Sales and marketing

(778,126)

(923,273)

(132,620)

General and administrative

(487,372)

(749,404)

(107,645)

Other operating income

56,599

24,419

3,508

Total operating expenses

(1,524,121)

(1,951,819)

(280,361)

Loss from operations

(348,994)

(870,844)

(125,089)

Other income/(expenses)

Interest and investment income

152,929

156,862

22,532

Interest expense

(7,918)

(34,052)

(4,891)

Foreign exchange (losses)/gains,net

(11,729)

(1,131)

(162)

Other income,net

16,494

18,509

2,658

Loss before income tax expense

(199,218)

(730,656)

(104,952)

Income tax expense

(153)

(949)

(136)

Equity in income of affiliates

-

2,223

320

Net loss

(199,371)

(729,382)

(104,768)

Net loss attributable to noncontrolling interests

(14,037)

(35,797)

(5,142)

Net income attributable to redeemable noncontrolling interests

178

980

141

Net loss attributable to Tuniu Corporation

(185,512)

(694,565)

(99,767)

Accretion on redeemable noncontrolling interests

(2,422)

(4,634)

(666)

Net loss attributable to ordinary shareholders

(187,934)

(699,199)

(100,433)

Net loss

(199,768)

Other comprehensive income:

Foreign currency translation adjustment,net of nil tax

11,693

9,705

1,394

Comprehensive loss

(187,678)

(719,677)

(103,374)

Net loss per ordinary share attributable to ordinary

shareholders - basic and diluted

(0.50)

(1.89)

(0.27)

Net loss per ADS - basic and diluted*

(1.50)

(5.67)

(0.81)

Weighted average number of ordinary shares used in

computing basic and diluted loss per share

377,744,381

369,472,880

369,880

Share-based compensation expenses included are as follows:

Cost of revenues

1,483

4,006

575

Research and product development

9,124

12,057

1,732

Sales and marketing

1,305

3,321

477

General and administrative

56,826

42,352

6,083

Total

68,738

61,736

8,867

*Each ADS represents three of the Company's ordinary shares.

Reconciliations of GAAP and Non-GAAP Results

(All amounts in thousands,except per share information)

Quarter Ended December 31,2019

GAAP

Share-based

Amortization of acquired

Impairment of acquired

Non-GAAP

Result

Compensation

intangible assets

intangible assets

Result

Cost of revenues

(234,623)

258

-

-

(234,365)

Research and product development

(79,038)

839

793

-

(77,406)

Sales and marketing

(239,898)

267

34,649

32,014

(172,968)

General and administrative

(341,487)

5,500

705

-

(335,282)

Other operating income

9,545

-

-

-

9,545

Total operating expenses

(650,878)

6,606

36,147

32,014

(576,111)

Loss from operations

(434,218)

6,864

36,014

(359,193)

Net Loss

(401,431)

6,014

(326,406)

Net loss attributable to ordinary shareholders

(367,137)

6,014

(292,112)

Net loss per ordinary share attributable to ordinary

shareholders - basic and diluted

(0.99)

(0.79)

Net loss per ADS - basic and diluted

(2.97)

(2.37)

Weighted average number of ordinary shares

used in computing basic and diluted loss per

share

369,249

Quarter Ended September 30,2019

GAAP

Share-based

Amortization of acquired

Impairment of acquired

Non-GAAP

Result

Compensation

intangible assets

intangible assets

Result

Cost of revenues

(472,040)

52

-

-

(471,988)

Research and product development

(64,310)

2,065

513

-

(61,732)

Sales and marketing

(239,973)

119

34,907

-

(204,947)

General and administrative

(138,456)

13,294

705

-

(124,457)

Other operating income

5,406

-

-

-

5,406

Total operating expenses

(437,333)

15,478

36,125

-

(385,730)

Loss from operations

(56,856)

15,530

36,125

-

(5,201)

Net (loss)/income

(12,621)

15,125

-

39,034

Net (loss)/income attributable to ordinary

shareholders

(13,472)

15,125

-

38,183

Net (loss)/income per ordinary share

-Basic

(0.04)

0.10

-Diluted

(0.04)

0.10

Net (loss)/income per ADS

-Basic

(0.12)

0.30

-Diluted

(0.12)

0.30

Weighted average number of ordinary shares

-Basic

369,765

-Diluted

369,765

379,770,193

Quarter Ended December 31,2018

GAAP

Share-based

Amortization of acquired

Impairment of acquired

Non-GAAP

Result

Compensation

intangible assets

intangible assets

Result

Cost of revenues

(201,018)

392

-

-

(200,626)

Research and product development

(75,854)

2,173

589

-

(73,092)

Sales and marketing

(209,094)

333

34,163

-

(174,598)

General and administrative

(120,510)

8,901

781

-

(110,828)

Other operating income

32,130

-

-

-

32,130

Total operating expenses

(373,328)

11,407

35,533

-

(326,388)

Loss from operations

(103,111)

11,799

35,533

-

(55,779)

Net loss

(72,938)

11,533

-

(25,606)

Net loss attributable to ordinary shareholders

(64,661)

11,533

-

(17,329)

Net loss per ordinary share attributable to ordinary

shareholders - basic and diluted

(0.17)

(0.05)

Net loss per ADS - basic and diluted

(0.51)

(0.15)

Weighted average number of ordinary shares used

in computing basic and diluted loss per share

370,502

370,502

*Basic net loss per ordinary share attributable to ordinary shareholders is calculated by dividing net loss attributable to ordinary shareholders by the weighted

average number of ordinary shares outstanding during the periods. Diluted net loss per ordinary share attributable to ordinary shareholders is calculated by

dividing net loss attributable to ordinary shareholders by the weighted average number of ordinary shares and dilutive potential ordinary shares outstanding

during the periods,including the dilutive effect of share-based awards as determined under the treasury stock method.

Reconciliations of GAAP and Non-GAAP Results

(All amounts in thousands,except per share information)

Year Ended December 31,2019

GAAP

Share-based

Amortization of acquired

Impairment of acquired

Non-GAAP

Result

Compensation

intangible assets

intangible assets

Result

Cost of revenues

(1,012)

4,006

-

-

(1,196,006)

Research and product development

(303,561)

12,057

2,332

-

(289,172)

Sales and marketing

(923,273)

3,321

137,882

32,014

(750,056)

General and administrative

(749,404)

42,352

2,816

-

(704,236)

Other operating income

24,419

-

-

-

24,419

Total operating expenses

(1,819)

57,730

143,030

32,014

(1,719,045)

Loss from operations

(870,844)

61,736

143,014

(634,064)

Net loss

(729,382)

61,014

(492,602)

Net loss attributable to ordinary shareholders

(699,199)

61,014

(462,419)

Net loss per ordinary share attributable to ordinary

shareholders - basic and diluted

(1.89)

(1.25)

Net loss per ADS - basic and diluted

(5.67)

(3.75)

Weighted average number of ordinary shares used

in computing basic and diluted loss per share

369,880

Year Ended December 31,2018

GAAP

Share-based

Amortization of acquired

Impairment of acquired

Non-GAAP

Result

Compensation

intangible assets

intangible assets

Result

Cost of revenues

(1,022)

1,483

-

-

(1,063,539)

Research and product development

(315,222)

9,124

1,786

-

(304,312)

Sales and marketing

(778,126)

1,305

136,652

-

(640,169)

General and administrative

(487,372)

56,826

3,124

-

(427,422)

Other operating income

56,599

-

-

-

56,599

Total operating expenses

(1,121)

67,255

141,562

-

(1,315,304)

Loss from operations

(348,994)

68,738

141,562

-

(138,694)

Net (loss)/income

(199,371)

68,562

-

10,929

Net (loss)/income attributable to ordinary

shareholders

(187,934)

68,562

-

22,366

Net (loss)/income per ordinary share attributable to

ordinary shareholders

-Basic

(0.50)

0.06

-Diluted

(0.50)

0.06

Net (loss)/income per ADS

-Basic

(1.50)

0.18

-Diluted

(1.50)

0.18

Weighted average number of ordinary shares used

in computing basic (loss)/income per share

377,381

377,381

Weighted average number of ordinary shares used

in computing diluted (loss)/income per share

377,381

386,224

*Basic net income/(loss) per share is calculated by dividing net income/(loss) attributable to ordinary shareholders by the weighted average number

of ordinary shares outstanding during the periods. Diluted net income/(loss) per share is calculated by dividing net income/(loss) attributable to

ordinary shareholders by the weighted average number of ordinary shares and dilutive potential ordinary shares outstanding during the periods,

including the dilutive effect of share-based awards as determined under the treasury stock method.

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