Cheetah Mobile Announces Second Half and Full Year 2022 Unaudited Consolidated Financial Results

BEIJING,April 11,2023 -- Cheetah Mobile Inc. (NYSE: CMCM) ("Cheetah Mobile" or the "Company"),a China-based IT company,today announced its unaudited consolidated financial results for the second half and full year 2022 ended December 31,2022.

Management Commentary

Mr. Sheng Fu,Cheetah Mobile's Chairman and Chief Executive Officer,stated," While there are some challenges such as Covid-19 in 2022,we managed to increase our total revenue year over year by around 13% to RMB884.1 million (USD128.2 million) in 2022. Driven by elevated products,services and user experience,both the revenues from our membership business and number of subscribers have increased for more than ten quarters consecutively. Our global cloud service business and overseas advertising agency business also maintained good momentum and contributed to our revenue growth in 2022. Looking ahead,we remain confident in our long-term opportunities and growth. We will continue to pursue healthy and high-quality development in 2023. "

Mr. Thomas Ren,Cheetah Mobile's Chief Financial Officer,commented,"In 2022,we continued to take measures to control our expenses and improve our organizational efficiency. Our gross margin increased year over year from 67.2% to 71.4% in this year. We maintained a strong cash position of RMB1,672.7 million as of December 31,2022. This gives us financial flexibility to execute the key strategic objectives we have set out for long-term growth. "

Second Half 2022 Consolidated Financial Results

REVENUES

Total revenues were RMB527.0 million (US$76.4 million) in the second half of 2022,representing an increase of 40.7% year over year.

Revenues from the Company's internet business increased by 41.6% year over year to RMB421.9 million (US$61.2 million) in the second half of 2022. The year-over-year increase was mainly due to our endeavors to increase user acquisition through multiple channels.

Revenues from the AI and others were RMB105.1 million (US$15.2 million) in the second half of 2022,representing a 37.5% year-over-year increase. The year-over-year increase was primarily attributable to the growth of our global cloud service business,overseas advertising agency business as well as the development of our E-coupon vending robot business.

COST OF REVENUES AND GROSS PROFIT

Cost of revenues decreased by 12.5% year over year to RMB129.3 million (US$18.8 million) in the second half of 2022. The year-over-year decrease was primarily attributable to decrease of advertising business related traffic acquisition costs and channel costs. Non-GAAP cost of revenues decreased by 12.4% year over year to RMB129.1 million (US$18.7 million) in the second half of 2022.

Gross profit increased by 75.4% year over year to RMB397.7 million (US$57.7 million) in the second half of 2022. Non-GAAP gross profit increased by 75.2% year over year to RMB398.0 million (US$57.7 million) in the second half of 2022.

Gross margin was 75.5% in the second half of 2022,compared to 60.5% in the second half of 2021. Non-GAAP gross margin was 75.5% in the second half of 2022,compared to 60.7% in the second half of 2021.

OPERATING INCOME/LOSS AND EXPENSES

Total operating expensesincreased by 45.8% year over year to RMB497.2 million (US$72.1 million) in the second half of 2022. Total non-GAAP operating expenses increased by 47.3% year over year to RMB493.6 million (US$71.6 million) in the second half of 2022.

Research and development expenses decreased by 5.6% year over year to RMB85.9 million (US$12.5 million) in the second half of 2022. The year-over-year decrease was primarily due to the improvement of operational efficiency. Non-GAAP research and development expenses decreased by 3.8% year over year to RMB84.7 million (US$12.3 million) in the second half of 2022.

Selling and marketing expenses increased by 81.7% year over year to RMB306.5 million (US$44.4 million) in the second half of 2022. The year-over-year increase was from the marketing and promotion expenses related to our user acquisition. Non-GAAP selling and marketing expenses increased by 82.2% year over year to RMB305.7 million (US$44.3 million) in the first half of 2022.

General and administrative expenses increased by 21.5% year over year to RMB115.1 million (US$16.7 million) in the second half of 2022. The year-over-year increase was mainly from some one-time expenses. Non-GAAP general and administrative expenses increased by 22.5% year over year to RMB113.6 million (US$16.5 million) in the first half of 2022.

Operating losswas RMB99.5 million (US$14.4 million) in the second half of 2022,compared to RMB114.2 million in the same period of the last year. Non-GAAP operating loss was RMB95.6 million (US$13.9 million) in the second half of 2022,compared to RMB107.8 million in the same period of the last year.

Share-based compensation expenses were RMB3.9 million (US$0.6 million) in the second half of 2022,compared to RMB6.4 million in the same period of the last year.

OTHER EXPENSE,NET

Other expense,net was RMB351.6 million (US$51.0 million) in the second half of 2022,which was primarily from the impairment of some long-term investments.

NET INCOME/(LOSS) ATTRIBUTABLE TO CHEETAH MOBILE SHAREHOLDERS

Net loss attributable to Cheetah Mobile shareholderswas RMB440.9 million (US$63.9 million) in the second half of 2022,compared to a net loss attributable to Cheetah Mobile shareholders of RMB428.5 million in the same period of the last year.

Non-GAAP net loss attributable to Cheetah Mobile shareholderswasRMB437.0 million (US$63.4 million) in the second half of 2022,compared to a non-GAAP net loss attributable to Cheetah Mobile shareholders of RMB422.1 million in the same period of the last year.

NET INCOME/(LOSS) PER ADS

Diluted loss per ADSwas RMB15.4 (US$2.2) in the second half of 2022,compared to diluted loss per ADS of RMB15.2 in the same period of the last year. Non-GAAP diluted loss per ADS was RMB15.3(US$2.2) in second half of 2022,compared to Non-GAAP diluted loss per ADS of RMB14.9 in the same period of the last year.

BALANCE SHEET

As of December 31,2022,the Company had cash and cash equivalents,restricted cash and short-term investments of RMB1,672.7 million (US$242.5 million).

SHARES ISSUED AND OUTSTANDING

As of December 31,the Company had a total of 1,449,473,689 Class A and Class B ordinary shares issued and outstanding. On August 23,the Company announced that it changed the ratio of its American Depositary Share ("ADS") to Class A ordinary share ("Share") from one (1) ADS representing ten (10) Shares to one (1) ADS representing fifty (50) Shares,effective September 2,2022. Accordingly,the Company has retrospectively revised the comparative data from the previous periods to conform to the requisite presentation for the current period.

Fiscal Year 2022 Consolidated Financial Results

REVENUES

Total revenues increased by 12.7% to RMB884.1 million (US$128.2 million) in 2022.

Revenues from the Company's internet business increased by 6.7% year over year to RMB697.4 million (US$101.1 million) in 2022. The year-over-year increase was mainly due to the growth of our membership business.

Revenues from the AI and others increased by 42.7% year over year to RMB186.7 million (US$27.1 million) in 2022. The year-over-year increase was primarily attributable to growth of our global cloud service business,overseas advertising agency business as well as the development of our E-coupon vending robot and related business.

COST OF REVENUES AND GROSS PROFIT

Cost of revenues decreased by 2.0% year over year to RMB252.6 million (US$36.6 million) in 2022. The year-over-year decrease was primarily due to lower advertising business related traffic acquisition costs and channel costs. Non-GAAP cost of revenues decreased by 1.9% year over year to RMB251.9 million (US$36.5 million) in 2022.

Gross profit increased by 19.8% year over year to RMB631.5 million (US$91.6 million) in 2022. Non-GAAP gross profit increased by 19.7% year over year to RMB632.2 million (US$91.7 million) in 2022.

Gross margin was 71.4% in 2022,compared to 67.2% in 2021. Non-GAAP gross margin was 71.5% in 2022,compared to 67.3% in 2021.

OPERATING INCOME/LOSS AND EXPENSES

Total operating expensesincreased by 13.3% year over year to RMB857.1 million (US$124.3 million) in 2022. Total non-GAAP operating expenses increased by 13.3% year over year to RMB849.9 million (US$123.2 million) in 2022.

Research and development expenses decreased by 14.5% year over year to RMB181.0 million (US$26.2 million) in 2022. The year-over-year decrease was due to improvement of operational efficiency. Non-GAAP research and development expenses decreased by 12.8% year over year to RMB179.4 million (US$26.0 million) in 2022.

Selling and marketing expenses increased by 28.8% year over year to RMB476.9 million (US$69.1 million) in 2022. This year-over-year increase was primarily due to the marketing and promotion expenses related to our user acquisition. Non-GAAP selling and marketing expenses increased by 28.7% year over year to RMB475.0 million (US$68.9 million) in 2022.

General and administrative expenses increased by 11.7% year over year to RMB214.3 million (US$31.1 million) in 2022. The year-over-year increase was mainly from some one-time expenses. Non-GAAP general and administrative expenses increased by 9.1% year over year to RMB210.6 million (US$30.5 million) in 2022.

Operating losswas RMB225.6 million (US$32.7 million) in 2022,compared to RMB229.6 million in 2021. Non-GAAP operating loss was RMB217.7 million (US$31.6 million) in 2022,compared to RMB222.4 million in 2021.

Share-based compensation expenses were RMB7.9 million (US$1.1 million) in 2022,compared to RMB7.2 million in 2021.

NET INCOME/(LOSS) ATTRIBUTABLE TO CHEETAH MOBILE SHAREHOLDERS

Net loss attributable to Cheetah Mobile shareholderswas RMB513.5 million (US$74.4 million) in 2022,compared to a net loss attributable to Cheetah Mobile shareholders of RMB351.1 million in 2021.

Non-GAAP net loss attributable to Cheetah Mobile shareholderswasRMB505.6 million (US$73.3 million) in 2022,compared to a non-GAAP net loss attributable to Cheetah Mobile shareholders of RMB344.0 million in 2021.

NET INCOME/(LOSS) PER ADS

Diluted loss per ADSwas RMB18.1 (US$2.6) in 2022,compared to diluted loss per ADS of RMB12.3 in 2021. Non-GAAP diluted loss per ADS was RMB17.8 (US$2.6) in 2022,compared to Non-GAAP diluted loss per ADS of RMB12.1 in 2021.

Business Outlook

For the first half of 2023,the Company expects its total revenues to be between RMB310 million (US$44.9 million) and RMB360 million (US$52.2 million). This amount reflects the Company's current and preliminary expectations.

Exchange Rate

This press release contains translations of certain Renminbi amounts into U.S. dollars at specified rates solely for the convenience of readers. Unless otherwise noted,all translations from Renminbi to U.S. dollars in this press release were made at a rate of RMB6.8972 to US$1.00,the exchange rate in effect as of December 31,as set forth in the H.10 statistical release of the Federal Reserve Board. Such translations should not be construed as representations that RMB amounts could be converted into U.S. dollars at that rate or any other rate,or to be the amounts that would have been reported under accounting principles generally accepted in the United States of America ("U.S. GAAP").

About Cheetah Mobile Inc.

Cheetah Mobile is a China-based IT company. It has attracted hundreds of millions of users through an array of internet products and services on PCs and mobile devices. The Company provides advertising services to advertisers worldwide,value-added services including the sale of premium membership and in-app virtual items to its users as well as multi-cloud management platform to companies globally. Cheetah Mobile is also committed to leveraging its cutting-edge artificial intelligence technologies to power its products and make the world smarter. It has been listed on the New York Stock Exchange since May 2014.

Safe Harbor Statement

This press release contains forward-looking statements. These statements,including management quotes and business outlook,constitute forward-looking statements under 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" and similar statements. Such statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in the forward-looking statements,including but are not limited to the following: Cheetah Mobile's growth strategies; Cheetah Mobile's ability to retain and increase its user base and expand its product and service offerings; Cheetah Mobile's ability to monetize its platform; Cheetah Mobile's future business development,financial condition and results of operations; competition with companies in a number of industries including internet companies that provide online marketing services and internet value-added services; expected changes in Cheetah Mobile's revenues and certain cost or expense items; and general economic and business condition globally and in China. Further information regarding these and other risks is included in Cheetah Mobile's filings with the U.S. Securities and Exchange Commission. Cheetah Mobile does not undertake any obligation to update any forward-looking statement as a result of new information,future events or otherwise,except as required under applicable law.

Use of Non-GAAP Financial Measures

This release contains the following non-GAAP financial measures:

Non-GAAP cost of revenues excludes share-based compensation expenses

Non-GAAP gross profit excludes share-based compensation expenses

Non-GAAP gross margin excludes share-based compensation expense

Total non-GAAP operating expenses exclude share-based compensation expenses

Non-GAAP research and development expenses exclude share-based compensation expenses

Non-GAAP selling and marketing expenses exclude share-based compensation expenses

Non-GAAP general and administrative expenses exclude share-based compensation expenses

Non-GAAP operating profit/loss excludes share-based compensation expenses

Non-GAAP net income/loss attributable to Cheetah Mobile shareholders excludes share-based compensation expenses

Non-GAAP diluted earnings/losses per ADS excludes share-based compensation expenses

Non-GAAP adjusted EBITDA represents net income/loss attributable to Cheetah Mobile shareholders excluding share-based compensation,interest income,depreciation and amortization,net income attributable to noncontrolling interests,other income,net and income tax expenses

The Company reviews these non-GAAP financial measures together with GAAP financial measures to obtain a better understanding of its operating performance. It uses the non-GAAP financial measures for planning,forecasting and measuring results against the forecast. The Company believes that non-GAAP financial measures are useful supplemental information for investors and analysts to assess its operating performance without the effect of share-based compensation expenses,which have been and will continue to be significant recurring expenses in its business. However,the use of non-GAAP financial measures has material limitations as an analytical tool. One of the limitations of using non-GAAP financial measures is that they do not include all items that impact the Company's net income for the period. In addition,because non-GAAP financial measures are not measured in the same manner by all companies,they may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations,you should not consider non-GAAP financial measure in isolation from or as an alternative to the financial measure prepared in accordance with U.S. GAAP. For more information on these non-GAAP financial measures,please see the tables captioned "Cheetah Mobile Inc. Reconciliation of GAAP and Non-GAAP Results".

Investor Relations Contact

Cheetah Mobile Inc.

Tel: +86 10 6292 7779

Email: ir@cmcm.com

CHEETAH MOBILE INC.

Condensed Consolidated Balance Sheets

(Unaudited,amounts in thousands of Renminbi ("RMB") and US dollars ("US$"))

As of

December31,2021

December31,2022

RMB

RMB

USD

ASSETS

Current assets:

Cash and cash equivalents

1,583,926

1,515,799

219,770

Restricted cash

781

696

101

Short-term investments

262,813

156,182

22,644

Accounts receivable,net

170,305

283,774

41,143

Prepayments and other current assets,net

479,329

968,145

140,368

Due from related parties,net

101,333

199,099

28,867

Total current assets

2,598,487

3,123,695

452,893

Non-current assets:

Property and equipment,794

58,727

8,515

Operating lease right-of-use assets

45,181

39,579

5,738

Intangible assets,net

10,052

8,430

1,222

Investmentinequityinvestees

236,552

238,591

34,592

Otherlongterminvestments

1,757,845

1,553,740

225,271

Due from related parties,net

111,335

3,840

557

Deferred tax assets

14,384

19,337

2,804

Other non-current assets

102,688

93,480

13,554

Total non-current assets

2,379,831

2,015,724

292,253

Total assets

4,978,318

5,139,419

745,146

LIABILITIES AND SHAREHOLDERS'

EQUITY

Current liabilities:

Accounts payable

134,879

132,994

19,282

Accrued expenses and other current liabilities

1,137,348

1,586,769

230,060

Due to related parties

37,760

23,629

3,426

Income tax payable

43,907

35,135

5,094

Total current liabilities

1,353,894

1,778,527

257,862

Non-current liabilities:

Deferred tax liabilities

58,564

55,770

8,086

Other non-current liabilities

205,717

200,336

29,046

Total non-current liabilities

264,281

256,106

37,132

Total liabilities

1,618,175

2,034,633

294,994

Shareholders' equity:

Ordinary shares

235

236

34

Additional paid-in capital

2,685,544

2,688,571

389,806

Retained earnings/ (Accumulated losses)

505,085

(9,424)

(1,366)

Accumulated other comprehensive income

88,262

353,948

51,318

Total Cheetah Mobile shareholders' equity

3,279,126

3,033,331

439,792

Noncontrolling interests

81,017

71,455

10,360

Total equity

3,360,143

3,104,786

450,152

Total liabilities and equity

4,146

CHEETAH MOBILE INC.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited,amounts in thousands of Renminbi ("RMB") and US dollars ("US$"),except for number of shares and

per share(or ADS) data)

For The Six Months Ended

For The Year Ended

December31,2022

December 31,2022

RMB

RMB

USD

RMB

RMB

USD

Revenues

374,470

527,043

76,415

784,616

884,066

128,178

Internet business

298,001

421,919

61,173

653,759

697,387

101,112

AI and others

76,469

105,124

15,242

130,857

186,679

27,066

Cost of revenues (a)

(147,743)

(129,340)

(18,753)

(257,656)

(252,561)

(36,618)

Gross profit

226,727

397,703

57,662

526,960

631,505

91,560

Operating income and expenses:

Research and development (a)

(91,059)

(85,920)

(12,457)

(211,594)

(180,957)

(26,236)

Selling and marketing (a)

(168,713)

(306,514)

(44,440)

(370,274)

(476,853)

(69,137)

General and administrative (a)

(94,740)

(115,149)

(16,695)

(191,868)

(214,337)

(31,076)

Other operating income

13,559

10,369

1,503

17,205

15,051

2,182

Total operating income and expenses

(340,953)

(497,214)

(72,089)

(756,531)

(857,096)

(124,267)

Operating loss

(114,226)

(99,511)

(14,427)

(229,571)

(225,591)

(32,707)

Other income/(expenses):

Interest income,net

16,961

21,547

3,124

25,391

35,710

5,177

Foreign exchange gains/(losses)

14,514

(40,395)

(5,857)

24,288

(95,434)

(13,837)

Other expense,net

(343,773)

(351,623)

(50,981)

(159,679)

(260,465)

(37,763)

Loss before taxes

(426,524)

(469,982)

(68,141)

(339,571)

(545,780)

(79,130)

Income tax (expenses)/ benefits

(5,525)

26,218

3,801

(13,633)

25,089

3,638

Net loss

(432,049)

(443,764)

(64,340)

(353,204)

(520,691)

(75,492)

Less: net loss attributable to noncontrolling

interests

(3,559)

(2,861)

(415)

(2,078)

(7,216)

(1,046)

Net loss attributable to Cheetah Mobile

shareholders

(428,490)

(440,903)

(63,925)

(351,126)

(513,475)

(74,446)

Net loss per share

Basic

(0.3034)

(0.3081)

(0.0447)

(0.2469)

(0.3617)

(0.0524)

Diluted

(0.3034)

(0.3083)

(0.0447)

(0.2469)

(0.3619)

(0.0525)

Net loss per ADS

Basic

(15.1688)

(15.4058)

(2.2336)

(12.3469)

(18.0854)

(2.6221)

Diluted

(15.1688)

(15.4126)

(2.2346)

(12.3469)

(18.0954)

(2.6236)

Weighted average number of shares

outstanding

Basic

1,431,394,861

1,447,753,976

1,430,052,602

1,443,682,305

1,305

Diluted

1,305

Weighted average number of ADSs

outstanding

Basic

28,627,897

28,955,080

28,601,052

28,873,646

28,646

Diluted

28,646

Other comprehensive (loss)/income,net of

tax of nil

Foreign currency translation adjustments

(40,669)

119,996

17,398

(75,536)

271,640

39,384

Unrealized gain on available-for-sale

securities,net

-

(8,269)

(1,199)

-

(8,199)

Other comprehensive (loss)/income

(40,669)

111,727

16,199

(75,536)

263,371

38,185

Total comprehensive loss

(472,718)

(332,037)

(48,141)

(428,740)

(257,320)

(37,307)

Less: Total comprehensive loss

attributable to noncontrolling interests

(5,611)

(1,822)

(264)

(2,536)

(9,531)

(1,382)

Total comprehensive loss attributable to

Cheetah Mobile shareholders

(467,107)

(330,215)

(47,877)

(426,204)

(247,789)

(35,925)

CHEETAH MOBILE INC.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited,except for number of shares and per

share(or ADS) data)

For The Six Months Ended

For The Year Ended

December31,2022

(a) Share-based compensation expenses

RMB

RMB

USD

RMB

RMB

USD

Cost of revenues

407

283

41

1,027

686

99

Research and development

3,088

1,259

183

5,996

1,580

229

Selling and marketing

928

860

125

1,339

1,899

275

General and administrative

1,964

1,533

222

(1,212)

3,698

536

Total

6,387

3,935

571

7,150

7,863

1,139

CHEETAH MOBILE INC.

Reconciliation of GAAP and Non-GAAP Results

(Unaudited,except for per share data )

For The Six Months Ended December 31,2022

For The Year Ended December31,2022

GAAP

Share-based

Non-GAAP

GAAP

Share-based

Non-GAAP

Result

Compensation

Result

Result

Compensation

Result

RMB

RMB

RMB

USD

RMB

RMB

RMB

USD

Revenues

527,043

-

527,043

76,415

884,066

-

884,066

128,178

Cost of revenues

(129,340)

283

(129,057)

(18,712)

(252,561)

686

(251,875)

(36,519)

Gross profit

397,703

283

397,986

57,703

631,505

686

632,191

91,659

Research and development

(85,920)

1,259

(84,661)

(12,274)

(180,957)

1,580

(179,377)

(26,007)

Selling and marketing

(306,514)

860

(305,654)

(44,315)

(476,853)

1,899

(474,954)

(68,862)

General and administrative

(115,149)

1,533

(113,616)

(16,473)

(214,337)

3,698

(210,639)

(30,540)

Other operating expense

10,369

-

10,503

15,051

-

15,182

Total operating income and expenses

(497,214)

3,652

(493,562)

(71,559)

(857,096)

7,177

(849,919)

(123,227)

Operating loss

(99,511)

3,935

(95,576)

(13,856)

(225,591)

7,863

(217,728)

(31,568)

Net loss attributable to Cheetah Mobile shareholders

(440,903)

3,935

(436,968)

(63,354)

(513,475)

7,863

(505,612)

(73,307)

Diluted losses per ordinary share (RMB)

(0.3083)

0.0028

(0.3055)

(0.3619)

0.0054

(0.3565)

Diluted losses per ADS (RMB)

(15.4126)

0.1359

(15.2767)

(18.0954)

0.2723

(17.8231)

Diluted losses per ADS (USD)

(2.2346)

0.0197

(2.2149)

(2.6236)

0.0395

(2.5841)

CHEETAH MOBILE INC.

Reconciliation of GAAP and Non-GAAP Results

(Unaudited,2021

For The Year Ended December31,2021

GAAP

Share-based

Non-GAAP

GAAP

Share-based

Non-GAAP

Result

Compensation

Result

Result

Compensation

Result

RMB

RMB

RMB

RMB

RMB

RMB

Revenues

374,470

-

374,470

784,616

-

784,616

Cost of revenues

(147,743)

407

(147,336)

(257,656)

1,027

(256,629)

Gross profit

226,727

407

227,134

526,960

1,027

527,987

Research and development

(91,059)

3,088

(87,971)

(211,594)

5,996

(205,598)

Selling and marketing

(168,713)

928

(167,785)

(370,274)

1,339

(368,935)

General and administrative

(94,740)

1,964

(92,776)

(191,868)

(1,212)

(193,080)

Other operating expense

13,559

-

13,559

17,205

-

17,205

Total operating income and expenses

(340,953)

5,980

(334,973)

(756,531)

6,123

(750,408)

Operating loss

(114,226)

6,387

(107,839)

(229,571)

7,150

(222,421)

Net income attributable to Cheetah Mobile shareholders

(428,490)

6,387

(422,103)

(351,126)

7,150

(343,976)

Dilutedlosses per ordinary share (RMB)

(0.3034)

0.0045

(0.2989)

(0.2469)

0.0050

(0.2419)

Diluted losses per ADS (RMB)

(15.1688)

0.2231

(14.9457)

(12.3469)

0.2500

(12.0969)

CHEETAH MOBILE INC.

Information about Segment

(Unaudited,except for percentage)

For The Six Months Ended December 31,2022

Internet Business

AI and others

Unallocated*

Consolidated

Internet Business

AI and others

Unallocated*

Consolidated

RMB

RMB

RMB

RMB

USD

RMB

RMB

RMB

RMB

USD

Revenue

421,919

105,124

-

527,415

697,387

186,679

-

884,178

Operating profit/(loss)

17,738

(113,314)

(3,935)

(99,511)

(14,427)

(369)

(217,359)

(7,863)

(225,591)

(32,707)

Operating margin

4.2

%

(107.8)

%

-

(18.9)

%

(18.9)

%

(0.1)

%

(116.4)

%

-

(25.5)

%

(25.5)

%

For The Six Months Ended December 31,2021

Internet Business

AI and others

Unallocated*

Consolidated

Internet Business

AI and others

Unallocated*

Consolidated

RMB

RMB

RMB

RMB

RMB

RMB

RMB

RMB

Revenue

298,001

76,469

-

374,470

653,759

130,857

-

784,616

Operating loss

(21,680)

(86,159)

(6,387)

(114,226)

(14,178)

(208,243)

(7,150)

(229,571)

Operating margin

(7.3)

%

(112.7)

%

-

(30.5)

%

(2.2)

%

(159.1)

%

-

(29.3)

%

* Unallocated expenses refer to SBC expenses that are not allocated to individual segments.

CHEETAH MOBILE INC.

Reconciliation from Net Income Attributable to Cheetah Mobile Shareholders to Adjusted EBITDA (Non-GAAP)

(Unaudited,amounts in thousands of Renminbi ("RMB") and US dollars ("US$"))

For The Six Months Ended

For The Year Ended

December31,2022

December31,2022

RMB

RMB

USD

RMB

RMB

USD

Net loss attributable to Cheetah Mobile shareholders

(428,490)

(440,903)

(63,925)

(351,126)

(513,475)

(74,446)

Add:

Income tax expenses/(benefits)

5,525

(26,218)

(3,801)

13,633

(25,089)

(3,638)

Interest income,net

(16,961)

(21,547)

(3,124)

(25,391)

(35,710)

(5,177)

Depreciation and amortization

33,959

25,133

3,644

50,822

53,025

7,688

Net loss attributable to noncontrolling interests

(3,046)

Other expense

329,259

392,018

56,838

135,391

355,899

51,600

Share-based compensation

6,387

3,935

571

7,150

7,863

1,139

Adjusted EBITDA

(73,880)

(70,443)

(10,212)

(171,599)

(164,703)

(23,880)