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» VisionChina Media Inc. Q2 2010 Earnings Call Transcript
I will now turn the call over to our CEO, Mr. Li.Limin Li Thank you, Colin. Hello, everyone, and thank for joining us. With an expected seasonally weeks first quarter behind us, we were excited to move on into the second quarter of 2011. We were thrilled to deliver strong results this quarter, with revenues meeting the company's guidance and breaking our own record for revenue generated in a single quarter. Total revenues in the second quarter of 2011 were $45 million, a 41.6% increase year-over-year and a 38.3% increase quarter-over-quarter. In the quarter, we realized non-GAAP profitability and we are now increasingly confident we will achieve profitability for the full year of 2011. I would like to share some key operating data from the quarter with all of you. Utilization for the second quarter of 2011 reached 8.63 minutes per broadcast hour, an increase of 36.1% year-over-year and an increase of 22.9% quarter-over-quarter. Revenue per broadcasting hour reached $1,003, an increase of 57.7% year-over-year and an increase of 43.5% quarter-over-quarter. Gross profit reached 29.3%, an increase of 19.5 percentage point year-over-year and an increase of 28.6 percentage points quarter-over-quarter. A total of 997 advertisers placed advertisement on our network in the second quarter, an increase of 62.4% year-over-year and an increase of 199.4% quarter-over-quarter. In aggregate, the number of companies that have placed advertisement on our network reached 2,766 as of June 30, 2011. Advertisers composition remains stable during the quarter and incremental advertising placement were noted among returning advertisers. Revenues from the subway side of the business continues to grow in the second quarter, contributing 52.5% of total revenues, an increase of 5.3 percentage points year-over-year and an increase of 7.1 percentage points quarter-over-quarter. In terms of our media network, we've signed an exclusive contract with the Beijing Subway company to operate subway mobile television on four new lines that became operational in the second quarter of 2011, and did so on very favorably terms, further strengthening our subway television network coverage in key metropolitan area.
Furthermore, the three new Shenzhen subway lines, for which we've signed an exclusive contract with Shenzhen subway in the first quarter, became operational in the second quarter, before the opening of with the 26th Universiade. On this newly operational subway lines in Shenzhen, the mobile television displays that have better quality screen and sound system and have been better placed for an improved audience experience.The completion and upgradation of Shenzhen three new subway lines, line two, four and five marks the beginning of a new subway era for Shenzhen, one of the China's tier-1 cities. Already the four tier-1 cities in which 60% of advertising budget VisionChina spent have formed seamless above-ground bus and below-ground subway public transit network. According to the 2010, mobile television effectiveness measurement report for China, on average in Tier-1 cities 50% of commuting is done on the public transport network. We believe that given the public's increasing reliance on public transportation, the public transit and mobile television market will have sustainable growth that leverages its outstanding coverage and dissemination power. As we mentioned in the first quarter, now e-commerce operator advertisers were once again excited about the positive conversion rate and the fast positive impact on revenues seen after phasing targeted ad on our public transportation network in the second quarter. As a result, these companies are already actively contributing to our placement backlog for the remainder of 2011. Also in the second quarter, we were actively engaged in work on technological innovations and enhance the overall mobile television audio vision environment for audiences. For example, a sound system that is auto control in accordance to external noise levels has been successfully developed and submitted for national utility model patent, and the invention patent registration. The technology has been installed for trial uses on our network on buses in some cities, and the results have shown significantly improved sound quality that impacts the effectiveness of media. Read the rest of this transcript for free on seekingalpha.com