Cheetah Mobile (NYSE:CMCM) Announces Earnings Results, Misses Expectations By $1.06 EPS

Key Points

• Cheetah Mobile missed earnings expectations: The company reported a quarterly loss of $0.42 per share versus the expected $0.64 profit, while revenue of $39.17 million fell well short of the $225.25 million consensus.
• Cloud, AI infrastructure and robotics gained momentum: Cloud and AI infrastructure revenue rose 83% year over year, while robotics revenue increased 72.5%, driven partly by smart wheelchair shipments in Europe and China. Together, these growth areas represented about 43% of second-quarter revenue.
• Advertising weakness and investment costs pressured results: Advertising agency revenue plunged 70% following policy changes at a major platform, contributing to a RMB25.6 million non-GAAP operating loss; robotics also remained in an investment phase with widening losses. Analysts maintain an average “Sell” rating.

Cheetah Mobile (NYSE:CMCM - Get Free Report) issued its quarterly earnings data on Thursday. The software maker reported ($0.42) earnings per share (EPS) for the quarter, missing the consensus estimate of $0.64 by ($1.06), reports. The business had revenue of $39.17 million for the quarter, compared to analysts' expectations of $225.25 million. Cheetah Mobile had a negative return on equity of 3.90% and a negative net margin of 21.14%.

Here are the key takeaways from Cheetah Mobile's conference call:

• Cloud and AI infrastructure accelerated: Revenue rose 83% year over year to RMB59.1 million, representing 22.2% of total revenue. Management expects 2026 gross billings to exceed RMB2 billion and related revenue to surpass RMB200 million.
• Business mix continued shifting toward growth areas: Cloud and AI infrastructure plus robotics accounted for approximately 43% of second-quarter revenue, up from 22% a year earlier, while revenue excluding advertising agency services grew about 10% year over year.
• Robotics expanded into smart mobility: Robotics and other revenue increased 72.5% year over year to RMB54.5 million as smart wheelchair products began shipping in Europe and China. Management highlighted the product line’s capital-efficient development and potential for further growth.
• Advertising agency revenue fell sharply: Revenue declined 70% year over year to RMB22 million due to review-policy changes at a major global advertising platform, contributing to a RMB25.6 million non-GAAP operating loss and a wider overall operating loss.
• Robotics remains in an investment phase: The segment’s adjusted operating loss widened sequentially to RMB34 million as the company invested in product development, commercialization, sales channels, and certifications, although management expects profitability to improve over time.

Cheetah Mobile Price Performance

Shares of NYSE CMCM opened at $3.04 on Friday. The stock has a fifty day moving average price of $3.10 and a 200 day moving average price of $4.50. Cheetah Mobile has a 1-year low of $2.65 and a 1-year high of $9.44. The company has a market cap of $92.02 million, a PE ratio of -2.59 and a beta of 1.87.

Analyst Ratings Changes

Separately, Weiss Ratings reiterated a "sell (d-)" rating on shares of Cheetah Mobile in a research note on Friday, July 17th. One investment analyst has rated the stock with a Sell rating, According to MarketBeat, the company currently has an average rating of "Sell".

Hedge Funds Weigh In On Cheetah Mobile

Institutional investors have recently bought and sold shares of the company. Dimensional Fund Advisors LP acquired a new stake in shares of Cheetah Mobile in the 4th quarter worth $69,000. Nomura Holdings Inc. acquired a new position in shares of Cheetah Mobile during the third quarter worth about $94,000. Goldman Sachs Group Inc. increased its stake in shares of Cheetah Mobile by 17.5% during the fourth quarter. Goldman Sachs Group Inc. now owns 23,131 shares of the software maker's stock worth $139,000 after acquiring an additional 3,443 shares during the period. Finally, Jane Street Group LLC increased its stake in shares of Cheetah Mobile by 852.7% during the fourth quarter. Jane Street Group LLC now owns 30,142 shares of the software maker's stock worth $181,000 after acquiring an additional 26,978 shares during the period. 0.41% of the stock is owned by institutional investors and hedge funds.

About Cheetah Mobile

Cheetah Mobile Inc operates as a mobile internet company primarily focused on developing and distributing utility and entertainment applications for smartphones and tablets. Its portfolio includes well-known security and optimization products such as Clean Master, Security Master and Battery Doctor, alongside consumer-oriented offerings in mobile gaming and content discovery. The company's software solutions are designed to enhance device performance, improve privacy protection and deliver engaging digital experiences for end users.

Founded as the mobile internet division of Kingsoft in 2010, Cheetah Mobile spun off as an independent, publicly traded company in late 2014.

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