SYS-CON MEDIA Authors: Pat Romanski, Gary Arora, Zakia Bouachraoui, Yeshim Deniz, Liz McMillan

News Feed Item

Seven Stars Cloud Reports Q1 2018 Results

- Q1 2018 revenue of $186 million (+461% vs. Q1 2017 and compared to $144 million for Full Year 2017)

NEW YORK, May 15, 2018 /PRNewswire/ -- Seven Stars Cloud Group, Inc. (NASDAQ: SSC) ("SSC" or the "Company"), announced today its Q1 2018 operating results for the period ended March 31, 2018 (a full copy of the Company's quarterly report on Form 10-Q will also be posted at  

Conference Call: SSC's management, including Bruno Wu (Executive Chairman & CEO), Bob  Benya (President, Director & Chief Revenue Officer), and Jason Wu (Interim CFO), will host an earnings release conference call at 4:05 p.m. on Tuesday, May 15, U.S. Eastern Time (4:05 a.m. on Wednesday, May 16, Beijing/Hong Kong Time).

To join the webcast, please visit the 'Events & Presentations' section of the SSC corporate
website (, or click
SSC Earnings Webcast 
or call the toll-free dial-in number: 877-407-3107; International callers should dial: 201-493-6796.


Revenue for Q1 2018 was $185.9 million as compared to $33.2 million for the same period in 2017, an increase of approximately $152.8 million, or 461%. The increase was primarily due to our expanding business in crude oil trading which began in October 2017. 

Cost of revenue was approximately $185.5 million in Q1 2018, as compared to $29.3 million for the same period in 2017.  Our cost of revenue increased by $156.2 million which is in line with our increase in revenue.  Cost of revenue is primarily comprised of costs to purchase electronic products and crude oil from suppliers in our supply chain management business.

Q1 2018 gross profit was approximately $0.4 million, as compared to gross profit in the amount of $3.8 million during the same period in 2017. The gross profit ratio for Q1 2018 was 0.21%, while in Q1 2017, it was 11.52%. The decrease was mainly due to the Company recording one-time consulting service fees, which generated most of our gross profit in the first quarter of 2017, as well as the current low gross profit margins that exist in the crude oil trading business.

Selling, general and administrative expenses for Q1 2018 was $3.7 million as compared to $1.3 million for the same period in 2017, an increase of approximately $2.4 million or 192%. The majority of the increase can be attributed to several factors: 1. an increase in headcount and relevant traveling expenses in the amount of $1.1 million; 2. an increase of approximately $0.9 million in consulting service fees attributable to our developing financial digital assets business; 3. an increase in our sales and marketing expense in the amount of $0.2 million relating to the introduction and marketing of our business models to various potential investors and business partners.

Professional fees are generally related to public company reporting and governance expenses as well as legal fees related to business transition and expansion. Our professional fees for the Q1 2018 were $0.7 million as compared to $0.3 million for the same period in 2017, an increase of approximately $0.4 million. The increase in professional fees was related to an increase in auditing service fees.   

Depreciation and amortization for Q1 2018 was $0.01 million as compared to $0.2 million for the same period in 2017, a decrease of approximately $0.19 million. The decrease was primarily due to the sale of our Beijing office building in 2017.             

Loss per share for Q1 2018 was $0.06 as compared to earnings per share of $0.04 in the same period 2017.

As of March 31, 2018, the Company had cash of approximately $3.9 million. Approximately $2.1 million was held in our Hong Kong, US and Singapore entities and $1.8 million was held in our mainland China entities.  The cash balance does not include the subscription agreement funds raised from a recent private placement with GT Dollar Ptd. Ltd. totaling a gross amount of $40.0 million US Dollars to the Company.  The Company has received all subscription payments from this GT Financing and is currently in the process of dispersing the proceeds to the Company's various bank accounts. The Company has not yet issued any shares with respect to this financing.

Notwithstanding the strong Q1 revenue to begin 2018, management, for the time being, will be maintaining the previously provided guidance of $280 million in revenue and $35 million in EBITDA for full year 2018.

Bob Benya, President, Director & Chief Revenue Officer, stated, "Q1 2018 was a quarter defined by explosive performance, as Seven Stars Cloud's $186 million in quarterly revenue constituted the best quarter in the company's history with 461% revenue growth compared to the same Q1 period in 2017.  Even more impressive, is that Q1 2018 revenue alone, is already, approximately $42 million higher than ALL OF 2017 revenue combined." 

"While the supply chain management engine had massive revenue growth, gross profitability is an area upon which the Company will need to improve.  Between earned purchasing power through deal flow, renegotiations of existing contractual arrangements and new future partnerships, we believe we can begin to improve gross profitability for this particular engine as the year continues."

"Looking back for a moment, January through October 2017 saw the Company, via Phase 1, solely focused on entirely converting our business over from its Legacy YOD model to a supply chain management model.  Starting in November 2017, the Company began Phase 2 which focused on blockchain-based commodity- and currency-related index products (for example the recently launched DOAI crude oil index).  Now, looking forward, the combined work and launches from both Phases are being merged to create what we are calling a Vertical Industry Digital Ecosystem.  SSC has identified an industry market opportunity to create economic efficiencies across a number of industries where we already have strong partner relationships per our supply chain business operations.  This market opportunity includes the deployment of digital asset B2B payment mechanisms in the form of centrally managed cryptocurrencies specific to those industries.  The usage of these respective cryptocurrencies will unlock economic efficiencies across B2B partners.  To follow, there are Big Data opportunities and industry optimizations that can be realized as there continues to be significant adoption of these digital assets for trading and settlement.  Based on these new areas of business, we anticipate vastly improving gross margins as the total product and service business mix becomes more balanced as the year moves ahead and with the continued introduction of new blockchain-based digital asset financial products along with the expansion of the Vertical Industry Digital Ecosystem, which will be highly strategic to our future growth, value creation and net profitability."

About Seven Stars Cloud Group, Inc. (

SSC is aiming to become a next generation Artificial-Intelligent (AI) & Blockchain-Powered, Fintech company.  By managing and providing an infrastructure and environment that facilitates the transformation of traditional financial markets such as commodities, currency and credit into the asset digitization era, SSC provides asset owners and holders a seamless method and platform for digital asset securitization and digital currency tokenization and trading. 

Safe Harbor Statement

This press release contains certain statements that may include "forward looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website ( All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

Jason Finkelstein    
VP, Investor Relations                         
Seven Stars Cloud Group, Inc.                                 

#  #  #


Seven Stars Cloud Group, Inc., Its Subsidiaries and Variable Interest Entities

Three Months Ended

March 31,

March 31,






Cost of revenue from third parties



Cost of revenue from related parties



Total cost of revenue



Gross profit



Operating expenses:

Selling, general and administrative expense



Research and development expense



Professional fees



Depreciation and amortization



Total operating expense



Income (loss) from operations



Interest and other income (expense)

Interest expense



Change in fair value of warrant liabilities



Equity in loss of equity method investees






Income (loss) before income taxes



Income tax benefit



Net income (loss)



Net loss attributable to non-controlling interest



Net income (loss) attributable to Seven Stars Cloud shareholders





Basic earnings (loss) per share





Diluted earnings (loss) per share






Seven Stars Cloud Group, Inc., Its Subsidiaries and Variable Interest Entities

Three Months Ended

March 31,

March 31,

Cash flows from operating activities:

Net income (loss)





Adjustments to reconcile net loss to net cash used in operating activities

Share-based compensation expense



Depreciation and amortization



Equity in loss of equity method investees



Loss on disposal of assets



Change in fair value of warrant liabilities



Change in assets and liabilities:

Accounts receivable



Licensed content



Prepaid expenses and other assets



Accounts payable



Accrued expenses, salary and other current liabilities



Amount due to related parties



Deferred revenue



Net cash used in operating activities



Cash flows from investing activities:

Cash paid for the acquisition of SVG



Acquisition of property and equipment



Net cash used in investing activities



Cash flows from financing activities

Proceeds from issuance of warrant and shares



Net cash provided by financing activities



Effect of exchange rate changes on cash



Net increase (decrease) in cash, cash equivalents and restricted cash



Cash, cash equivalents and restricted cash at beginning of period



Cash, cash equivalents and restricted cash at end of period





Supplemental Cash Flow Information:

Payable for purchase of building





No income tax and interest expenses was paid for the periods ended March 31, 2017 and 2018.




Cision View original content:

SOURCE Seven Stars Cloud Group, Inc.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
While a hybrid cloud can ease that transition, designing and deploy that hybrid cloud still offers challenges for organizations concerned about lack of available cloud skillsets within their organization. Managed service providers offer a unique opportunity to fill those gaps and get organizations of all sizes on a hybrid cloud that meets their comfort level, while delivering enhanced benefits for cost, efficiency, agility, mobility, and elasticity.
Isomorphic Software is the global leader in high-end, web-based business applications. We develop, market, and support the SmartClient & Smart GWT HTML5/Ajax platform, combining the productivity and performance of traditional desktop software with the simplicity and reach of the open web. With staff in 10 timezones, Isomorphic provides a global network of services related to our technology, with offerings ranging from turnkey application development to SLA-backed enterprise support. Leadin...
DevOps has long focused on reinventing the SDLC (e.g. with CI/CD, ARA, pipeline automation etc.), while reinvention of IT Ops has lagged. However, new approaches like Site Reliability Engineering, Observability, Containerization, Operations Analytics, and ML/AI are driving a resurgence of IT Ops. In this session our expert panel will focus on how these new ideas are [putting the Ops back in DevOps orbringing modern IT Ops to DevOps].
Darktrace is the world's leading AI company for cyber security. Created by mathematicians from the University of Cambridge, Darktrace's Enterprise Immune System is the first non-consumer application of machine learning to work at scale, across all network types, from physical, virtualized, and cloud, through to IoT and industrial control systems. Installed as a self-configuring cyber defense platform, Darktrace continuously learns what is ‘normal' for all devices and users, updating its understa...
Enterprises are striving to become digital businesses for differentiated innovation and customer-centricity. Traditionally, they focused on digitizing processes and paper workflow. To be a disruptor and compete against new players, they need to gain insight into business data and innovate at scale. Cloud and cognitive technologies can help them leverage hidden data in SAP/ERP systems to fuel their businesses to accelerate digital transformation success.
Concerns about security, downtime and latency, budgets, and general unfamiliarity with cloud technologies continue to create hesitation for many organizations that truly need to be developing a cloud strategy. Hybrid cloud solutions are helping to elevate those concerns by enabling the combination or orchestration of two or more platforms, including on-premise infrastructure, private clouds and/or third-party, public cloud services. This gives organizations more comfort to begin their digital tr...
Most organizations are awash today in data and IT systems, yet they're still struggling mightily to use these invaluable assets to meet the rising demand for new digital solutions and customer experiences that drive innovation and growth. What's lacking are potent and effective ways to rapidly combine together on-premises IT and the numerous commercial clouds that the average organization has in place today into effective new business solutions.
Keeping an application running at scale can be a daunting task. When do you need to add more capacity? Larger databases? Additional servers? These questions get harder as the complexity of your application grows. Microservice based architectures and cloud-based dynamic infrastructures are technologies that help you keep your application running with high availability, even during times of extreme scaling. But real cloud success, at scale, requires much more than a basic lift-and-shift migrati...
David Friend is the co-founder and CEO of Wasabi, the hot cloud storage company that delivers fast, low-cost, and reliable cloud storage. Prior to Wasabi, David co-founded Carbonite, one of the world's leading cloud backup companies. A successful tech entrepreneur for more than 30 years, David got his start at ARP Instruments, a manufacturer of synthesizers for rock bands, where he worked with leading musicians of the day like Stevie Wonder, Pete Townsend of The Who, and Led Zeppelin. David has ...
Darktrace is the world's leading AI company for cyber security. Created by mathematicians from the University of Cambridge, Darktrace's Enterprise Immune System is the first non-consumer application of machine learning to work at scale, across all network types, from physical, virtualized, and cloud, through to IoT and industrial control systems. Installed as a self-configuring cyber defense platform, Darktrace continuously learns what is ‘normal' for all devices and users, updating its understa...
Dion Hinchcliffe is an internationally recognized digital expert, bestselling book author, frequent keynote speaker, analyst, futurist, and transformation expert based in Washington, DC. He is currently Chief Strategy Officer at the industry-leading digital strategy and online community solutions firm, 7Summits.
Addteq is a leader in providing business solutions to Enterprise clients. Addteq has been in the business for more than 10 years. Through the use of DevOps automation, Addteq strives on creating innovative solutions to solve business processes. Clients depend on Addteq to modernize the software delivery process by providing Atlassian solutions, create custom add-ons, conduct training, offer hosting, perform DevOps services, and provide overall support services.
Contino is a global technical consultancy that helps highly-regulated enterprises transform faster, modernizing their way of working through DevOps and cloud computing. They focus on building capability and assisting our clients to in-source strategic technology capability so they get to market quickly and build their own innovation engine.
When applications are hosted on servers, they produce immense quantities of logging data. Quality engineers should verify that apps are producing log data that is existent, correct, consumable, and complete. Otherwise, apps in production are not easily monitored, have issues that are difficult to detect, and cannot be corrected quickly. Tom Chavez presents the four steps that quality engineers should include in every test plan for apps that produce log output or other machine data. Learn the ste...
Digital Transformation is much more than a buzzword. The radical shift to digital mechanisms for almost every process is evident across all industries and verticals. This is often especially true in financial services, where the legacy environment is many times unable to keep up with the rapidly shifting demands of the consumer. The constant pressure to provide complete, omnichannel delivery of customer-facing solutions to meet both regulatory and customer demands is putting enormous pressure on...