BEIJING, Jan. 31, 2011 /PRNewswire-Asia/ -- Changyou.com
Limited ("Changy ou" or the "Company") (Nasdaq: CYOU), a leading
online game developer and operator in China, today announced its unaudited financial
results for the fourth quarter and fiscal year ended December 31, 2010.
(Logo: http://photos.prnewswire.com/prnh/20090402/CNTH020 )
Fourth Quarter 2010 Highlights
- Total revenues reached a record US$91.7
million, an increase of 7% quarter-over-quarter and 30%
year-over-year, and exceeded the high end of the Company's guidance
by US$2.7 million.
- Net income reached a record US$47.8
million, or US$0.90 per fully
diluted ADS(1). Net income increased by 6% quarter-over-quarter and
23% year-over-year.
- Non-GAAP(2) net income (i.e. excluding share-based compensation
expenses) reached a record US$49.7
million, or US$0.93 per fully
diluted ADS, exceeding the high end of the Company's guidance by
US$1.7 million. Non-GAAP net income
increased by 5% quarter-over-quarter and 18% year-over-year.
- Aggregate registered accounts for the Company's games(3) grew
6% quarter-over-quarter and 38% year-over-year to 111.4
million.
- Aggregate peak concurrent users ("PCU") for the Company's games
grew 5% quarter-over-quarter and 7% year-over-year to
1,030,000.
- Aggregate active paying accounts ("APA") for the Company's
games grew 3% quarter-over-quarter and 13% year-over-year to 2.7
million.
- Average revenue per active paying account ("ARPU") for the
Company's games increased 2% quarter-over-quarter and 12%
year-over-year to RMB219.
(1) Each American depositary share (“ADS”) represents two Class
A ordinary shares.
(2) Explanation of the Company’s non-GAAP financial measures and
related reconciliations to GAAP financial measures are included in
the accompanying “Non-GAAP Disclosure” and “Reconciliations to
Unaudited Condensed Consolidated Statements of Operations.”
(3) Comprises the following games operated in China: Tian Long Ba
Bu (“TLBB”), Blade Online, Blade Hero 2, Da Hua Shui Hu,
Zhong Hua Ying Xiong, Immortal Faith
and San Jie Qi Yuan.
Fiscal Year 2010
Highlights
- Total revenues reached a record US$327.1
million, up 22% year-over-year.
- Net income reached a record US$174.9
million, or US$3.29 per fully
diluted ADS. Net income increased 21% year-over-year.
- Non-GAAP net income (i.e. excluding share-based compensation
expenses) reached a record US$183.5
million, or US$3.43 per fully
diluted ADS. Non-GAAP net income increased 16% year-over-year.
Mr. Tao Wang, Changyou's chief executive officer, commented,
"2010 was another year of growth and progress. Our ongoing
focus on content creation and meeting the needs of our customers
paid off and enabled us to end the quarter and the year with record
financial and operational results. After three years and the
release of a series of expansion packs, TLBB's community remains
vibrant and growing, and the game continues to be one of the most
popular online game titles in China today. We have also finalized the
marketing plan for Duke of Mount Deer, our next in-house developed
game, and target to officially start a nationwide marketing
campaign for the game in March 2011.
With the marketing campaign, the full version of DMD will, for the
first time, be available to players to try out. The full version
contains many times the amount of content found in the existing
version and features technical innovations within the global online
games industry. Through these efforts, we aim to capture new growth
opportunities for our business and reaffirm our position as one of
the leading online game companies in China."
Mr. Dewen Chen, president and
chief operating officer, continued, "In the fourth quarter, we
continued to license and launch new games targeted at players with
different interests so as to extend our product offering and
diversify our user base. San Jie Qi Yuan, a licensed 2D
cartoon-style turn-based game, was launched on December 3rd and has already brought new users to
our platform. In addition, we have several other titles
slated for launch in 2011. With all of our games, we aim to provide
players with refreshing and entertaining content, while delivering
the service that will help set us apart from the competition."
Mr. Alex Ho, Changyou's chief
financial officer, added, "Our record fourth quarter and full year
financial results demonstrate the solid execution of our growth and
investment strategies in 2010. During the year, we made
ongoing investments in our workforce to further enhance our R&D
and marketing capabilities, while keeping effective controls on
costs and maintaining a strong and debt-free balance sheet.
These strengths, coupled with the rich cash flows from our
solid base of existing games, provide us with the financial
capacity to continually invest in projects that position us well
for further growth over the long term."
Fourth Quarter 2010 Operational
Results
Aggregate registered accounts for the Company's games as of
December 31, 2010 increased 6%
quarter-over-quarter and 38% year-over-year to 111.4 million.
Aggregate PCU for the Company's games increased 5%
quarter-over-quarter and 7% year-over-year to 1,030,000.
Aggregate APA for the Company's games increased 3%
quarter-over-quarter and 13% year-over-year to 2.7 million.
ARPU for the Company's games increased 2% quarter-over-quarter
and 12% year-over-year to RMB219,
which is consistent with the Company's intention of having ARPU
remain within a range that keeps the Company's games affordable for
the majority of game players in China.
Fourth Quarter 2010 Unaudited Financial
Results
Revenues
Total revenues for the fourth quarter of 2010 increased 7%
quarter-over-quarter and 30% year-over-year to US$91.7 million.
Revenues from game operations for the fourth quarter of 2010
increased 7% quarter-over-quarter and 30% year-over-year to
US$89.5 million. The increases were
mainly due to the continued popularity of TLBB in China.
Overseas licensing revenues for the fourth quarter of 2010
increased 11% quarter-over-quarter and 7% year-over-year to
US$2.2 million. The increases were
mainly due to increased momentum of TLBB in Vietnam and revenue contribution for a full
quarter from the game in Thailand
in the fourth quarter of 2010.
Gross Profit
Gross profit for the fourth quarter of 2010 increased 7%
quarter-over-quarter and 27% year-over-year to US$82.8 million. Non-GAAP gross profit for the
fourth quarter of 2010 increased 7% quarter-over-quarter and 27%
year-over-year to US$82.9 million.
Gross margin in the fourth quarter of 2010 was 90%, which compares
with 90% in the previous quarter and 92% in the fourth quarter of
2009. Non-GAAP gross margin in the fourth quarter of 2010 was 90%,
which compares with 90% in the previous quarter and 92% in the
fourth quarter of 2009. The decline in gross margin was mainly due
to an increase in salaries and benefits and higher bandwidth and
server depreciation costs associated with the operation of more
games in the fourth quarter of 2010.
Operating Expenses
For the fourth quarter of 2010, total operating expenses were
US$27.4 million, an increase of 16%
quarter-over-quarter and 30% year-over-year. Non-GAAP operating
expenses were US$25.6 million, an
increase of 17% quarter-over-quarter and 44% year-over-year.
GAAP product development expenses were US$13.0 million, an increase of 27%
quarter-over-quarter and 89% year-over-year. Non-GAAP product
development expenses were US$12.1
million, an increase of 30% quarter-over-quarter and 135%
year-over-year. The sequential and year-over-year increases in both
GAAP and non-GAAP product development expenses were primarily
attributable to the hiring of more game engineers and expenses
related to royalties for licensed games in the fourth quarter of
2010.
GAAP sales and marketing expenses were US$9.9 million, an increase of 2%
quarter-over-quarter and 3% year-over-year. Non-GAAP sales and
marketing expenses were US$9.8
million, an increase of 1% quarter-over-quarter and 3%
year-over-year. The sequential and year-over-year increases in both
GAAP and non-GAAP sales and marketing expenses were primarily
attributable to an increase in salaries and benefits in the fourth
quarter of 2010.
GAAP general and administrative expenses were US$4.5 million, an increase of 21%
quarter-over-quarter and a decline of 1% year-over-year. Non-GAAP
general and administrative expenses were US$3.7 million, an increase of 28%
quarter-over-quarter and 19% year-over-year. The sequential
increases in both GAAP and non-GAAP general and administrative
expenses were primarily due to an increase in salaries and benefits
and an increase in professional fees in the fourth quarter of 2010.
The year-over-year decline in GAAP general and administrative
expenses was primarily due to lower share-based compensation
expenses incurred, offset by an increase in professional fees in
the fourth quarter of 2010. The year-over-year increase in non-GAAP
general and administrative expenses was primarily due to an
increase in professional fees in the fourth quarter of 2010.
Operating Profit
Operating profit for the fourth quarter of 2010 increased 4%
quarter-over-quarter and 25% year-over-year to US$55.4 million. Operating margin in the fourth
quarter of 2010 was 60%, compared with 62% in the previous quarter
and 63% in the fourth quarter of 2009. Non-GAAP operating profit
for the fourth quarter of 2010 increased 4% quarter-over-quarter
and 20% year-over-year to US$57.3
million. Non-GAAP operating margin in the fourth quarter of
2010 was 62%, compared with 64% in the previous quarter and 67% in
the fourth quarter of 2009.
Net Income
For the fourth quarter of 2010, net income increased 6%
quarter-over-quarter and 23% year-over-year to US$47.8 million. Non-GAAP net income increased 5%
quarter-over-quarter and 18% year-over-year to US$49.7 million. Fully diluted earnings per ADS
were US$0.90, up from US$0.85 in the previous quarter and US$0.73 in the fourth quarter of 2009. Non-GAAP
fully diluted earnings per ADS were US$0.93, up from US$0.88 in the previous quarter and US$0.79 in the fourth quarter of 2009. Net margin
for the fourth quarter of 2010 was 52%, compared with 53% in the
previous quarter and 55% in the fourth quarter of 2009. Non-GAAP
net margin for the fourth quarter was 54%, compared with 55% in the
previous quarter and 60% in the fourth quarter of 2009.
Cash Balance
As of December 31, 2010, Changyou
had a net cash balance of US$351.0
million, up from US$292.0
million as of September 30,
2010. Operating cash flow for the quarter was a net inflow
of US$59.3 million.
Fiscal Year 2010 Unaudited Financial
Results
Revenues
Total revenues in 2010 were US$327.1
million, an increase of 22% from US$267.6 million in 2009.
Revenues from game operations in 2010 were US$318.9 million, an increase of 23% from
US$259.8 million in 2009. The
increase was mainly due to the continued popularity of TLBB in
China.
Overseas licensing revenues in 2010 were US$8.2 million, an increase of 5% from
US$7.8 million in 2009. The increase
was largely due to increased momentum of TLBB in Vietnam and Malaysia.
Gross Profit
Gross profit in 2010 was US$297.3
million, an increase of 19% from US$250.1 million in 2009. Non-GAAP gross profit
in 2010 was US$297.5 million, an
increase of 19% from US$250.4 million
in 2009. Gross margin in 2010 was 91%, which compares with 93% in
2009. Non-GAAP gross margin in 2010 was 91%, which compares with
94% in 2009. The decline in gross margin was mainly due to an
increase in salaries and benefits and higher bandwidth and server
depreciation costs associated with the operation of more games in
2010.
Operating Expenses
Total operating expenses in 2010 were US$96.4 million, an increase of 12% from
US$86.2 million in 2009. Non-GAAP
operating expenses in 2010 totaled US$88.1
million, an increase of 21% from US$73.1 million in 2009.
GAAP product development expenses in 2010 were US$37.9 million, an increase of 39% from
US$27.4 million in 2009. Non-GAAP
product development expenses in 2010 were US$33.5 million, an increase of 68% from
US$19.9 million in 2009. The
increases in both GAAP and non-GAAP product development expenses
were primarily attributable to the hiring of more game engineers
and expenses related to royalties for licensed games in 2010.
GAAP sales and marketing expenses in 2010 were US$41.0 million, an increase of 2% from
US$40.0 million in 2009. Non-GAAP
sales and marketing expenses in 2010 were US$40.8 million, an increase of 3% from
US$39.8 million for in 2009. The
increases in both GAAP and non-GAAP sales and marketing expenses
were primarily attributable to the hiring of more sales and
marketing professionals in 2010.
GAAP general and administrative expenses in 2010 were
US$17.5 million, a decrease of 7%
from US$18.8 million in 2009.
Non-GAAP general and administrative expenses in 2010 were
US$13.8 million, an increase of 4%
from US$13.3 million in 2009. The
decrease in GAAP general and administrative expenses was largely
due to the recognition of a one-time share based compensation
expense in the second quarter of 2009 after the completion of the
Company's initial public offering. The increase in non-GAAP general
and administrative expenses was primarily due to an increase in
headcount and an increase in professional fees.
Operating Profit
Operating profit in 2010 was US$200.8
million, an increase of 23% from US$163.9 million in 2009. Operating margin in
2010 was 61%, which was unchanged from 61% in 2009. Non-GAAP
operating profit in 2010 was US$209.4
million, an increase of 18% from US$177.3 million in 2009. Non-GAAP operating
margin in 2010 was 64%, which compares with 66% in 2009.
Net Income
Net income in 2010 was US$174.9
million, an increase of 21% from US$144.7 million in 2009. Non-GAAP net income in
2010 was US$183.5 million, an
increase of 16% from US$158.1 million
in 2009. Fully diluted earnings per ADS in 2010 were US$3.29, up from US$2.81 in 2009. Non-GAAP fully diluted earnings
per ADS in 2010 were US$3.43, up from
US$3.05 in 2009. Net margin in 2010
was 53%, which compares with 54% in 2009. Non-GAAP net margin in
2010 was 56%, which compares with 59% in 2009.
Other Business Developments
Open Beta Testing of San Jie Qi
Yuan
On December 3, 2010, Changyou
began open beta testing of San Jie Qi Yuan, a 2D turn-based
cartoon-style massively multi-player online role-playing game.
Adapted from one of the four great classical novels, Journey to
the West, the game allows users to experience fast-paced
martial arts combat in entertaining 2D graphics within a mythical
fantasy world in ancient China.
The game was licensed from a game studio in China and is operated by Changyou's
wholly-owned subsidiary I.C.E. Entertainment Limited.
Changyou To Acquire Remaining Stake in Jing
Mao
In January 2011, Changyou entered
into a definitive agreement under which Changyou will acquire the
remaining 50% of the equity in Shanghai Jing Mao Cultural
Communications Ltd. and its affiliate ("Jing Mao"). Jing Mao
is primarily engaged in cinema advertising in China. The purpose of the acquisition is to
secure additional advertising resources for the promotion of the
Company's online games. Following the completion of the
transaction, Changyou will hold 100% of the equity in Jing Mao.
Jing Mao will be consolidated into the Company's financial
statements starting from February 1,
2011.
Business Outlook
The following guidance assumes the completion of and includes
the Jing Mao acquisition, unless otherwise noted.
For the first quarter of 2011, Changyou expects:
- Total revenues to be between US$92.0
million and US$95.0 million, of which revenues from online
games, which are revenues exclusive of revenues from Jing Mao, are
expected to be between US$91.0 million and
US$93.0 million.
- Non-GAAP net income to be between US$49.5 million and US$51.0 million.
- Non-GAAP fully diluted earnings per ADS to be between
US$0.93 and US$0.96.
- Assuming no new grants of share-based awards, share-based
compensation expense to be between US$1.5
million and US$2.0 million, reducing fully diluted earnings
per ADS by US$0.03 to US$0.04.
Non-GAAP Disclosure
To supplement the unaudited consolidated financial information
prepared in accordance with United States Generally Accepted
Accounting Principles ("GAAP"), Changyou's management uses non-GAAP
measures of cost of revenues, operating expenses, net income and
net income per ADS, which are adjusted from results based on GAAP
to exclude the compensation cost of share-based awards granted.
These measures should be considered in addition to results prepared
in accordance with GAAP, but should not be considered a substitute
for, or superior to, GAAP results.
Changyou's management believes that excluding the share-based
compensation expense from its non-GAAP financial measures is useful
for itself and investors. Further, the amount of share-based
compensation expense cannot be anticipated by management, and these
expenses are not built into the Company's annual budgets and
quarterly forecasts, which generally will be the basis for
information Changyou provides to analysts and investors as guidance
for future operating performance. As share-based compensation
expense does not involve any upfront or subsequent cash outflow,
Changyou does not factor this in when evaluating and approving
expenditures or when determining the allocation of its resources to
its business operations. As a result, in general, the monthly
financial results for internal reporting and any performance
measure for commissions and bonuses are based on non-GAAP financial
measures that exclude share-based compensation expense.
The non-GAAP financial measures are provided to enhance
investors' overall understanding of Changyou's current financial
performance and prospects for the future. A limitation of using
non-GAAP cost of revenues, operating expenses, net income and net
income per ADS, excluding share-based compensation expense, is that
the share-based compensation charge has been and will continue to
be a significant recurring expense in the Company's business for
the foreseeable future. In order to mitigate these limitations the
Company has provided specific information regarding the GAAP
amounts excluded from each non-GAAP measure. The accompanying
tables include details on the reconciliation between GAAP financial
measures that are most directly comparable to the non-GAAP
financial measures the Company has presented.
Notes to Financial Information
Financial information in this press release other than the
information indicated as being non-GAAP is derived from Changyou's
unaudited financial statements prepared in accordance with
GAAP.
Safe Harbor Statement
It is currently expected that the Business Outlook will not be
updated until the release of Changyou's next quarterly earnings
announcement; however, Changyou reserves the right to update its
Business Outlook at any time for any reason.
This announcement contains forward-looking statements.
Statements that are not historical facts, including statements
about the Company's beliefs and expectations, are forward-looking
statements. These statements are based on current plans, estimates
and projections, and therefore you should not place undue reliance
on them. Forward-looking statements involve inherent risks and
uncertainties. The Company cautions that a number of important
factors could cause actual results to differ materially from those
contained in any forward-looking statement. Potential risks and
uncertainties include, but are not limited to, the current global
financial and credit markets crisis and its potential impact on the
Chinese economy, the uncertain regulatory landscape in the People's Republic of China, fluctuations
in Changyou's quarterly operating results, Changyou's historical
and possible future losses and limited operating history, and the
Company's reliance on Tian Long Ba
Bu as its major revenue source. Further information
regarding these and other risks is included in Changyou's Annual
Report on Form 20-F filed on February 26,
2010, and other filings with the Securities and Exchange
Commission.
Conference Call Information
Changyou's management team will host an earnings conference call
on the same day at 7 a.m. U.S.
Eastern Time, January 31, 2011
(8 p.m. Beijing/Hong
Kong, January 31, 2011)
following its fourth quarter and fiscal year 2010 results
announcement.
The dial-in details for the live conference call are:
US:
|
+1-800-901-5231
|
|
Hong Kong:
|
+852-3002-1672
|
|
International:
|
+1-617-786-2961
|
|
Passcode:
|
CYOU
|
|
|
|
Please dial in 10 minutes before the call is scheduled to begin
and provide the passcode to join the call.
A telephone replay of the call will be available after the
conclusion of the conference call at 10: 00 a.m. Eastern Time on
January 31 through February 07, 2011.
The dial-in details for the telephone replay are:
International:
|
+1-617-801-6888
|
|
Passcode:
|
11626226
|
|
|
|
The live webcast and archive of the conference call will be
available on the Investor Relations section of Changyou's website
at http://www.changyou.com/ir/.
About Changyou
Changyou.com Limited's massively multi-player online
role-playing games ("MMORPG") business began operations as a
business unit within Sohu.com Inc. (NASDAQ: SOHU) in 2003.
Changyou, a leading developer and operator of online games in
China, was carved out as a
separate, stand-alone company in December
2007, completed an initial public offering on April 7, 2009. Changyou currently operates seven
online games, including the in-house developed Tian Long Ba Bu, one of the most popular online
games in China, and the licensed
Blade Online, Blade Hero 2, Da Hua Shui Hu, Zhong Hua Ying Xiong, Immortal Faith and San Jie
Qi Yuan. Changyou has a diversified pipeline of games with various
graphic styles and themes, including the in-house developed Duke of
Mount Deer, which received an award as one of China's most anticipated online games.
Changyou's advanced technology platform includes advanced 2.5D and
3D graphics engines, a uniform game development platform, effective
anti-cheating and anti-hacking technologies, proprietary
cross-networking technology and advanced data protection
technology. For more information about Changyou, please visit
http://www.changyou.com/en/.
For investor and media
inquiries, please contact:
|
|
|
|
In China:
|
|
|
|
Ms. Angie Chang
|
|
Investors Relations
Manager
|
|
Changyou.com Limited
|
|
Tel: +86
(10) 6861-3688
|
|
E-mail:
ir@cyou-inc.com
|
|
|
|
In the United
States:
|
|
|
|
Mr. Jeff
Bloker
|
|
Christensen
|
|
Tel:
+1 (480)
614-3003
|
|
E-mail: jbloker@ChristensenIR.com
|
|
|
CHANGYOU.COM
LIMITED
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED,
IN THOUSANDS EXCEPT PER ADS
AMOUNTS)
|
|
|
|
Three Months
Ended
|
|
Twelve
Months
Ended
|
|
|
|
Dec. 31,
2010
|
|
Sep. 30,
2010
|
|
Dec. 31,
2009
|
|
Dec. 31,
2010
|
|
Dec. 31,
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Game operation
revenues
|
$
|
89,521
|
$
|
83,628
|
$
|
68,621
|
$
|
318,923
|
$
|
259,783
|
|
Overseas licensing
revenues
|
|
2,215
|
|
1,996
|
|
2,077
|
|
8,230
|
|
7,802
|
|
Total revenues
|
|
91,736
|
|
85,624
|
|
70,698
|
|
327,153
|
|
267,585
|
|
Cost of revenues
(includes share-based
compensation expense of $44,
$40,
$57,
$194
and $324,
respectively)
|
|
8,923
|
|
8,537
|
|
5,420
|
|
29,852
|
|
17,518
|
|
Gross profit
|
|
82,813
|
|
77,087
|
|
65,278
|
|
297,301
|
|
250,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Product
development (includes share-based compensation expense
of $949,
$922,
$1,763,
$4,399
and $7,404,
respectively)
|
|
13,006
|
|
10,222
|
|
6,888
|
|
37,918
|
|
27,353
|
|
Sales and
marketing (includes share-based compensation expense of
$96,
$8,
$77,
$220
and $261,
respectively)
|
|
9,872
|
|
9,711
|
|
9,551
|
|
41,002
|
|
40,048
|
|
General and
administrative (includes share-based compensation
expense of $766,
$819,
$1,432,
$3,781
and $5,412,
respectively)
|
|
4,493
|
|
3,728
|
|
4,556
|
|
17,533
|
|
18,759
|
|
Total operating
expenses
|
|
27,371
|
|
23,661
|
|
20,995
|
|
96,453
|
|
86,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating profit
|
|
55,442
|
|
53,426
|
|
44,283
|
|
200,848
|
|
163,907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
and foreign currency exchange
gain/loss
|
|
967
|
|
1,043
|
|
762
|
|
3,628
|
|
3,275
|
|
Other income
(expense)
|
|
(963)
|
|
(713)
|
|
125
|
|
(1,394)
|
|
158
|
|
Income before income tax
expense
|
|
55,446
|
|
53,756
|
|
45,170
|
|
203,082
|
|
167,340
|
|
Income tax expense
|
|
(7,631)
|
|
(8,464)
|
|
(6,312)
|
|
(28,178)
|
|
(22,656)
|
|
Net income
|
$
|
47,815
|
$
|
45,292
|
$
|
38,858
|
$
|
174,904
|
$
|
144,684
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per
ADS
|
$
|
0.92
|
$
|
0.87
|
$
|
0.75
|
$
|
3.37
|
$
|
2.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADSs used in
computing basic net income per ADS
|
|
52,039
|
|
52,034
|
|
51,496
|
|
51,896
|
|
50,364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per
ADS
|
$
|
0.90
|
$
|
0.85
|
$
|
0.73
|
$
|
3.29
|
$
|
2.81
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADSs used in
computing diluted net income per ADS
|
|
53,186
|
|
53,135
|
|
52,999
|
|
53,121
|
|
51,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGYOU.COM
LIMITED
CONDENSED
CONSOLIDATED BALANCE SHEETS
(UNAUDITED,
IN THOUSANDS)
|
|
|
|
As
of Dec.
31, 2010
|
|
As of Dec.
31, 2009
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and bank
deposits
|
$
|
350,957
|
$
|
226,901
|
|
Accounts
receivable, net
|
|
1,464
|
|
3,395
|
|
Prepaid and other current
assets
|
|
12,383
|
|
4,720
|
|
Due from Sohu
|
|
312
|
|
340
|
|
Total current
assets
|
|
365,116
|
|
235,356
|
|
Non-current
assets:
|
|
|
|
|
|
Fixed assets, net
|
|
53,659
|
|
49,178
|
|
Goodwill
|
|
10,258
|
|
-
|
|
Intangible assets,
net
|
|
7,251
|
|
3,221
|
|
Interests in associated
companies
|
|
3,645
|
|
-
|
|
Deferred tax assets
|
|
2,369
|
|
1,383
|
|
Other assets, net
|
|
60,214
|
|
253
|
|
TOTAL ASSETS
|
$
|
502,512
|
$
|
289,391
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Receipts in advance and deferred
revenue
|
$
|
34,509
|
$
|
30,244
|
|
Accrued liabilities
|
|
34,783
|
|
26,618
|
|
Tax payables
|
|
13,471
|
|
6,628
|
|
Deferred tax
liabilities
|
|
243
|
|
-
|
|
Due to Sohu
|
|
5,155
|
|
5,046
|
|
Total liabilities
|
|
88,161
|
|
68,536
|
|
Total
shareholders'
equity
|
|
414,351
|
|
220,855
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY
|
$
|
502,512
|
$
|
289,391
|
|
|
|
|
|
|
|
|
CHANGYOU.COM
LIMITED
RECONCILIATIONS TO
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(IN
THOUSANDS EXCEPT PER ADS AMOUNTS)
|
|
|
|
Three Months
Ended Dec.
31, 2010
|
|
|
Three Months
Ended Sep. 30,
2010
|
|
|
Three Months
Ended Dec.
31, 2009
|
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
Total revenues
|
$
|
91,736
|
$
|
-
|
$
|
91,736
|
|
$
|
85,624
|
$
|
-
|
$
|
85,624
|
|
$
|
70,698
|
$
|
–
|
$
|
70,698
|
|
Less: Cost of
revenues
|
|
8,923
|
|
(44)
|
(a)$
|
8,879
|
|
|
8,537
|
|
(40)
|
(a)$
|
8,497
|
|
|
5,420
|
|
(57)
|
(a)$
|
5,363
|
|
Gross profit
|
$
|
82,813
|
$
|
44
|
$
|
82,857
|
|
$
|
77,087
|
$
|
40
|
$
|
77,127
|
|
$
|
65,278
|
$
|
57
|
$
|
65,335
|
|
Gross margin
|
|
90%
|
|
|
|
90%
|
|
|
90%
|
|
|
|
90%
|
|
|
92%
|
|
|
|
92%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
$
|
27,371
|
$
|
(1,811)
|
(a)$
|
25,560
|
|
$
|
23,661
|
$
|
(1,749)
|
(a)$
|
21,912
|
|
$
|
20,995
|
$
|
(3,272)
|
(a)$
|
17,723
|
|
Product development
expenses
|
$
|
13,006
|
$
|
(949)
|
(a)$
|
12,057
|
|
$
|
10,222
|
$
|
(922)
|
(a)$
|
9,300
|
|
$
|
6,888
|
|
(1,763)
|
(a)$
|
5,125
|
|
Sales and marketing
expenses
|
$
|
9,872
|
$
|
(96)
|
(a)$
|
9,776
|
|
$
|
9,711
|
$
|
(8)
|
(a)$
|
9,703
|
|
$
|
9,551
|
|
(77)
|
(a)$
|
9,474
|
|
General and
administrative expenses
|
$
|
4,493
|
$
|
(766)
|
(a)$
|
3,727
|
|
$
|
3,728
|
$
|
(819)
|
(a)$
|
2,909
|
|
$
|
4,556
|
|
(1,432)
|
(a)$
|
3,124
|
|
Operating profit
|
$
|
55,442
|
$
|
1,855
|
$
|
57,297
|
|
$
|
53,426
|
$
|
1,789
|
$
|
55,215
|
|
$
|
44,283
|
$
|
3,329
|
$
|
47,612
|
|
Operating margin
|
|
60%
|
|
|
|
62%
|
|
|
62%
|
|
|
|
64%
|
|
|
63%
|
|
|
|
67%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
47,815
|
$
|
1,855
|
$
|
49,670
|
|
$
|
45,292
|
$
|
1,789
|
$
|
47,081
|
|
$
|
38,858
|
$
|
3,329
|
$
|
42,187
|
|
Net
margin
|
|
52%
|
|
|
|
54%
|
|
|
53%
|
|
|
|
55%
|
|
|
55%
|
|
|
|
60%
|
|
Diluted net income per
ADS
|
$
|
0.90
|
|
|
$
|
0.93
|
|
$
|
0.85
|
|
|
$
|
0.88
|
|
$
|
0.73
|
|
|
$
|
0.79
|
|
ADSs used in
computing diluted net income per ADS
|
|
53,186
|
|
|
|
53,423
|
|
|
53,135
|
|
|
|
53,427
|
|
|
52,999
|
|
|
|
53,436
|
|
Note:
(a) To eliminate
share-based compensation expense as measured using the fair value
method.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGYOU.COM
LIMITED
RECONCILIATIONS TO
UNAUDITED CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(IN
THOUSANDS EXCEPT PER ADS AMOUNTS)
|
|
|
|
Twelve
Months
Ended Dec.
31, 2010
|
|
|
Twelve
Months
Ended Dec.
31, 2009
|
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
Total revenues
|
$
|
327,153
|
$
|
-
|
$
|
327,153
|
|
$
|
267,585
|
$
|
–
|
$
|
267,585
|
|
Less: Cost of
revenues
|
|
29,852
|
|
(194)
|
(a)$
|
29,658
|
|
|
17,518
|
|
(324)
|
(a)$
|
17,194
|
|
Gross profit
|
$
|
297,301
|
$
|
194
|
$
|
297,495
|
|
$
|
250,067
|
$
|
324
|
$
|
250,391
|
|
Gross margin
|
|
91%
|
|
|
|
91%
|
|
|
93%
|
|
|
|
94%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
$
|
96,453
|
$
|
(8,400)
|
(a)$
|
88,053
|
|
$
|
86,160
|
$
|
(13,077)
|
(a)$
|
73,083
|
|
Product development
expenses
|
$
|
37,918
|
$
|
(4,399)
|
(a)$
|
33,519
|
|
$
|
27,353
|
$
|
(7,404)
|
(a)$
|
19,949
|
|
Sales and marketing
expenses
|
$
|
41,002
|
$
|
(220)
|
(a)$
|
40,782
|
|
$
|
40,048
|
$
|
(261)
|
(a)$
|
39,787
|
|
General and
administrative expenses
|
$
|
17,533
|
$
|
(3,781)
|
(a)$
|
13,752
|
|
$
|
18,759
|
$
|
(5,412)
|
(a)$
|
13,347
|
|
Operating profit
|
$
|
200,848
|
$
|
8,594
|
$
|
209,442
|
|
$
|
163,907
|
$
|
13,401
|
$
|
177,308
|
|
Operating margin
|
|
61%
|
|
|
|
64%
|
|
|
61%
|
|
|
|
66%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
174,904
|
$
|
8,594
|
$
|
183,498
|
|
$
|
144,684
|
$
|
13,401
|
$
|
158,085
|
|
Net
margin
|
|
53%
|
|
|
|
56%
|
|
|
54%
|
|
|
|
59%
|
|
Diluted net income per
ADS
|
$
|
3.29
|
|
|
$
|
3.43
|
|
$
|
2.81
|
|
|
$
|
3.05
|
|
ADSs used in
computing diluted net income per ADS
|
|
53,121
|
|
|
|
53,431
|
|
|
51,526
|
|
|
|
51,909
|
|
Note:
(a) To eliminate
share-based compensation expense as measured using the fair value
method.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Changyou.com Limited