BEIJING, Aug. 5, 2019
/PRNewswire/ -- Sohu.com Limited (NASDAQ: SOHU), China's leading online media, video, search
and gaming business group, today reported unaudited financial
results for the second quarter ended June
30, 2019.
Second Quarter Highlights
- Total revenues were US$475
million[1], down 2% year-over-year and up 10%
quarter-over-quarter.
- Brand advertising revenues were US$44
million, down 29% year-over-year and up 2%
quarter-over-quarter.
- Search and search related advertising revenues[2]
were US$276 million, up 2%
year-over-year and 18% quarter-over-quarter.
- Online game revenues were US$102
million, up 8% year-over-year and 3%
quarter-over-quarter.
- Operating loss for Sohu Video was US$23
million, compared with a loss of US$35 million in the second quarter of 2018.
- GAAP net loss attributable to Sohu.com Limited was US$53 million, compared with a net loss of
US$48 million in the second quarter
of 2018.
- Non-GAAP net loss attributable to Sohu.com Limited was
US$50 million. Excluding a charge for
impairment of assets recognized by Changyou in the second quarter
of 2019 related to the cinema advertising business, Non-GAAP net
loss attributable to Sohu.com Limited was US$38 million, compared with a net loss of
US$49 million in the second quarter
of 2018.
- Excluding the profit/loss generated by Sogou and Changyou, the
Non-GAAP net loss attributable to Sohu.com Limited was US$68 million, compared with a net loss of
US$80 million in the second quarter
of 2018.
[1] On a
constant currency (non-GAAP) basis, if the exchange rate in the
second quarter of 2019 had been the same as it was in the second
quarter of 2018, or RMB6.38=US$1.00, US$ total revenues in the
second quarter of 2019 would have been US$507 million, or US$32
million more than GAAP total revenues, and up 4%
year-over-year.
|
[2] Search
and Search related advertising revenues exclude intra-Group
transactions.
|
Dr. Charles Zhang, Chairman and
CEO of Sohu.com Limited, commented, "Under the current challenging
macroeconomic environment, our total revenues stayed largely
in-line with our prior guidance. Our bottom line performance,
excluding the charge for impairment of assets recognized by
Changyou related to its cinema advertising business, met the
high-end of our prior guidance. This was mainly driven by the
continued cost savings that we were able to achieve at Sohu Video,
and the solid performance of our online game business. Sohu Media
is making a comeback and living up to its reputation as a top tier
media platform. We have been hosting high-quality events,
generating and distributing premium content, and strengthening our
core competitiveness and credibility among media brands. Meanwhile,
Sohu Video continues to provide users with unique, high-quality
dramas and shows. We have seen the positive effects of this
differential development strategy and stable improvements in
monetization at both Sohu Media and Sohu Video. We hope to see
further progress in the coming quarters. In the second quarter of
2019, Sogou achieved steady growth in its core search business
while Sogou Mobile Keyboard further expanded its user base and
contributed a larger portion to total revenues. As for Changyou,
both its revenue and profit exceeded expectations, excluding the
aforementioned charge for impairment. Changyou is demonstrating a
stable profitability while developing more games to provide a
diversified product portfolio."
Second Quarter Financial Results
Revenues
Total revenues for the second quarter of 2019 were US$475 million, down 2% year-over-year and up 10%
quarter-over-quarter.
Total online advertising revenues, which include revenues from
the brand advertising and search and search-related advertising
businesses, for the second quarter of 2019 were US$320 million, down 4% year-over-year and up 15%
quarter-over-quarter.
Brand advertising revenues for the second quarter of 2019
totaled US$44 million, down 29%
year-over-year and up 2% quarter-over-quarter. The year-over-year
decrease was mainly due to decreases in portal and video
advertising revenues.
Search and search-related advertising revenues for the second
quarter of 2019 were US$276 million,
up 2% year-over-year and 18% quarter-over-quarter.
Online game revenues for the second quarter of 2019 were
US$102 million, up 8% year-over-year
and 3% quarter-over-quarter. The year-over-year increase was due to
the improved performance of some of the Changyou's older games as a
result of some promotional activities during the quarter.
Gross Margin
Both GAAP and non-GAAP[3] gross margin was 43% for
the second quarter of 2019, compared with 44% in the second quarter
of 2018 and 40% in the first quarter of 2019.
Both GAAP and non-GAAP gross margin for the online advertising
business for the second quarter of 2019 was 33%, compared with 35%
in the second quarter of 2018 and 23% in the first quarter of
2019.
GAAP gross margin for the brand advertising business in the
second quarter of 2019 was 29%, compared with 23% in the second
quarter of 2018 and 20% in the first quarter of 2019. Non-GAAP
gross margin for the brand advertising business was 28%, compared
with 23% in the second quarter of 2018 and 20% in the first quarter
of 2019. The margin improvement was mainly due to decreased video
content cost.
Both GAAP and non-GAAP gross margin for the search and
search-related advertising business in the second quarter of 2019
was 34%, compared with 38% in the second quarter of 2018 and 24% in
the first quarter of 2019. The year-over-year decrease primarily
resulted from the growth of traffic acquisition cost outpacing
revenue growth. The quarter-over-quarter increase was primarily due
to seasonal factors.
Both GAAP and non-GAAP gross margin for online games in the
second quarter of 2019 was 82%, compared with 85% in the second
quarter of 2018 and 86% in the first quarter of 2019.
[3]
Non-GAAP results exclude share-based compensation expense; non-cash
tax benefits from excess tax deductions related to share-based
awards; changes in fair value recognized in the Company's
consolidated statements of operations with respect to equity
investments with readily determinable fair values; income/expense
from the adjustment of contingent consideration previously recorded
for acquisitions; dividends and deemed dividends to non-controlling
preferred shareholders of Sogou; a one-time income tax expense
recognized in the fourth quarter of 2017 as a result of the
one-time transition tax (the "Toll Charge") imposed by the U.S. Tax
Cuts and Jobs Act signed into law on December 22, 2017 (the
"TCJA"); the subsequent re-evaluation for the fourth quarter of
2018 and adjustment of the tax expense previously recognized for
the Toll Charge; the resulting recognition of a previously
unrecognized tax benefit and recording of an uncertain tax position
related to the balance of the Toll Charge; and interest accrued in
relation to the previously unrecognized tax benefit. 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 of Non-GAAP
Results of Operation Measures to the Nearest Comparable GAAP
Measures."
|
Operating Expenses
For the second quarter of 2019, GAAP operating expenses totaled
US$242 million, down 1%
year-over-year and up 12% quarter-over-quarter. Non-GAAP operating
expenses were US$238 million, down 2%
year-over-year and up 11% quarter-over-quarter. The
quarter-over-quarter increase in operating expenses was mainly due
to a charge for impairment of assets of US$17 million related to Changyou's cinema
advertising business.
Operating Loss
GAAP operating loss for the second quarter of 2019 was
US$38 million, compared with an
operating loss of US$32 million in
the second quarter of 2018 and an operating loss of US$46 million in the first quarter of 2019.
Non-GAAP operating loss for the second quarter of 2019 was
US$34 million, compared with an
operating loss of US$31 million in
the second quarter of 2018 and an operating loss of US$44 million in the first quarter of 2019.
Income Tax Expense
GAAP income tax expense was US$4
million for the second quarter of 2019, compared with income
tax expense of US$6 million in the
second quarter of 2018 and income tax expense of US$11 million in the first quarter of 2019.
Non-GAAP income tax expense was US$2
million for the second quarter of 2019, compared with income
tax expense of US$6 million in the
second quarter of 2018 and income tax expense of US$9 million in the first quarter of 2019. Income
tax expense in the second quarter of 2019 included a tax benefit
from Sogou's tax filing adjustment of income tax expense previously
recognized, which was due to a reduction in taxable income related
to Chinese government initiatives to encourage investment in
R&D.
Net Loss
GAAP net loss attributable to Sohu.com Limited for the second
quarter of 2019 was US$53 million, or
US$1.35 loss per fully-diluted ADS,
compared with a net loss of US$48
million in the second quarter of 2018 and a net loss of
US$57 million in the first quarter of
2019. Non-GAAP net loss attributable to Sohu.com Limited for the
second quarter of 2019 was US$50
million, or US$1.27 loss per
fully-diluted ADS, compared with a net loss of US$49 million in the second quarter of 2018 and a
net loss of US$55 million in the
first quarter of 2019.
Liquidity
As of June 30, 2019, cash and cash
equivalents and short-term investments held by the Sohu Group,
minus short-term bank loans, were US$1.56
billion, compared with US$1.73
billion as of December 31,
2018.
Recent Development
Sogou today announced that on August 3,
2019, its Board of Directors authorized a share repurchase
program of up to US$50 million of the
outstanding American depositary shares, or ADSs, of Sogou over the
next twelve months. The ADSs may be purchased from time to time at
management's discretion at prevailing market prices in accordance
with Rule 10b-18 and Rule 10b5-1
under the Securities Exchange Act of 1934. Sogou's management will
determine the timing and amount of any purchases of Sogou ADSs
based on their evaluation of market conditions, the trading price
of Sogou's ADSs and other factors. The purchase program may be
suspended or discontinued at any time. Sogou plans to fund
repurchases from its existing cash balance.
Business Outlook
For the third quarter of 2019, Sohu estimates:
- Total revenues to be between US$445
million and US$470
million.
- Brand advertising revenues to be between US$45 million and US$50
million; this implies an annual decrease of 12% to 21% and a
sequential increase of 2% to 14%.
- Sogou revenues to be between US$304
million and US$314 million;
this implies an annual increase of 10% to 14% and a sequential
increase of nil to 3%.
- Online game revenues to be between US$80
million and US$90 million;
this implies an annual decrease of 6% to 17 % and a sequential
decrease of 12% to 22%.
- Non-GAAP net loss attributable to Sohu.com
Limited. to be between US$22 million and US$32 million, and non-GAAP loss per
fully-diluted ADS to be between US$0.55 and US$0.80. GAAP net loss attributable
to Sohu.com Limited to be between US$25 million and
US$35 million, and GAAP loss per
fully-diluted ADS to be between US$0.65 and US$0.90.
- Excluding the profit/loss generated by Sogou and Changyou,
Non-GAAP net loss attributable to Sohu.com Limited. to be between
US$50 million and US$55 million, GAAP net loss attributable to
Sohu.com Limited to be between US$53million and US$58
million.
For the third quarter 2019 guidance, the Company has adopted a
presumed exchange rate of RMB6.90=US$1.00, as
compared with the actual exchange rate of approximately
RMB6.80=US$1.00 for the third quarter of 2018, and
RMB6.81=US$1.00 for the second quarter of 2019.
Non-GAAP Disclosure
To supplement the unaudited consolidated financial statements
presented in accordance with accounting principles generally
accepted in the United States of
America ("GAAP"), Sohu's management uses non-GAAP measures
of gross profit, operating profit, net income, net income
attributable to Sohu.com Limited and diluted net income
attributable to Sohu.com Limited per share, which are adjusted from
results based on GAAP to exclude the impact of the share-based
awards, which consist mainly of share-based compensation expenses
and non-cash tax benefits from excess tax deductions related to
share-based awards; changes in fair value recognized in the
Company's consolidated statements of operations with respect to
equity investments with readily determinable fair values;
income/expense from the adjustment of contingent consideration
previously recorded for acquisitions; dividend and deemed dividend
to non-controlling preferred shareholders; the one-time income tax
expense recognized in the fourth quarter of 2017 as a result of the
Toll Charge imposed by the TCJA and the subsequent re-evaluation
for the fourth quarter of 2018 and adjustment of the tax expense
previously recognized for the Toll Charge; the resulting
recognition of a previously unrecognized tax benefit and recording
of an uncertain tax position related to the balance of the Toll
Charge; and interest expense recognize in connection with the Toll
Charge. 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.
Sohu's management believes excluding share-based compensation
expense, changes in fair value recognized in the Company's
consolidated statements of operations with respect to equity
investments with readily determinable fair values; non-cash tax
benefits from excess tax deductions related to share-based awards;
income/expense from the adjustment of contingent consideration
previously recorded for acquisitions; dividend and deemed dividend
to non-controlling preferred shareholders; and income tax expense,
income tax benefit, uncertain tax position, and interest recognized
in relation to the Toll Charge from its non-GAAP financial measure
is useful for itself and investors. Further, the impact of
share-based compensation expense and changes in fair value
recognized in the Company's consolidated statements of operations
with respect to equity investments with readily determinable fair
values; non-cash tax benefits from excess tax deductions related to
share-based awards; income/expense from the adjustment of
contingent consideration previously recorded for acquisitions;
dividend and deemed dividend to non-controlling preferred
shareholders; the one-time income tax expense recognized in the
fourth quarter of 2017 as a result of the Toll Charge imposed by
the TCJA and the subsequent re-evaluation for the fourth quarter of
2018 and adjustment of the tax expense previously recognized for
the Toll Charge; the resulting recognition of a previously
unrecognized tax benefit and recording of an uncertain tax position
related to the balance of the Toll Charge; and interest expense
recognized in connection with the Toll Charge cannot be anticipated
by management and business line leaders and these expenses were not
built into the annual budgets and quarterly forecasts that have
been the basis for information Sohu provides to analysts and
investors as guidance for future operating performance. As the
impact of share-based compensation expense and changes in fair
value recognized in the Company's consolidated statements of
operations with respect to equity investments with readily
determinable fair values, non-cash tax benefits from excess tax
deductions related to share-based awards, income/expense from the
adjustment of contingent consideration previously recorded for
acquisitions, and dividend and deemed dividend to non-controlling
preferred shareholders does not involve subsequent cash outflow or
is reflected in the cash flows at the equity transaction level,
Sohu does not factor this impact in when evaluating and approving
expenditures or when determining the allocation of its resources to
its business segments. As a result, in general, the monthly
financial results for internal reporting and any performance
measures for commissions and bonuses are based on non-GAAP
financial measures that exclude share-based compensation expense
and changes in fair value recognized in the Company's
consolidated statements of operations with respect to equity
investments with readily determinable fair values, non-cash tax
benefits from excess tax deductions related to share-based awards,
income/expense from the adjustment of contingent consideration
previously recorded for acquisitions, and dividend and deemed
dividend to non-controlling preferred shareholders, and also
excluded the one-time income tax expense recognized in the fourth
quarter of 2017 as a result of the Toll Charge imposed by the TCJA
and the subsequent re-evaluation for the fourth quarter of 2018 and
adjustment of the tax expense previously recognized for the Toll
Charge, the resulting recognition of a previously unrecognized tax
benefit and recording of an uncertain tax position related to the
balance of the Toll Charge, and interest expense recognized in
connection with the Toll Charge.
The non-GAAP financial measures are provided to enhance
investors' overall understanding of Sohu's current financial
performance and prospects for the future. A limitation of using
non-GAAP gross profit, operating profit, net income, net income
attributable to Sohu.com Limited and diluted net income
attributable to Sohu.com Limited per share, excluding share-based
compensation expense, non-cash tax benefits from excess tax
deductions related to share-based awards, income/expense from the
adjustment of contingent consideration previously recorded for
acquisitions, dividend, and deemed dividend to non-controlling
preferred shareholders is that the impact of share-based awards and
non-cash tax benefits from excess tax deductions related to
share-based awards has been and will continue to be a significant
recurring expense in Sohu's business for the foreseeable future,
income/expense from the adjustment of contingent consideration
previously recorded for acquisitions may recur in the future, and
dividend and deemed dividend to non-controlling preferred
shareholders may recur when Sohu and its affiliates enter into
equity transactions. In order to mitigate these limitations Sohu
has provided specific information regarding the GAAP amounts
excluded from each non-GAAP measure. The accompanying tables
include details on the reconciliation between the GAAP financial
measures that are most directly comparable to the non-GAAP
financial measures that have been presented.
Notes to Financial Information
Financial information in this press release other than the
information indicated as being non-GAAP is derived from Sohu's
unaudited interim financial statements prepared in accordance with
GAAP.
Safe Harbor Statement
This announcement contains forward-looking statements. It is
currently expected that the Business Outlook will not be updated
until release of Sohu's next quarterly earnings announcement;
however, Sohu reserves right to update its Business Outlook at any
time for any reason. Statements that are not historical facts,
including statements about Sohu'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. We caution you 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,
instability in global financial and credit markets and its
potential impact on the Chinese economy; exchange rate
fluctuations, including their potential impact on the Chinese
economy and on Sohu's reported US dollar results; recent slow-downs
in the growth of the Chinese economy; the uncertain regulatory
landscape in the People's Republic of
China; fluctuations in Sohu's quarterly operating results;
the possibilities that Sohu will be unable to recoup its investment
in video content and that Changyou will be unable to develop a
series of successful games for mobile platforms or successfully
monetize mobile games it develops or acquires; Sohu's reliance on
online advertising sales, online games and mobile services for its
revenues; and the impact of the U.S. TCJA. Further information
regarding these and other risks is included in Sohu's annual report
on Form 20-F for the year ended December 31,
2018, and other filings with the Securities and Exchange
Commission.
Conference Call and Webcast
Sohu's management team will host a conference call at
8:30 a.m. U.S. Eastern Time,
August 5, 2019 (8:30 p.m. Beijing/Hong
Kong time, August 5, 2019)
following the quarterly results announcement.
The dial-in details for the live conference call are:
US
Toll-Free:
|
+1-866-519-4004
|
International:
|
+65-6713-5090
|
Hong Kong:
|
+852-3018-6771
|
China
Mainland
|
+86-800-819-0121 /
+86-400-620-8038
|
Passcode:
|
SOHU
|
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 11:30
a.m. Eastern Time on August 5 through
August 12, 2019. The dial-in details for the telephone
replay are:
International:
|
+1-646-254-3697
|
Passcode:
|
8053369
|
The live Webcast and archive of the conference call will be
available on the Investor Relations section of Sohu's Website at
http://investors.sohu.com/.
About Sohu.com
Sohu.com Limited (NASDAQ: SOHU) is China's premier online brand and indispensable
to the daily life of millions of Chinese, providing a network of
web properties and community based/web 2.0 products which offer the
vast Sohu user community a broad array of choices regarding
information, entertainment and communication. Sohu has built one of
the most comprehensive matrices of Chinese language web properties
and proprietary search engines, consisting of the mass portal and
leading online media destination www.sohu.com; interactive search
engine www.sogou.com; developer and operator of online games
www.changyou.com/en/ and online video website tv.sohu.com.
Sohu's corporate services consist of online brand advertising on
Sohu's matrix of websites as well as bid listing and home page on
its in-house developed search directory and engine. Sohu also
provides multiple news and information services on mobile
platforms, including Sohu News App and the mobile news portal
m.sohu.com. Sohu's online game subsidiary, Changyou.com (NASDAQ:
CYOU) develops and operates a diverse portfolio of PC and mobile
games, such as Tian Long Ba Bu
("TLBB"), one of the most popular PC games in China. Changyou also owns and operates the
17173.com Website, a game information portal in China. Sohu's online search subsidiary Sogou
(NYSE: SOGO) has grown to become the second largest search engine
by mobile queries in China. It
also owns and operates Sogou Input Method, the largest Chinese
language input software. Sohu.com, established by Dr. Charles Zhang, one of China's internet pioneers, is in its
twenty-third year of operation.
For investor and media inquiries, please contact:
In China:
Ms. Pu
Huang
|
Sohu.com
Limited
|
Tel:
|
+86 (10)
6272-6645
|
E-mail:
|
ir@contact.sohu.com
|
In the United
States:
Ms. Linda
Bergkamp
|
Christensen
|
Tel:
|
+1 (480)
614-3004
|
E-mail:
|
lbergkamp@christensenir.com
|
SOHU.COM
LIMITED
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(UNAUDITED, IN
THOUSANDS EXCEPT PER SHARE AMOUNTS)
|
|
|
|
Three Months
Ended
|
|
|
|
Jun. 30,
2019
|
|
Mar. 31,
2019
|
|
Jun. 30,
2018
|
|
Revenues:
|
|
|
|
|
|
|
|
Online
advertising
|
|
|
|
|
|
|
|
Brand
advertising
|
$
|
43,944
|
$
|
42,981
|
$
|
61,511
|
|
Search and
search-related advertising
|
|
275,942
|
|
234,130
|
|
270,359
|
|
Subtotal
|
|
319,886
|
|
277,111
|
|
331,870
|
|
Online
games
|
|
102,147
|
|
99,054
|
|
94,250
|
|
Others
|
|
52,725
|
|
55,215
|
|
59,894
|
|
Total revenues
|
|
474,758
|
|
431,380
|
|
486,014
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
Online
advertising
|
|
|
|
|
|
|
|
Brand
advertising (includes stock-based
compensation expense of $-22, $38, and $-2,
respectively)
|
|
31,419
|
|
34,305
|
|
47,319
|
|
Search and
search-related (includes stock-based
compensation expense of $127, $$27, and $263
respectively)
|
|
182,593
|
|
178,824
|
|
168,126
|
|
Subtotal
|
|
214,012
|
|
213,129
|
|
215,445
|
|
Online games (includes
stock-based compensation
expense of $-17, $0, and $-23, respectively)
|
|
18,163
|
|
14,362
|
|
14,461
|
|
Others
|
|
38,309
|
|
32,734
|
|
44,346
|
|
Total cost of
revenues
|
|
270,484
|
|
260,225
|
|
274,252
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
204,274
|
|
171,155
|
|
211,762
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Product development
(includes stock-based
compensation expense of $3,587, $1,019, and $2,136,
respectively)
|
|
109,048
|
|
100,434
|
|
113,843
|
|
Sales and marketing
(includes stock-based
compensation expense of $1,355, $120, and $77,
respectively)
|
|
93,679
|
|
85,454
|
|
102,138
|
|
General and
administrative (includes stock-based
compensation expense of $-572, $911, and $-1,260,
respectively)
|
|
39,666
|
|
23,833
|
|
27,982
|
|
Goodwill impairment
and impairment of intangibles via
acquisitions of businesses
|
|
-
|
|
7,245
|
|
-
|
|
Total operating expenses
|
|
242,393
|
|
216,966
|
|
243,963
|
|
|
|
|
|
|
|
|
|
Operating
loss
|
|
(38,119)
|
|
(45,811)
|
|
(32,201)
|
|
|
|
|
|
|
|
|
|
Other
income
|
|
5,693
|
|
14,215
|
|
9,991
|
|
Interest
income
|
|
3,290
|
|
3,795
|
|
5,156
|
|
Interest
expense
|
|
(3,737)
|
|
(5,501)
|
|
(3,004)
|
|
Exchange
difference
|
|
3,552
|
|
(2,662)
|
|
10,774[4]
|
|
Loss before income
tax expense
|
|
(29,321)
|
|
(35,964)
|
|
(9,284)
|
|
Income tax
expense
|
|
4,054
|
|
11,208
|
|
5,891
|
|
Net loss
|
|
(33,375)
|
|
(47,172)
|
|
(15,175)
|
|
|
|
|
|
|
|
|
|
Less: Net income
attributable to the noncontrolling
interest shareholders
|
|
19,518
|
|
9,257
|
|
32,463
|
|
Net loss attributable
to Sohu.com Limited
|
|
(52,893)
|
|
(56,429)
|
|
(47,638)
|
|
|
|
|
|
|
|
|
|
Basic net loss per
ADS attributable to Sohu.com Limited
|
$
|
(1.35)
|
$
|
(1.44)
|
$
|
(1.22)
|
|
ADS used in computing
basic net loss per ADS attributable
to Sohu.com Limited
|
|
39,244
|
|
39,236
|
|
38,927
|
|
|
|
|
|
|
|
|
|
Diluted net loss per
ADS attributable to Sohu.com Limited
|
$
|
(1.35)
|
$
|
(1.44)
|
$
|
(1.23)
|
|
ADS used in computing
diluted net loss per ADS
attributable to Sohu.com Limited
|
|
39,244
|
|
39,236
|
|
38,927
|
|
|
|
|
|
|
|
|
|
[4] The
exchange gain in the second quarter of 2018 primarily resulted from
depreciation of the RMB against the USD.
|
SOHU.COM
LIMITED
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(UNAUDITED, IN
THOUSANDS)
|
|
|
|
As of Jun. 30,
2019
|
|
As of Dec. 31,
2018
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash equivalents
|
$
|
375,190
|
$
|
819,713
|
Restricted
cash
|
|
5,462
|
|
5,974
|
Short-term
investments
|
|
1,323,096
|
|
1,041,395
|
Accounts receivable, net
|
|
177,010
|
|
242,361
|
Prepaid and other current assets
|
|
191,462
|
|
207,117
|
Total current assets
|
|
2,072,220
|
|
2,316,560
|
Long-term
investments
|
|
123,434
|
|
108,356
|
Fixed assets,
net
|
|
485,473
|
|
504,998
|
Goodwill
|
|
53,228
|
|
53,263
|
Intangible assets,
net
|
|
13,644
|
|
24,118
|
Restricted time
deposits
|
|
240
|
|
244,179
|
Prepaid non-current
assets
|
|
2,479
|
|
3,107
|
Other
assets[5]
|
|
70,598
|
|
43,928
|
Total assets
|
$
|
2,821,316
|
$
|
3,298,509
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable
|
$
|
345,189
|
$
|
295,954
|
Accrued liabilities
|
|
260,990
|
|
301,915
|
Receipts in advance and deferred revenue
|
|
123,023
|
|
124,782
|
Accrued salary and benefits
|
|
102,981
|
|
112,898
|
Taxes payable
|
|
97,192
|
|
93,569
|
Short-term bank loans
|
|
140,220
|
|
129,677
|
Other short-term liabilities[5]
|
|
132,041
|
|
124,085
|
Total current liabilities
|
$
|
1,201,636
|
$
|
1,182,880
|
|
|
|
|
|
Long-term accounts
payable
|
|
751
|
|
752
|
Long-term Bank
Loans
|
|
29,092
|
|
302,323
|
Long-term tax
liabilities
|
|
266,554
|
|
259,603
|
Other long-term
liabilities[5]
|
|
10,858
|
|
-
|
Total long-term
liabilities
|
$
|
307,255
|
$
|
562,678
|
Total liabilities
|
$
|
1,508,891
|
$
|
1,745,558
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
Sohu.com Limited shareholders' equity
|
|
476,147
|
|
588,840
|
Noncontrolling Interest
|
|
836,278
|
|
964,111
|
Total shareholders' equity
|
$
|
1,312,425
|
$
|
1,552,951
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
$
|
2,821,316
|
$
|
3,298,509
|
|
|
|
|
|
[5] We
have adopted ASU No. 2016-02, "Leases," beginning January 1, 2019.
As a result of adoption of the standard, we recognized a
right-of-use asset of
approximately $23 million in other assets, and a lease liability of
approximately $11 million and $11 million in other short-term
liabilities and other
long-term liabilities, respectively, on our consolidated balance
sheet as of June 30, 2019.
|
SOHU.COM
LIMITED
|
RECONCILIATIONS OF
NON-GAAP RESULTS OF OPERATION MEASURES TO THE NEAREST COMPARABLE
GAAP MEASURES
|
(UNAUDITED, IN
THOUSANDS EXCEPT PER SHARE AMOUNTS)
|
|
|
|
Three Months Ended
Jun. 30, 2019
|
|
Three Months Ended
Mar. 31, 2019
|
|
Three Months Ended
Jun. 30, 2018
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(22)
|
(a)
|
|
|
|
|
38
|
(a)
|
|
|
|
|
(2)
|
(a)
|
|
Brand advertising
gross profit
|
$
|
12,525
|
$
|
(22)
|
$
|
12,503
|
$
|
8,676
|
$
|
38
|
$
|
8,714
|
$
|
14,192
|
$
|
(2)
|
$
|
14,190
|
Brand advertising
gross
margin
|
|
29%
|
|
|
|
28%
|
|
20%
|
|
|
|
20%
|
|
23%
|
|
|
|
23%
|
|
|
|
|
127
|
(a)
|
|
|
|
|
27
|
(a)
|
|
|
|
|
263
|
(a)
|
|
Search and
search-related
advertising gross profit
|
$
|
93,349
|
$
|
127
|
$
|
93,476
|
$
|
55,306
|
$
|
27
|
$
|
55,333
|
$
|
102,233
|
$
|
263
|
$
|
102,496
|
Search and
search-related
advertising gross margin
|
|
34%
|
|
|
|
34%
|
|
24%
|
|
|
|
24%
|
|
38%
|
|
|
|
38%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
105
|
(a)
|
|
|
|
|
65
|
(a)
|
|
|
|
|
261
|
(a)
|
|
Online advertising
gross profit
|
$
|
105,874
|
$
|
105
|
$
|
105,979
|
$
|
63,982
|
$
|
65
|
$
|
64,047
|
$
|
116,425
|
$
|
261
|
$
|
116,686
|
Online advertising
gross
margin
|
|
33%
|
|
|
|
33%
|
|
23%
|
|
|
|
23%
|
|
35%
|
|
|
|
35%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(17)
|
(a)
|
|
|
|
|
-
|
(a)
|
|
|
|
|
(23)
|
(a)
|
|
Online games gross
profit
|
$
|
83,984
|
$
|
(17)
|
$
|
83,967
|
$
|
84,692
|
$
|
-
|
$
|
84,692
|
$
|
79,789
|
$
|
(23)
|
$
|
79,766
|
Online games gross
margin
|
|
82%
|
|
|
|
82%
|
|
86%
|
|
|
|
86%
|
|
85%
|
|
|
|
85%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others gross
profit
|
$
|
14,416
|
$
|
-
|
(a) $
|
14,416
|
$
|
22,481
|
$
|
-
|
(a) $
|
22,481
|
$
|
15,548
|
$
|
-
|
(a) $
|
15,548
|
Others gross
margin
|
|
27%
|
|
|
|
27%
|
|
41%
|
|
|
|
41%
|
|
26%
|
|
|
|
26%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
88
|
(a)
|
|
|
|
|
65
|
(a)
|
|
|
|
|
238
|
(a)
|
|
Gross
profit
|
$
|
204,274
|
$
|
88
|
$
|
204,362
|
$
|
171,155
|
$
|
65
|
$
|
171,220
|
$
|
211,762
|
$
|
238
|
$
|
212,000
|
Gross
margin
|
|
43%
|
|
|
|
43%
|
|
40%
|
|
|
|
40%
|
|
44%
|
|
|
|
44%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
$
|
242,393
|
$
|
(4,370)
|
(a) $
|
238,023
|
$
|
216,966
|
$
|
(2,050)
|
(a) $
|
214,916
|
$
|
243,963
|
$
|
(953)
|
(a) $
|
243,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,458
|
(a)
|
|
|
|
|
2,115
|
(a)
|
|
|
|
|
1,191
|
(a)
|
|
Operating
loss
|
$
|
(38,119)
|
$
|
4,458
|
$
|
(33,661)
|
$
|
(45,811)
|
$
|
2,115
|
$
|
(43,696)
|
$
|
(32,201)
|
$
|
1,191
|
$
|
(31,010)
|
Operating
margin
|
|
-8%
|
|
|
|
-7%
|
|
-11%
|
|
|
|
-10%
|
|
-7%
|
|
|
|
-6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
$
|
(4,054)
|
$
|
1,566
|
(c,d)$
|
(2,488)
|
$
|
(11,208)
|
$
|
1,778
|
(c,d)$
|
(9,430)
|
$
|
(5,891)
|
$
|
165
|
$
|
(5,726)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,458
|
(a)
|
|
|
|
|
2,115
|
(a)
|
|
|
|
|
1,191
|
(a)
|
|
|
|
|
|
794
|
(c)
|
|
|
|
|
(744)
|
(c)
|
|
|
|
|
(494)
|
(c)
|
|
|
|
|
|
1,831
|
(d)
|
|
|
|
|
1,531
|
(d)
|
|
|
|
|
-
|
|
|
Net loss before
non-
controlling interest
|
$
|
(33,375)
|
|
7,083
|
|
(26,292)
|
$
|
(47,172)
|
|
2,902
|
|
(44,270)
|
$
|
(15,175)
|
$
|
697
|
$
|
(14,478)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,458
|
(a)
|
|
|
|
|
2,115
|
(a)
|
|
|
|
|
1,191
|
(a)
|
|
|
|
|
|
(3,733)
|
(b)
|
|
|
|
|
(798)
|
(b)
|
|
|
|
|
(1,976)
|
(b)
|
|
|
|
|
|
794
|
(c)
|
|
|
|
|
(744)
|
(c)
|
|
|
|
|
(494)
|
(c)
|
|
|
|
|
|
1,831
|
(d)
|
|
|
|
|
1,531
|
(d)
|
|
|
|
|
-
|
|
|
Net loss attributable
to
Sohu.com Limited for diluted
net loss per ADS
|
$
|
(52,994)
|
|
3,350
|
|
(49,644)
|
$
|
(56,650)
|
|
2,104
|
|
(54,546)
|
$
|
(47,965)
|
$
|
(1,279)
|
|
(49,244)
|
Diluted net loss per ADS
attributable to Sohu.com
Limited
|
$
|
(1.35)
|
|
|
|
(1.27)
|
$
|
(1.44)
|
|
|
|
(1.39)
|
$
|
(1.23)
|
|
|
|
(1.27)
|
Shares used in
computing
diluted net loss per ADS
attributable to Sohu.com
Limited
|
|
39,244
|
|
|
|
39,244
|
|
39,236
|
|
|
|
39,236
|
|
38,927
|
|
|
|
38,927
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
(a) To eliminate the
impact of share-based awards as measured using the fair value
method. This adjustment does not have an impact on income tax
expense.
|
(b) To adjust Sohu's
economic interests in Changyou and Sogou attributable to the above
non-GAAP adjustments. This adjustment does not have an impact on
income tax expense.
|
(c) To adjust for a
change in the fair value of the Company's investment in Hylink and
the income tax effect.
|
(d) To adjust for the
effect of the U.S. TCJA.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/sohucom-reports-second-quarter-2019-unaudited-financial-results-300896159.html
SOURCE Sohu.com Ltd.