BEIJING, July 30, 2018 /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, 2018.
Second Quarter Highlights
- Total revenues[1] were US$486
million[2], up 5% year-over-year and 7%
quarter-over-quarter.
- Brand advertising revenues were US$62
million, down 29% year-over-year and up 9%
quarter-over-quarter.
- Search and search related advertising revenues[3]
were US$270 million, up 45%
year-over-year and 23% quarter-over-quarter.
- Online game revenues were US$94
million, down 23% year-over-year and 11%
quarter-over-quarter.
Dr. Charles Zhang, Chairman and
CEO of Sohu.com Limited, commented, "We saw mixed financial
performance in the second quarter. While quarterly revenue was
slightly soft given the continued headwinds against our brand
advertising business, the bottom line performance was better than
expected as we aggressively slashed content costs. For Sohu Media
Portal, we continued to focus on user growth for the Sohu News App
by consistently refining the product design and content quality.
For Sohu Video, we maintained steady momentum with our original
content and substantially narrowed the loss as a result of lowered
spending on licensed content. For Sogou, in the second quarter its
core search revenues posted 45% year-over-year growth and Sogou
Mobile Keyboard's DAU increased by 36% from the prior year to 380
million. Changyou delivered in-line performance as its online game
business continued to generate healthy cash flow."
[1] The
Company has adopted ASU No. 2014-09, ''Revenue from Contracts with
Customers" beginning January 1, 2018. The only major impact of the
standard is that revenues and expenses related to advertising
barter transactions will be recognized beginning January 1, 2018.
The impact for the second quarter of 2018 was approximately US$6
million for both revenues and cost of revenues and expenses, most
of which were generated from Sogou.
|
[2] On a
constant currency (non-GAAP) basis, if the exchange rate in the
second quarter of 2018 had been the same as it was in the second
quarter of 2017, or RMB6.86=US$1.00, US$ total revenues in the
second quarter of 2018 would have been US$452 million, or US$34
million less than GAAP total revenues, and down 2%
year-over-year.
|
[3] Search
and Search related advertising revenues exclude intra-Group
transactions.
|
Second Quarter Financial Results
Revenues
Total revenues for the second quarter of 2018 were US$486 million, up 5% year-over-year and 7%
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 2018 were US$332 million, up 22% year-over-year and 20%
quarter-over-quarter.
Brand advertising revenues for the second quarter of 2018
totaled US$62 million, down 29%
year-over-year and up 9% quarter-over-quarter. The year-over-year
decrease was mainly due to decreases in portal and real estate
advertising revenues. The quarter-over-quarter increase was mainly
attributable to a seasonality increase in revenues from the media
portal.
Search and search-related advertising revenues for the second
quarter of 2018 were US$270 million,
up 45% year-over-year and 23% quarter-over-quarter. The
year-over-year and quarter-over-quarter increases were primarily
driven by continued traffic growth and improved monetization in
mobile search.
Online game revenues for the second quarter of 2018 were
US$94 million, down 23%
year-over-year and 11% quarter-over-quarter. The year-over-year and
quarter-over-quarter decreases were due to the natural decline in
revenue of Changyou's older games, including Legacy TLBB Mobile and
Dao Jian Dou Shen Zhuan.
Gross Margin
Both GAAP and non-GAAP[4] gross margin for the second
quarter of 2018 was 44%, compared with 40% in the second quarter of
2017 and 43% in the first quarter of 2018.
Both GAAP and non-GAAP gross margin for the online advertising
business for the second quarter of 2018 was 35%, compared with 19%
in the second quarter of 2017 and 29% in the first quarter of
2018.
GAAP gross margin for the brand advertising business in the
second quarter of 2018 was 23%, compared with negative 45% in the
second quarter of 2017 and 10% in the first quarter of 2018.
Non-GAAP gross margin for the brand advertising business was 23%,
compared with negative 45% in the second quarter of 2017 and 9% in
the first quarter of 2018. The year-over-year increase was mainly
due to decreased video content cost and the Company's having
recognized impairment charges of approximately US$45 million in video content cost in the second
quarter of 2017. The quarter-over-quarter increase was mainly due
to the increase in brand advertising revenue.
Both GAAP and non-GAAP gross margin for the search and
search-related advertising business in the second quarter of 2018
was 38%, compared with 48% in the second quarter of 2017 and 34% in
the first quarter of 2018. The year-over-year decrease primarily
resulted from traffic acquisition cost outgrowing revenues. The
quarter-over-quarter increase was due to normal seasonal
fluctuation.
Both GAAP and non-GAAP gross margin for online games business in
the second quarter of 2018 was 85%, compared with 91% in the second
quarter of 2017 and 84% in the first quarter of 2018. The
year-over-year decrease in gross margin was mainly due to a decline
in revenue from Legacy TLBB Mobile, which has a high gross margin,
as revenue is recognized on a net basis after revenue-sharing with
the third-party licensee operator.
[4]
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, and a one-time income tax expense,
offset by a one-time reduction in liability for deferred U.S.
income tax, as a result of the U.S. Tax Reform. 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 2018, GAAP operating expenses totaled
US$244 million, up 10% year-over-year
and 8% quarter-over-quarter. Non-GAAP operating expenses were
US$243 million, up 16% year-over-year
and 7% quarter-over-quarter. The year-over-year increase was mainly
due to increased marketing expenses, and increased product
development expenses for Sogou. The quarter-over-quarter increase
was mainly due to increased marketing expenses.
Operating Loss
GAAP operating loss for the second quarter of 2018 was
US$32 million, compared with an
operating loss of US$40 million in
the second quarter of 2017 and an operating loss of US$31 million in the first quarter of 2018.
Non-GAAP operating loss for the second quarter of 2018 was
US$31 million, compared with an
operating loss of US$27 million in
the second quarter of 2017 and an operating loss of US$34 million in the first quarter of 2018.
Income Tax Expense
Both GAAP and non-GAAP income tax expense was US$6 million for the second quarter of 2018,
compared with income tax expense of US$13
million in the second quarter of 2017 and income tax expense
of US$63 million in the first quarter
of 2018. The quarter-over-quarter decrease was mainly due to
Changyou's accrual of additional withholding income taxes of
US$47 million for the period before
December 31, 2017 recognized in
relation to a change in policy for Changyou's PRC subsidiaries with
respect to their distribution of cash dividends in the first
quarter of 2018, offset by the impact of the reversal of a deferred
tax liability of US$5.5 million in
the second quarter of 2018 as a result of the liquidation of
Sohu.com Inc.
Net Loss
Before deducting the share of net income pertaining to
non-controlling interest, GAAP net loss for the second quarter of
2018 was US$15 million, compared with
a net loss of US$48 million in the
second quarter of 2017 and net loss of US$87
million in the first quarter of 2018. Before deducting the
share of net income pertaining to non-controlling interest,
non-GAAP net loss for the second quarter of 2018 was US$14 million, compared with a net loss of
US$35 million in the second quarter
of 2017 and net loss of US$90 million
in the first quarter of 2018.
GAAP net loss attributable to Sohu.com Limited for the second
quarter of 2018 was US$48 million, or
a loss of US$1.23 per fully-diluted
ADS, compared with a net loss of US$89
million in the second quarter of 2017 and a net loss of
US$93 million in the first quarter of
2018. Non-GAAP net loss attributable to Sohu.com Limited for the
second quarter of 2018 was US$49
million, or a loss of US$1.27
per fully-diluted ADS, compared with a net loss of US$72 million in the second quarter of 2017 and a
net loss of US$97 million in the
first quarter of 2018.
Liquidity
As of June 30, 2018, cash and cash
equivalents and short-term investments held by the Sohu Group,
minus short-term bank loans, were US$1.89
billion, compared with US$2.12
billion as of December 31,
2017.
Recent Developments
Sogou, the Company's online search subsidiary, announced that
Chinese regulatory authorities, including the Beijing Office of the
Cyberspace Administration of China
and the Beijing Administration for Industry and Commerce, initiated
an investigation of Sogou after certain advertisements involving
content that the authorities believed insulted a national hero were
displayed on its platform. The advertisements were developed and
reviewed by Douyin, a Chinese short-form video platform, and
displayed on Sogou Search in June
2018. Following the investigation, the regulatory
authorities instructed Sogou to amend its advertising practices.
Sogou fully cooperated with the authorities in their investigation
and Sogou has taken steps to revise its advertising policies and
audit procedures to ensure compliance with relevant
regulations.
In connection with implementing such remedial measures, Sogou
suspended its search advertising for ten days commencing
July 1, 2018. This is expected to
result in a one-time reduction in Sogou's revenues for the
third quarter of 2018.
Business Outlook
For the third quarter of 2018, Sohu estimates:
- Total revenues to be between US$445
million and US$470
million.
- Brand advertising revenues to be between US$60 million and US$65
million; this implies an annual decrease of 13% to 20% and a
sequential decrease of 2% to a sequential increase of 6%.
- Sogou revenues to be between US$275
million and US$285 million;
this implies an annual increase of 7% to 11% and a sequential
decrease of 5% to 9%.
- Online game revenues to be between US$80
million and US$90 million;
this implies an annual decrease of 32% to 40% and a sequential
decrease of 5% to 15%.
- Before deducting the share of non-GAAP net income pertaining to
non-controlling interest, non-GAAP net loss to be
between US$44 million and US$54
million. Assuming no new grants of share-based awards and
that the market price of our shares is unchanged, we estimate that
compensation expense relating to share-based awards will be
around US$5 million. Including the impact of these share-based
awards, GAAP net loss before non-controlling interest to be
between US$49 million and US$59
million.
- Non-GAAP net loss attributable to Sohu.com Limited to be
between US$55 million and US$65
million, and non-GAAP loss per fully-diluted ADS to be
between US$1.40 and US$1.65. Including the impact of the
aforementioned share-based awards, and netting off
approximately US$2 million of Sohu's economic interests in
Changyou and Sogou, GAAP net loss attributable to Sohu.com
Limited to be between US$58 million and US$68 million, and GAAP loss per fully-diluted
ADS to be between US$1.50 and US$1.75.
For the third quarter 2018 guidance, the Company has adopted a
presumed exchange rate of RMB6.80=US$1.00, as
compared with the actual exchange rate of approximately
RMB6.67=US$1.00 for the third quarter of 2017, and
RMB6.38=US$1.00 for the second quarter of 2018.
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, and a one-time income
tax expense, offset by a one-time reduction in liability for
deferred U.S. income tax, as a result of the U.S. Tax Reform. 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 net one-time tax
expense as a result of the U.S. Tax Reform 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, and net one-time tax expense as a result of
the U.S. Tax Reform 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 net one-time tax expense as a
result of U.S. Tax Reform.
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;
Sohu's current and projected future losses due to increased
spending by Sohu for video content; 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. Tax Reform. Further information regarding these and other
risks is included in Sohu's annual report on Form 10-K for the year
ended December 31, 2017, 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,
July 30, 2018 (8:30 p.m. Beijing/Hong
Kong time, July 30, 2018)
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 July 30 through
August 5, 2018. The dial-in details for the telephone replay
are:
International:
|
+1-646-254-3697
|
Passcode:
|
5495973
|
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 leading 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 leading 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-second year of operation.
For investor and media inquiries, please contact:
In China:
Mr. Eric
Yuan
|
Sohu.com
Limited
|
Tel:
|
+86 (10)
6272-6593
|
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 ADS AMOUNTS)
|
|
|
|
Three Months
Ended
|
|
|
Jun. 30,
2018
|
|
Mar. 31,
2018
|
|
Jun. 30,
2017
|
Revenues:
|
|
|
|
|
|
|
Online
advertising
|
|
|
|
|
|
|
Brand
advertising
|
$
|
61,511
|
$
|
56,254
|
$
|
86,071
|
Search and
search-related advertising
|
|
270,359
|
|
220,301
|
|
186,747
|
Subtotal
|
|
331,870
|
|
276,555
|
|
272,818
|
Online
games
|
|
94,250
|
|
105,461
|
|
122,398
|
Others
|
|
59,894
|
|
72,979
|
|
65,952
|
Total revenues
|
|
486,014
|
|
454,995
|
|
461,168
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
Online
advertising
|
|
|
|
|
|
|
Brand advertising (includes stock-based
compensation
expense of $-2, $-657, and $182, respectively)
|
|
47,319
|
|
50,611
|
|
124,730
|
Search and search-related
(includes stock-based
compensation expense of $263, $219, and
$2, respectively)
|
|
168,126
|
|
144,696
|
|
96,692
|
Subtotal
|
|
215,445
|
|
195,307
|
|
221,422
|
Online games (includes stock-based compensation expense of
$-23, $-12, and $44,
respectively)
|
|
14,461
|
|
17,119
|
|
11,613
|
Others
|
|
44,346
|
|
48,407
|
|
45,159
|
Total cost of
revenues
|
|
274,252
|
|
260,833
|
|
278,194
|
|
|
|
|
|
|
|
Gross
profit
|
|
211,762
|
|
194,162
|
|
182,974
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
Product development
(includes stock-based compensation
expense of $2,136, $715, and $4,925, respectively)
|
|
113,843
|
|
111,543
|
|
100,146
|
Sales and marketing
(includes stock-based compensation
expense of $77, $-89, and $930, respectively)
|
|
102,138
|
|
90,273
|
|
94,845
|
General and administrative
(includes stock-based compensation
expense of $-1,260, $-2,520, and $6,597, respectively)
|
|
27,982
|
|
23,836
|
|
27,657
|
Total operating expenses
|
|
243,963
|
|
225,652
|
|
222,648
|
|
|
|
|
|
|
|
Operating
loss
|
|
(32,201)
|
|
(31,490)
|
|
(39,674)
|
|
|
|
|
|
|
|
Other
income
|
|
9,991
|
|
12,281
|
|
3,306
|
Interest
income
|
|
5,156
|
|
7,808
|
|
5,813
|
Interest
expense
|
|
(3,004)
|
|
(3,081)
|
|
(205)
|
Exchange
difference
|
|
10,774[5]
|
|
(9,340)
|
|
(4,528)
|
Loss before income
tax expense
|
|
(9,284)
|
|
(23,822)
|
|
(35,288)
|
Income tax
expense
|
|
5,891
|
|
63,379
|
|
12,764
|
Net loss
|
|
(15,175)
|
|
(87,201)
|
|
(48,052)
|
|
|
|
|
|
|
|
Less: Net income
attributable to the noncontrolling interest
shareholders
|
|
32,463
|
|
5,617
|
|
40,131
|
Net loss attributable
to Sohu.com Limited
|
|
(47,638)
|
|
(92,818)
|
|
(88,183)
|
|
|
|
|
|
|
|
Basic net loss per
ADS attributable to Sohu.com Limited
|
$
|
(1.22)
|
$
|
(2.39)
|
$
|
(2.27)
|
ADSs used in
computing basic net loss per ADS attributable to
Sohu.com Limited
|
|
38,927
|
|
38,904
|
|
38,855
|
|
|
|
|
|
|
|
Diluted net loss per
ADS attributable to Sohu.com Limited
|
$
|
(1.23)
|
$
|
(2.39)
|
$
|
(2.28)
|
ADSs used in
computing diluted net loss per ADS attributable to
Sohu.com Limited
|
|
38,927
|
|
38,904
|
|
38,855
|
|
[5] The
exchange gain in the second quarter of 2018 is primarily resulted
from the depreciation of RMB against USD.
|
SOHU.COM
LIMITED
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(UNAUDITED, IN
THOUSANDS)
|
|
|
|
As of Jun. 30,
2018
|
|
As of Dec. 31,
2017
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash equivalents
|
$
|
669,081
|
$
|
1,366,115
|
Restricted
cash
|
|
4,272
|
|
1,908
|
Short-term
investments
|
|
1,324,865
|
|
818,934
|
Accounts receivable, net
|
|
238,553
|
|
250,468
|
Prepaid and other current assets
|
|
224,010
|
|
192,676
|
Total current assets
|
|
2,460,781
|
|
2,630,101
|
Long-term
investments
|
|
94,556
|
|
90,145
|
Fixed assets,
net
|
|
520,210
|
|
529,717
|
Goodwill
|
|
71,076
|
|
71,565
|
Intangible assets,
net
|
|
28,220
|
|
23,060
|
Restricted time
deposits
|
|
270
|
|
271
|
Prepaid non-current
assets
|
|
3,877
|
|
4,211
|
Other
assets
|
|
37,909
|
|
40,169
|
Total assets
|
$
|
3,216,899
|
$
|
3,389,239
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable
|
$
|
315,076
|
$
|
288,394
|
Accrued liabilities
|
|
329,274
|
|
343,106
|
Receipts in advance and deferred revenue
|
|
135,299
|
|
127,758
|
Accrued salary and benefits
|
|
97,154
|
|
102,087
|
Taxes payable
|
|
88,043
|
|
96,541
|
Short-term bank loans
|
|
104,283
|
|
61,216
|
Other short-term liabilities
|
|
144,280
|
|
136,300
|
Total current liabilities
|
$
|
1,213,409
|
$
|
1,155,402
|
|
|
|
|
|
Long-term accounts
payable
|
|
1,143
|
|
1,157
|
Long-term bank
loans
|
|
122,419
|
|
122,433
|
Long-term tax
liabilities
|
|
336,089
|
|
293,010
|
Total long-term
liabilities
|
$
|
459,651
|
$
|
416,600
|
Total liabilities
|
$
|
1,673,060
|
$
|
1,572,002
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
Sohu.com Limited shareholders' equity
|
|
616,464
|
|
750,634
|
Noncontrolling Interest
|
|
927,375
|
|
1,066,603
|
Total shareholders' equity
|
$
|
1,543,839
|
$
|
1,817,237
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
3,216,899
|
$
|
3,389,239
|
SOHU.COM
LIMITED
|
RECONCILIATIONS OF
NON-GAAP RESULTS OF OPERATION MEASURES TO THE NEAREST COMPARABLE
GAAP MEASURES
|
(UNAUDITED, IN
THOUSANDS EXCEPT PER ADS AMOUNTS)
|
|
|
|
Three Months
Ended Jun. 30, 2018
|
|
Three Months
Ended Mar. 31, 2018
|
|
Three Months
Ended Jun. 30, 2017
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
(a)
|
|
|
|
|
(657)
|
(a)
|
|
|
|
|
182
|
(a)
|
|
Brand advertising
gross profit
|
$
|
14,192
|
$
|
(2)
|
$
|
14,190
|
$
|
5,643
|
$
|
(657)
|
$
|
4,986
|
$
|
(38,659)
|
$
|
182
|
$
|
(38,477)
|
Brand advertising
gross
margin
|
|
23%
|
|
|
|
23%
|
|
10%
|
|
|
|
9%
|
|
-45%
|
|
|
|
-45%
|
|
|
|
|
263
|
(a)
|
|
|
|
|
219
|
(a)
|
|
|
|
|
2
|
(a)
|
|
Search and
search-related
advertising gross profit
|
$
|
102,233
|
$
|
263
|
$
|
102,496
|
$
|
75,605
|
$
|
219
|
$
|
75,824
|
$
|
90,055
|
$
|
2
|
$
|
90,057
|
Search and
search-related
advertising gross margin
|
|
38%
|
|
|
|
38%
|
|
34%
|
|
|
|
34%
|
|
48%
|
|
|
|
48%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
261
|
(a)
|
|
|
|
|
(438)
|
(a)
|
|
|
|
|
184
|
(a)
|
|
Online advertising
gross profit
|
$
|
116,425
|
$
|
261
|
$
|
116,686
|
$
|
81,248
|
$
|
(438)
|
$
|
80,810
|
$
|
51,396
|
$
|
184
|
$
|
51,580
|
Online advertising
gross
margin
|
|
35%
|
|
|
|
35%
|
|
29%
|
|
|
|
29%
|
|
19%
|
|
|
|
19%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(23)
|
(a)
|
|
|
|
|
(12)
|
(a)
|
|
|
|
|
44
|
(a)
|
|
Online games gross
profit
|
$
|
79,789
|
$
|
(23)
|
$
|
79,766
|
$
|
88,342
|
$
|
(12)
|
$
|
88,330
|
$
|
110,785
|
$
|
44
|
$
|
110,829
|
Online games gross
margin
|
|
85%
|
|
|
|
85%
|
|
84%
|
|
|
|
84%
|
|
91%
|
|
|
|
91%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others gross
profit
|
$
|
15,548
|
$
|
-
|
(a) $
|
15,548
|
$
|
24,572
|
$
|
-
|
(a) $
|
24,572
|
$
|
20,793
|
$
|
-
|
(a) $
|
20,793
|
Others gross
margin
|
|
26%
|
|
|
|
26%
|
|
34%
|
|
|
|
34%
|
|
32%
|
|
|
|
32%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
238
|
(a)
|
|
|
|
|
(450)
|
(a)
|
|
|
|
|
228
|
(a)
|
|
Gross
profit
|
$
|
211,762
|
$
|
238
|
$
|
212,000
|
$
|
194,162
|
$
|
(450)
|
$
|
193,712
|
$
|
182,974
|
$
|
228
|
$
|
183,202
|
Gross
margin
|
|
44%
|
|
|
|
44%
|
|
43%
|
|
|
|
43%
|
|
40%
|
|
|
|
40%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
$
|
243,963
|
$
|
(953)
|
(a) $
|
243,010
|
$
|
225,652
|
$
|
1,894
|
(a) $
|
227,546
|
$
|
222,648
|
$
|
(12,452)
|
(a) $
|
210,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,191
|
(a)
|
|
|
|
|
(2,344)
|
(a)
|
|
|
|
|
12,680
|
(a)
|
|
Operating
loss
|
$
|
(32,201)
|
$
|
1,191
|
$
|
(31,010)
|
$
|
(31,490)
|
$
|
(2,344)
|
$
|
(33,834)
|
$
|
(39,674)
|
$
|
12,680
|
$
|
(26,994)
|
Operating
margin
|
|
-7%
|
|
|
|
-6%
|
|
-7%
|
|
|
|
-7%
|
|
-9%
|
|
|
|
-6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
$
|
(5,891)
|
$
|
165
|
$
|
(5,726)
|
$
|
(63,379)
|
$
|
-
|
$
|
(63,379)
|
$
|
12,764
|
$
|
-
|
(a)$
|
12,764
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,191
|
(a)
|
|
|
|
|
(2,344)
|
(a)
|
|
|
|
|
12,680
|
(a)
|
|
|
|
|
|
(494)
|
(c)
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
Net loss before
non-
controlling interest
|
$
|
(15,175)
|
$
|
697
|
$
|
(14,478)
|
$
|
(87,201)
|
$
|
(2,344)
|
$
|
(89,545)
|
$
|
(48,052)
|
$
|
12,680
|
$
|
(35,372)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,191
|
(a)
|
|
|
|
|
(2,344)
|
(a)
|
|
|
|
|
12,680
|
(a)
|
|
|
|
|
|
(1,976)
|
(b)
|
|
|
|
|
(2,102)
|
(b)
|
|
|
|
|
4,254
|
(b)
|
|
|
|
|
|
(494)
|
(c)
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
Net loss attributable
to
Sohu.com Limited for diluted
net loss per ADS
|
$
|
(47,965)
|
$
|
(1,279)
|
|
(49,244)
|
$
|
(92,925)
|
$
|
(4,446)
|
|
(97,371)
|
$
|
(88,698)
|
$
|
16,934
|
$
|
(71,764)
|
Diluted net
loss per ADS
attributable to Sohu.com
Limited
|
$
|
(1.23)
|
|
|
|
(1.27)
|
$
|
(2.39)
|
|
|
|
(2.50)
|
$
|
(2.28)
|
|
|
$
|
(1.85)
|
ADSs used in
computing
diluted net loss per ADS
attributable to Sohu.com
Limited
|
|
38,927
|
|
|
|
38,927
|
|
38,904
|
|
|
|
38,904
|
|
38,855
|
|
|
|
38,855
|
|
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.
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/sohucom-reports-second-quarter-2018-unaudited-financial-results-300688282.html
SOURCE Sohu.com Ltd.