BEIJING, Nov. 4, 2019 /PRNewswire/ -- Changyou.com Limited
("Changyou" or the "Company") (NASDAQ: CYOU), a leading online game
developer and operator in China,
today announced its unaudited financial results for the third
quarter ended September 30, 2019.
Third Quarter 2019 Highlights[1]
- Total revenue was US$111 million,
an increase of 9% year-over-year and 4% quarter-over-quarter,
exceeding the Company's guidance.
- Online game revenue was US$108
million, an increase of 13% year-over-year and 6%
quarter-over-quarter, exceeding the Company's guidance.
- GAAP net income attributable to Changyou.com Limited was
US$34 million, compared with net
income of US$68 million[2]
in the third quarter of 2018 and net income of US$43 million in the second quarter of 2019.
- Non-GAAP[3] net income attributable to Changyou.com
Limited was US$34 million, compared
with net income of US$67
million[2] in the third quarter of 2018 and net
income of US$41 million in the second
quarter of 2019.
[1] The
Company's wholly-owned subsidiary Shanghai Jingmao Culture
Communication Co., Ltd. ("Shanghai Jingmao"), which operated the
Company's cinema advertising business, ceased operations and wound
down the business during the third quarter of 2019 as a result of a
Chinese court having granted a petition by Shanghai Jingmao for
bankruptcy relief. Accordingly, the results of operations for the
Company's cinema advertising business have been excluded from the
Company's results from continuing operations in the condensed
consolidated statements of operations for the third quarter and are
presented in separate line items as discontinued operations.
Retrospective adjustments to the historical statements have been
made in order to provide a consistent basis of comparison. Unless
indicated otherwise, results presented in this release are related
to continuing operations only, and exclude results from the cinema
advertising business.
|
[2] GAAP
and non-GAAP net income attributable to Changyou.com Limited for
the third quarter of 2018 included a one-time tax benefit of US$23
million that was recognized as a result of some of the Company's
subsidiaries having been granted preferential tax rates upon their
receipt of 2017 Key National Software Enterprise status or 2017
Software Enterprise status.
|
[3] Non-GAAP results exclude
share-based compensation expense. 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 Operations
Measures to the Nearest Comparable GAAP Measures".
|
Mr. Chen Dewen, CEO, commented,
"During the quarter, TLBB PC maintained its solid performance. We
introduced new game content and rolled out a promotional event that
ranked and rewarded our highest-paying users. We were happy to see
that it not only helped to sustain player engagement, but it also
effectively stabilized the in-game spending of players. For mobile
games, revenue from Legacy TLBB Mobile increased slightly in the
third quarter on a sequential basis, mainly thanks to the expansion
pack that we launched during the quarter. We also launched a new
mobile game, TLBB Honor, during the quarter. Leveraging the
influence of the TLBB franchise among active mobile players, the
game has performed quite well since its launch. Going forward,
MMORPG mobile games will continue to be our strategic focus and we
will continue to work on improving the quality of the key games
that we are developing so that we can give them the best possible
chance to become hits. In the meantime, we're also developing some
casual and strategy games to make sure that we maintain a
diversified product portfolio."
Mr. Wei Qing, Chief Games
Development Officer, added, "During the quarter, we launched an
expansion pack for Legacy TLBB Mobile that featured an underwater
world map and new challenging dungeons, all of which helped to
drive higher player involvement. In addition, we were pleased to
see that a newly introduced clan has been well received by players. Overall, we have been able
to maintain stable user engagement during the quarter and attract
solid player spending. During the fourth quarter of 2019, we will
launch more expanded content that includes casual gameplay
featuring some additional elements of day-to-day life. In addition,
we will do a preliminary review of the skill system of all clans in
order to be prepared to further enhance the PvP experience in the
future."
Mr. Wang Yaobin, CFO of Changyou, added, "During the quarter,
online game revenue was much better than we expected, and our
overall financial performance continued to be stable. In addition
to the solid results delivered by TLBB PC and Legacy TLBB Mobile,
TLBB Honor, a new mobile game launched during the quarter, also
performed well. However, since the game content is not particularly
extensive, its revenue contribution and profitability are not
comparable to Legacy TLBB Mobile."
Third Quarter 2019 Operational Results
- Total average monthly active accounts[4] of the
Company's PC games were 2.1 million, a decrease of 9%
year-over-year and an increase of 5% quarter-over-quarter. The
year-over-year decrease reflected the natural declining life cycles
of the Company's older games, including TLBB PC.
- Total average monthly active accounts of the Company's mobile
games were 3.5 million, a decrease of 5% year-over-year and an
increase of 30% quarter-over-quarter. The quarter-over-quarter
increase was mainly due to the launch of new games in the third
quarter of 2019.
- Total quarterly aggregate active paying accounts[5]
of the Company's PC games were 1.0 million, an increase of 25%
year-over-year and 11% quarter-over-quarter. The year-over-year and
quarter-over-quarter increases were due to the improved performance
of some of the Company's older games, including TLBB PC, as a
result of some promotional activities during the quarter.
- Total quarterly aggregate active paying accounts of the
Company's mobile games were 1.1 million, an increase of 57%
year-over-year and 83% quarter-over-quarter. The year-over-year and
quarter-over-quarter increases were mainly due to the launch of new
games in the third quarter of 2019.
[4]
Monthly active accounts refers to the number of registered accounts
that are logged in to these games at least once during the
month.
|
[5] Quarterly aggregate active paying
accounts refers to the number of accounts from which game points
are utilized at least once during the quarter.
|
Third Quarter 2019 Unaudited Financial Results
Revenue
Total revenue was US$111 million,
an increase of 9% year-over-year and 4% quarter-over-quarter.
Online game revenue was US$108
million, an increase of 13% year-over-year and 6%
quarter-over-quarter. The year-over-year and quarter-over-quarter
increases were mainly due to the revenue contribution from new
games launched during the quarter.
Online advertising revenue was US$3
million, a decrease of 42% year-over-year and 30%
quarter-over-quarter. The year-over-year and quarter-over-quarter
decreases were mainly due to fewer games being marketed on the
17173.com website.
Gross profit/ (loss)
GAAP and non-GAAP gross profit were both US$86 million, an increase of 2% year-over-year
and flat quarter-over-quarter. GAAP and non-GAAP gross margin were
both 78%, compared with 83% in the third quarter of 2018, and 82%
in the second quarter of 2019.
GAAP and non-GAAP gross profit of the online games business were
both US$85 million, an increase of 5%
year-over-year and 1% quarter-over-quarter. GAAP and non-GAAP gross
margin of the online games business were both 78%, compared with
84% in the third quarter of 2018 and 82% in the second quarter of
2019.
GAAP and non-GAAP gross profit of the online advertising
business were both US$1 million, a
decrease of 59% year-over-year and 46% quarter-over-quarter. GAAP
and non-GAAP gross margin of the online advertising business were
both 53%, compared with 75% in the third quarter of 2018 and 68% in
the second quarter of 2019. The year-over-year and
quarter-over-quarter decreases in gross margin were mainly due
to lower online advertising revenue in the third quarter of
2019.
Operating expenses
Total operating expenses were US$51
million, an increase of 18% year-over-year and 10%
quarter-over-quarter.
Product development expenses were US$28
million, a decrease of 5% year-over-year and 8%
quarter-over-quarter. The year-over-year and quarter-over-quarter
decreases were mainly due to a decline in salary and benefit
expenses as a result of a reduction in workforce.
Sales and marketing expenses were US$18
million, an increase of 149% year-over-year and 69%
quarter-over-quarter. The year-over-year and quarter-over-quarter
increases reflect higher marketing and promotional spending for new
games launched during the quarter.
General and administrative expenses were US$6 million, a decrease of 20% year-over-year
and an increase of 2% quarter-over-quarter. The year-over-year
decrease was mainly due to a bad debt provision related to the
online advertising business that was recognized during the third
quarter of 2018.
Operating profit
Operating profit was US$35
million, compared with an operating profit of US$41 million in the third quarter of 2018 and
US$40 million in the second quarter
of 2019.
Non-GAAP operating profit was US$35
million, compared with a non-GAAP operating profit of
US$40 million in the third quarter of
2018 and US$38 million in the second
quarter of 2019.
Other income, net
Other income was US$6 million,
compared with US$9 million in the
third quarter of 2018 and US$2
million in the second quarter of 2019.
Income tax benefit/ (expense)
Income tax expense was US$12
million, compared with income tax benefit of US$12 million in the third quarter of 2018 and
income tax expense of US$3 million in
the second quarter of 2019. The income tax benefit in the third
quarter of 2018 was mainly due to some of the Company's
subsidiaries having been granted preferential tax rates upon their
receipt of 2017 Key National Software Enterprise status or 2017
Software Enterprise status.
Net income
Net income from continuing operations was US$34 million, compared with US$68 million in the third quarter of 2018 and
US$43 million in the second quarter
of 2019.
Non-GAAP net income from continuing operations was US$34 million, compared with US$67 million in the third quarter of 2018 and
US$41 million in the second quarter
of 2019.
Net loss attributable to non-controlling
interests
GAAP and non-GAAP net loss attributable to non-controlling
interests were both US$0.03 million.
This compares with a GAAP and non-GAAP net loss of US$0.02 million in the third quarter of 2018 and
US$0.07 million in the second quarter
of 2019. Non-controlling interests include the non-controlling
interests in RaidCall, which provides online music and
entertainment services primarily in Taiwan; a joint venture that operates Korean
comics online in China; and a
joint venture that is engaged in intellectual property
authorization, game production and distribution in China.
Net income attributable to Changyou.com
Limited
Net income from continuing operations attributable to
Changyou.com Limited was US$34
million, compared with US$68
million[2] in the third quarter of 2018 and
US$43 million in the second quarter
of 2019. Fully-diluted net income from continuing operations
attributable to Changyou.com Limited per ADS[6] was
US$0.64, compared with US$1.26 in the third quarter of 2018 and
US$0.81 in the second quarter of
2019.
Non-GAAP net income from continuing operations attributable to
Changyou.com Limited was US$34
million, compared with US$67
million[2] in the third quarter of 2018 and
US$41 million in the second quarter
of 2019. Non-GAAP fully-diluted net income from continuing
operations attributable to Changyou.com Limited per ADS was
US$0.64, compared with US$1.25 in the third quarter of 2018 and
US$0.77 in the second quarter of
2019.
Liquidity
As of September 30, 2019, Changyou
had net cash[7] of US$250 million, compared with
US$671 million as of December 31, 2018. The decrease was mainly due to
the distribution of a special cash dividend of approximately
US$503 million in the second quarter
of 2019.
Operating cash flow for the third quarter of 2019 was a net
inflow of US$56 million.
[6] Each
ADS represents two Class A ordinary shares.
|
[7] Net
cash is calculated as the sum of cash and cash equivalents,
short-term investments, current restricted cash and non-current
restricted time deposits, minus long-term bank loans.
|
Business Outlook
For the fourth quarter of 2019, Changyou expects:
- Total revenue to be between US$100
million and US$110 million,
including online game revenue of US$95
million to US$105
million;
- Non-GAAP net income attributable to Changyou.com Limited to be between US$27 million and US$32
million, and non-GAAP net income per fully-diluted ADS to be
between US$0.50 and US$0.60. Share-based compensation expense to be
around US$3 million, reflecting
grants to certain key employees of share-based awards approved by
the Company's board of directors under a newly-adopted share
incentive plan, as well as remaining share-based awards under 2014
Share Incentive Plan, and assuming no other grants of share-based
awards in the fourth quarter of 2019. Taking into account the
elimination of the impact of these share-based awards, GAAP net
income attributable to Changyou.com Limited to be between
US$24 million and US$29 million, and GAAP net income per
fully-diluted ADS to be between US$0.45 and US$0.54.
For the fourth quarter of 2019 guidance, the Company has adopted
a presumed exchange rate of RMB7.10 =
US$1.00, which compares with the
actual exchange rate of approximately RMB6.91 = US$1.00
for the fourth quarter of 2018, and RMB6.99 = US$1.00
for the third quarter of 2019.
Non-GAAP Disclosure
To supplement the unaudited consolidated financial information
prepared in accordance with generally accepted accounting
principles in the United States of
America ("GAAP"), Changyou's management uses non-GAAP
measures of gross profit, operating profit, net income, net income
attributable to Changyou.com Limited and diluted net income
attributable to Changyou.com Limited per ADS, which are adjusted
from results based on GAAP to exclude the compensation cost of
share-based awards granted, non-cash tax benefits from excess tax
deductions related to share-based awards and income/expense from
the adjustment of contingent consideration previously recorded for
acquisitions. 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 share-based
compensation expense, non-cash tax benefits from excess tax
deductions related to share-based awards and income/expense from
the adjustment of contingent consideration previously recorded for
acquisitions from its non-GAAP financial measures is useful for
itself and investors. Further, the amount of share-based
compensation expense, non-cash tax benefits from excess tax
deductions related to share-based awards and income/expense from
the adjustment of contingent consideration previously recorded for
acquisitions cannot be anticipated by management, and these
expenses and benefits 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, non-cash tax benefits from excess tax
deductions related to share-based awards and income/expense from
the adjustment of contingent consideration previously recorded for
acquisitions do not involve subsequent cash outflow, Changyou does
not factor these 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, non-cash tax benefits from excess
tax deductions related to share-based awards and income/expense
from the adjustment of contingent consideration previously recorded
for acquisitions.
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 gross profit, operating profit, net income, net income
attributable to Changyou.com Limited and diluted net income
attributable to Changyou.com Limited per ADS, excluding share-based
compensation expense, non-cash tax benefits from excess tax
deductions related to share-based awards and income/expense from
the adjustment of contingent consideration previously recorded for
acquisitions, 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, non-cash tax
benefits from excess tax deductions related to share-based awards
and income/expense from the adjustment of contingent consideration
previously recorded for acquisitions may recur in the 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 of 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, continuing
volatility in global financial and credit markets and its potential
impact on the Chinese economy; exchange rate fluctuations in
general and possible continued devaluation of the RMB in
particular, including their potential impact on the Chinese economy
and on the Company's reported U.S. dollar results; slowing growth
in the Chinese economy; the uncertain regulatory landscape in
the People's Republic of China;
fluctuations in Changyou's quarterly operating results; the
possibility that Changyou will be unable to develop a series of
successful games for mobile platforms or successfully monetize
mobile games it develops or acquires; the possibility that the
Company's margins will decline as a result of the need for
revenue-sharing with mobile game platform operators; and the
Company's reliance on TLBB 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 March 28, 2019, and other filings with the
Securities and Exchange Commission.
Conference Call Information
Changyou's management team will host an earnings conference call
today at 6:30 a.m. U.S. Eastern Time,
November 4, 2019 (7:30 p.m. Beijing/Hong
Kong, November 4, 2019).
The dial-in details for the live conference call are:
US:
|
+1-866-519-4004
|
Hong Kong:
|
800-906-601
|
China
Mainland:
|
400-620-8038
|
International:
|
+1-845-675-0437
|
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 9:30
a.m. U.S. Eastern Time on November 4,
2019 through November 11,
2019. The dial-in details for the telephone replay are:
International:
|
+61-2-8199-0299
|
Passcode:
|
3095238
|
The live Webcast and archive of the conference call will be
available on the Investor Relations section of Changyou's Website
at http://ir.changyou.com/.
About Changyou
Changyou.com Limited (NASDAQ: CYOU) is a leading developer and
operator of online games in China
with a diverse portfolio of popular online games, such as
Tian Long Ba Bu ("TLBB"), one of the
most popular PC games in China, as
well as a number of mobile games. Changyou also owns and operates
the 17173.com Website, a leading game information portal in
China. Changyou began operations
as a business unit within Sohu.com Limited (NASDAQ: SOHU) in 2003,
and was carved out as a separate, stand-alone company in
December 2007. It completed an
initial public offering on April 7,
2009. Changyou has an advanced technology platform that
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, please visit
http://ir.changyou.com/.
For investor and media inquiries, please contact:
In China:
Mr. Yujia Zhao
Investor Relations
Tel: +86 (10) 6192-0800
E-mail: ir@cyou-inc.com
In the United
States:
Ms. Linda Bergkamp
Christensen
Phone: +1 (480) 614-3004
E-mail: lbergkamp@ChristensenIR.com
CHANGYOU.COM
LIMITED
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(UNAUDITED, IN
THOUSANDS EXCEPT PER ADS AMOUNTS)
|
|
|
Three Months
Ended
|
|
|
Sep. 30,
2019
|
|
Jun. 30,
2019
|
|
Sep. 30,
2018
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
Online game
|
$
|
108,012
|
$
|
102,147
|
$
|
95,971
|
Online
advertising
|
|
2,832
|
|
4,022
|
|
4,872
|
IVAS
|
|
-
|
|
-
|
|
1,306
|
Total revenue
|
|
110,844
|
|
106,169
|
|
102,149
|
|
|
|
|
|
|
|
Cost of
revenue:
|
|
|
|
|
|
|
Online game (includes
share-based compensation expense/
(benefit) of
$0, $(17) and $(3), respectively)
|
|
23,285
|
|
18,163
|
|
14,902
|
Online
advertising
|
|
1,345
|
|
1,293
|
|
1,241
|
IVAS
|
|
-
|
|
150
|
|
1,155
|
Total cost of revenue
|
|
24,630
|
|
19,606
|
|
17,298
|
Gross
profit
|
|
86,214
|
|
86,563
|
|
84,851
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
Product development
(includes share-based
compensation
expense/ (benefit) of $0, $(926)
and $(267),
respectively)
|
|
27,874
|
|
30,372
|
|
29,326
|
Sales and marketing
(includes share-based
compensation
expense/ (benefit) of $0,
$(283) and
$(41), respectively)
|
|
17,870
|
|
10,596
|
|
7,173
|
General and administrative
(includes share-
based
compensation expense/ (benefit) of $(7), $(639)
and
$(533), respectively)
|
|
5,640
|
|
5,548
|
|
7,081
|
Total operating expenses
|
|
51,384
|
|
46,516
|
|
43,580
|
|
|
|
|
|
|
|
Operating
profit
|
|
34,830
|
|
40,047
|
|
41,271
|
Interest income,
net
|
|
3,996
|
|
3,778
|
|
3,136
|
Foreign currency
exchange gain
|
|
1,375
|
|
1,022
|
|
1,785
|
Other income,
net
|
|
5,914
|
|
1,876
|
|
9,123
|
Income before
income tax expense
|
|
46,115
|
|
46,723
|
|
55,315
|
Income tax expense/
(benefit)
|
|
11,858
|
|
3,486
|
|
(12,347)
|
Net income from
continuing operations
|
|
34,257
|
|
43,237
|
|
67,662
|
Net loss from
discontinued operations, net of tax
|
|
(2,706)
|
|
(27,037)
|
|
(12,443)
|
Net
income
|
|
31,551
|
|
16,200
|
|
55,219
|
Less: Net loss from
continuing operations attributable to non-
controlling
interests
|
|
(29)
|
|
(74)
|
|
(20)
|
Net loss from discontinued operations attributable to non-
controlling
interests
|
|
-
|
|
-
|
|
-
|
Net income from
continuing operations attributable to Changyou
|
|
34,286
|
|
43,311
|
|
67,682
|
Net loss from
discontinued operations attributable to Changyou
|
|
(2,706)
|
|
(27,037)
|
|
(12,443)
|
Net income
attributable to Changyou.com Limited
|
$
|
31,580
|
$
|
16,274
|
$
|
55,239
|
Basic net income/
(loss) attributable to Changyou.com Limited
per ADS
|
$
|
0.59
|
$
|
0.30
|
$
|
1.04
|
From continuing
operations
|
|
0.64
|
|
0.81
|
|
1.27
|
From discontinued
operations
|
|
(0.05)
|
|
(0.51)
|
|
(0.23)
|
|
|
|
|
|
|
|
ADSs used in
computing basic net income attributable to
Changyou.com Limited per ADS
|
|
53,618
|
|
53,464
|
|
53,217
|
|
|
|
|
|
|
|
Diluted net income/
(loss) attributable to Changyou.com Limited
per ADS
|
$
|
0.59
|
$
|
0.30
|
$
|
1.03
|
From continuing
operations
|
|
0.64
|
|
0.81
|
|
1.26
|
From discontinued
operations
|
|
(0.05)
|
|
(0.51)
|
|
(0.23)
|
|
|
|
|
|
|
|
ADSs used in
computing diluted net income attributable to
Changyou.com Limited per ADS
|
|
53,677
|
|
53,673
|
|
53,632
|
CHANGYOU.COM
LIMITED
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(UNAUDITED, IN
THOUSANDS)
|
|
|
|
As of Sep. 30,
2019
|
|
As of Dec. 31,
2018
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
84,867
|
$
|
454,305
|
Restricted
cash
|
|
1,952
|
|
2,340
|
Accounts receivable,
net
|
|
45,532
|
|
40,627
|
Short-term
investments
|
|
163,547
|
|
190,068
|
Prepaid and other
current assets
|
|
1,263,703
|
|
778,480
|
Current assets
associated with discontinued operations
|
|
-
|
|
34,324
|
Total current
assets
|
|
1,559,601
|
|
1,500,144
|
Non-current
assets:
|
|
|
|
|
Fixed assets,
net
|
|
159,431
|
|
170,396
|
Goodwill
|
|
10,257
|
|
10,257
|
Intangible assets,
net
|
|
10,229
|
|
13,856
|
Deferred tax
assets
|
|
11,398
|
|
13,467
|
Restricted time
deposits
|
|
-
|
|
243,910
|
Other assets,
net
|
|
28,775
|
|
85,375
|
Non-current assets
associated with discontinued operations
|
|
-
|
|
398
|
Total non-current
assets
|
|
220,090
|
|
537,659
|
TOTAL
ASSETS
|
$
|
1,779,691
|
$
|
2,037,803
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Receipts in advance
and deferred revenue
|
$
|
37,353
|
$
|
40,966
|
Accounts payable and
accrued liabilities
|
|
1,250,322
|
|
729,158
|
Tax
payables
|
|
25,002
|
|
17,715
|
Current liabilities
associated with discontinued operations
|
|
-
|
|
101,105
|
Total current
liabilities
|
|
1,312,677
|
|
888,944
|
Long-term
liabilities:
|
|
|
|
|
Deferred tax
liabilities
|
|
89,111
|
|
83,026
|
Long-term tax
payable
|
|
13,039
|
|
13,438
|
Long-term bank
loans
|
|
-
|
|
220,000
|
Other long-term
liabilities
|
|
827
|
|
751
|
Total long-term
liabilities
|
|
102,977
|
|
317,215
|
Total
liabilities
|
|
1,415,654
|
|
1,206,159
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
Changyou.com Limited
shareholders' equity
|
|
362,434
|
|
829,735
|
Non-controlling
interests
|
|
1,603
|
|
1,909
|
Total
shareholders' equity
|
|
364,037
|
|
831,644
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
$
|
1,779,691
|
$
|
2,037,803
|
CHANGYOU.COM
LIMITED
|
RECONCILIATIONS OF
NON-GAAP RESULTS OF OPERATIONS MEASURES TO THE NEAREST
COMPARABLE GAAP MEASURES
|
(UNAUDITED, IN
THOUSANDS, EXCEPT PER ADS AMOUNTS)
|
|
|
|
Three Months Ended
Sep. 30, 2019
|
|
|
|
|
Non-GAAP adjustments
(a)
|
|
|
|
|
GAAP
|
|
Share-based
compensation
expense (b)
|
|
Non-GAAP
|
Online game gross
profit
|
$
|
84,727
|
|
-
|
|
84,727
|
Online advertising
gross profit
|
|
1,487
|
|
-
|
|
1,487
|
IVAS gross
loss
|
|
-
|
|
-
|
|
-
|
Gross
profit
|
$
|
86,214
|
|
-
|
|
86,214
|
Gross
margin
|
|
78%
|
|
|
|
78%
|
Operating
expenses
|
|
51,384
|
|
7
|
|
51,391
|
Operating
profit
|
$
|
34,830
|
|
(7)
|
|
34,823
|
Operating
margin
|
|
31%
|
|
|
|
31%
|
Income tax
expense
|
|
11,858
|
|
|
|
11,858
|
Net income from
continuing operations
|
|
34,257
|
|
(7)
|
|
34,250
|
Net loss from
discontinued operations, net of tax
|
|
(2,706)
|
|
-
|
|
(2,706)
|
Net income
|
$
|
31,551
|
|
(7)
|
|
31,544
|
Less: Net loss from
continuing operations attributable to non-
controlling interests
|
|
(29)
|
|
-
|
|
(29)
|
Net loss from
discontinued operations attributable to non-
controlling interests
|
|
-
|
|
-
|
|
-
|
Net income from
continuing operations attributable to Changyou.com
Limited
|
|
34,286
|
|
(7)
|
|
34,279
|
Net loss from
discontinued operations attributable to Changyou.com
Limited
|
|
(2,706)
|
|
-
|
|
(2,706)
|
Net income
attributable to Changyou.com Limited
|
$
|
31,580
|
|
(7)
|
|
31,573
|
Net margin from
continuing operations attributable to
Changyou.com Limited
|
|
31%
|
|
|
|
31%
|
Diluted net income/
(loss) attributable to Changyou.com Limited per
ADS
|
$
|
0.59
|
|
|
|
0.59
|
From continuing
operations
|
|
0.64
|
|
|
|
0.64
|
From discontinued
operations
|
|
(0.05)
|
|
|
|
(0.05)
|
ADSs used in
computing diluted net income attributable to
Changyou.com Limited per ADS
|
|
53,677
|
|
|
|
53,681
|
|
Note:
|
(a) The Non-GAAP
adjustment does not have an impact on income tax
expense.
|
(b) To eliminate
share-based compensation expense measured using the fair value
method. The downward adjustment of share-based compensation
expense was a result of fluctuations in the market price for the
Company's ADS.
|
CHANGYOU.COM
LIMITED
|
RECONCILIATIONS OF
NON-GAAP RESULTS OF OPERATIONS MEASURES TO THE NEAREST
COMPARABLE GAAP MEASURES
|
(UNAUDITED, IN
THOUSANDS, EXCEPT PER ADS AMOUNTS)
|
|
|
|
Three Months Ended
Jun. 30, 2019
|
|
|
|
|
Non-GAAP adjustments
(a)
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
Share-based
compensation
expense (b)
|
|
Non-GAAP
|
Online game gross
profit
|
$
|
83,984
|
|
(17)
|
|
83,967
|
Online advertising
gross profit
|
|
2,729
|
|
-
|
|
2,729
|
IVAS gross
loss
|
|
(150)
|
|
-
|
|
(150)
|
Gross
profit
|
$
|
86,563
|
|
(17)
|
|
86,546
|
Gross
margin
|
|
82%
|
|
|
|
82%
|
Operating
expenses
|
|
46,516
|
|
1,848
|
|
48,364
|
Operating
profit
|
$
|
40,047
|
|
(1,865)
|
|
38,182
|
Operating
margin
|
|
38%
|
|
|
|
36%
|
Income tax
expense
|
|
3,486
|
|
|
|
3,486
|
Net income from
continuing operations
|
|
43,237
|
|
(1,865)
|
|
41,372
|
Net loss from
discontinued operations, net of tax
|
|
(27,037)
|
|
-
|
|
(27,037)
|
Net income
|
$
|
16,200
|
|
(1,865)
|
|
14,335
|
Less: Net loss from
continuing operations attributable to non-
controlling interests
|
|
(74)
|
|
-
|
|
(74)
|
Net loss from
discontinued operations attributable to non-
controlling interests
|
|
-
|
|
-
|
|
-
|
Net income from
continuing operations attributable to Changyou.com
Limited
|
|
43,311
|
|
(1,865)
|
|
41,446
|
Net loss from
discontinued operations attributable to Changyou.com
Limited
|
|
(27,037)
|
|
-
|
|
(27,037)
|
Net income
attributable to Changyou.com Limited
|
$
|
16,274
|
|
(1,865)
|
|
14,409
|
Net margin from
continuing operations attributable to
Changyou.com Limited
|
|
41%
|
|
|
|
39%
|
Diluted net income/
(loss) attributable to Changyou.com Limited per
ADS
|
$
|
0.30
|
|
|
|
0.27
|
From continuing
operations
|
|
0.81
|
|
|
|
0.77
|
From discontinued
operations
|
|
(0.51)
|
|
|
|
(0.50)
|
ADSs used in
computing diluted net income attributable to
Changyou.com Limited per ADS
|
|
53,673
|
|
|
|
53,681
|
|
Note:
|
(a) The Non-GAAP
adjustment does not have an impact on income tax
expense.
|
(b) To eliminate
share-based compensation expense measured using the fair value
method. The downward adjustment of share-based compensation
expense was a result of fluctuations in the market price for the
Company's ADS.
|
CHANGYOU.COM LIMITED
|
RECONCILIATIONS OF
NON-GAAP RESULTS OF OPERATIONS MEASURES TO THE NEAREST
COMPARABLE GAAP MEASURES
|
(UNAUDITED, IN
THOUSANDS, EXCEPT PER ADS AMOUNTS)
|
|
|
|
Three Months Ended
Sep. 30, 2018
|
|
|
|
|
Non-GAAP
adjustments (a)
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
Share-based
compensation expense (b)
|
|
Non-GAAP
|
Online game gross
profit
|
$
|
81,069
|
|
(3)
|
|
81,066
|
Online advertising
gross profit
|
|
3,631
|
|
-
|
|
3,631
|
IVAS gross
profit
|
|
151
|
|
-
|
|
151
|
Gross
profit
|
$
|
84,851
|
|
(3)
|
|
84,848
|
Gross
margin
|
|
83%
|
|
|
|
83%
|
Operating
expenses
|
|
43,580
|
|
841
|
|
44,421
|
Operating
profit
|
$
|
41,271
|
|
(844)
|
|
40,427
|
Operating margin
|
|
40%
|
|
|
|
40%
|
Income tax
benefit
|
|
(12,347)
|
|
|
|
(12,347)
|
Net income from
continuing operations
|
|
67,662
|
|
(844)
|
|
66,818
|
Net loss from
discontinued operations, net of tax
|
|
(12,443)
|
|
-
|
|
(12,443)
|
Net income
|
$
|
55,219
|
|
(844)
|
|
54,375
|
Less: Net loss from
continuing operations attributable to non-
controlling interests
|
|
(20)
|
|
-
|
|
(20)
|
Net
loss from discontinued operations attributable to non-
controlling
interests
|
|
-
|
|
-
|
|
-
|
Net income from
continuing operations attributable to Changyou.com
Limited
|
|
67,682
|
|
(844)
|
|
66,838
|
Net income/ (loss)
from discontinued operations attributable to
Changyou.com Limited
|
|
(12,443)
|
|
-
|
|
(12,443)
|
Net income
attributable to Changyou.com Limited
|
$
|
55,239
|
|
(844)
|
|
54,395
|
Net
margin from continuing operations attributable to
Changyou.com Limited
|
|
66%
|
|
|
|
65%
|
Diluted net income
attributable to Changyou.com Limited per ADS
|
$
|
1.03
|
|
|
|
1.01
|
From
continuing operations
|
|
1.26
|
|
|
|
1.25
|
From discontinued
operations
|
|
(0.23)
|
|
|
|
(0.24)
|
ADSs used in
computing diluted net income attributable to
Changyou.com Limited per ADS
|
|
53,632
|
|
|
|
53,685
|
|
Note:
|
(a) The Non-GAAP
adjustment does not have an impact on income tax
expense.
|
(b) To eliminate
share-based compensation expense measured using the fair value
method. The downward adjustment of share-based compensation
expense in the current period was a result of fluctuations in the
market price for the Company's ADS.
|
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SOURCE Changyou.com Limited