BEIJING, March 9, 2020 /PRNewswire/ -- Sohu.com Limited
(NASDAQ: SOHU), China's leading
online media, video, search and gaming business group, today
reported unaudited financial results for the fourth quarter and
fiscal year ended December 31, 2019.
Fourth Quarter Highlights[1]
- Total revenues were US$490
million[2], up 5% year-over-year and 2%
quarter-over-quarter.
- Brand advertising revenues were US$42
million, down 27% year-over-year and 10%
quarter-over-quarter.
- Search and search related
advertising revenues[3] were US$275 million, down 1% year-over-year and 5%
quarter-over-quarter.
- Online game revenues were US$132
million, up 40% year-over-year and 22%
quarter-over-quarter.
- Including an impairment charge of approximately US$23 million recognized for the quarter for an
investment unrelated to the Company' core businesses, GAAP net loss
attributable to Sohu.com Limited was US$18
million, compared with net income of US$23 million in the fourth quarter of 2018.
- Excluding the impairment charge, non-GAAP net income
attributable to Sohu.com Limited was US$7
million, compared with a net loss of US$51 million in the fourth quarter of 2018 and a
net loss of US$17 million in the
third quarter of 2019.
- Excluding the profit/loss generated by Sogou and Changyou, and
further excluding the impairment charge, non-GAAP net loss
attributable to Sohu.com Limited was US$46
million, compared with a net loss of US$75 million in the fourth quarter of 2018 and a
net loss of US$53 million in the
third quarter of 2019.
[1] As
Changyou's cinema advertising business ceased operations during the
third quarter of 2019, its results of operations have been excluded
from the Company's results from continuing operations in the
condensed consolidated statements of operations 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.
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[2] On a
constant currency (non-GAAP) basis, if the exchange rate in the
fourth quarter of 2019 had been the same as it was in the fourth
quarter of 2018, or RMB6.91=US$1.00, US$ total revenues in the
fourth quarter of 2019 would have been US$498 million, or US$8
million more than GAAP total revenues, and up 7%
year-over-year.
|
[3] Search
and Search related advertising revenues exclude intra-Group
transactions.
|
Fiscal Year 2019 Highlights
- Total revenues were US$1.85
billion, up 2% compared with 2018.
- Brand advertising revenues were US$175
million, down 25% compared with 2018.
- Search and search related advertising revenues were
US$1.07 billion, up 5% compared with
2018.
- Online game revenues were US$441
million, up 13% compared with 2018.
- GAAP net loss attributable to Sohu.com Limited was US$128 million, compared with a net loss of
US$131 million in 2018.
- Non-GAAP net loss attributable to Sohu.com Limited was
US$93 million, compared with a net
loss of US$207 million in 2018.
- Excluding the profit/loss generated by Sogou and Changyou, the
Non-GAAP net loss attributable to Sohu.com Limited was US$246 million, compared with a net loss of
US$326 million in 2018.
Dr. Charles Zhang, Chairman and
CEO of Sohu.com Limited, commented, "During 2019, China's economy continued to slow down and
competition intensified. However, these challenges did not stop us
from exploring new opportunities and improving operating
efficiencies. As a result, our operating results further improved
due to the solid performance of our business and the effective cost
saving initiatives. For the fourth quarter of 2019, excluding an
impairment charge recognized for an investment unrelated to our
core businesses, non-GAAP net income attributable to Sohu.com
Limited was US$7 million. For Sohu
Media Portal, we strengthened our position as a mainstream media
platform with high quality original content and various events. For
Sohu Video, with the unique and high-quality dramas and other
shows, we actively searched for diversified monetization sources.
With improved monetization capabilities and strict budget control,
Sohu video was able to further trim its losses in 2019. For Sogou,
search revenue grew faster than the industry average, and revenues
from Sogou's Recommendation Service that leverages Mobile Keyboard
continued to experience robust growth. In 2019, Changyou's online
games performed well, and it took a number of steps to enhance its
capacity to create new, high-quality games."
Fourth Quarter Financial Results
Revenues
Total revenues for the fourth quarter of 2019 were US$490 million, up 5% year-over-year and 2%
quarter-over-quarter.
Total online advertising revenues, which include revenues from
the brand advertising and search and search-related
advertising businesses, for the fourth quarter of 2019 were
US$316 million, down 5% both
year-over-year and quarter-over-quarter.
Brand advertising revenues for the fourth quarter of 2019
totaled US$42 million, down 27%
year-over-year and 10% quarter-over-quarter. The decrease was
mainly due to decreases in portal and video advertising
revenues.
Search and search-related advertising revenues for the fourth
quarter of 2019 were US$275 million,
down 1% year-over-year and 5% quarter-over-quarter.
Online game revenues for the fourth quarter of 2019 were
US$132 million, up 40% year-over-year
and 22% quarter-over-quarter. The year-over-year and
quarter-over-quarter increases were mainly due to the contribution
of TLBB Honor, as well as improved performance of some of
Changyou's older games, including TLBB PC and Legacy TLBB Mobile,
as a result of content updates and some promotional activities
during the quarter.
Gross Margin
Both GAAP and non-GAAP[4] gross margin was 52%
for the fourth quarter of 2019, compared with 46% in the
fourth quarter of 2018 and 48% in the third quarter of 2019.
Both GAAP and non-GAAP gross margin for the online
advertising business for the fourth quarter of 2019 was 39%,
compared with 32% in the fourth quarter of 2018 and 37%
in the third quarter of 2019.
Both GAAP and non-GAAP gross margin for the brand advertising
business in the fourth quarter of 2019 was 31%, compared
with 26% in the fourth quarter of 2018 and 31% in the
third quarter of 2019. The year-over-year margin
improvement was mainly due to decreased video content cost.
GAAP gross margin for the search and search-related
advertising business in the fourth quarter of 2019 was 40%,
compared with 34% in the fourth quarter of 2018 and 38% in the
third quarter of 2019. Non-GAAP gross margin for the search
and search-related advertising business in the fourth quarter
of 2019 was 41%, compared with 34% in the fourth quarter of 2018
and 38% in the third quarter of 2019. The year-over-year and
quarter-over-quarter increases primarily resulted from decreases in
traffic acquisition cost as a percentage of search and search
related advertising revenues.
Both GAAP and non-GAAP gross margin for online games in the
fourth quarter of 2019 was 75%, compared with 85% in the fourth
quarter of 2018 and 78% in the third quarter of 2019. The
decreases in gross margins were mainly a result of an increase in
the revenue contribution from new mobile games, primarily TLBB
Honor, which typically require larger revenue-sharing payments
compared with PC games and Legacy TLBB Mobile, and as a result
drive down gross margin.
[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; a one-time
impairment charge recognized for an investment unrelated to the
Company's core businesses; 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."
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Operating Expenses
For the fourth quarter of 2019, GAAP operating expenses
totaled US$211 million, down 15%
year-over-year and 4% quarter-over-quarter. Non-GAAP operating
expenses were US$204 million, down
17% year-over-year and 5% quarter-over-quarter. The year-over-year
decrease in operating expenses was mainly due to decreased
marketing expenses, and an approximately US$16 million impairment charge recognized by
Changyou related to its 17173.com website business in the fourth
quarter of 2018. The quarter-over-quarter decrease was mainly due
to decreased marketing expenses.
Operating Profit/(Loss)
GAAP operating profit for the fourth quarter of
2019 was US$42 million, compared
with an operating loss of US$36 million in the fourth quarter
of 2018 and an operating profit of US$12
million in the third quarter of 2019.
Non-GAAP operating profit for the fourth quarter of 2019
was US$49 million, compared with an operating loss
of US$34 million in the fourth quarter of 2018 and
an operating profit of US$16
million in the third quarter of 2019.
Income Tax Expense
GAAP income tax benefit was US$1
million for the fourth quarter of 2019, compared with income
tax benefit of US$70 million in the
fourth quarter of 2018 and income tax expense of US$17 million in the third quarter of 2019.
Non-GAAP income tax benefit was US$4
million for the fourth quarter of 2019, compared with income
tax expense of US$5 million in the
fourth quarter of 2018 and income tax expense of US$15 million in the third quarter of 2019.
The income tax benefit in the fourth quarter of 2019 included a
one-time tax benefit of US$19 million
that was recognized as a result of some of the Changyou's
subsidiaries having been granted preferential tax rates upon their
receipt of 2018 Key National Software Enterprise status or 2018
Software Enterprise status. GAAP income tax benefit recognized in
the fourth quarter of 2018 resulted from management's re-evaluation
and adjustment of the tax expense previously recognized in the
fourth quarter of 2017 for the one-time transition tax (the "Toll
Charge") imposed by the U.S. Tax Cuts and Jobs Act (the "TCJA"),
and interest accrued in relation to the unrecognized tax
benefit.[5].
[5] The
tax benefit recognized and the unrecognized tax benefit in relation
to the Toll Charge may be subject to further adjustment in
subsequent periods based on future circumstances and on
management's further judgment and estimates.
|
Net Income/(Loss)
GAAP net loss attributable to Sohu.com Limited for the
fourth quarter of 2019 was US$18 million, or US$0.45 loss per fully-diluted ADS,
compared with net income of US$23
million in the fourth quarter of 2018 and a net
loss of US$21 million in the
third quarter of 2019. Non-GAAP net income attributable
to Sohu.com Limited for the fourth quarter of 2019 was
US$7 million, or US$0.17 income per fully-diluted ADS,
compared with a net loss of US$51 million in
the fourth quarter of 2018 and a net loss of US$17 million in the third quarter of
2019.
Liquidity
As of December 31, 2019, cash and
cash equivalents and short-term investments held by the Sohu Group,
minus short-term bank loans, were US$1.51
billion, compared with US$1.73
billion as of December 31,
2018.
Fiscal Year 2019 Financial Results
Revenues
Total revenues for 2019 were US$1.85
billion, up 2% compared with 2018.
Total online advertising revenues, which include revenues from
the brand advertising and search and search-related
advertising businesses, for 2019 were US$1.25 billion, down 1% compared with 2018.
Brand advertising revenues for 2019 were US$175 million, down 25% compared with 2018. The
decrease was mainly due to declines in portal and video advertising
revenues.
Search and search-related advertising revenues for
2019 were US$1.07 billion, up 5%
compared with 2018.
Online game revenues for 2019 were US$441
million, up 13% compared with 2018. The increase was mainly
due to the revenue contribution from TLBB Honor, which was launched
in the third quarter of 2019, as well as improved performance of
some of Changyou's older games in 2019, including TLBB PC.
Gross Margin
Both GAAP and non-GAAP gross margin was 47% for 2019, compared
with 46% in 2018.
Both GAAP and non-GAAP gross margin for the online
advertising business for 2019 was 34%, compared
with 32% in 2018.
Both GAAP and non-GAAP gross margin for the brand advertising
business for 2019 was 28%, compared with 20% in
2018. The increase was mainly attributable to a decrease in video
content cost.
GAAP gross margin for the search and search-related
advertising business for 2019 was 34%, compared with
35% in 2018. Non-GAAP gross margin for the search and
search-related advertising business for 2019 was 35%,
compared with 35% in 2018.
Both GAAP and non-GAAP gross margin for online games for 2019
was 80%, compared with 84% in 2018.
Operating Expenses
For 2019, GAAP operating expenses totaled US$863 million,
down 9% compared with 2018. Non-GAAP operating expenses were
US$845 million, down 10% compared with 2018. The decrease
was mainly due to decreased marketing and promotional
expenses.
Operating Profit/(Loss)
GAAP operating profit for 2019 was US$0.4 million, compared with an operating loss
of US$116 million in 2018.
Non-GAAP operating profit for 2019 was US$19 million,
compared with an operating loss of US$114 million in
2018.
Income Tax Expense
GAAP income tax expense for 2019 was US$31 million, compared with income tax benefit
of US$13 million in 2018. Non-GAAP income tax
expense for 2019 was US$23 million,
compared with income tax expense of US$62 million in
2018. The income tax expense in 2019 included a one-time tax
benefit of US$19 million that was
recognized as a result of some of the Changyou's subsidiaries
having been granted preferential tax rates upon their receipt of
2018 Key National Software Enterprise status or 2018 Software
Enterprise status. GAAP income tax benefit in 2018 included
management's re-evaluation and adjustment of the tax expense
previously recognized for the Toll Charge in the fourth quarter of
2017.
Net Loss
GAAP net loss attributable to Sohu.com Limited for
2019 was US$128 million, or US$3.25 loss per fully-diluted ADS, compared
with a net loss of US$131
million in 2018. Non-GAAP net loss attributable to
Sohu.com Limited for 2019 was US$93
million, or US$2.38 loss per fully-diluted ADS,
compared with a net loss of US$207million in
2018.
Business Outlook
For the first quarter of 2020, Sohu estimates:
- Total revenues to be between US$400 million and
US$435 million.
- Brand advertising revenues to be between US$25 million and
US$30 million; this implies an annual
decrease of 30% to 42% and a sequential decrease of 28% to
40%.
- Sogou revenues to be between US$240
million and US$260 million;
this implies an annual decrease of 5% to an annual increase of 3%
and a sequential decrease of 14 to 20%.
- Online game revenues to be between US$120 million and US$130
million; this implies an annual increase of 21% to 31% and a
sequential decrease of 1% to 9%.
- Non-GAAP net loss attributable to Sohu.com
Limited. to be between US$25 million and US$35 million, and non-GAAP loss per
fully-diluted ADS to be between US$0.65 and US$0.90. GAAP net loss attributable
to Sohu.com Limited to be between US$28 million and
US$38 million, and GAAP loss per
fully-diluted ADS to be between US$0.70 and US$0.95.
- Excluding the profit/loss generated by Sogou and Changyou,
Non-GAAP net loss attributable to Sohu.com Limited. to be between
US$43 million and US$48 million, GAAP net loss attributable to
Sohu.com Limited to be between US$45
million and US$50
million.
For the first quarter 2020 guidance, the Company has
adopted a presumed exchange rate of RMB7.00=US$1.00, as
compared with the actual exchange rate of approximately
RMB6.74=US$1.00 for the first quarter of 2019, and
RMB7.03=US$1.00 for the fourth quarter of
2019.
This forecast reflects Sohu's management's current and
preliminary view, which at present is subject to substantial
uncertainty, particularly in view of the potential impact of the
COVID-19 virus, the effects of which are difficult to analyze and
predict.
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 ADS, 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; a
one-time impairment charge recognized for an investment unrelated
to the Company's core businesses; 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. 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; the one-time
impairment charge recognized for an investment unrelated to the
Company's core businesses; 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; the
one-time impairment charge recognized for an investment unrelated
to the Company's core businesses; 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, the one-time impairment
charge recognized for an investment unrelated to the Company's core
businesses, 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, the one-time
impairment charge recognized for an investment unrelated to the
Company's core businesses, 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 ADS, 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 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; the impact of the U.S. TCJA; and the effects of the
COVID-19 virus on the economy in China in general and on Sohu's business in
particular. 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,
March 9, 2020 (8:30 p.m. Beijing/Hong
Kong time, March 9, 2020)
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 March 9 through
March 16, 2020. The dial-in details for the telephone replay
are:
International:
|
+1-646-254-3697
|
Passcode:
|
4797261
|
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-fourth 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
|
|
Twelve Months
Ended
|
|
|
|
Dec. 31,
2019
|
|
Sep. 30,
2019
|
|
Dec. 31,
2018
|
|
Dec.
31, 2019
|
|
Dec.
31, 2018
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Online
advertising
|
|
|
|
|
|
|
|
|
|
|
|
Brand
advertising
|
$
|
41,599
|
$
|
46,323
|
$
|
57,222
|
$
|
174,861
|
$
|
231,945
|
|
Search and
search-related advertising
|
|
274,590
|
|
288,198
|
|
276,666
|
|
1,072,860
|
|
1,022,456
|
|
Subtotal
|
|
316,189
|
|
334,521
|
|
333,888
|
|
1,247,721
|
|
1,254,401
|
|
Online
games
|
|
131,689
|
|
108,012
|
|
94,106
|
|
440,902
|
|
389,788
|
|
Others
|
|
41,769
|
|
39,750
|
|
36,287
|
|
156,824
|
|
168,638
|
|
Total
revenues
|
|
489,647
|
|
482,283
|
|
464,281
|
|
1,845,447
|
|
1,812,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Online
advertising
|
|
|
|
|
|
|
|
|
|
|
|
Brand
advertising (includes stock-based
compensation expense of $2, $4, $-34, $22 and $-707,
respectively)
|
|
28,677
|
|
31,992
|
|
42,485
|
|
126,406
|
|
184,473
|
|
Search and
search-related (includes stock-based
compensation expense of $256, $64, $-48,
$474 and
$669, respectively)
|
|
163,384
|
|
178,343
|
|
183,678
|
|
703,144
|
|
664,164
|
|
Subtotal
|
|
192,061
|
|
210,335
|
|
226,163
|
|
829,550
|
|
848,637
|
|
Online games (includes
stock-based compensation
expense of $137, $0, $7, $120 and $-31,
respectively)
|
|
33,181
|
|
23,286
|
|
14,499
|
|
88,992
|
|
60,981
|
|
Others
|
|
12,198
|
|
17,680
|
|
12,113
|
|
63,553
|
|
72,868
|
|
Total cost of revenues
|
|
237,440
|
|
251,301
|
|
252,775
|
|
982,095
|
|
982,486
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
252,207
|
|
230,982
|
|
211,506
|
|
863,352
|
|
830,341
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Product development
(includes stock-based
compensation expense of $4,594, $2,863, $919,
$12,063
and $6,132, respectively)
|
|
105,425
|
|
104,207
|
|
108,611
|
|
419,114
|
|
441,161
|
|
Sales and marketing
(includes stock-based
compensation expense of $797, $1,126, $216,
$3,398 and
$405, respectively)
|
|
78,375
|
|
91,335
|
|
97,422
|
|
340,840
|
|
380,290
|
|
General and
administrative (includes stock-based
compensation expense of $1,518, $317, $470,
$2,174 and
$-4,372, respectively)
|
|
26,901
|
|
23,797
|
|
25,119
|
|
95,773
|
|
108,764
|
|
Goodwill impairment
and impairment of intangibles via
acquisitions of businesses
|
|
-
|
|
-
|
|
16,369[6]
|
|
7,245
|
|
16,369
|
|
Total operating
expenses
|
|
210,701
|
|
219,339
|
|
247,521
|
|
862,972
|
|
946,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit/(loss)
|
|
41,506
|
|
11,643
|
|
(36,015)
|
|
380
|
|
(116,243)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income/(expense)
|
|
(13,787)[7]
|
|
15,832
|
|
13,073
|
|
21,948
|
|
64,724
|
|
Interest
income
|
|
1,508
|
|
1,959
|
|
6,455
|
|
10,546
|
|
24,074
|
|
Interest
expense
|
|
(2,501)
|
|
(2,631)
|
|
(5,279)
|
|
(14,370)
|
|
(17,538)
|
|
Exchange
difference
|
|
(2,324)
|
|
4,714
|
|
(378)
|
|
3,279
|
|
9,026
|
|
Income/(Loss) before
income tax expense
|
|
24,402
|
|
31,517
|
|
(22,144)
|
|
21,783
|
|
(35,957)
|
|
Income tax
expense/(benefit)
|
|
(954)
|
|
17,011
|
|
(69,557)
|
|
31,176
|
|
(13,433)
|
|
Income/(loss) from
continuing operations
|
|
25,356
|
|
14,506
|
|
47,413
|
|
(9,393)
|
|
(22,524)
|
|
Net loss from
discontinued operations
|
|
-
|
|
(2,706)
|
|
(12,000)
|
|
(33,998)
|
|
(44,835)
|
|
Net
income/(loss)
|
|
25,356
|
|
11,800
|
|
35,413
|
|
(43,391)
|
|
(67,359)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income from
continuing operations
attributable to the noncontrolling interest
shareholders
|
|
42,451
|
|
35,615
|
|
24,685
|
|
117,177
|
|
107,318
|
|
Less: Net loss from
discontinued operations
attributable to the noncontrolling interest
shareholders
|
|
-
|
|
(896)
|
|
(3,912)
|
|
(11,232)
|
|
(14,595)
|
|
Net income/(loss)
from continuing operations attributable to
Sohu.com Limited
|
|
(17,095)
|
|
(21,109)
|
|
22,728
|
|
(126,570)
|
|
(129,842)
|
|
Net loss from
discontinued operations attributable to
Sohu.com Limited
|
|
-
|
|
(1,810)
|
|
(8,088)
|
|
(22,766)
|
|
(30,240)
|
|
Net income/(loss)
attributable to Sohu.com Limited
|
|
(17,095)
|
|
(22,919)
|
|
14,640
|
|
(149,336)
|
|
(160,082)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income/(loss)
from continuing operations per
ADS attributable to Sohu.com Limited
|
|
(0.44)
|
|
(0.54)
|
|
0.58
|
|
(3.22)
|
|
(3.33)
|
|
Basic net loss from
discontinued operations per ADS
attributable to Sohu.com Limited
|
|
-
|
|
(0.04)
|
|
(0.21)
|
|
(0.58)
|
|
(0.78)
|
|
Basic net
income/(loss) per ADS attributable to
Sohu.com Limited
|
$
|
(0.44)
|
$
|
(0.58)
|
$
|
0.37
|
$
|
(3.80)
|
$
|
(4.11)
|
|
ADS used in computing
basic net loss per ADS attributable
to Sohu.com Limited
|
|
39,263
|
|
39,254
|
|
39,069
|
|
39,249
|
|
38,959
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net
income/(loss) from continuing operations per
ADS attributable to Sohu.com Limited
|
|
(0.45)
|
|
(0.55)
|
|
0.57
|
|
(3.25)
|
|
(3.36)
|
|
Diluted net loss from
discontinued operations per ADS
attributable to Sohu.com Limited
|
|
-
|
|
(0.04)
|
|
(0.20)
|
|
(0.58)
|
|
(0.77)
|
|
Diluted net
income/(loss) per ADS attributable to
Sohu.com Limited
|
$
|
(0.45)
|
$
|
(0.59)
|
$
|
0.37
|
$
|
(3.83)
|
$
|
(4.13)
|
|
ADS used in computing
diluted net loss per ADS attributable
to Sohu.com Limited
|
|
39,263
|
|
39,254
|
|
39,234
|
|
39,249
|
|
38,959
|
|
[6] The impairment was mainly related
to Changyou's 17173.com website business. The launch of new
initiatives for the 17173.com website fell behind schedule in
the
fourth quarter of 2018, and the profit outlook of the business
remained uncertain. In addition, due to more stringent regulations,
there was a significant decline in the
number of new game launches in the market, so the number of games
marketed on 17173.com also fell. As a result, Changyou determined
that the future performance
of 17173.com would likely fall short of expectations, and that
impairment charges were required.
[7] Other
expenses in the fourth quarter of 2019 mainly included an
impairment charge of approximately US$23 million recognized for the
quarter for an investment
unrelated to the Company' core businesses, and an impairment loss
of approximately US$9 million on certain Sogou equity
investments.
|
|
SOHU.COM
LIMITED
CONDENSED
CONSOLIDATED BALANCE SHEETS
(UNAUDITED, IN
THOUSANDS)
|
|
|
|
|
|
|
|
As of Dec. 31,
2019
|
|
As of Dec. 31,
2018
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash equivalents
|
$
|
305,126
|
$
|
819,485
|
Restricted
cash
|
|
8,661
|
|
3,539
|
Short-term
investments
|
|
1,316,833
|
|
1,041,395
|
Account and financing receivable, net
|
|
260,716
|
|
264,411
|
Prepaid and other current assets
|
|
124,332
|
|
225,744
|
Current assets associated with discontinued operations
|
|
-
|
|
34,324
|
Total current assets
|
|
2,015,668
|
|
2,388,898
|
Long-term
investments
|
|
94,332
|
|
108,356
|
Fixed assets,
net
|
|
447,688
|
|
504,647
|
Goodwill
|
|
52,923
|
|
53,263
|
Intangible assets,
net
|
|
11,437
|
|
24,071
|
Restricted time
deposits
|
|
240
|
|
244,179
|
Prepaid non-current
assets
|
|
1,882
|
|
3,107
|
Other
assets[8]
|
|
65,620
|
|
43,928
|
Non-current assets
associated with discontinued operations
|
|
-
|
|
398
|
Total
assets
|
$
|
2,689,790
|
$
|
3,370,847
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable
|
$
|
253,403
|
$
|
286,745
|
Accrued liabilities
|
|
249,810
|
|
292,282
|
Receipts in advance and deferred revenue
|
|
118,222
|
|
120,404
|
Accrued salary and benefits
|
|
110,833
|
|
108,011
|
Taxes payable
|
|
102,686
|
|
93,073
|
Short-term bank loans
|
|
114,528
|
|
129,677
|
Other short-term liabilities[8]
|
|
149,311
|
|
123,921
|
Current liabilities associated with discontinued
operations
|
|
-
|
|
101,105
|
Total current liabilities
|
$
|
1,098,793
|
$
|
1,255,218
|
|
|
|
|
|
Long-term accounts
payable
|
|
767
|
|
752
|
Long-term Bank
Loans
|
|
-
|
|
302,323
|
Long-term tax
liabilities
|
|
277,544
|
|
259,603
|
Other long-term
liabilities[8]
|
|
5,769
|
|
-
|
Total long-term
liabilities
|
$
|
284,080
|
$
|
562,678
|
Total liabilities
|
$
|
1,382,873
|
$
|
1,817,896
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
Sohu.com Limited shareholders' equity
|
|
428,454
|
|
588,840
|
Noncontrolling Interest
|
|
878,463
|
|
964,111
|
Total shareholders' equity
|
$
|
1,306,917
|
$
|
1,552,951
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
$
|
2,689,790
|
$
|
3,370,847
|
|
[8] We
have adopted ASU No. 2016-02, "Leases," beginning January 1, 2019.
As a result of adoption of the standard,
we recognized right-of-use assets of approximately $17 million in
other assets, and lease liabilities of approximately
$9 million and $6 million in other short-term liabilities and other
long-term liabilities, respectively, on our consolidated
balance sheet as of December 31, 2019.
|
SOHU.COM
LIMITED
RECONCILIATIONS OF
NON-GAAP RESULTS MEASURES TO THE NEAREST COMPARABLE GAAP
MEASURES
(UNAUDITED, IN
THOUSANDS EXCEPT PER SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
Dec. 31, 2019
|
|
Three Months Ended
Sep. 30, 2019
|
|
Three Months
Ended Dec. 31, 2018
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
(a)
|
|
|
|
|
4
|
(a)
|
|
|
|
|
(34)
|
(a)
|
|
Brand advertising
gross profit
|
$
|
12,922
|
$
|
2
|
$
|
12,924
|
$
|
14,331
|
$
|
4
|
$
|
14,335
|
$
|
14,737
|
$
|
(34)
|
$
|
14,703
|
Brand advertising
gross margin
|
|
31%
|
|
|
|
31%
|
|
31%
|
|
|
|
31%
|
|
26%
|
|
|
|
26%
|
|
|
|
|
256
|
(a)
|
|
|
|
|
64
|
(a)
|
|
|
|
|
(48)
|
(a)
|
|
Search and
search-related
advertising gross profit
|
$
|
111,206
|
$
|
256
|
$
|
111,462
|
$
|
109,855
|
$
|
64
|
$
|
109,919
|
$
|
92,988
|
$
|
(48)
|
$
|
92,940
|
Search and
search-related
advertising gross margin
|
|
40%
|
|
|
|
41%
|
|
38%
|
|
|
|
38%
|
|
34%
|
|
|
|
34%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
258
|
(a)
|
|
|
|
|
68
|
(a)
|
|
|
|
|
(82)
|
(a)
|
|
Online advertising
gross profit
|
$
|
124,128
|
$
|
258
|
$
|
124,386
|
$
|
124,186
|
$
|
68
|
$
|
124,254
|
$
|
107,725
|
$
|
(82)
|
$
|
107,643
|
Online advertising
gross margin
|
|
39%
|
|
|
|
39%
|
|
37%
|
|
|
|
37%
|
|
32%
|
|
|
|
32%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
137
|
(a)
|
|
|
|
|
-
|
(a)
|
|
|
|
|
7
|
(a)
|
|
Online games gross
profit
|
$
|
98,508
|
$
|
137
|
$
|
98,645
|
$
|
84,726
|
$
|
-
|
$
|
84,726
|
$
|
79,607
|
$
|
7
|
$
|
79,614
|
Online games gross
margin
|
|
75%
|
|
|
|
75%
|
|
78%
|
|
|
|
78%
|
|
85%
|
|
|
|
85%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others gross
profit
|
$
|
29,571
|
$
|
-
|
(a) $
|
29,571
|
$
|
22,070
|
$
|
-
|
(a) $
|
22,070
|
$
|
24,174
|
$
|
-
|
(a) $
|
24,174
|
Others gross
margin
|
|
71%
|
|
|
|
71%
|
|
56%
|
|
|
|
56%
|
|
67%
|
|
|
|
67%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
395
|
(a)
|
|
|
|
|
68
|
(a)
|
|
|
|
|
(75)
|
(a)
|
|
Gross
profit
|
$
|
252,207
|
$
|
395
|
$
|
252,602
|
$
|
230,982
|
$
|
68
|
$
|
231,050
|
$
|
211,506
|
$
|
(75)
|
$
|
211,431
|
Gross
margin
|
|
52%
|
|
|
|
52%
|
|
48%
|
|
|
|
48%
|
|
46%
|
|
|
|
46%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
$
|
210,701
|
$
|
(6,909)
|
(a) $
|
203,792
|
$
|
219,339
|
$
|
(4,306)
|
(a) $
|
215,033
|
$
|
247,521
|
$
|
(1,605)
|
(a) $
|
245,916
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,304
|
(a)
|
|
|
|
|
4,374
|
(a)
|
|
|
|
|
1,530
|
(a)
|
|
Operating
profit/(loss)
|
$
|
41,506
|
$
|
7,304
|
$
|
48,810
|
$
|
11,643
|
$
|
4,374
|
$
|
16,017
|
$
|
(36,015)
|
$
|
1,530
|
$
|
(34,485)
|
Operating
margin
|
|
8%
|
|
|
|
10%
|
|
2%
|
|
|
|
3%
|
|
-8%
|
|
|
|
-7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
$
|
954
|
$
|
2,737
|
(c,d)$
|
3,691
|
$
|
(17,011)
|
$
|
2,468
|
(c,d)$
|
(14,543)
|
$
|
69,557
|
$
|
(74,160)
|
$
|
(4,603)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,304
|
(a)
|
|
|
|
|
4,374
|
(a)
|
|
|
|
|
1,530
|
(a)
|
|
|
|
|
|
(2,490)
|
(c)
|
|
|
|
|
448
|
(c)
|
|
|
|
|
267
|
(c)
|
|
|
|
|
|
1,907
|
(d)
|
|
|
|
|
2,618
|
(d)
|
|
|
|
|
(74,071)
|
(d)
|
|
|
|
|
|
23,154
|
(e)
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
Net income/(loss)
before
non-controlling interest
|
$
|
25,356
|
|
29,875
|
|
55,231
|
$
|
14,506
|
|
7,440
|
|
21,946
|
$
|
47,413
|
$
|
(72,274)
|
$
|
(24,861)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,304
|
(a)
|
|
|
|
|
4,374
|
(a)
|
|
|
|
|
1,530
|
(a)
|
|
|
|
|
|
(5,416)
|
(b)
|
|
|
|
|
(2,863)
|
(b)
|
|
|
|
|
(988)
|
(b)
|
|
|
|
|
|
(2,490)
|
(c)
|
|
|
|
|
448
|
(c)
|
|
|
|
|
267
|
(c)
|
|
|
|
|
|
1,907
|
(d)
|
|
|
|
|
2,618
|
(d)
|
|
|
|
|
(74,071)
|
(d)
|
|
|
|
|
|
23,154
|
(e)
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
Net income/(loss)
from
continuing operations
attributable to Sohu.com
Limited for diluted net
loss per ADS
|
$
|
(17,613)
|
|
24,459
|
|
6,846
|
$
|
(21,400)
|
|
4,577
|
|
(16,823)
|
$
|
22,539
|
$
|
(73,262)
|
|
(50,723)
|
Net loss from
discontinued
operations attributable to
Sohu.com Limited for
diluted net loss per ADS
|
|
-
|
|
-
|
|
-
|
|
(1,807)
|
|
-
|
|
(1,807)
|
|
(8,028)
|
|
12
|
|
(8,016)
|
Net income/(loss) attributable
to Sohu.com Limited for
diluted net loss per ADS
|
|
(17,613)
|
|
24,459
|
|
6,846
|
|
(23,207)
|
|
4,577
|
|
(18,630)
|
|
14,511
|
|
(73,250)
|
|
(58,739)
|
Diluted net income/(loss) from
continuing operations per
ADS attributable to Sohu.com
Limited
|
$
|
(0.45)
|
|
|
|
0.17
|
$
|
(0.55)
|
|
|
|
(0.43)
|
$
|
0.57
|
|
|
|
(1.30)
|
Diluted net
loss from
discontinued operations per
ADS attributable to Sohu.com
Limited
|
|
-
|
|
|
|
-
|
|
(0.04)
|
|
|
|
(0.04)
|
|
(0.20)
|
|
|
|
(0.20)
|
Diluted net
income/(loss) per
ADS attributable to Sohu.com
Limited
|
|
(0.45)
|
|
|
|
0.17
|
|
(0.59)
|
|
|
|
(0.47)
|
|
0.37
|
|
|
|
(1.50)
|
Shares used in
computing diluted
net loss per ADS attributable to
Sohu.com Limited
|
|
39,263
|
|
|
|
39,396
|
|
39,254
|
|
|
|
39,254
|
|
39,234
|
|
|
|
39,069
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
(e) To adjust
for a one-time impairment charge recognized for an investment
unrelated to the Company's core businesses
|
SOHU.COM
LIMITED
RECONCILIATIONS OF
NON-GAAP RESULTS OF OPERATION MEASURES TO THE NEAREST COMPARABLE
GAAP MEASURES
(UNAUDITED, IN
THOUSANDS EXCEPT PER SHARE AMOUNTS)
|
|
|
|
|
|
|
|
Twelve Months
Ended Dec. 31, 2019
|
|
Twelve Months
Ended Dec. 31, 2018
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22
|
(a)
|
|
|
|
|
(707)
|
(a)
|
|
Brand advertising
gross profit
|
$
|
48,455
|
$
|
22
|
$
|
48,477
|
$
|
47,472
|
$
|
(707)
|
$
|
46,765
|
Brand advertising
gross margin
|
|
28%
|
|
|
|
28%
|
|
20%
|
|
|
|
20%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
474
|
(a)
|
|
|
|
|
669
|
(a)
|
|
Search and
search-related
advertising gross profit
|
$
|
369,716
|
$
|
474
|
$
|
370,190
|
$
|
358,292
|
$
|
669
|
$
|
358,961
|
Search and
search-related
advertising gross margin
|
|
34%
|
|
|
|
35%
|
|
35%
|
|
|
|
35%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
496
|
(a)
|
|
|
|
|
(38)
|
(a)
|
|
Online advertising
gross profit
|
$
|
418,171
|
$
|
496
|
$
|
418,667
|
$
|
405,764
|
$
|
(38)
|
$
|
405,726
|
Online advertising
gross margin
|
|
34%
|
|
|
|
34%
|
|
32%
|
|
|
|
32%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
120
|
(a)
|
|
|
|
|
(31)
|
(a)
|
|
Online games gross
profit
|
$
|
351,910
|
$
|
120
|
$
|
352,030
|
$
|
328,807
|
$
|
(31)
|
$
|
328,776
|
Online games gross
margin
|
|
80%
|
|
|
|
80%
|
|
84%
|
|
|
|
84%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others gross
profit
|
$
|
93,271
|
$
|
-
|
(a)$
|
93,271
|
$
|
95,770
|
$
|
-
|
(a)$
|
95,770
|
Others gross
margin
|
|
59%
|
|
|
|
59%
|
|
57%
|
|
|
|
57%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
616
|
(a)
|
|
|
|
|
(69)
|
(a)
|
|
Gross
profit
|
$
|
863,352
|
$
|
616
|
$
|
863,968
|
$
|
830,341
|
$
|
(69)
|
$
|
830,272
|
Gross
margin
|
|
47%
|
|
|
|
47%
|
|
46%
|
|
|
|
46%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
$
|
862,972
|
$
|
(17,635)
|
(a)$
|
845,337
|
$
|
946,584
|
$
|
(2,165)
|
(a)$
|
944,419
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,251
|
(a)
|
|
|
|
|
2,096
|
(a)
|
|
Operating
loss
|
$
|
380
|
$
|
18,251
|
$
|
18,631
|
$
|
(116,243)
|
$
|
2,096
|
$
|
(114,147)
|
Operating
margin
|
|
0%
|
|
|
|
1%
|
|
-6%
|
|
|
|
-6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
benefit/(expense)
|
$
|
(31,176)
|
$
|
8,549
|
(c,d)$
|
(22,627)
|
$
|
13,433
|
$
|
(75,281)
|
(c,d)$
|
(61,848)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,251
|
(a)
|
|
|
|
|
2,096
|
(a)
|
|
|
|
|
|
(1,992)
|
(c)
|
|
|
|
|
3,634
|
(c)
|
|
|
|
|
|
7,887
|
(d)
|
|
|
|
|
(74,071)
|
(d)
|
|
|
|
|
|
23,154
|
(e)
|
|
|
|
|
-
|
|
|
Net
loss before
non-controlling interest
|
$
|
(9,393)
|
$
|
47,300
|
$
|
37,907
|
$
|
(22,524)
|
$
|
(68,341)
|
$
|
(90,865)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,251
|
(a)
|
|
|
|
|
2,096
|
(a)
|
|
|
|
|
|
(12,811)
|
(b)
|
|
|
|
|
(7,624)
|
(b)
|
|
|
|
|
|
(1,992)
|
(c)
|
|
|
|
|
3,634
|
(c)
|
|
|
|
|
|
7,887
|
(d)
|
|
|
|
|
(74,071)
|
(d)
|
|
|
|
|
|
23,154
|
(e)
|
|
|
|
|
-
|
|
|
Net loss from
continuing
operations attributable to
Sohu.com Limited for diluted
net loss per ADS
|
|
(127,738)
|
|
34,489
|
|
(93,249)
|
|
(130,960)
|
|
(75,965)
|
|
(206,925)
|
Net loss from
discontinued
operations attributable to
Sohu.com Limited for diluted
net loss per ADS
|
|
(22,711)
|
|
-
|
|
(22,711)
|
|
(29,999)
|
|
50
|
(b)
|
(29,949)
|
Net loss attributable
to
Sohu.com Limited for diluted
net loss per ADS
|
$
|
(150,449)
|
|
34,489
|
|
(115,960)
|
$
|
(160,959)
|
|
(75,915)
|
|
(236,874)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net loss from continuing
operations per ADS attributable
to Sohu.com Limited
|
|
(3.25)
|
|
|
|
(2.37)
|
|
(3.36)
|
|
|
|
(5.31)
|
Diluted net
loss from discontinued
operations per ADS attributable
to Sohu.com Limited
|
|
(0.58)
|
|
|
|
(0.58)
|
|
(0.77)
|
|
|
|
(0.77)
|
Diluted net loss per ADS
attributable to Sohu.com Limited.
|
$
|
(3.83)
|
|
|
$
|
(2.95)
|
$
|
(4.13)
|
|
|
$
|
(6.08)
|
ADS used in
computing diluted
net loss per ADS attributable to
Sohu.com Limited
|
|
39,249
|
|
|
|
39,249
|
|
38,959
|
|
|
|
38,959
|
|
Note:
(a) To
eliminate the impact of share-based awards as measured using the
fair value method.
(b) To adjust
Sohu's economic interests in Changyou and Sogou attributable to the
above non-GAAP adjustments.
(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.
(e) To adjust
for the one-time impairment charge recognized for an investment
unrelated to the Company's core businesses.
|
Logo -
http://photos.prnewswire.com/prnh/20100201/CNM013LOGO
View original
content:http://www.prnewswire.com/news-releases/sohucom-reports-fourth-quarter-and-fiscal-year-2019-unaudited-financial-results-301019507.html
SOURCE Sohu.com Ltd.