Sohu.com Reports Third Quarter 2018 Unaudited Financial Results
BEIJING, Nov. 5, 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 third quarter ended September 30, 2018.
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Third Quarter Highlights
-- Total revenues[1] were US$460 million[2], down 11% year-over-year and 5%
quarter-over-quarter.
-- Brand advertising revenues were US$57 million, down 24% year-over-year
and 7% quarter-over-quarter.
-- Search and search related advertising revenues[3] were US$255 million,
up 13% year-over-year and down 6% quarter-over-quarter.
-- Online game revenues were US$96 million, down 28% year-over-year and up
2% quarter-over-quarter.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Limited, commented, "For the third quarter, while our total revenues were largely in-line with prior guidance, the bottom line performance, excluding non-operating items, came in better than we expected, mainly driven by the cost savings of Sohu Video and solid results of our online game business. For Sohu Media Portal, we focused our efforts on upgrading the content as well as optimizing our recommendation engine algorithms. Our key mobile apps gained momentum in terms of DAU and time spent by users. For Sohu Video, we remained on track to reduce content costs while develop new original programs, which tend to generate better ROI. This helped us narrow the segment's loss by more than 50% year-over-year. Sogou continuously integrated more innovative AI features into its search and mobile keyboard products, strengthening its market competiveness. Lastly, Changyou comfortably beat expectations on both revenues and profit, supported by the healthy performance of its TLBB PC and mobile games."
[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 third
quarter of 2018 was approximately US$7 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 third quarter of
2018 had been the same as it was in the third
quarter of 2017, or RMB6.67=US$1.00, US$ total
revenues in the third quarter of 2018 would
have been US$469 million, or US$9 million more
than GAAP total revenues, and down 9% year-
over-year.
[3] Search and Search related advertising
revenues exclude intra-Group transactions.
Third Quarter Financial Results
Revenues
Total revenues for the third quarter of 2018 were US$460 million, down 11% year-over-year and 5% quarter-over-quarter.
Total online advertising revenues, which include revenues from the brand advertising and search and search-related advertising businesses, for the third quarter of 2018 were US$312 million, up 4% year-over-year and down 6% quarter-over-quarter.
Brand advertising revenues for the third quarter of 2018 totaled US$57 million, down 24% year-over-year and 7% quarter-over-quarter. The decrease was mainly due to decreases in portal and video advertising revenues.
Search and search-related advertising revenues for the third quarter of 2018 were US$255 million, up 13% year-over-year and down 6% quarter-over-quarter. In the third quarter of 2018, while mobile search traffic and monetization maintained growth, the search advertising business was adversely affected by a one-off 10-day suspension of a portion of Sogou's advertising services implemented to ensure compliance with government regulations.
Online game revenues for the third quarter of 2018 were US$96 million, down 28% year-over-year and up 2% quarter-over-quarter. The year-over-year decrease was due to the natural decline in revenue of Changyou's older games, including Legacy TLBB Mobile.
Gross Margin
Both GAAP and non-GAAP[4] gross margin for the third quarter of 2018 was 43%, compared with 49% in the third quarter of 2017 and 44% in the second quarter of 2018.
Both GAAP and non-GAAP gross margin for the online advertising business for the third quarter of 2018 was 32%, compared with 36% in the third quarter of 2017 and 35% in the second quarter of 2018.
Both GAAP and non-GAAP gross margin for the brand advertising business in the third quarter of 2018 was 23%, compared with negative 1% in the third quarter of 2017 and 23% in the second quarter of 2018. The year-over-year increase was mainly due to decreased video content cost.
Both GAAP and non-GAAP gross margin for the search and search-related advertising business in the third quarter of 2018 was 34%, compared with 49% in the third quarter of 2017 and 38% in the second quarter of 2018. The year-over-year decrease primarily resulted from traffic acquisition cost outgrowing revenues and the one-time adverse impact. The quarter-over-quarter decrease was primarily due to the one-time adverse impact.
Both GAAP and non-GAAP gross margin for online games business in the third quarter of 2018 was 84%, compared with 87% in the third quarter of 2017 and 85% in the second quarter of 2018.
[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 third quarter of 2018, GAAP operating expenses totaled US$248 million, down 26% year-over-year and up 2% quarter-over-quarter. Non-GAAP operating expenses were US$247 million, down 25% year-over-year and up 2% quarter-over-quarter. The year-over-year decrease was mainly due to Changyou having recognized a one-off impairment charge of US$87 million in relation to the MoboTap business in the third quarter of 2017.
Operating Loss
GAAP operating loss for the third quarter of 2018 was US$49 million, compared with an operating loss of US$81 million in the third quarter of 2017 and an operating loss of US$32 million in the second quarter of 2018.
Non-GAAP operating loss for the third quarter of 2018 was US$47 million, compared with an operating loss of US$75 million in the third quarter of 2017 and an operating loss of US$31 million in the second quarter of 2018.
Other Income
Other income for the third quarter of 2018 was US$29 million, compared with other expense of US$5 million in the third quarter of 2017 and other income of US$10 million in the second quarter of 2018. The change was mainly attributable to other income of US$24 million from Sogou. In the third quarter of 2018, upon the adoption of a new accounting standard, Sogou recognized a US$18 million gain from one of its equity investments.
Income Tax Expense
GAAP income tax benefit was US$13 million for the third quarter of 2018, compared with income tax expense of US$16 million in the third quarter of 2017 and income tax expense of US$6 million in the second quarter of 2018. Non-GAAP income tax benefit was US$12 million for the third quarter of 2018, compared with income tax expense of US$16 million in the third quarter of 2017 and income tax expense of US$6 million in the second quarter of 2018. The income tax benefit in the third quarter of 2018 was mainly due to recognition of a tax benefit for preferential tax rates enjoyed by some of Changyou's subsidiaries upon their receipt of 2017 Key National Software Enterprise status or 2017 Software Enterprise status.
Net Income/(Loss)
Before deducting the share of net income pertaining to non-controlling interest, GAAP net loss for the third quarter of 2018 was US$0.4 million, compared with a net loss of US$102 million in the third quarter of 2017 and net loss of US$15 million in the second quarter of 2018. Before deducting the share of net income pertaining to non-controlling interest, non-GAAP net income for the third quarter of 2018 was US$5 million, compared with a net loss of US$90 million in the third quarter of 2017 and net loss of US$14 million in the second quarter of 2018.
GAAP net loss[5] attributable to Sohu.com Limited for the third quarter of 2018 was US$35 million, or a loss of US$0.89 per fully-diluted ADS, compared with a net loss of US$104 million in the third quarter of 2017 and a net loss of US$48 million in the second quarter of 2018. Non-GAAP net loss attributable to Sohu.com Limited for the third quarter of 2018 was US$32 million, or a loss of US$0.81 per fully-diluted ADS, compared with a net loss of US$93 million in the third quarter of 2017 and a net loss of US$49 million in the second quarter of 2018.
[5] Excluding the impact of
Changyou's tax benefit on the
2018 third quarter results,
GAAP and non-GAAP net loss
attributable to Sohu.com
Limited would have been US$51
million and US$47 million,
respectively.
Liquidity
As of September 30, 2018, cash and cash equivalents and short-term investments held by the Sohu Group, minus short-term bank loans, were US$1.88 billion, compared with US$2.12 billion as of December 31, 2017.
Business Outlook
For the fourth quarter of 2018, Sohu estimates:
-- Total revenues to be between US$465 million and US$495 million.
-- Brand advertising revenues to be between US$55 million and US$60
million; this implies an annual decrease of 16% to 23% and a sequential
decrease of 3% to a sequential increase of 5%.
-- Sogou revenues to be between US$292 million and US$307 million; this
implies an annual increase of 5% to 11% and a sequential increase of 6%
to 11%.
-- Online game revenues to be between US$85 million and US$95 million; this
implies an annual decrease of 13% to 22% and a sequential decrease of 1%
to 11%.
-- Before deducting the share of non-GAAP net income pertaining to
non-controlling interest, non-GAAP net loss to be between US$23 million
and US$33 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$3
million. Including the impact of these share-based awards, GAAP net loss
before non-controlling interest to be between US$26 million and US$36
million.
-- Non-GAAP net loss attributable to Sohu.com Limited to be between US$45
million and US$55 million, and non-GAAP loss per fully-diluted ADS to be
between US$1.15 and US$1.40. 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$46 million and US$56 million, and GAAP
loss per fully-diluted ADS to be between US$1.20 and US$1.45.
For the fourth quarter 2018 guidance, the Company has adopted a presumed exchange rate of RMB7.00=US$1.00, as compared with the actual exchange rate of approximately RMB6.61=US$1.00 for the fourth quarter of 2017, and RMB6.80=US$1.00 for the third 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, November 5, 2018 (9:30 p.m. Beijing/Hong Kong time, November 5, 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 November 5 through November 12, 2018. The dial-in details for the telephone replay are:
International: +1-646-254-3697
Passcode: 9646667
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
Sep. 30
, 20 Jun. 30
, 20 Sep. 30
, 20
18 18 17
Revenues:
Online advertising
Brand advertising $
56,958 $
61,511 $
74,832
Search and search-related
advertising 255,130 270,359 225,363
Subtotal 312,088 331,870 300,195
Online games 95,971 94,250 132,427
Others 51,763 59,894 83,439
Total revenues 459,822 486,014 516,061
Cost of revenues:
Online advertising
Brand advertising (includes stock-
based compensation 44,059 47,319 75,733
expense of $-14, $-2, and $278,
respectively)
Search and search-related (includes
stock-based 167,664 168,126 115,422
compensation expense of $235, $263,
and $0, respectively)
Subtotal 211,723 215,445 191,155
Online games (includes stock-based
compensation expense of 14,902 14,461 17,560
$-3, $-23, and $4, respectively)
Others 33,716 44,346 53,679
Total cost of revenues 260,341 274,252 262,394
Gross profit 199,481 211,762 253,667
Operating expenses:
Product development (includes stock-
based compensation 107,164 113,843 105,162
expense of $2,362, $2,136, and
$2,247, respectively)
Sales and marketing (includes stock-
based compensation 106,056 102,138 111,935
expense of $201, $77, and $344,
respectively)
General and administrative (includes
stock-based compensation 35,078 27,982 31,038
expense of $-1,062, $-1,260, and
$3,682, respectively)
Goodwill impairment and impairment of
intangibles via 86,882
acquisitions of businesses
Total operating expenses 248,298 243,963 335,017
Operating loss (48,817) (32,201) (81,350)
Other income/(expense) 28,822 9,991 (5,068)
Interest income 4,658 5,156 6,497
Interest expense (6,174) (3,004) (1,141)
Exchange difference 7,970 10,774 (5,032)
Loss before income tax expense (13,541) (9,284) (86,094)
(13,145) 5,891 15,927
Income tax expense /(benefit)
Net loss (396) (15,175) (102,021)
Less: Net income attributable to the
noncontrolling interest 33,870 32,463 1,939
shareholders
(34,266) (47,638) (103,960)
Net loss attributable to Sohu.com
Limited
Basic net loss per ADS
attributable to Sohu.com
Limited $
(0.88) $
(1.22) $
(2.67)
ADSs used in computing basic net loss
per ADS attributable to 38,936 38,927 38,877
Sohu.com Limited
Diluted net loss per ADS
attributable to Sohu.com
Limited $
(0.89) $
(1.23) $
(2.67)
ADSs used in computing diluted net
loss per ADS attributable to 38,936 38,927 38,877
Sohu.com Limited
SOHU.COM LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED, IN THOUSANDS)
As of Sep. 30, 2018
As of Dec. 31, 2017
ASSETS
Current assets:
Cash and cash equivalents $
833,247 $
1,366,115
Restricted cash 7,298 1,908
Short-term investments 1,148,711 818,934
Accounts receivable, net 236,958 250,468
Prepaid and other current assets 200,972 192,676
Total current assets 2,427,186 2,630,101
Long-term investments 106,201 90,145
Fixed assets, net 499,007 529,717
Goodwill 69,595 71,565
Intangible assets, net 25,634 23,060
Restricted time deposits 269 271
Prepaid non-current assets 3,414 4,211
Other assets 33,294 40,169
Total assets $
3,164,600 $
3,389,239
LIABILITIES
Current liabilities:
Accounts payable $
339,141 $
288,394
Accrued liabilities 310,611 343,106
Receipts in advance and deferred revenue 135,655 127,758
Accrued salary and benefits 99,999 102,087
Taxes payable 80,000 96,541
Short-term bank loans 100,302 61,216
Other short-term liabilities 133,008 136,300
Total current liabilities $
1,198,716 $
1,155,402
Long-term accounts payable 1,099 1,157
Long-term bank loans 117,746 122,433
Long-term tax liabilities 333,753 293,010
Total long-term liabilities $
452,598 $
416,600
Total liabilities $
1,651,314 $
1,572,002
SHAREHOLDERS' EQUITY:
Sohu.com Limited shareholders' equity 571,955 750,634
Noncontrolling Interest 941,331 1,066,603
Total shareholders' equity $
1,513,286 $
1,817,237
Total liabilities and shareholders' equity $
3,164,600 $
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
Sep. 30 Three Months Ended
Jun. 30 Three Months Ended
Sep. 30
, 2018 , 2018 , 201
7
GAAP
Non-GAAP Non-GAAP GAAP
Non-GAAP Non-GAAP
GAAP
Non-GAAP Non-GAAP
Adjustments Adjustments Adjustments
(14)
(a) (2)
(a) 278
(a)
Brand advertising gross profit $
12,899 $
(14) $
12,885 $
14,192 $
(2) $
14,190 $
(901) $
278 $
(623)
Brand advertising gross 23% 23% 23% 23% -1% -1%
margin
235
(a) 263
(a)
(a)
Search and search-related $
87,466 $
235 $
87,701 $
102,233 $
263 $
102,496 $
109,941
$ $
109,941
advertising gross profit
Search and search-related 34% 34% 38% 38% 49% 49%
advertising gross margin
221
(a) 261
(a) 278
(a)
Online advertising gross profit $
100,365 $
221 $
100,586 $
116,425 $
261 $
116,686 $
109,040 $
278 $
109,318
Online advertising gross margin 32% 32% 35% 35% 36% 36%
(3)
(a) (23)
(a) 4
(a)
Online games gross profit $
81,069 $
(3) $
81,066 $
79,789 $
(23) $
79,766 $
114,867 $
4 $
114,871
Online games gross margin 84% 84% 85% 85% 87% 87%
Others gross profit $
18,047
$
(a) $
18,047 $
15,548
$
(a) $
15,548 $
29,760
$
(a) $
29,760
Others gross margin 35% 35% 26% 26% 36% 36%
218
(a) 238
(a) 282
(a)
Gross profit $
199,481 $
218 $
199,699 $
211,762 $
238 $
212,000 $
253,667 $
282 $
253,949
Gross margin 43% 43% 44% 44% 49% 49%
Operating expenses $
248,298 $
(1,501)
(a) $
246,797 $
243,963 $
(953)
(a) $
243,010 $
335,017 $
(6,273)
(a) $
328,744
1,719
(a) 1,191
(a) 6,555
(a)
Operating loss $
(48,817) $
1,719 $
(47,098) $
(32,201) $
1,191 $
(31,010) $
(81,350) $
6,555 $
(74,795)
Operating margin -11% -10% -7% -6% -16% -14%
Income tax benefit/(expense) $
13,145 $
(1,286) $
11,859 $
(5,891) $
165 $
(5,726) $
(15,927)
$
(a) $
(15,927)
1,719
(a) 1,191
(a) 12,309
(a)
3,861
(c) (494)
(c)
Net (loss)/income before non- $
(396) $
5,580 $
5,184 $
(15,175) $
697 $
(14,478) $
(102,021) $
12,309 $
(89,712)
controlling interest
1,719
(a) 1,191
(a) 6,555
(a)
(2,571)
(b) (1,976)
(b) (1,017)
(b)
3,861
(c) (494)
(c)
5,754
(d)
Net loss attributable to $
(34,685) $
3,009 (31,676) $
(47,965) $
(1,279) (49,244) $
(103,960) $
11,292 $
(92,668)
Sohu.com Limited for diluted
net loss per ADS
Diluted net loss per ADS $
(0.89) (0.81) $
(1.23) (1.27) $
(2.67) $
(2.38)
attributable to Sohu.com
Limited
38,936 38,936 38,927 38,927 38,877 38,877
ADSs used in computing
diluted net loss per ADS
attributable to Sohu.com
Limited
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 an impairment loss from available-for-sale securities of an investee that is unrelated to the Company's current business operations.
View original content:http://www.prnewswire.com/news-releases/sohucom-reports-third-quarter-2018-unaudited-financial-results-300743687.html
SOURCE Sohu.com Ltd.
