SINA Reports Fourth Quarter and Fiscal Year 2018 Unaudited Financial Results
BEIJING, March 5, 2019 /PRNewswire/ -- SINA Corporation (the "Company" or "SINA") (NASDAQ: SINA), a leading online media company serving China and the global Chinese communities, today announced its unaudited financial results for the fourth quarter and the fiscal year ended December 31, 2018.
Fourth Quarter 2018 Highlights
-- Both net revenues and non-GAAP net revenues increased 14% year-over-year
to $573.0 million and $570.4 million, respectively.
-- Advertising revenues increased 14% year-over-year to $484.3 million.
-- Non-advertising revenues increased 12% year-over-year to $88.7 million.
Non-GAAP non-advertising revenues increased 13% year-over-year to $86.1
million.
-- Net income attributable to SINA was $16.4 million, or $0.22 for diluted
net income per share attributable to SINA's ordinary shareholders.
Non-GAAP net income attributable to SINA was $57.7 million, or $0.80 for
non-GAAP diluted net income per share attributable to SINA's ordinary
shareholders.
-- Weibo's monthly active users ("MAUs") were 462 million in December 2018,
a net addition of approximately 70 million users on a year-over-year
basis. Weibo's mobile MAUs represented 93% of Weibo's MAUs.
-- Weibo's average daily active users ("DAUs") were 200 million in December
2018, a net addition of approximately 28 million users on a
year-over-year basis.
Fiscal Year 2018 Highlights
-- Both net revenues and non-GAAP net revenues increased 33% year-over-year
to $2.11 billion and $2.10 billion, respectively.
-- Advertising revenues increased 36% year-over-year to $1.79 billion.
-- Non-advertising revenues increased 17% year-over-year to $319.0 million.
Non-GAAP non-advertising revenues increased 18% year-over-year to $308.6
million.
-- Net income attributable to SINA was $125.6 million, or $1.70 for diluted
net income per share attributable to SINA's ordinary shareholders.
Non-GAAP net income attributable to SINA was $227.1 million, or $3.07
for non-GAAP diluted net income per share attributable to SINA's
ordinary shareholders.
Fourth Quarter 2018 Financial Results
For the fourth quarter of 2018, SINA reported net revenues of $573.0 million, an increase of 14% compared to $503.7 million for the same period last year. Non-GAAP net revenues for the fourth quarter of 2018 were $570.4 million, an increase of 14% compared to $501.1 million for the same period last year.
Advertising revenues for the fourth quarter of 2018 were $484.3 million, an increase of 14% compared to $424.8 million for the same period last year, primarily driven by an increase of $84.7 million, or 25% growth in Weibo advertising and marketing revenues.
Non-advertising revenues for the fourth quarter of 2018 were $88.7 million, an increase of 12% compared to $79.0 million for the same period last year. Non-GAAP non-advertising revenues for the fourth quarter of 2018 were $86.1 million, an increase of 13% compared to $76.4 million for the same period last year. The year-over-year growth in non-advertising revenues was mainly attributable to the newly acquired live broadcasting business by Weibo in the fourth quarter of 2018.
Gross margin for the fourth quarter of 2018 was 79%, compared to 75% for the same period last year. Advertising gross margin for the fourth quarter of 2018 was 82%, compared to 76% for the same period last year. The increase in advertising gross margin was due to our revenue reporting changed from gross basis to net basis under the new revenue guidance adopted. Non-advertising gross margin for the fourth quarter of 2018 was 57%, down from 66% for the same period last year, mainly resulted from the relatively lower margin of the acquired live broadcasting business of Weibo.
Operating expenses for the fourth quarter of 2018 totaled $319.9 million, compared to $248.4 million for the same period last year. The increase primarily resulted from the inclusion of marketing expense related to barter transactions recorded under the new revenue guidance as illustrated below as well as goodwill and acquired intangibles impairment charge for non-core business line. Non-GAAP operating expenses for the fourth quarter of 2018 totaled $288.6 million, compared to $226.8 million for the same period last year.
Income from operations for the fourth quarter of 2018 was $130.1 million, compared to $128.7 million for the same period last year. Operating margin was 23%, down from 26% for the same period last year. Non-GAAP income from operations for the fourth quarter of 2018 was $159.6 million, compared to $149.8 million for the same period last year. Non-GAAP operating margin was 28%, slightly down from 30% for the same period last year.
Non-operating loss for the fourth quarter of 2018 was $12.6 million, compared to a non-operating income of $7.7 million for the same period last year. Non-operating loss for the fourth quarter of 2018 included (i) a $23.0 million net loss on sale of investments, fair value changes and impairment on investments, which is excluded under non-GAAP measure; (ii) a $15.1 million net interest and other income; and (iii) a $4.7 million net loss from equity-method investments, which is reported one quarter in arrears. Non-operating income for the fourth quarter of 2017 composed of an $11.2 million net interest and other income and a $2.8 million loss pick-up from equity-method investments, which is reported one quarter in arrears.
Income tax expenses for the fourth quarter of 2018 were $14.3 million, compared to $17.2 million for the same period last year.
Net income attributable to SINA's ordinary shareholders for the fourth quarter of 2018 was $16.4 million, compared to $45.4 million for the same period last year. Diluted net income per share attributable to SINA's ordinary shareholders for the fourth quarter of 2018 was $0.22, compared to $0.60 for the same period last year. Non-GAAP net income attributable to SINA's ordinary shareholders for the fourth quarter of 2018 was $57.7 million, compared to $60.0 million for the same period last year. Non-GAAP diluted net income per share attributable to SINA's ordinary shareholders for the fourth quarter of 2018 was $0.80, compared to $0.79 for the same period last year.
As of December 31, 2018, SINA's cash, cash equivalents and short-term investments totaled $2.3 billion, compared to $3.4 billion as of December 31, 2017. The decrease of SINA's cash, cash equivalents and short-term investments mainly resulted from continued investment activities, the execution of the Company's share repurchase program and repayment of SINA's convertible senior notes. For the fourth quarter of 2018, net cash provided by operating activities was $138.9 million, capital expenditures totaled $17.1 million, and depreciation and amortization expenses amounted to $11.9 million.
Fiscal Year 2018 Financial Results
For fiscal year 2018, SINA reported net revenues of $2.11 billion, an increase of 33% compared to $1.58 billion in 2017. Non-GAAP net revenues for 2018 were $2.10 billion, an increase of 33% compared to $1.57 billion in 2017.
Advertising revenues in 2018 were $1.79 billion, an increase of 36% compared to $1.31 billion in 2017, primarily driven by an increase of $502.4 million, or 50% growth in Weibo advertising and marketing revenues.
Non-advertising revenues in 2018 were $319.0 million, an increase of 17% compared to $272.0 million in 2017. Non-GAAP non-advertising revenues in 2018 were $308.6 million, an increase of 18% compared to $261.6 million in 2017, benefiting from increased Weibo membership fees and incremental revenue contributed from the live broadcasting business of Weibo.
Gross margin in 2018 was 79%, compared to 74% in 2017. Advertising gross margin in 2018 was 81%, compared to 75% in 2017. The increase in advertising gross margin mainly resulted from our revenue reporting changed from gross basis to net basis under the new accounting standard adopted. Non-advertising gross margin in 2018 was 65%, slightly down from 67% in 2017.
Operating expenses in 2018 totaled $1.19 billion, compared to $781.2 million in 2017. Apart from the inclusion of marketing expense related to barter transactions recorded under the new revenue guidance as illustrated below, the increase in operating expenses was also attributable to the increase in sales and marketing expenses for Weibo's user acquisition and the increase in personnel related expenses. Non-GAAP operating expenses in 2018 totaled $1.07 billion, compared to $694.6 million in 2017.
Income from operations in 2018 was $467.0 million, compared to $388.6 million in 2017. Operating margin was 22%, down from 25% in 2017. Non-GAAP income from operations in 2018 was $581.5 million, compared to $474.0 million in 2017. Non-GAAP operating margin was 28%, slightly down from 30% in 2017.
Non-operating income in 2018 was $88.5 million, compared to $35.7 million in 2017. Non-operating income in 2018 included (i) a $69.4 million net interest and other income; (ii) an $18.0 million net gain on sale of investments, fair value changes and impairment on investments, which is excluded under non-GAAP measure; and (iii) a $1.1 million net income from equity-method investments, which is reported one quarter in arrears. Non-operating income in 2017 mainly included (i) a $42.7 million net interest and other income; (ii) a $16.1 million net loss from equity-method investments, which is reported one quarter in arrears; and (iii) a $9.0 million net gain on sale of investments, fair value changes and impairment on investments, which is excluded under non-GAAP measure.
Income tax expenses in 2018 were $129.1 million, compared to $74.7 million in 2017. The increase was primarily due to higher profits generated in 2018 and the deferred tax provision recognized in respect of the fair value changes of investments. Non-GAAP income tax expenses in 2018 were $91.0 million, compared to $73.9 million in 2017.
Net income attributable to SINA's ordinary shareholders in 2018 was $125.6 million, compared to $156.6 million in 2017. Diluted net income per share attributable to SINA's ordinary shareholders in 2018 was $1.70, compared to $2.09 in 2017. Non-GAAP net income attributable to SINA's ordinary shareholders in 2018 was $227.1 million, compared to $207.9 million in 2017. Non-GAAP diluted net income per share attributable to SINA's ordinary shareholders in 2018 was $3.07, compared to $2.77 in 2017.
For the fiscal year of 2018, net cash provided by operating activities was $311.0 million, capital expenditures totaled $262.2 million, and depreciation and amortization expenses amounted to $41.2 million.
Financial Impact from New Revenue Guidance
As the Company adopted new revenue guidance ASC Topic 606 on January 1, 2018, results for reporting periods beginning after January 1, 2018 are presented under Topic 606 ('New Basis'), while prior period amounts are not adjusted and continue to be reported under Topic 605 ('Old Basis') , which is the Company's historic accounting method.
The Company's current period reported results which reflected the impact from the adoption of the new revenue guidance are as follows:
Three months ended December 31, 2018
Adjustments
Old Basis
VAT
Barter New Basis
ASC 605 Transaction ASC 606
($ In thousands, except for percentage)
Net revenues 556,519 (31,196) 47,691 573,014
- Portal 99,497 (5,463) 643 94,677
- Weibo 460,772 (25,945) 47,048 481,875
Cost of revenues 154,241 (31,196) 123,045
Operating expenses 276,081 43,834 319,915
- Sales and marketing 147,374 43,834 191,208
Income from operations 126,197 3,857 130,054
Gross margin 72.3% 78.5%
Operating margin 22.7% 22.7%
Year ended December 31, 2018
Adjustments
Old Basis
VAT
Barter New Basis
ASC 605 Transaction ASC 606
($ In thousands, except for percentage)
Net revenues 2,113,954 (118,006) 112,379 2,108,327
- Portal 422,835 (23,243) 2,035 401,627
- Weibo 1,703,644 (95,470) 110,344 1,718,518
Cost of revenues 570,046 (118,006) 452,040
Operating expenses 1,076,520 112,813 1,189,333
- Sales and marketing 587,149 112,813 699,962
Income from operations 467,388 (434) 466,954
Gross margin 73.0% 78.6%
Operating margin 22.1% 22.1%
Business Outlook
For the fiscal year 2019, SINA estimates that its net revenues are between RMB16.5 billion and RMB17.5 billion, or US$2.44 billion and US$2.59 billion, assuming US dollar and RMB exchange rate of 6.75. It represents an annual growth rate of 18% to 25% on a constant currency basis. Such revenue forecast includes the recognition of $10.4 million in deferred license revenues related to the license granted to Leju. This forecast reflects SINA's current and preliminary view, which is subject to change.
Non-GAAP Measures
This release contains the following non-GAAP financial measures: non-GAAP net revenues, non-GAAP non-advertising revenues, non-GAAP advertising and non-advertising gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income attributable to SINA's ordinary shareholders and non-GAAP diluted net income per share attributable to SINA's ordinary shareholders. These non-GAAP financial measures should be considered in addition to, not as a substitute for, measures of the Company's financial performance prepared in accordance with U.S. GAAP. The Company's non-GAAP financial measures may be defined differently than similar terms used by other companies. Accordingly, care should be exercised in understanding how the Company defines its non-GAAP financial measures.
The Company's non-GAAP financial measures exclude recognition of deferred revenues related to the license granted to Leju, stock-based compensation, amortization of intangible assets, goodwill and acquired intangibles impairment, adjustment for non-GAAP to GAAP reconciling items on the share of equity method investments, gain (loss) on sale of investment, deemed disposal, fair value changes and impairment on investment, and income tax effects of above non-GAAP to GAAP reconciling items and adjustment for non-GAAP to GAAP reconciling items for the income attributable to non-controlling interests and amortization of convertible debt issuance cost. The Company's management uses these non-GAAP financial measures in their financial and operating decision-making, because management believes these measures reflect the Company's ongoing business operations in a manner that allows more meaningful period-to-period comparisons. The Company believes that these non-GAAP financial measures provide useful information to investors and others in the following ways: (i) in comparing the Company's current financial results with the Company's past financial results in a consistent manner, and (ii) in understanding and evaluating the Company's current operating performance and future prospects in the same manner as management does, if they so choose. The Company also believes that the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses, gain/loss and other items (i) that are not expected to result in future cash payments or (ii) that are non-recurring in nature or may not be indicative of the Company's core operating results and business outlook.
Use of non-GAAP financial measures has limitations. The Company's non-GAAP financial measures do not include all income and expense items that affect the Company's operations. They may not be comparable to non-GAAP financial measures used by other companies. Management compensates for these limitations by also considering the Company's financial results prepared in accordance with U.S. GAAP. Reconciliations of the Company's non-GAAP measures to the nearest comparable GAAP measures are set forth in the section below titled "Unaudited Reconciliation of Non-GAAP to GAAP Results."
Conference Call
SINA will host a conference call from 7:10 a.m. - 7:40 a.m. Eastern Time on March 5, 2019 (or 8:10 p.m. - 8:40 p.m. Beijing Time on March 5, 2019) to present an overview of the Company's financial performance and business operations. A live webcast of the call will be available through the Company's corporate website at http://ir.sina.com. The conference call can be accessed as follows:
US: +1 845 675 0438
Hong Kong: +852 3018 6776
China:
400 120 0654
International:
+65 6713 5440
Passcode for all regions: 4677406
A replay of the conference call will be available through morning Eastern Time March 13, 2019. The dial-in number is +61 2 9003 4211. The passcode for the replay is 4677406.
About SINA
SINA is a leading online media company serving China and the global Chinese communities. Its digital media network of SINA.com (portal), SINA mobile (mobile portal and mobile apps) and Weibo (social media) enables internet users to access professional media and user generated content in multi-media formats from personal computers and mobile devices and share their interests with friends and acquaintances.
SINA.com offers distinct and targeted professional content on each of its region-specific websites and a full range of complementary offerings. SINA mobile provides news information, professional and entertainment content customized for mobile users through mobile applications and mobile portal site SINA.cn.
Weibo is a leading social media platform for people to create, distribute and discover content. Based on an open platform architecture, Weibo provides unprecedented and simple way for people and organizations to publicly express themselves in real time, interact with others on a massive global platform and stay connected with the world.
Through these properties and other product lines, SINA offer an array of online media and social media services to its users to create a rich canvas for businesses and advertisers to effectively connect and engage with their targeted audiences.
Safe Harbor Statement
This press release contains forward-looking statements that relate to, among other things, SINA's expected financial performance and SINA's strategic and operational plans (as described, without limitation, in quotations from management in this press release). SINA may also make forward-looking statements in the Company's periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "confidence," "estimates" and similar statements. SINA assumes no obligation to update the forward-looking statements in this press release and elsewhere. Forward-looking statements involve inherent risks and uncertainties. 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 failure to meet internal or external expectations of future performance given the rapidly evolving markets; condition of the global financial and credit market; the uncertain regulatory landscape in China; fluctuations in the Company's quarterly operating results; the Company's reliance on online advertising sales and value-added services for a majority of its revenues; failure to successfully develop, introduce, drive adoption of or monetize new features and products, including portal, Weibo and fin-tech products; failure to enter and develop the small and medium enterprise market by the Company or through cooperation with other parties, such as Alibaba; failure to successfully integrate acquired businesses; risks associated with the Company's investments, including equity pick-up and impairment; and failure to compete successfully against new entrants and established industry competitors. Further information regarding these and other risks is included in SINA's 2017 annual reports on Form 20-F and other filings with the Securities and Exchange Commission.
Contact:
Investor Relations
SINA Corporation
Phone: +86 10 5898 3336
Email: ir@staff.sina.com.cn
SINA CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. Dollars in thousands, except per share data)
Three months ended
Year ended
December 31,
September 30,
December 31,
2018 2017 2018 2018 2017
Net revenues(1):
Advertising $484,307 $424,756 $483,806 $1,789,285 $1,311,866
Non-advertising 88,707 78,982 73,395 319,042 272,018
573,014 503,738 557,201 2,108,327 1,583,884
Cost of revenues(1)(2):
Advertising 85,048 99,858 92,407 341,153 325,494
Non-advertising 37,997 26,812 21,408 110,887 88,643
123,045 126,670 113,815 452,040 414,137
Gross profit 449,969 377,068 443,386 1,656,287 1,169,747
Operating expenses:
Sales and marketing (1)(2) 191,208 143,020 185,478 699,962 408,856
Product development (2) 85,383 78,977 91,545 345,942 267,392
General and administrative (2) 30,633 26,421 28,377 120,184 104,923
Goodwill and acquired intangibles impairment 12,691 10,554 23,245
319,915 248,418 315,954 1,189,333 781,171
Income from operations 130,054 128,650 127,432 466,954 388,576
Non-operating income (loss):
Earning (Loss) from equity method investments, net (4,731) (2,843) 10,150 1,120 (16,070)
Gain (Loss) on sale of investments, fair value changes and impairment (22,960) (740) 50,111 17,981 9,037
on investments, net (3)
Interest and other income, net 15,090 11,244 17,051 69,355 42,696
(12,601) 7,661 77,312 88,456 35,663
Income before income taxes 117,453 136,311 204,744 555,410 424,239
Income tax expense (14,347) (17,160) (68,129) (129,084) (74,676)
Net income 103,106 119,151 136,615 426,326 349,563
Less: Net income attributable to non-controlling interests 86,729 73,787 91,176 300,764 192,994
Net income attributable to SINA's ordinary shareholders $16,377 $45,364 $45,439 $125,562 $156,569
Basic net income per share $0.24 $0.63 $0.66 $1.79 $2.20
Diluted net income per share (4) $0.22 $0.60 $0.62 $1.70 $2.09
Shares used in computing basic net income per share 69,235 71,516 69,332 70,296 71,284
Shares used in computing diluted net income per share 69,666 74,213 71,322 72,375 73,931
(1) On January 1, 2018, the Company adopted ASC 606 Revenue from Contracts with Customers using the modified retrospective method,which means that prior periods amount will be
reported on a historical basis and amounts for 2018 are reported on the new basis. Under the new accounting standard, the main impact to the Company is that it now reports revenue net of
value added tax and recognizes revenues and expenses at fair value for advertising barter transactions.
(2) Stock-based compensation in each category:
Cost of revenues $922 $2,145 $3,775 $10,128 $9,257
Sales and marketing 3,174 5,370 7,414 21,942 20,790
Product development 4,403 6,432 11,205 30,830 29,163
General and administrative 8,834 8,237 9,012 32,169 32,177
(3) The Company adopted ASU 2016-1, Classification and Measurement of Financial Instruments beginning the first quarter of fiscal year 2018. After the adoption of this new accounting
update, the Company measures long-term investments other than those accounted for under the equity method, at fair value through earnings. For those investments without readily
determinable fair values, the Company elected to record these investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Changes in the
basis of these investments are reported in current earnings. The Company recognized net loss of $20.3 million and net gain of $96.5 million from fair value changes in the investments for the
three months and the year ended December 31, 2018, respectively.
(4) Net income attributable to SINA's ordinary shareholders is adjusted for diluted shares issued by our subsidiary and equity method investments.
SINA CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in thousands)
December 31,
December 31,
2018 2017
Assets
Current assets:
Cash and cash equivalents $1,545,800 $1,990,552
Short-term investments 799,534 1,381,991
Restricted cash 97,032 216,151
Accounts receivable, net 527,897 285,681
Prepaid expenses and other current assets 362,435 228,238
Subtotal 3,332,698 4,102,613
Property and equipment, net 262,846 262,676
Goodwill and intangible assets, net 319,575 104,207
Long-term investments (1) 1,889,843 1,288,816
Other assets 81,127 57,082
Total assets $5,886,089 $5,815,394
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable $172,562 $130,431
Amount due to customers 97,032 216,151
Accrued expenses and other current liabilities 540,807 446,779
Short-term bank loan 78,229 89,309
Convertible debt (2) 153,092
Deferred revenues 139,306 134,580
Income taxes payable 115,725 102,458
Subtotal 1,143,661 1,272,800
Convertible debt 884,123 879,983
Long-term deferred revenues 43,652 54,372
Other long-term liabilities 51,781 8,510
Total liabilities 2,123,217 2,215,665
Shareholders' equity
SINA shareholders' equity (1) 2,717,791 2,846,842
Non-controlling interests 1,045,081 752,887
Total shareholders' equity 3,762,872 3,599,729
Total liabilities and shareholders' equity $5,886,089 $5,815,394
1)
The Company adopted ASU 2016-1, Classification and Measurement of Financial Instruments
beginning the first quarter
of fiscal year 2018. After the adoption of this new accounting update, the Company measures long-term
investments other
than those investments accounted for under the equity method, at fair value through earnings. For
those investments
without readily determinable fair values, the Company elected to record these investments at cost, less
impairment, and plus
or minus subsequent adjustments for observable price changes. Changes in the basis of these investments
are reported in
current earnings. The cumulative impact arising from the adoption was a credit to retained earnings as
of January 1, 2018 of
$49.0 million.
(2)
In December 2018, the Company repaid $153.1 million in aggregate principal amount of
1.00% coupon interest
convertible senior notes on its maturity date.
SINA CORPORATION
UNAUDITED ADDITIONAL INFORMATION
(U.S. Dollars in thousands)
Three months ended
Year ended
December 31,
September 30,
December 31,
2018 2017 2018 2018 2017
Net revenues
Portal:
Portal Advertising $67,377 $95,319 $74,533 $290,215 $320,473
Other 27,300 33,842 26,707 111,412 122,535
Subtotal 94,677 129,161 101,240 401,627 443,008
Weibo:
Advertising and marketing 417,016 332,305 409,273 1,499,180 996,745
Weibo VAS 64,859 45,140 50,898 219,338 153,309
Subtotal 481,875 377,445 460,171 1,718,518 1,150,054
Elimination (3,538) (2,868) (4,210) (11,818) (9,178)
$573,014 $503,738 $557,201 $2,108,327 $1,583,884
Cost of revenues
Portal:
Portal Advertising $29,180 $35,647 $30,501 $117,600 $121,278
Other 14,377 19,180 17,508 68,500 65,733
Subtotal 43,557 54,827 48,009 186,100 187,011
Weibo 82,940 72,005 70,016 277,648 231,255
Elimination (3,452) (162) (4,210) (11,708) (4,129)
$123,045 $126,670 $113,815 $452,040 $414,137
Gross margin
Portal 54% 58% 53% 54% 58%
Weibo 83% 81% 85% 84% 80%
79% 75% 80% 79% 74%
SINA CORPORATION
UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS
(U.S. Dollars in thousands, except per share data)
Three months ended
---
December 31, 2018
December 31, 2017
September 30, 2018
Non-GAAP
Non-GAAP
Non-GAAP
Actual
Adjustments
Results
Actual
Adjustments
Results
Actual
Adjustments
Results
Advertising revenues $484,307 $484,307 $424,756 $424,756 $483,806 $483,806
Non-advertising revenues 88,707 (2,609) (a) 86,098 78,982 (2,609) (a) 76,373 73,395 (2,609) (a) 70,786
Net revenues $573,014 $(2,609) $570,405 $503,738 $(2,609) $501,129 $557,201 $(2,609) $554,592
===
(2,609) (a) (2,609) (a) (2,609) (a)
922 (b) 2,145 (b) 3,775 (b)
Gross profit $449,969 $(1,687) $448,282 $377,068 $(464) $376,604 $443,386 $1,166 $444,552
===
(16,411) (b) (27,631) (b)
(2,177) (c) (20,039) (b) (1,354) (c)
(12,691) (d) (1,535) (c) (10,554) (d)
Operating expenses $319,915 $(31,279) $288,636 $248,418 $(21,574) $226,844 $315,954 $(39,539) $276,415
===
(2,609) (a) (2,609) (a)
17,333 (b) (2,609) (a) 31,406 (b)
2,177 (c) 22,184 (b) 1,354 (c)
12,691 (d) 1,535 (c) 10,554 (d)
Income from operations $130,054 $29,592 $159,646 $128,650 $21,110 $149,760 $127,432 $40,705 $168,137
===
(2,609) (a) (2,609) (a)
17,333 (b) (2,609) (a) 31,406 (b)
2,177 (c) 22,184 (b) 1,354 (c)
12,691 (d) 1,535 (c) 10,554 (d)
4,797 (e) 1,503 (e) (6,879) (e)
22,960 (f) 740 (f) (50,111) (f)
(14,929) (g) (9,197) (g) (2,845) (g)
1,035 (h) 690 (h) 1,035 (h)
(2,138) (i) (253) (i) 40,311 (i)
Net income attributable to SINA's ordinary shareholders $16,377 $41,317 $57,694 $45,364 $14,593 $59,957 $45,439 $22,216 $67,655
===
Diluted net income per share * $0.22 $0.80 $0.60 $0.79 $0.62 $0.93
===
Shares used in computing diluted net income per share 69,666 960 (j) 70,626 74,213 74,213 71,322 71,322
Gross margin - advertising 82% 1% 83% 76% 1% 77% 81% 1% 82%
Gross margin - non-advertising 57% -1% 56% 66% -1% 65% 71% -1% 70%
Operating margin 23% 5% 28% 26% 4% 30% 23% 7% 30%
Year ended
December 31, 2018
December 31, 2017
Non-GAAP
Non-GAAP
Actual
Adjustments
Results
Actual
Adjustments
Results
Advertising revenues $1,789,285 $1,789,285 $1,311,866 $1,311,866
Non-advertising revenues 319,042 (10,436) (a) 308,606 272,018 (10,436) (a) 261,582
Net revenues $2,108,327 $(10,436) $2,097,891 $1,583,884 $(10,436) $1,573,448
(10,436) (a) (10,436) (a)
10,128 (b) 9,257 (b)
Gross profit $1,656,287 $(308) $1,655,979 $1,169,747 $(1,179) $1,168,568
(84,941) (b)
(6,689) (c) (82,130) (b)
(23,245) (d) (4,455) (c)
Operating expenses $1,189,333 $(114,875) $1,074,458 $781,171 $(86,585) $694,586
(10,436) (a)
95,069 (b) (10,436) (a)
6,689 (c) 91,387 (b)
23,245 (d) 4,455 (c)
Income from operations $466,954 $114,567 $581,521 $388,576 $85,406 $473,982
(10,436) (a)
95,069 (b) (10,436) (a)
6,689 (c) 91,387 (b)
23,245 (d) 4,455 (c)
(2,493) (e) 3,276 (e)
(17,981) (f) (9,037) (f)
(34,806) (g) (29,827) (g)
4,140 (h) 690 (h)
38,109 (i) 785 (i)
Net income attributable to SINA's ordinary shareholders $125,562 $101,536 $227,098 $156,569 $51,293 $207,862
Diluted net income per share * $1.70 $3.07 $2.09 $2.77
Shares used in computing diluted net income per share 72,375 72,375 73,931 73,931
Gross margin - advertising 81% 81% 75% 1% 76%
Gross margin - non-advertising 65% -1% 64% 67% -1% 66%
Operating margin 22% 6% 28% 25% 5% 30%
(a) To exclude the recognition of deferred revenue related to the license granted to Leju.
(b) To exclude stock-based compensation.
(c) To adjust amortization of intangible assets.
(d) To exclude goodwill and acquired intangibles impairment
(e) To exclude the non-GAAP to GAAP reconciling items on the share of equity method investments, net of share of amortization of intangibles not on their books.
(f) To exclude (gain) loss on sale of investments, (gain) loss on deemed disposal, fair value changes and impairment on investments, net.
(g) To exclude Non-GAAP to GAAP reconciling items for the income attributable to non-controlling interests.
(h) To exclude the amortization of convertible debt issuance cost.
(i) To exclude the provision (benefit) for income tax related to item (c), (d) and (f). Other non-GAAP to GAAP reconciling items have no income tax effect.**
(j) To adjust the number of shares for dilution resulted from convertible debt and unvested equity granted.
*
Net income attributable to SINA's ordinary shareholders is adjusted for diluted shares issued by our subsidiary and equity method investments.
** The Company considered the tax implication arising from the reconciliation items, and those items recorded in entities in tax free jurisdictions were without relevant tax
implications.
For impairment on investments, valuation allowances were made for those differences the Company does not expect they can be realized in the foreseeable future.
UNAUDITED RECONCILIATION OF SINA'S SHARE OF EQUITY INVESTMENTS' NON-GAAP TO GAAP RESULTS*
Three months ended
---
December 31, 2018
December 31, 2017
September 30, 2018
Actual
Adjustments
Non-GAAP
Actual
Adjustments
Non-GAAP
Actual
Adjustments
Non-GAAP
Results Results Results
To exclude stock-based compensation $350 $881 $674
To exclude amortization of intangible
assets resulting from business acquisitions 1,062 1,177 1,079
To exclude loss on disposal and impairment on investments, net 848 1,245
To exclude (gain) loss resulting from the fair value changes in investments, net 4,062 (1,426) (9,187)
To exclude tax impacts related to amortization of intangible assets (248) (178) (263)
Earning (Loss) from equity method investments, net $(5,160) $5,226 $66 $(2,642) $1,302 $(1,340) $9,723 $(6,452) $3,271
Share of amortization of equity investments'
intangibles not on their books 367 (367) (253) 253 364 (364)
Share of tax impacts related to amortization of
equity investments' intangibles not on their books 62 (62) 52 (52) 63 (63)
$(4,731) $4,797 $66 $(2,843) $1,503 $(1,340) $10,150 $(6,879) $3,271
Year ended
December 31, 2018
December 31, 2017
Non-GAAP
Non-GAAP
Actual
Adjustments
Results
Actual
Adjustments
Results
To exclude stock-based compensation $2,441 $3,759
To exclude amortization of intangible
assets resulting from business acquisitions 4,379 3,441
To exclude (gain) loss on disposal and impairment on investments, net 2,989 (465)
To exclude gain resulting from the fair value changes in
investments, net (9,777) (3,769)
To exclude tax impacts related to amortization of intangible assets (942) (508)
Loss from equity method investments, net $(463) $(910) $(1,373) $(15,252) $2,458 $(12,794)
Share of amortization of equity investments'
intangibles not on their books 1,306 (1,306) (1,031) 1,031
Share of tax impacts related to amortization of
equity investments' intangibles not on their books 277 (277) 213 (213)
$1,120 $(2,493) $(1,373) $(16,070) $3,276 $(12,794)
* Earning (Loss) from equity method investments is recorded one quarter in arrears.
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SOURCE SINA Corporation
