BEIJING, July 30, 2018 /PRNewswire/ -- Sohu.com Limited
(NASDAQ: SOHU), China's leading online media, video, search and gaming business group, today
reported unaudited financial results for the second quarter ended June 30, 2018.
Second Q uarter Highlights
- Total revenues[1] were US$486 million [2], up 5% year-over-year and 7%
quarter-over-quarter.
- Brand advertising revenues were US$62 million, down 29% year-over-year and up 9%
quarter-over-quarter.
- Search and search related advertising revenues[3] were US$270 million, up 45%
year-over-year and 23% quarter-over-quarter.
- Online game revenues were US$94 million, down 23% year-over-year and 11%
quarter-over-quarter.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Limited, commented, "We saw mixed financial
performance in the second quarter. While quarterly revenue was slightly soft given the continued headwinds against our brand
advertising business, the bottom line performance was better than expected as we aggressively slashed content costs. For Sohu
Media Portal, we continued to focus on user growth for the Sohu News App by consistently refining the product design and content
quality. For Sohu Video, we maintained steady momentum with our original content and substantially narrowed the loss as a result
of lowered spending on licensed content. For Sogou, in the second quarter its core search revenues posted 45% year-over-year
growth and Sogou Mobile Keyboard's DAU increased by 36% from the prior year to 380 million. Changyou delivered in-line
performance as its online game business continued to generate healthy cash flow."
[1] The Company has adopted ASU No. 2014-09, ''Revenue from
Contracts with Customers" beginning January 1, 2018. The only major impact of the standard is that revenues and expenses
related to advertising barter transactions will be recognized beginning January 1, 2018. The impact for the second
quarter of 2018 was approximately US$6 million for both revenues and cost of revenues and expenses, most of which were
generated from Sogou.
|
[2] On a constant currency (non-GAAP) basis, if the exchange
rate in the second quarter of 2018 had been the same as it was in the second quarter of 2017, or RMB6.86=US$1.00, US$
total revenues in the second quarter of 2018 would have been US$452 million, or US$34 million less than GAAP total
revenues, and down 2% year-over-year.
|
[3] Search and Search related advertising revenues exclude
intra-Group transactions.
|
Second Quarter Financial Results
Revenues
Total revenues for the second quarter of 2018 were US$486 million, up 5% year-over-year and 7%
quarter-over-quarter.
Total online advertising revenues, which include revenues from the brand advertising and search and search-related advertising
businesses, for the second quarter of 2018 were US$332 million, up 22% year-over-year and 20%
quarter-over-quarter.
Brand advertising revenues for the second quarter of 2018 totaled US$62 million, down 29%
year-over-year and up 9% quarter-over-quarter. The year-over-year decrease was mainly due to decreases in portal and real estate
advertising revenues. The quarter-over-quarter increase was mainly attributable to a seasonality increase in revenues from the
media portal.
Search and search-related advertising revenues for the second quarter of 2018 were US$270
million, up 45% year-over-year and 23% quarter-over-quarter. The year-over-year and quarter-over-quarter increases were
primarily driven by continued traffic growth and improved monetization in mobile search.
Online game revenues for the second quarter of 2018 were US$94 million, down 23% year-over-year
and 11% quarter-over-quarter. The year-over-year and quarter-over-quarter decreases were due to the natural decline in revenue of
Changyou's older games, including Legacy TLBB Mobile and Dao Jian Dou Shen Zhuan.
Gross Margin
Both GAAP and non-GAAP[4] gross margin for the second quarter of 2018 was 44%, compared with 40% in the second
quarter of 2017 and 43% in the first quarter of 2018.
Both GAAP and non-GAAP gross margin for the online advertising business for the second quarter of 2018 was 35%, compared with
19% in the second quarter of 2017 and 29% in the first quarter of 2018.
GAAP gross margin for the brand advertising business in the second quarter of 2018 was 23%, compared with negative 45% in the
second quarter of 2017 and 10% in the first quarter of 2018. Non-GAAP gross margin for the brand advertising business was 23%,
compared with negative 45% in the second quarter of 2017 and 9% in the first quarter of 2018. The year-over-year increase was
mainly due to decreased video content cost and the Company's having recognized impairment charges of approximately US$45 million in video content cost in the second quarter of 2017. The quarter-over-quarter increase was mainly
due to the increase in brand advertising revenue.
Both GAAP and non-GAAP gross margin for the search and search-related advertising business in the second quarter of 2018 was
38%, compared with 48% in the second quarter of 2017 and 34% in the first quarter of 2018. The year-over-year decrease primarily
resulted from traffic acquisition cost outgrowing revenues. The quarter-over-quarter increase was due to normal seasonal
fluctuation.
Both GAAP and non-GAAP gross margin for online games business in the second quarter of 2018 was 85%, compared with 91% in the
second quarter of 2017 and 84% in the first quarter of 2018. The year-over-year decrease in gross margin was mainly due to a
decline in revenue from Legacy TLBB Mobile, which has a high gross margin, as revenue is recognized on a net basis after
revenue-sharing with the third-party licensee operator.
[4] Non-GAAP results exclude share-based compensation expense,
non-cash tax benefits from excess tax deductions related to share-based awards, changes in fair value recognized in the
Company's consolidated statements of operations with respect to equity investments with readily determinable fair values,
income/expense from the adjustment of contingent consideration previously recorded for acquisitions, dividends and deemed
dividends to non-controlling preferred shareholders of Sogou, and a one-time income tax expense, offset by a one-time
reduction in liability for deferred U.S. income tax, as a result of the U.S. Tax Reform. Explanation of the Company's
non-GAAP financial measures and related reconciliations to GAAP financial measures are included in the accompanying
"Non-GAAP Disclosure" and "Reconciliations of Non-GAAP Results of Operation Measures to the Nearest Comparable GAAP
Measures."
|
Operating Expenses
For the second quarter of 2018, GAAP operating expenses totaled US$244 million, up 10%
year-over-year and 8% quarter-over-quarter. Non-GAAP operating expenses were US$243 million, up 16%
year-over-year and 7% quarter-over-quarter. The year-over-year increase was mainly due to increased marketing expenses, and
increased product development expenses for Sogou. The quarter-over-quarter increase was mainly due to increased marketing
expenses.
Operating Loss
GAAP operating loss for the second quarter of 2018 was US$32 million, compared with an operating
loss of US$40 million in the second quarter of 2017 and an operating loss of US$31 million in the first quarter of 2018.
Non-GAAP operating loss for the second quarter of 2018 was US$31 million, compared with an
operating loss of US$27 million in the second quarter of 2017 and an operating loss of US$34 million in the first quarter of 2018.
Income Tax Expense
Both GAAP and non-GAAP income tax expense was US$6 million for the second quarter of 2018,
compared with income tax expense of US$13 million in the second quarter of 2017 and income tax
expense of US$63 million in the first quarter of 2018. The quarter-over-quarter decrease was mainly
due to Changyou's accrual of additional withholding income taxes of US$47 million for the period
before December 31, 2017 recognized in relation to a change in policy for Changyou's PRC
subsidiaries with respect to their distribution of cash dividends in the first quarter of 2018, offset by the impact of the
reversal of a deferred tax liability of US$5.5 million in the second quarter of 2018 as a result of
the liquidation of Sohu.com Inc.
Net Loss
Before deducting the share of net income pertaining to non-controlling interest, GAAP net loss for the second quarter of 2018
was US$15 million, compared with a net loss of US$48 million in the
second quarter of 2017 and net loss of US$87 million in the first quarter of 2018. Before deducting
the share of net income pertaining to non-controlling interest, non-GAAP net loss for the second quarter of 2018 was US$14 million, compared with a net loss of US$35 million in the second quarter of
2017 and net loss of US$90 million in the first quarter of 2018.
GAAP net loss attributable to Sohu.com Limited for the second quarter of 2018 was US$48 million,
or a loss of US$1.23 per fully-diluted ADS, compared with a net loss of US$89 million in the second quarter of 2017 and a net loss of US$93 million in
the first quarter of 2018. Non-GAAP net loss attributable to Sohu.com Limited for the second quarter of 2018 was US$49 million, or a loss of US$1.27 per fully-diluted ADS, compared with a net
loss of US$72 million in the second quarter of 2017 and a net loss of US$97
million in the first quarter of 2018.
Liquidity
As of June 30, 2018, cash and cash equivalents and short-term investments held by the Sohu
Group, minus short-term bank loans, were US$1.89 billion, compared with US$2.12 billion as of December 31, 2017.
Recent Developments
Sogou, the Company's online search subsidiary, announced that Chinese regulatory authorities, including the Beijing Office of
the Cyberspace Administration of China and the Beijing Administration for Industry and Commerce,
initiated an investigation of Sogou after certain advertisements involving content that the authorities believed insulted a
national hero were displayed on its platform. The advertisements were developed and reviewed by Douyin, a Chinese short-form
video platform, and displayed on Sogou Search in June 2018. Following the investigation, the
regulatory authorities instructed Sogou to amend its advertising practices. Sogou fully cooperated with the authorities in their
investigation and Sogou has taken steps to revise its advertising policies and audit procedures to ensure compliance with
relevant regulations.
In connection with implementing such remedial measures, Sogou suspended its search advertising for ten days commencing
July 1, 2018. This is expected to result in a one-time reduction in Sogou's revenues for the
third quarter of 2018.
Business Outlook
For the third quarter of 2018, Sohu estimates:
- Total revenues to be between US$445 million and US$470
million.
- Brand advertising revenues to be between US$60 million and US$65
million; this implies an annual decrease of 13% to 20% and a sequential decrease of 2% to a sequential increase of
6%.
- Sogou revenues to be between US$275 million and US$285 million;
this implies an annual increase of 7% to 11% and a sequential decrease of 5% to 9%.
- Online game revenues to be between US$80 million and US$90
million; this implies an annual decrease of 32% to 40% and a sequential decrease of 5% to 15%.
- Before deducting the share of non-GAAP net income pertaining to non-controlling interest, non-GAAP net loss to be
between US$44 million and US$54 million. Assuming no new grants of share-based awards and
that the market price of our shares is unchanged, we estimate that compensation expense relating to share-based awards will be
around US$5 million. Including the impact of these share-based awards, GAAP net loss before non-controlling interest to
be between US$49 million and US$59 million .
- Non-GAAP net loss attributable to Sohu.com Limited to be between US$55 million and US$65
million, and non-GAAP loss per fully-diluted ADS to be between US$1.40 and US$1.65. Including the impact of the aforementioned share-based awards, and netting off
approximately US$2 million of Sohu's economic interests in Changyou and Sogou, GAAP net loss attributable
to Sohu.com Limited to be between US$58 million and US$68 million, and GAAP loss per
fully-diluted ADS to be between US$1.50 and US$1.75.
For the third quarter 2018 guidance, the Company has adopted a presumed exchange rate of RMB6.80=US$1.00, as compared with the actual exchange rate of approximately
RMB6.67=US$1.00 for the third quarter of 2017, and RMB6.38=US$1.00 for the second quarter of 2018.
Non-GAAP Disclosure
To supplement the unaudited consolidated financial statements presented in accordance with accounting principles generally
accepted in the United States of America ("GAAP"), Sohu's management uses non-GAAP measures of
gross profit, operating profit, net income, net income attributable to Sohu.com Limited and diluted net income attributable to
Sohu.com Limited per share, which are adjusted from results based on GAAP to exclude the impact of the share-based awards, which
consist mainly of share-based compensation expenses and non-cash tax benefits from excess tax deductions related to share-based
awards, changes in fair value recognized in the Company's consolidated statements of operations with respect to equity
investments with readily determinable fair values, income/expense from the adjustment of contingent consideration previously
recorded for acquisitions, dividend and deemed dividend to non-controlling preferred shareholders, and a one-time income tax
expense, offset by a one-time reduction in liability for deferred U.S. income tax, as a result of the U.S. Tax Reform. These
measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute
for, or superior to, GAAP results.
Sohu's management believes excluding share-based compensation expense, changes in fair value recognized in the Company's
consolidated statements of operations with respect to equity investments with readily determinable fair values, non-cash tax
benefits from excess tax deductions related to share-based awards, income/expense from the adjustment of contingent consideration
previously recorded for acquisitions, dividend and deemed dividend to non-controlling preferred shareholders, and net one-time
tax expense as a result of the U.S. Tax Reform from its non-GAAP financial measure is useful for itself and investors. Further,
the impact of share-based compensation expense and changes in fair value recognized in the Company's consolidated
statements of operations with respect to equity investments with readily determinable fair values, non-cash tax benefits from
excess tax deductions related to share-based awards, income/expense from the adjustment of contingent consideration previously
recorded for acquisitions, dividend and deemed dividend to non-controlling preferred shareholders, and net one-time tax expense
as a result of the U.S. Tax Reform cannot be anticipated by management and business line leaders and these expenses were not
built into the annual budgets and quarterly forecasts that have been the basis for information Sohu provides to analysts and
investors as guidance for future operating performance. As the impact of share-based compensation expense and changes in fair
value recognized in the Company's consolidated statements of operations with respect to equity investments with readily
determinable fair values, non-cash tax benefits from excess tax deductions related to share-based awards, income/expense from the
adjustment of contingent consideration previously recorded for acquisitions, and dividend and deemed dividend to non-controlling
preferred shareholders does not involve subsequent cash outflow or is reflected in the cash flows at the equity transaction
level, Sohu does not factor this impact in when evaluating and approving expenditures or when determining the allocation of its
resources to its business segments. As a result, in general, the monthly financial results for internal reporting and any
performance measures for commissions and bonuses are based on non-GAAP financial measures that exclude share-based compensation
expense and changes in fair value recognized in the Company's consolidated statements of operations with respect to equity
investments with readily determinable fair values, non-cash tax benefits from excess tax deductions related to share-based
awards, income/expense from the adjustment of contingent consideration previously recorded for acquisitions, and dividend and
deemed dividend to non-controlling preferred shareholders, and also excluded the net one-time tax expense as a result of U.S. Tax
Reform.
The non-GAAP financial measures are provided to enhance investors' overall understanding of Sohu's current financial
performance and prospects for the future. A limitation of using non-GAAP gross profit, operating profit, net income, net income
attributable to Sohu.com Limited and diluted net income attributable to Sohu.com Limited per share, excluding share-based
compensation expense, non-cash tax benefits from excess tax deductions related to share-based awards, income/expense from
the adjustment of contingent consideration previously recorded for acquisitions, dividend, and deemed dividend to non-controlling
preferred shareholders is that the impact of share-based awards and non-cash tax benefits from excess tax deductions related to
share-based awards has been and will continue to be a significant recurring expense in Sohu's business for the foreseeable
future, income/expense from the adjustment of contingent consideration previously recorded for acquisitions may recur in the
future, and dividend and deemed dividend to non-controlling preferred shareholders may recur when Sohu and its affiliates enter
into equity transactions. In order to mitigate these limitations Sohu has provided specific information regarding the GAAP
amounts excluded from each non-GAAP measure. The accompanying tables include details on the reconciliation between the GAAP
financial measures that are most directly comparable to the non-GAAP financial measures that have been presented.
Notes to Financial Information
Financial information in this press release other than the information indicated as being non-GAAP is derived from Sohu's
unaudited interim financial statements prepared in accordance with GAAP.
Safe Harbor Statement
This announcement contains forward-looking statements. It is currently expected that the Business Outlook will not be updated
until release of Sohu's next quarterly earnings announcement; however, Sohu reserves right to update its Business Outlook at any
time for any reason. Statements that are not historical facts, including statements about Sohu's beliefs and expectations, are
forward-looking statements. These statements are based on current plans, estimates and projections, and therefore you should not
place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number
of important factors could cause actual results to differ materially from those contained in any forward-looking statement.
Potential risks and uncertainties include, but are not limited to, instability in global financial and credit markets and its
potential impact on the Chinese economy; exchange rate fluctuations, including their potential impact on the Chinese economy and
on Sohu's reported US dollar results; recent slow-downs in the growth of the Chinese economy; the uncertain regulatory landscape
in the People's Republic of China; fluctuations in Sohu's quarterly operating results; Sohu's
current and projected future losses due to increased spending by Sohu for video content; the possibilities that Sohu will be
unable to recoup its investment in video content and that Changyou will be unable to develop a series of successful games for
mobile platforms or successfully monetize mobile games it develops or acquires; Sohu's reliance on online advertising sales,
online games and mobile services for its revenues; and the impact of the U.S. Tax Reform. Further information regarding these and
other risks is included in Sohu's annual report on Form 10-K for the year ended December 31, 2017,
and other filings with the Securities and Exchange Commission.
Conference Call and Webcast
Sohu's management team will host a conference call at 8:30 a.m. U.S. Eastern Time, July 30, 2018 (8:30 p.m. Beijing/Hong Kong time, July 30, 2018) following the quarterly results
announcement.
The dial-in details for the live conference call are:
US Toll-Free:
|
+1-866-519-4004
|
International:
|
+65-6713-5090
|
Hong Kong:
|
+852-3018-6771
|
China Mainland
|
+86-800-819-0121 / +86-400-620-8038
|
Passcode:
|
SOHU
|
Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call.
A telephone replay of the call will be available after the conclusion of the conference call at 11:30
a.m. Eastern Time on July 30 through August 5, 2018. The dial-in details for the telephone
replay are:
International:
|
+1-646-254-3697
|
Passcode:
|
5495973
|
The live Webcast and archive of the conference call will be available on the Investor Relations section of Sohu's Website at
http://investors.sohu.com/.
About Sohu.com
Sohu.com Limited (NASDAQ: SOHU) is China's premier online brand and indispensable to the
daily life of millions of Chinese, providing a network of web properties and community based/web 2.0 products which offer the
vast Sohu user community a broad array of choices regarding information, entertainment and communication. Sohu has built one of
the most comprehensive matrices of Chinese language web properties and proprietary search engines, consisting of the mass portal
and leading online media destination www.sohu.com; interactive
search engine www.sogou.com; developer and operator of online
games www.changyou.com/en/ and leading online video
website tv.sohu.com.
Sohu's corporate services consist of online brand advertising on Sohu's matrix of websites as well as bid listing and home
page on its in-house developed search directory and engine. Sohu also provides multiple news and information services on mobile
platforms, including Sohu News App and the mobile news portal m.sohu.com. Sohu's online game subsidiary, Changyou.com (NASDAQ:
CYOU) develops and operates a diverse portfolio of PC and mobile games, such as Tian Long Ba Bu
("TLBB"), one of the most popular PC games in China. Changyou also owns and operates the
17173.com Website, a leading game information portal in China. Sohu's online search subsidiary
Sogou (NYSE: SOGO) has grown to become the second largest search engine by mobile queries in China. It also owns and operates Sogou Input Method, the largest Chinese language input software. Sohu.com,
established by Dr. Charles Zhang, one of China's internet
pioneers, is in its twenty-second year of operation.
For investor and media inquiries, please contact:
In China:
In the United States:
SOHU.COM LIMITED
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(UNAUDITED, IN THOUSANDS EXCEPT PER ADS AMOUNTS)
|
|
|
|
Three Months Ended
|
|
|
Jun. 30 , 20 18
|
|
Mar. 31 , 20 18
|
|
Jun. 30 , 20 17
|
Revenues:
|
|
|
|
|
|
|
Online advertising
|
|
|
|
|
|
|
Brand advertising
|
$
|
61,511
|
$
|
56,254
|
$
|
86,071
|
Search and search-related
advertising
|
|
270,359
|
|
220,301
|
|
186,747
|
Subtotal
|
|
331,870
|
|
276,555
|
|
272,818
|
Online games
|
|
94,250
|
|
105,461
|
|
122,398
|
Others
|
|
59,894
|
|
72,979
|
|
65,952
|
Total revenues
|
|
486,014
|
|
454,995
|
|
461,168
|
|
|
|
|
|
|
|
Cost of revenues:
|
|
|
|
|
|
|
Online advertising
|
|
|
|
|
|
|
Brand advertising (includes
stock-based compensation
expense of $-2, $-657, and $182, respectively)
|
|
47,319
|
|
50,611
|
|
124,730
|
Search and
search-related (includes stock-based
compensation expense of $263, $219, and $2, respectively)
|
|
168,126
|
|
144,696
|
|
96,692
|
Subtotal
|
|
215,445
|
|
195,307
|
|
221,422
|
Online games
(includes stock-based compensation expense of
$-23, $-12, and $44, respectively)
|
|
14,461
|
|
17,119
|
|
11,613
|
Others
|
|
44,346
|
|
48,407
|
|
45,159
|
Total cost of revenues
|
|
274,252
|
|
260,833
|
|
278,194
|
|
|
|
|
|
|
|
Gross profit
|
|
211,762
|
|
194,162
|
|
182,974
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
Product development (includes stock-based
compensation
expense of $2,136, $715, and $4,925, respectively)
|
|
113,843
|
|
111,543
|
|
100,146
|
Sales and marketing (includes stock-based
compensation
expense of $77, $-89, and $930, respectively)
|
|
102,138
|
|
90,273
|
|
94,845
|
General and administrative (includes stock-based
compensation
expense of $-1,260, $-2,520, and $6,597, respectively)
|
|
27,982
|
|
23,836
|
|
27,657
|
Total operating expenses
|
|
243,963
|
|
225,652
|
|
222,648
|
|
|
|
|
|
|
|
Operating loss
|
|
(32,201)
|
|
(31,490)
|
|
(39,674)
|
|
|
|
|
|
|
|
Other income
|
|
9,991
|
|
12,281
|
|
3,306
|
Interest income
|
|
5,156
|
|
7,808
|
|
5,813
|
Interest expense
|
|
(3,004)
|
|
(3,081)
|
|
(205)
|
Exchange difference
|
|
10,774[5]
|
|
(9,340)
|
|
(4,528)
|
Loss before income tax expense
|
|
(9,284)
|
|
(23,822)
|
|
(35,288)
|
Income tax expense
|
|
5,891
|
|
63,379
|
|
12,764
|
Net loss
|
|
(15,175)
|
|
(87,201)
|
|
(48,052)
|
|
|
|
|
|
|
|
Less: Net income attributable to the
noncontrolling interest
shareholders
|
|
32,463
|
|
5,617
|
|
40,131
|
Net loss attributable to Sohu.com Limited
|
|
(47,638)
|
|
(92,818)
|
|
(88,183)
|
|
|
|
|
|
|
|
Basic net loss per ADS attributable to Sohu.com Limited
|
$
|
(1.22)
|
$
|
(2.39)
|
$
|
(2.27)
|
ADSs used in computing basic net loss per ADS attributable to
Sohu.com Limited
|
|
38,927
|
|
38,904
|
|
38,855
|
|
|
|
|
|
|
|
Diluted net loss per ADS attributable to Sohu.com Limited
|
$
|
(1.23)
|
$
|
(2.39)
|
$
|
(2.28)
|
ADSs used in computing diluted net loss per ADS attributable to
Sohu.com Limited
|
|
38,927
|
|
38,904
|
|
38,855
|
|
[5] The exchange gain in the second quarter of 2018 is primarily
resulted from the depreciation of RMB against USD.
|
SOHU.COM LIMITED
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(UNAUDITED, IN THOUSANDS)
|
|
|
|
As of Jun. 30, 2018
|
|
As of Dec. 31, 2017
|
ASSETS
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
669,081
|
$
|
1,366,115
|
Restricted cash
|
|
4,272
|
|
1,908
|
Short-term investments
|
|
1,324,865
|
|
818,934
|
Accounts
receivable, net
|
|
238,553
|
|
250,468
|
Prepaid and
other current assets
|
|
224,010
|
|
192,676
|
Total current assets
|
|
2,460,781
|
|
2,630,101
|
Long-term investments
|
|
94,556
|
|
90,145
|
Fixed assets, net
|
|
520,210
|
|
529,717
|
Goodwill
|
|
71,076
|
|
71,565
|
Intangible assets, net
|
|
28,220
|
|
23,060
|
Restricted time deposits
|
|
270
|
|
271
|
Prepaid non-current assets
|
|
3,877
|
|
4,211
|
Other assets
|
|
37,909
|
|
40,169
|
Total assets
|
$
|
3,216,899
|
$
|
3,389,239
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts
payable
|
$
|
315,076
|
$
|
288,394
|
Accrued
liabilities
|
|
329,274
|
|
343,106
|
Receipts in
advance and deferred revenue
|
|
135,299
|
|
127,758
|
Accrued salary
and benefits
|
|
97,154
|
|
102,087
|
Taxes
payable
|
|
88,043
|
|
96,541
|
Short-term
bank loans
|
|
104,283
|
|
61,216
|
Other
short-term liabilities
|
|
144,280
|
|
136,300
|
Total current liabilities
|
$
|
1,213,409
|
$
|
1,155,402
|
|
|
|
|
|
Long-term accounts payable
|
|
1,143
|
|
1,157
|
Long-term bank loans
|
|
122,419
|
|
122,433
|
Long-term tax liabilities
|
|
336,089
|
|
293,010
|
Total long-term liabilities
|
$
|
459,651
|
$
|
416,600
|
Total liabilities
|
$
|
1,673,060
|
$
|
1,572,002
|
|
|
|
|
|
SHAREHOLDERS' EQUITY:
|
|
|
|
|
Sohu.com Limited
shareholders' equity
|
|
616,464
|
|
750,634
|
Noncontrolling
Interest
|
|
927,375
|
|
1,066,603
|
Total shareholders' equity
|
$
|
1,543,839
|
$
|
1,817,237
|
|
|
|
|
|
Total liabilities and shareholders' equity
|
$
|
3,216,899
|
$
|
3,389,239
|
SOHU.COM LIMITED
|
RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATION MEASURES TO THE NEAREST
COMPARABLE GAAP MEASURES
|
(UNAUDITED, IN THOUSANDS EXCEPT PER ADS AMOUNTS)
|
|
|
|
Three Months Ended Jun. 30 , 2018
|
|
Three Months Ended Mar. 31 , 2018
|
|
Three Months Ended Jun. 30 , 201 7
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
(a)
|
|
|
|
|
(657)
|
(a)
|
|
|
|
|
182
|
(a)
|
|
Brand advertising gross profit
|
$
|
14,192
|
$
|
(2)
|
$
|
14,190
|
$
|
5,643
|
$
|
(657)
|
$
|
4,986
|
$
|
(38,659)
|
$
|
182
|
$
|
(38,477)
|
Brand advertising gross
margin
|
|
23%
|
|
|
|
23%
|
|
10%
|
|
|
|
9%
|
|
-45%
|
|
|
|
-45%
|
|
|
|
|
263
|
(a)
|
|
|
|
|
219
|
(a)
|
|
|
|
|
2
|
(a)
|
|
Search and search-related
advertising gross profit
|
$
|
102,233
|
$
|
263
|
$
|
102,496
|
$
|
75,605
|
$
|
219
|
$
|
75,824
|
$
|
90,055
|
$
|
2
|
$
|
90,057
|
Search and search-related
advertising gross margin
|
|
38%
|
|
|
|
38%
|
|
34%
|
|
|
|
34%
|
|
48%
|
|
|
|
48%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
261
|
(a)
|
|
|
|
|
(438)
|
(a)
|
|
|
|
|
184
|
(a)
|
|
Online advertising gross profit
|
$
|
116,425
|
$
|
261
|
$
|
116,686
|
$
|
81,248
|
$
|
(438)
|
$
|
80,810
|
$
|
51,396
|
$
|
184
|
$
|
51,580
|
Online advertising gross
margin
|
|
35%
|
|
|
|
35%
|
|
29%
|
|
|
|
29%
|
|
19%
|
|
|
|
19%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(23)
|
(a)
|
|
|
|
|
(12)
|
(a)
|
|
|
|
|
44
|
(a)
|
|
Online games gross profit
|
$
|
79,789
|
$
|
(23)
|
$
|
79,766
|
$
|
88,342
|
$
|
(12)
|
$
|
88,330
|
$
|
110,785
|
$
|
44
|
$
|
110,829
|
Online games gross margin
|
|
85%
|
|
|
|
85%
|
|
84%
|
|
|
|
84%
|
|
91%
|
|
|
|
91%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Others gross profit
|
$
|
15,548
|
$
|
-
|
(a) $
|
15,548
|
$
|
24,572
|
$
|
-
|
(a) $
|
24,572
|
$
|
20,793
|
$
|
-
|
(a) $
|
20,793
|
Others gross margin
|
|
26%
|
|
|
|
26%
|
|
34%
|
|
|
|
34%
|
|
32%
|
|
|
|
32%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
238
|
(a)
|
|
|
|
|
(450)
|
(a)
|
|
|
|
|
228
|
(a)
|
|
Gross profit
|
$
|
211,762
|
$
|
238
|
$
|
212,000
|
$
|
194,162
|
$
|
(450)
|
$
|
193,712
|
$
|
182,974
|
$
|
228
|
$
|
183,202
|
Gross margin
|
|
44%
|
|
|
|
44%
|
|
43%
|
|
|
|
43%
|
|
40%
|
|
|
|
40%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
$
|
243,963
|
$
|
(953)
|
(a) $
|
243,010
|
$
|
225,652
|
$
|
1,894
|
(a) $
|
227,546
|
$
|
222,648
|
$
|
(12,452)
|
(a) $
|
210,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,191
|
(a)
|
|
|
|
|
(2,344)
|
(a)
|
|
|
|
|
12,680
|
(a)
|
|
Operating loss
|
$
|
(32,201)
|
$
|
1,191
|
$
|
(31,010)
|
$
|
(31,490)
|
$
|
(2,344)
|
$
|
(33,834)
|
$
|
(39,674)
|
$
|
12,680
|
$
|
(26,994)
|
Operating margin
|
|
-7%
|
|
|
|
-6%
|
|
-7%
|
|
|
|
-7%
|
|
-9%
|
|
|
|
-6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
$
|
(5,891)
|
$
|
165
|
$
|
(5,726)
|
$
|
(63,379)
|
$
|
-
|
$
|
(63,379)
|
$
|
12,764
|
$
|
-
|
(a)$
|
12,764
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,191
|
(a)
|
|
|
|
|
(2,344)
|
(a)
|
|
|
|
|
12,680
|
(a)
|
|
|
|
|
|
(494)
|
(c)
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
Net loss before non-
controlling interest
|
$
|
(15,175)
|
$
|
697
|
$
|
(14,478)
|
$
|
(87,201)
|
$
|
(2,344)
|
$
|
(89,545)
|
$
|
(48,052)
|
$
|
12,680
|
$
|
(35,372)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,191
|
(a)
|
|
|
|
|
(2,344)
|
(a)
|
|
|
|
|
12,680
|
(a)
|
|
|
|
|
|
(1,976)
|
(b)
|
|
|
|
|
(2,102)
|
(b)
|
|
|
|
|
4,254
|
(b)
|
|
|
|
|
|
(494)
|
(c)
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
Net loss attributable to
Sohu.com Limited for diluted
net loss per ADS
|
$
|
(47,965)
|
$
|
(1,279)
|
|
(49,244)
|
$
|
(92,925)
|
$
|
(4,446)
|
|
(97,371)
|
$
|
(88,698)
|
$
|
16,934
|
$
|
(71,764)
|
Diluted net loss per ADS
attributable to Sohu.com
Limited
|
$
|
(1.23)
|
|
|
|
(1.27)
|
$
|
(2.39)
|
|
|
|
(2.50)
|
$
|
(2.28)
|
|
|
$
|
(1.85)
|
ADSs used in computing
diluted net loss per ADS
attributable to Sohu.com
Limited
|
|
38,927
|
|
|
|
38,927
|
|
38,904
|
|
|
|
38,904
|
|
38,855
|
|
|
|
38,855
|
|
Note:
|
(a) To eliminate the impact of share-based awards as measured using the
fair value method. This adjustment does not have an impact on income tax expense.
|
(b) To adjust Sohu's economic interests in Changyou and Sogou attributable
to the above non-GAAP adjustments. This adjustment does not have an impact on income tax expense.
|
(c) To adjust for a change in the fair value of the Company's investment in
Hylink and the income tax effect.
|
View original content with multimedia:http://www.prnewswire.com/news-releases/sohucom-reports-second-quarter-2018-unaudited-financial-results-300688282.html
SOURCE Sohu.com Ltd.