UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of March 2020
Commission File Number: 000-38511
SOHU.COM LIMITED
(Exact name of registrant as specified in its charter)
Level 18, Sohu.com Media Plaza
Block 3, No. 2 Kexueyuan South Road, Haidian District
Beijing 100190, Peoples Republic of China
+86-10-6272-6666
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐ No ☒
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐ No ☒
Press Release
On March 9, 2020, the registrant announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2019. A copy of the press release issued by the registrant regarding the foregoing is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
Exhibits.
99.1 | Press release reporting Sohu.com Limiteds unaudited financial results for the fourth quarter and fiscal year ended December 31, 2019. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
SOHU.COM LIMITED | ||
By: | /s/ Joanna Lv | |
Name: | Joanna Lv | |
Title: | Chief Financial Officer |
Date: March 9, 2020
Exhibit 99.1
SOHU.COM REPORTS FOURTH QUARTER AND FISCAL YEAR 2019 UNAUDITED FINANCIAL RESULTS
BEIJING, March 9, 2020 Sohu.com Limited (NASDAQ: SOHU), Chinas leading online media, video, search and gaming business group, today reported unaudited financial results for the fourth quarter and fiscal year ended December 31, 2019.
Fourth Quarter Highlights1
| Total revenues were US$490 million2, up 5% year-over-year and 2% quarter-over-quarter. |
| Brand advertising revenues were US$42 million, down 27% year-over-year and 10% quarter-over-quarter. |
| Search and search related advertising revenues3 were US$275 million, down 1% year-over-year and 5% quarter-over-quarter. |
| Online game revenues were US$132 million, up 40% year-over-year and 22% quarter-over-quarter. |
| Including an impairment charge of approximately US$23 million recognized for the quarter for an investment unrelated to the Company core businesses, GAAP net loss attributable to Sohu.com Limited was US$18 million, compared with net income of US$23 million in the fourth quarter of 2018. |
| Excluding the impairment charge, non-GAAP net income attributable to Sohu.com Limited was US$7 million, compared with a net loss of US$51 million in the fourth quarter of 2018 and a net loss of US$17 million in the third quarter of 2019. |
| Excluding the profit/loss generated by Sogou and Changyou, and further excluding the impairment charge, non-GAAP net loss attributable to Sohu.com Limited was US$46 million, compared with a net loss of US$75 million in the fourth quarter of 2018 and a net loss of US$53 million in the third quarter of 2019. |
Fiscal Year 2019 Highlights
| Total revenues were US$1.85 billion, up 2% compared with 2018. |
| Brand advertising revenues were US$175 million, down 25% compared with 2018. |
| Search and search related advertising revenues were US$1.07 billion, up 5% compared with 2018. |
| Online game revenues were US$441 million, up 13% compared with 2018. |
| GAAP net loss attributable to Sohu.com Limited was US$128 million, compared with a net loss of US$131 million in 2018. |
| Non-GAAP net loss attributable to Sohu.com Limited was US$93 million, compared with a net loss of US$207 million in 2018. |
| Excluding the profit/loss generated by Sogou and Changyou, the Non-GAAP net loss attributable to Sohu.com Limited was US$246 million, compared with a net loss of US$326 million in 2018. |
Dr. Charles Zhang, Chairman and CEO of Sohu.com Limited, commented, During 2019, Chinas economy continued to slow down and competition intensified. However, these challenges did not stop us from exploring new opportunities and improving operating efficiencies. As a result, our operating results further improved due to the solid performance of our business and the effective cost saving initiatives. For the fourth quarter of 2019, excluding an impairment charge recognized for an investment unrelated to our core businesses, non-GAAP net income attributable to Sohu.com Limited was US$7 million. For Sohu Media Portal, we strengthened our position as a mainstream media platform with high quality original content and various events. For Sohu Video, with the unique and high-quality dramas and other shows, we actively searched for diversified monetization sources. With improved monetization capabilities and strict budget control, Sohu video was able to further trim its losses in 2019. For Sogou, search revenue grew faster than the industry average, and revenues from Sogous Recommendation Service that leverages Mobile Keyboard continued to experience robust growth. In 2019, Changyous online games performed well, and it took a number of steps to enhance its capacity to create new, high-quality games.
1 | As Changyous cinema advertising business ceased operations during the third quarter of 2019, its results of operations have been excluded from the Companys results from continuing operations in the condensed consolidated statements of operations and are presented in separate line items as discontinued operations. Retrospective adjustments to the historical statements have been made in order to provide a consistent basis of comparison. Unless indicated otherwise, results presented in this release are related to continuing operations only, and exclude results from the cinema advertising business. |
2 | On a constant currency (non-GAAP) basis, if the exchange rate in the fourth quarter of 2019 had been the same as it was in the fourth quarter of 2018, or RMB6.91=US$1.00, US$ total revenues in the fourth quarter of 2019 would have been US$498 million, or US$8 million more than GAAP total revenues, and up 7% year-over-year. |
3 | Search and Search related advertising revenues exclude intra-Group transactions. |
1
Fourth Quarter Financial Results
Revenues
Total revenues for the fourth quarter of 2019 were US$490 million, up 5% year-over-year and 2% quarter-over-quarter.
Total online advertising revenues, which include revenues from the brand advertising and search and search-related advertising businesses, for the fourth quarter of 2019 were US$316 million, down 5% both year-over-year and quarter-over-quarter.
Brand advertising revenues for the fourth quarter of 2019 totaled US$42 million, down 27% year-over-year and 10% quarter-over-quarter. The decrease was mainly due to decreases in portal and video advertising revenues.
Search and search-related advertising revenues for the fourth quarter of 2019 were US$275 million, down 1% year-over-year and 5% quarter-over-quarter.
Online game revenues for the fourth quarter of 2019 were US$132 million, up 40% year-over-year and 22% quarter-over-quarter. The year-over-year and quarter-over-quarter increases were mainly due to the contribution of TLBB Honor, as well as improved performance of some of Changyous older games, including TLBB PC and Legacy TLBB Mobile, as a result of content updates and some promotional activities during the quarter.
Gross Margin
Both GAAP and non-GAAP4 gross margin was 52% for the fourth quarter of 2019, compared with 46% in the fourth quarter of 2018 and 48% in the third quarter of 2019.
Both GAAP and non-GAAP gross margin for the online advertising business for the fourth quarter of 2019 was 39%, compared with 32% in the fourth quarter of 2018 and 37% in the third quarter of 2019.
Both GAAP and non-GAAP gross margin for the brand advertising business in the fourth quarter of 2019 was 31%, compared with 26% in the fourth quarter of 2018 and 31% in the third quarter of 2019. The year-over-year margin improvement was mainly due to decreased video content cost.
GAAP gross margin for the search and search-related advertising business in the fourth quarter of 2019 was 40%, compared with 34% in the fourth quarter of 2018 and 38% in the third quarter of 2019. Non-GAAP gross margin for the search and search-related advertising business in the fourth quarter of 2019 was 41%, compared with 34% in the fourth quarter of 2018 and 38% in the third quarter of 2019. The year-over-year and quarter-over-quarter increases primarily resulted from decreases in traffic acquisition cost as a percentage of search and search related advertising revenues.
Both GAAP and non-GAAP gross margin for online games in the fourth quarter of 2019 was 75%, compared with 85% in the fourth quarter of 2018 and 78% in the third quarter of 2019. The decreases in gross margins were mainly a result of an increase in the revenue contribution from new mobile games, primarily TLBB Honor, which typically require larger revenue-sharing payments compared with PC games and Legacy TLBB Mobile, and as a result drive down gross margin.
4 | Non-GAAP results exclude share-based compensation expense; non-cash tax benefits from excess tax deductions related to share-based awards; changes in fair value recognized in the Companys consolidated statements of operations with respect to equity investments with readily determinable fair values; a one-time impairment charge recognized for an investment unrelated to the Companys core businesses; income/expense from the adjustment of contingent consideration previously recorded for acquisitions; dividends and deemed dividends to non-controlling preferred shareholders of Sogou; a one-time income tax expense recognized in the fourth quarter of 2017 as a result of the one-time transition tax (the Toll Charge) imposed by the U.S. Tax Cuts and Jobs Act signed into law on December 22, 2017 (the TCJA); the subsequent re-evaluation for the fourth quarter of 2018 and adjustment of the tax expense previously recognized for the Toll Charge; the resulting recognition of a previously unrecognized tax benefit and recording of an uncertain tax position related to the balance of the Toll Charge; and interest accrued in relation to the previously unrecognized tax benefit. Explanation of the Companys 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. |
2
Operating Expenses
For the fourth quarter of 2019, GAAP operating expenses totaled US$211 million, down 15% year-over-year and 4% quarter-over-quarter. Non-GAAP operating expenses were US$204 million, down 17% year-over-year and 5% quarter-over-quarter. The year-over-year decrease in operating expenses was mainly due to decreased marketing expenses, and an approximately US$16 million impairment charge recognized by Changyou related to its 17173.com website business in the fourth quarter of 2018. The quarter-over-quarter decrease was mainly due to decreased marketing expenses.
Operating Profit/(Loss)
GAAP operating profit for the fourth quarter of 2019 was US$42 million, compared with an operating loss of US$36 million in the fourth quarter of 2018 and an operating profit of US$12 million in the third quarter of 2019.
Non-GAAP operating profit for the fourth quarter of 2019 was US$49 million, compared with an operating loss of US$34 million in the fourth quarter of 2018 and an operating profit of US$16 million in the third quarter of 2019.
Income Tax Expense
GAAP income tax benefit was US$1 million for the fourth quarter of 2019, compared with income tax benefit of US$70 million in the fourth quarter of 2018 and income tax expense of US$17 million in the third quarter of 2019. Non-GAAP income tax benefit was US$4 million for the fourth quarter of 2019, compared with income tax expense of US$5 million in the fourth quarter of 2018 and income tax expense of US$15 million in the third quarter of 2019.
The income tax benefit in the fourth quarter of 2019 included a one-time tax benefit of US$19 million that was recognized as a result of some of the Changyous subsidiaries having been granted preferential tax rates upon their receipt of 2018 Key National Software Enterprise status or 2018 Software Enterprise status. GAAP income tax benefit recognized in the fourth quarter of 2018 resulted from managements re-evaluation and adjustment of the tax expense previously recognized in the fourth quarter of 2017 for the one-time transition tax (the Toll Charge) imposed by the U.S. Tax Cuts and Jobs Act (the TCJA), and interest accrued in relation to the unrecognized tax benefit.5.
Net Income/(Loss)
GAAP net loss attributable to Sohu.com Limited for the fourth quarter of 2019 was US$18 million, or US$0.45 loss per fully-diluted ADS, compared with net income of US$23 million in the fourth quarter of 2018 and a net loss of US$21 million in the third quarter of 2019. Non-GAAP net income attributable to Sohu.com Limited for the fourth quarter of 2019 was US$7 million, or US$0.17 income per fully-diluted ADS, compared with a net loss of US$51 million in the fourth quarter of 2018 and a net loss of US$17 million in the third quarter of 2019.
Liquidity
As of December 31, 2019, cash and cash equivalents and short-term investments held by the Sohu Group, minus short-term bank loans, were US$1.51 billion, compared with US$1.73 billion as of December 31, 2018.
Fiscal Year 2019 Financial Results
Revenues
Total revenues for 2019 were US$1.85 billion, up 2% compared with 2018.
Total online advertising revenues, which include revenues from the brand advertising and search and search-related advertising businesses, for 2019 were US$1.25 billion, down 1% compared with 2018.
Brand advertising revenues for 2019 were US$175 million, down 25% compared with 2018. The decrease was mainly due to declines in portal and video advertising revenues.
Search and search-related advertising revenues for 2019 were US$1.07 billion, up 5% compared with 2018.
5 | The tax benefit recognized and the unrecognized tax benefit in relation to the Toll Charge may be subject to further adjustment in subsequent periods based on future circumstances and on managements further judgment and estimates. |
3
Online game revenues for 2019 were US$441 million, up 13% compared with 2018. The increase was mainly due to the revenue contribution from TLBB Honor, which was launched in the third quarter of 2019, as well as improved performance of some of Changyous older games in 2019, including TLBB PC.
Gross Margin
Both GAAP and non-GAAP gross margin was 47% for 2019, compared with 46% in 2018.
Both GAAP and non-GAAP gross margin for the online advertising business for 2019 was 34%, compared with 32% in 2018.
Both GAAP and non-GAAP gross margin for the brand advertising business for 2019 was 28%, compared with 20% in 2018. The increase was mainly attributable to a decrease in video content cost.
GAAP gross margin for the search and search-related advertising business for 2019 was 34%, compared with 35% in 2018. Non-GAAP gross margin for the search and search-related advertising business for 2019 was 35%, compared with 35% in 2018.
Both GAAP and non-GAAP gross margin for online games for 2019 was 80%, compared with 84% in 2018.
Operating Expenses
For 2019, GAAP operating expenses totaled US$863 million, down 9% compared with 2018. Non-GAAP operating expenses were US$845 million, down 10% compared with 2018. The decrease was mainly due to decreased marketing and promotional expenses.
Operating Profit/(Loss)
GAAP operating profit for 2019 was US$0.4 million, compared with an operating loss of US$116 million in 2018.
Non-GAAP operating profit for 2019 was US$19 million, compared with an operating loss of US$114 million in 2018.
Income Tax Expense
GAAP income tax expense for 2019 was US$31 million, compared with income tax benefit of US$13 million in 2018. Non-GAAP income tax expense for 2019 was US$23 million, compared with income tax expense of US$62 million in 2018. The income tax expense in 2019 included a one-time tax benefit of US$19 million that was recognized as a result of some of the Changyous subsidiaries having been granted preferential tax rates upon their receipt of 2018 Key National Software Enterprise status or 2018 Software Enterprise status. GAAP income tax benefit in 2018 included managements re-evaluation and adjustment of the tax expense previously recognized for the Toll Charge in the fourth quarter of 2017.
Net Loss
GAAP net loss attributable to Sohu.com Limited for 2019 was US$128 million, or US$3.25 loss per fully-diluted ADS, compared with a net loss of US$131 million in 2018. Non-GAAP net loss attributable to Sohu.com Limited for 2019 was US$93 million, or US$2.38 loss per fully-diluted ADS, compared with a net loss of US$207million in 2018.
Business Outlook
For the first quarter of 2020, Sohu estimates:
| Total revenues to be between US$400 million and US$435 million. |
| Brand advertising revenues to be between US$25 million and US$30 million; this implies an annual decrease of 30% to 42% and a sequential decrease of 28% to 40%. |
| Sogou revenues to be between US$240 million and US$260 million; this implies an annual decrease of 5% to an annual increase of 3% and a sequential decrease of 14 to 20%. |
4
| Online game revenues to be between US$120 million and US$130 million; this implies an annual increase of 21% to 31% and a sequential decrease of 1% to 9%. |
| Non-GAAP net loss attributable to Sohu.com Limited. to be between US$25 million and US$35 million, and non-GAAP loss per fully-diluted ADS to be between US$0.65 and US$0.90. GAAP net loss attributable to Sohu.com Limited to be between US$28 million and US$38 million, and GAAP loss per fully-diluted ADS to be between US$0.70 and US$0.95. |
| Excluding the profit/loss generated by Sogou and Changyou, Non-GAAP net loss attributable to Sohu.com Limited. to be between US$43 million and US$48 million, GAAP net loss attributable to Sohu.com Limited to be between US$45 million and US$50 million. |
For the first quarter 2020 guidance, the Company has adopted a presumed exchange rate of RMB7.00=US$1.00, as compared with the actual exchange rate of approximately RMB6.74=US$1.00 for the first quarter of 2019, and RMB7.03=US$1.00 for the fourth quarter of 2019.
This forecast reflects Sohus managements current and preliminary view, which at present is subject to substantial uncertainty, particularly in view of the potential impact of the COVID-19 virus, the effects of which are difficult to analyze and predict.
Non-GAAP Disclosure
To supplement the unaudited consolidated financial statements presented in accordance with accounting principles generally accepted in the United States of America (GAAP), Sohus management uses non-GAAP measures of gross profit, operating profit, net income, net income attributable to Sohu.com Limited and diluted net income attributable to Sohu.com Limited per ADS, which are adjusted from results based on GAAP to exclude the impact of the share-based awards, which consist mainly of share-based compensation expenses and non-cash tax benefits from excess tax deductions related to share-based awards; changes in fair value recognized in the Companys consolidated statements of operations with respect to equity investments with readily determinable fair values; a one-time impairment charge recognized for an investment unrelated to the Companys core businesses; income/expense from the adjustment of contingent consideration previously recorded for acquisitions; dividend and deemed dividend to non-controlling preferred shareholders; the one-time income tax expense recognized in the fourth quarter of 2017 as a result of the Toll Charge imposed by the TCJA and the subsequent re-evaluation for the fourth quarter of 2018 and adjustment of the tax expense previously recognized for the Toll Charge; the resulting recognition of a previously unrecognized tax benefit and recording of an uncertain tax position related to the balance of the Toll Charge; and interest expense recognized in connection with the Toll Charge. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results.
Sohus management believes excluding share-based compensation expense, changes in fair value recognized in the Companys consolidated statements of operations with respect to equity investments with readily determinable fair values; the one-time impairment charge recognized for an investment unrelated to the Companys core businesses; non-cash tax benefits from excess tax deductions related to share-based awards; income/expense from the adjustment of contingent consideration previously recorded for acquisitions; dividend and deemed dividend to non-controlling preferred shareholders; and income tax expense, income tax benefit, uncertain tax position, and interest recognized in relation to the Toll Charge from its non-GAAP financial measure is useful for itself and investors. Further, the impact of share-based compensation expense and changes in fair value recognized in the Companys consolidated statements of operations with respect to equity investments with readily determinable fair values; the one-time impairment charge recognized for an investment unrelated to the Companys core businesses; non-cash tax benefits from excess tax deductions related to share-based awards; income/expense from the adjustment of contingent consideration previously recorded for acquisitions; dividend and deemed dividend to non-controlling preferred shareholders; the one-time income tax expense recognized in the fourth quarter of 2017 as a result of the Toll Charge imposed by the TCJA and the subsequent re-evaluation for the fourth quarter of 2018 and adjustment of the tax expense previously recognized for the Toll Charge; the resulting recognition of a previously unrecognized tax benefit and recording of an uncertain tax position related to the balance of the Toll Charge; and interest expense recognized in connection with the Toll Charge cannot be anticipated by management and business line leaders and these expenses were not built into the annual budgets and quarterly forecasts that have been the basis for information Sohu provides to analysts and investors as guidance for future operating performance. As the impact of share-based compensation expense and changes in fair value recognized in the Companys consolidated statements of operations with respect to equity investments with readily determinable fair values, the one-time impairment charge recognized for an investment unrelated to the Companys core businesses, non-cash tax benefits from excess tax deductions related to share-based awards, income/expense from the adjustment of contingent consideration previously recorded for acquisitions, and dividend and deemed dividend to non-controlling preferred shareholders does not involve subsequent cash outflow or is reflected in the cash flows at the equity transaction level, Sohu does not factor this impact in when evaluating and approving expenditures or when determining the allocation of its resources to its business segments. As a result, in general, the monthly financial results for internal reporting and any performance measures for commissions and bonuses are based on non-GAAP financial measures that exclude share-based compensation expense and changes in fair value recognized in the Companys consolidated statements of operations with respect to equity investments with readily determinable fair values, the one-time impairment charge recognized for an investment unrelated to the Companys core businesses, non-cash tax benefits from excess tax deductions related to share-based awards, income/expense from the adjustment of contingent consideration previously recorded for acquisitions, and dividend and deemed dividend to non-controlling preferred shareholders, and also excluded the one-time income tax expense recognized in the fourth quarter of 2017 as a result of the Toll Charge imposed by the TCJA and the subsequent re-evaluation for the fourth quarter of 2018 and adjustment of the tax expense previously recognized for the Toll Charge, the resulting recognition of a previously unrecognized tax benefit and recording of an uncertain tax position related to the balance of the Toll Charge, and interest expense recognized in connection with the Toll Charge.
5
The non-GAAP financial measures are provided to enhance investors overall understanding of Sohus current financial performance and prospects for the future. A limitation of using non-GAAP gross profit, operating profit, net income, net income attributable to Sohu.com Limited and diluted net income attributable to Sohu.com Limited per ADS, excluding share-based compensation expense, non-cash tax benefits from excess tax deductions related to share-based awards, income/expense from the adjustment of contingent consideration previously recorded for acquisitions, dividend, and deemed dividend to non-controlling preferred shareholders is that the impact of share-based awards and non-cash tax benefits from excess tax deductions related to share-based awards has been and will continue to be a significant recurring expense in Sohus 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 Sohus unaudited financial statements prepared in accordance with GAAP.
Safe Harbor Statement
This announcement contains forward-looking statements. It is currently expected that the Business Outlook will not be updated until release of Sohus 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 Sohus 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 Sohus reported US dollar results; recent slow-downs in the growth of the Chinese economy; the uncertain regulatory landscape in the Peoples Republic of China; fluctuations in Sohus quarterly operating results; the possibilities that Sohu will be unable to recoup its investment in video content and that Changyou will be unable to develop a series of successful games for mobile platforms or successfully monetize mobile games it develops or acquires; Sohus reliance on online advertising sales, online games and mobile services for its revenues; the impact of the U.S. TCJA; and the effects of the COVID-19 virus on the economy in China in general and on Sohus business in particular. Further information regarding these and other risks is included in Sohus annual report on Form 20-F for the year ended December 31, 2018, and other filings with the Securities and Exchange Commission.
Conference Call and Webcast
Sohus management team will host a conference call at 8:30 a.m. U.S. Eastern Time, March 9, 2020 (8:30 p.m. Beijing/Hong Kong time, March 9, 2020) following the quarterly results announcement.
The dial-in details for the live conference call are:
US Toll-Free: |
+1-866-519-4004 | |
International: |
+65-6713-5090 | |
Hong Kong: |
+852-3018-6771 | |
China Mainland |
+86-800-819-0121 / +86-400-620-8038 | |
Passcode: |
SOHU |
6
Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call.
A telephone replay of the call will be available after the conclusion of the conference call at 11:30 a.m. Eastern Time on March 9 through March 16, 2020. The dial-in details for the telephone replay are:
International: |
+1-646-254-3697 | |
Passcode: |
4797261 |
The live Webcast and archive of the conference call will be available on the Investor Relations section of Sohus Website at http://investors.sohu.com/.
About Sohu.com
Sohu.com Limited (NASDAQ: SOHU) is Chinas premier online brand and indispensable to the daily life of millions of Chinese, providing a network of web properties and community based/web 2.0 products which offer the vast Sohu user community a broad array of choices regarding information, entertainment and communication. Sohu has built one of the most comprehensive matrices of Chinese language web properties and proprietary search engines, consisting of the mass portal and leading online media destination www.sohu.com; interactive search engine www.sogou.com; developer and operator of online games www.changyou.com/en/ and online video website tv.sohu.com.
Sohus corporate services consist of online brand advertising on Sohus 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. Sohus online game subsidiary, Changyou.com (NASDAQ: CYOU) develops and operates a diverse portfolio of PC and mobile games, such as Tian Long Ba Bu (TLBB), one of the most popular PC games in China. Changyou also owns and operates the 17173.com Website, a game information portal in China. Sohus 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 Chinas internet pioneers, is in its twenty-fourth year of operation.
For investor and media inquiries, please contact:
In China:
Ms. Pu Huang | ||
Sohu.com Limited | ||
Tel: | +86 (10) 6272-6645 | |
E-mail: | ir@contact.sohu.com |
In the United States:
Ms. Linda Bergkamp | ||
Christensen | ||
Tel: | +1 (480) 614-3004 | |
E-mail: | lbergkamp@christensenir.com |
7
SOHU.COM LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Three Months Ended | Twelve Months Ended | |||||||||||||||||||
Dec. 31, 2019 |
Sep. 30, 2019 |
Dec. 31, 2018 |
Dec. 31, 2019 |
Dec. 31, 2018 |
||||||||||||||||
Revenues: |
||||||||||||||||||||
Online advertising |
||||||||||||||||||||
Brand advertising |
$ | 41,599 | $ | 46,323 | $ | 57,222 | $ | 174,861 | $ | 231,945 | ||||||||||
Search and search-related advertising |
274,590 | 288,198 | 276,666 | 1,072,860 | 1,022,456 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Subtotal |
316,189 | 334,521 | 333,888 | 1,247,721 | 1,254,401 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Online games |
131,689 | 108,012 | 94,106 | 440,902 | 389,788 | |||||||||||||||
Others |
41,769 | 39,750 | 36,287 | 156,824 | 168,638 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total revenues |
489,647 | 482,283 | 464,281 | 1,845,447 | 1,812,827 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Cost of revenues: |
||||||||||||||||||||
Online advertising Brand advertising (includes stock-based compensation expense of $2, $4, $-34, $22 and $-707, respectively) |
28,677 | 31,992 | 42,485 | 126,406 | 184,473 | |||||||||||||||
Search and search-related (includes stock-based compensation expense of $256, $64, $-48, $474 and $669, respectively) |
163,384 | 178,343 | 183,678 | 703,144 | 664,164 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Subtotal |
192,061 | 210,335 | 226,163 | 829,550 | 848,637 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Online games (includes stock-based compensation expense of $137, $0, $7, $120 and $-31, respectively) |
33,181 | 23,286 | 14,499 | 88,992 | 60,981 | |||||||||||||||
Others |
12,198 | 17,680 | 12,113 | 63,553 | 72,868 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total cost of revenues |
237,440 | 251,301 | 252,775 | 982,095 | 982,486 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gross profit |
252,207 | 230,982 | 211,506 | 863,352 | 830,341 | |||||||||||||||
Operating expenses: |
||||||||||||||||||||
Product development (includes stock-based compensation expense of $4,594, $2,863, $919, $12,063 and $6,132, respectively) |
105,425 | 104,207 | 108,611 | 419,114 | 441,161 | |||||||||||||||
Sales and marketing (includes stock-based compensation expense of $797, $1,126, $216, $3,398 and $405, respectively) |
78,375 | 91,335 | 97,422 | 340,840 | 380,290 | |||||||||||||||
General and administrative (includes stock-based compensation expense of $1,518, $317, $470, $2,174 and $-4,372, respectively) |
26,901 | 23,797 | 25,119 | 95,773 | 108,764 | |||||||||||||||
Goodwill impairment and impairment of intangibles via acquisitions of businesses |
| | 16,369 | 6 | 7,245 | 16,369 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total operating expenses |
210,701 | 219,339 | 247,521 | 862,972 | 946,584 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating profit/(loss) |
41,506 | 11,643 | (36,015 | ) | 380 | (116,243 | ) | |||||||||||||
Other income/(expense) |
(13,787 | )7 | 15,832 | 13,073 | 21,948 | 64,724 | ||||||||||||||
Interest income |
1,508 | 1,959 | 6,455 | 10,546 | 24,074 | |||||||||||||||
Interest expense |
(2,501 | ) | (2,631 | ) | (5,279 | ) | (14,370 | ) | (17,538 | ) | ||||||||||
Exchange difference |
(2,324 | ) | 4,714 | (378 | ) | 3,279 | 9,026 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income/(Loss) before income tax expense |
24,402 | 31,517 | (22,144 | ) | 21,783 | (35,957 | ) | |||||||||||||
Income tax expense/(benefit) |
(954 | ) | 17,011 | (69,557 | ) | 31,176 | (13,433 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income/(loss) from continuing operations |
25,356 | 14,506 | 47,413 | (9,393 | ) | (22,524 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net loss from discontinued operations |
| (2,706 | ) | (12,000 | ) | (33,998 | ) | (44,835 | ) | |||||||||||
Net income/(loss) |
25,356 | 11,800 | 35,413 | (43,391 | ) | (67,359 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Less: Net income from continuing operations attributable to the noncontrolling interest shareholders |
42,451 | 35,615 | 24,685 | 117,177 | 107,318 | |||||||||||||||
Less: Net loss from discontinued operations attributable to the noncontrolling interest shareholders |
| (896 | ) | (3,912 | ) | (11,232 | ) | (14,595 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income/(loss) from continuing operations attributable to Sohu.com Limited |
(17,095 | ) | (21,109 | ) | 22,728 | (126,570 | ) | (129,842 | ) | |||||||||||
Net loss from discontinued operations attributable to Sohu.com Limited |
| (1,810 | ) | (8,088 | ) | (22,766 | ) | (30,240 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income/(loss) attributable to Sohu.com Limited |
(17,095 | ) | (22,919 | ) | 14,640 | (149,336 | ) | (160,082 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic net income/(loss) from continuing operations per ADS attributable to Sohu.com Limited |
(0.44 | ) | (0.54 | ) | 0.58 | (3.22 | ) | (3.33 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic net loss from discontinued operations per ADS attributable to Sohu.com Limited |
| (0.04 | ) | (0.21 | ) | (0.58 | ) | (0.78 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Basic net income/(loss) per ADS attributable to Sohu.com Limited |
$ | (0.44 | ) | $ | (0.58 | ) | $ | 0.37 | $ | (3.80 | ) | $ | (4.11 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
ADS used in computing basic net loss per ADS attributable to Sohu.com Limited |
39,263 | 39,254 | 39,069 | 39,249 | 38,959 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Diluted net income/(loss) from continuing operations per ADS attributable to Sohu.com Limited |
(0.45 | ) | (0.55 | ) | 0.57 | (3.25 | ) | (3.36 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Diluted net loss from discontinued operations per ADS attributable to Sohu.com Limited |
| (0.04 | ) | (0.20 | ) | (0.58 | ) | (0.77 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Diluted net income/(loss) per ADS attributable to Sohu.com Limited |
$ | (0.45 | ) | $ | (0.59 | ) | $ | 0.37 | $ | (3.83 | ) | $ | (4.13 | ) | ||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
ADS used in computing diluted net loss per ADS attributable to Sohu.com Limited |
39,263 | 39,254 | 39,234 | 39,249 | 38,959 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
6 | The impairment was mainly related to Changyous 17173.com website business. The launch of new initiatives for the 17173.com website fell behind schedule in the fourth quarter of 2018, and the profit outlook of the business remained uncertain. In addition, due to more stringent regulations, there was a significant decline in the number of new game launches in the market, so the number of games marketed on 17173.com also fell. As a result, Changyou determined that the future performance of 17173.com would likely fall short of expectations, and that impairment charges were required. |
7 | Other expenses in the fourth quarter of 2019 mainly included an impairment charge of approximately US$23 million recognized for the quarter for an investment unrelated to the Company core businesses, and an impairment loss of approximately US$9 million on certain Sogou equity investments. |
8
SOHU.COM LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED, IN THOUSANDS)
As of Dec. 31, 2019 | As of Dec. 31, 2018 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 305,126 | $ | 819,485 | ||||
Restricted cash |
8,661 | 3,539 | ||||||
Short-term investments |
1,316,833 | 1,041,395 | ||||||
Account and financing receivable, net |
260,716 | 264,411 | ||||||
Prepaid and other current assets |
124,332 | 225,744 | ||||||
Current assets associated with discontinued operations |
| 34,324 | ||||||
|
|
|
|
|||||
Total current assets |
2,015,668 | 2,388,898 | ||||||
|
|
|
|
|||||
Long-term investments |
94,332 | 108,356 | ||||||
Fixed assets, net |
447,688 | 504,647 | ||||||
Goodwill |
52,923 | 53,263 | ||||||
Intangible assets, net |
11,437 | 24,071 | ||||||
Restricted time deposits |
240 | 244,179 | ||||||
Prepaid non-current assets |
1,882 | 3,107 | ||||||
Other assets8 |
65,620 | 43,928 | ||||||
Non-current assets associated with discontinued operations |
| 398 | ||||||
|
|
|
|
|||||
Total assets |
$ | 2,689,790 | $ | 3,370,847 | ||||
|
|
|
|
|||||
LIABILITIES |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 253,403 | $ | 286,745 | ||||
Accrued liabilities |
249,810 | 292,282 | ||||||
Receipts in advance and deferred revenue |
118,222 | 120,404 | ||||||
Accrued salary and benefits |
110,833 | 108,011 | ||||||
Taxes payable |
102,686 | 93,073 | ||||||
Short-term bank loans |
114,528 | 129,677 | ||||||
Other short-term liabilities8 |
149,311 | 123,921 | ||||||
Current liabilities associated with discontinued operations |
| 101,105 | ||||||
|
|
|
|
|||||
Total current liabilities |
$ | 1,098,793 | $ | 1,255,218 | ||||
|
|
|
|
|||||
Long-term accounts payable |
767 | 752 | ||||||
Long-term Bank Loans |
| 302,323 | ||||||
Long-term tax liabilities |
277,544 | 259,603 | ||||||
Other long-term liabilities8 |
5,769 | | ||||||
|
|
|
|
|||||
Total long-term liabilities |
$ | 284,080 | $ | 562,678 | ||||
|
|
|
|
|||||
Total liabilities |
$ | 1,382,873 | $ | 1,817,896 | ||||
|
|
|
|
|||||
SHAREHOLDERS EQUITY: |
||||||||
Sohu.com Limited shareholders equity |
428,454 | 588,840 | ||||||
Noncontrolling Interest |
878,463 | 964,111 | ||||||
|
|
|
|
|||||
Total shareholders equity |
$ | 1,306,917 | $ | 1,552,951 | ||||
|
|
|
|
|||||
Total liabilities and shareholders equity |
$ | 2,689,790 | $ | 3,370,847 | ||||
|
|
|
|
8 | We have adopted ASU No. 2016-02, Leases, beginning January 1, 2019. As a result of adoption of the standard, we recognized right-of-use assets of approximately $17 million in other assets, and lease liabilities of approximately $9 million and $6 million in other short-term liabilities and other long-term liabilities, respectively, on our consolidated balance sheet as of December 31, 2019. |
SOHU.COM LIMITED
RECONCILIATIONS OF NON-GAAP RESULTS MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES
(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Three Months Ended Dec. 31, 2019 | Three Months Ended Sep. 30, 2019 | Three Months Ended Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments |
Non-GAAP | GAAP | Non-GAAP Adjustments |
Non-GAAP | GAAP | Non-GAAP Adjustments |
Non-GAAP | ||||||||||||||||||||||||||||||||||||||||
2 | (a | ) | 4 | (a | ) | (34 | ) | (a | ) | |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
Brand advertising gross profit |
$ | 12,922 | $ | 2 | $ | 12,924 | $ | 14,331 | $ | 4 | $ | 14,335 | $ | 14,737 | $ | (34 | ) | $ | 14,703 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Brand advertising gross margin |
31 | % | 31 | % | 31 | % | 31 | % | 26 | % | 26 | % | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
256 | (a | ) | 64 | (a | ) | (48 | ) | (a | ) | |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
Search and search-related advertising gross profit |
$ | 111,206 | $ | 256 | $ | 111,462 | $ | 109,855 | $ | 64 | $ | 109,919 | $ | 92,988 | $ | (48 | ) | $ | 92,940 | |||||||||||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Search and search-related advertising gross margin |
40 | % | 41 | % | 38 | % | 38 | % | 34 | % | 34 | % | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
258 | (a | ) | 68 | (a | ) | (82 | ) | (a | ) | |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
Online advertising gross profit |
$ | 124,128 | $ | 258 | $ | 124,386 | $ | 124,186 | $ | 68 | $ | 124,254 | $ | 107,725 | $ | (82 | ) | $ | 107,643 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Online advertising gross margin |
39 | % | 39 | % | 37 | % | 37 | % | 32 | % | 32 | % | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
137 | (a | ) | | (a | ) | 7 | (a | ) | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
Online games gross profit |
$ | 98,508 | $ | 137 | $ | 98,645 | $ | 84,726 | $ | | $ | 84,726 | $ | 79,607 | $ | 7 | $ | 79,614 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Online games gross margin |
75 | % | 75 | % | 78 | % | 78 | % | 85 | % | 85 | % | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
Others gross profit |
$ | 29,571 | $ | | (a | ) | $ | 29,571 | $ | 22,070 | $ | | (a | ) | $ | 22,070 | $ | 24,174 | $ | | (a | ) | $ | 24,174 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Others gross margin |
71 | % | 71 | % | 56 | % | 56 | % | 67 | % | 67 | % | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
395 | (a | ) | 68 | (a | ) | (75 | ) | (a | ) | |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
Gross profit |
$ | 252,207 | $ | 395 | $ | 252,602 | $ | 230,982 | $ | 68 | $ | 231,050 | $ | 211,506 | $ | (75 | ) | $ | 211,431 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Gross margin |
52 | % | 52 | % | 48 | % | 48 | % | 46 | % | 46 | % | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
Operating expenses |
$ | 210,701 | $ | (6,909 | ) | (a | ) | $ | 203,792 | $ | 219,339 | $ | (4,306 | ) | (a | ) | $ | 215,033 | $ | 247,521 | $ | (1,605 | ) | (a | ) | $ | 245,916 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
7,304 | (a | ) | 4,374 | (a | ) | 1,530 | (a | ) | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
Operating profit/(loss) |
$ | 41,506 | $ | 7,304 | $ | 48,810 | $ | 11,643 | $ | 4,374 | $ | 16,017 | $ | (36,015 | ) | $ | 1,530 | $ | (34,485 | ) | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended Dec. 31, 2019 | Three Months Ended Sep. 30, 2019 | Three Months Ended Dec. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments |
Non-GAAP | GAAP | Non-GAAP Adjustments |
Non-GAAP | GAAP | Non-GAAP Adjustments |
Non-GAAP | ||||||||||||||||||||||||||||||||||||||||
Operating margin |
8 | % | 10 | % | 2 | % | 3 | % | -8 | % | -7 | % | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
Income tax expense |
$ | 954 | $ | 2,737 | (c,d | ) | $ | 3,691 | $ | (17,011 | ) | $ | 2,468 | (c,d | ) | $ | (14,543 | ) | $ | 69,557 | $ | (74,160 | ) | $ | (4,603 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
7,304 | (a | ) | 4,374 | (a | ) | 1,530 | (a | ) | ||||||||||||||||||||||||||||||||||||||||
(2,490 | ) | (c | ) | 448 | (c | ) | 267 | (c | ) | |||||||||||||||||||||||||||||||||||||||
1,907 | (d | ) | 2,618 | (d | ) | (74,071 | ) | (d | ) | |||||||||||||||||||||||||||||||||||||||
23,154 | (e | ) | | | ||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
Net income/(loss) before non-controlling interest |
$ | 25,356 | 29,875 | 55,231 | $ | 14,506 | 7,440 | 21,946 | $ | 47,413 | $ | (72,274 | ) | $ | (24,861 | ) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
7,304 | (a | ) | 4,374 | (a | ) | 1,530 | (a | ) | ||||||||||||||||||||||||||||||||||||||||
(5,416 | ) | (b | ) | (2,863 | ) | (b | ) | (988 | ) | (b | ) | |||||||||||||||||||||||||||||||||||||
(2,490 | ) | (c | ) | 448 | (c | ) | 267 | (c | ) | |||||||||||||||||||||||||||||||||||||||
1,907 | (d | ) | 2,618 | (d | ) | (74,071 | ) | (d | ) | |||||||||||||||||||||||||||||||||||||||
23,154 | (e | ) | | | ||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
Net income/(loss) from continuing operations attributable to Sohu.com Limited for diluted net loss per ADS |
$ | (17,613 | ) | 24,459 | 6,846 | $ | (21,400 | ) | 4,577 | (16,823 | ) | $ | 22,539 | $ | (73,262 | ) | (50,723 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Net loss from discontinued operations attributable to Sohu.com Limited for diluted net loss per ADS |
| | | (1,807 | ) | | (1,807 | ) | (8,028 | ) | 12 | (8,016 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Net income/(loss) attributable to Sohu.com Limited for diluted net loss per ADS |
(17,613 | ) | 24,459 | 6,846 | (23,207 | ) | 4,577 | (18,630 | ) | 14,511 | (73,250 | ) | (58,739 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Diluted net income/(loss) from continuing operations per ADS attributable to Sohu.com Limited |
$ | (0.45 | ) | 0.17 | $ | (0.55 | ) | (0.43 | ) | $ | 0.57 | (1.30 | ) | |||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
Diluted net loss from discontinued operations per ADS attributable to Sohu.com Limited |
| | (0.04 | ) | (0.04 | ) | (0.20 | ) | (0.20 | ) | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
Diluted net income/(loss) per ADS attributable to Sohu.com Limited |
(0.45 | ) | 0.17 | (0.59 | ) | (0.47 | ) | 0.37 | (1.50 | ) | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
Shares used in computing diluted net loss per ADS attributable to Sohu.com Limited |
39,263 | 39,396 | 39,254 | 39,254 | 39,234 | 39,069 | ||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
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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 Sohus 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 Companys investment in Hylink and the income tax effect. |
(d) | To adjust for the effect of the U.S. TCJA. |
(e) | To adjust for a one-time impairment charge recognized for an investment unrelated to the Companys core businesses |
SOHU.COM LIMITED
RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATION MEASURES TO THE NEAREST COMPARABLE GAAP
MEASURES
(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Twelve Months Ended Dec. 31, 2019 | Twelve Months Ended Dec. 31, 2018 | |||||||||||||||||||||||||||||||
GAAP | Non-GAAP Adjustments |
Non-GAAP | GAAP | Non-GAAP Adjustments |
Non-GAAP | |||||||||||||||||||||||||||
22 | (a | ) | (707 | ) | (a | ) | ||||||||||||||||||||||||||
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Brand advertising gross profit |
$ | 48,455 | $ | 22 | $ | 48,477 | $ | 47,472 | $ | (707 | ) | $ | 46,765 | |||||||||||||||||||
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Brand advertising gross margin |
28 | % | 28 | % | 20 | % | 20 | % | ||||||||||||||||||||||||
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474 | (a | ) | 669 | (a | ) | |||||||||||||||||||||||||||
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Search and search-related advertising gross profit |
$ | 369,716 | $ | 474 | $ | 370,190 | $ | 358,292 | $ | 669 | $ | 358,961 | ||||||||||||||||||||
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Search and search-related advertising gross margin |
34 | % | 35 | % | 35 | % | 35 | % | ||||||||||||||||||||||||
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496 | (a | ) | (38 | ) | (a | ) | ||||||||||||||||||||||||||
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Online advertising gross profit |
$ | 418,171 | $ | 496 | $ | 418,667 | $ | 405,764 | $ | (38 | ) | $ | 405,726 | |||||||||||||||||||
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Online advertising gross margin |
34 | % | 34 | % | 32 | % | 32 | % | ||||||||||||||||||||||||
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120 | (a | ) | (31 | ) | (a | ) | ||||||||||||||||||||||||||
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Online games gross profit |
$ | 351,910 | $ | 120 | $ | 352,030 | $ | 328,807 | $ | (31 | ) | $ | 328,776 | |||||||||||||||||||
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Online games gross margin |
80 | % | 80 | % | 84 | % | 84 | % | ||||||||||||||||||||||||
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Others gross profit |
$ | 93,271 | $ | | (a | ) | $ | 93,271 | $ | 95,770 | $ | | (a | ) | $ | 95,770 | ||||||||||||||||
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Others gross margin |
59 | % | 59 | % | 57 | % | 57 | % | ||||||||||||||||||||||||
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616 | (a | ) | (69 | ) | (a | ) | ||||||||||||||||||||||||||
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Gross profit |
$ | 863,352 | $ | 616 | $ | 863,968 | $ | 830,341 | $ | (69 | ) | $ | 830,272 | |||||||||||||||||||
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Gross margin |
47 | % | 47 | % | 46 | % | 46 | % | ||||||||||||||||||||||||
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Operating expenses |
$ | 862,972 | $ | (17,635 | ) | (a | ) | $ | 845,337 | $ | 946,584 | $ | (2,165 | ) | (a | ) | $ | 944,419 | ||||||||||||||
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18,251 | (a | ) | 2,096 | (a | ) | |||||||||||||||||||||||||||
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Operating loss |
$ | 380 | $ | 18,251 | $ | 18,631 | $ | (116,243 | ) | $ | 2,096 | $ | (114,147 | ) | ||||||||||||||||||
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Operating margin |
0 | % | 1 | % | -6 | % | -6 | % | ||||||||||||||||||||||||
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Income tax benefit/(expense) |
$ | (31,176 | ) | $ | 8,549 | (c,d | ) | $ | (22,627 | ) | $ | 13,433 | $ | (75,281 | ) | (c,d | ) | $ | (61,848 | ) | ||||||||||||
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18,251 | (a | ) | 2,096 | (a | ) | |||||||||||||||||||||||||||
(1,992 | ) | (c | ) | 3,634 | (c | ) | ||||||||||||||||||||||||||
7,887 | (d | ) | (74,071 | ) | (d | ) | ||||||||||||||||||||||||||
23,154 | (e | ) | | |||||||||||||||||||||||||||||
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Net loss before non-controlling interest |
$ | (9,393 | ) | $ | 47,300 | $ | 37,907 | $ | (22,524 | ) | $ | (68,341 | ) | $ | (90,865 | ) | ||||||||||||||||
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18,251 | (a | ) | 2,096 | (a | ) | |||||||||||||||||||||||||||
(12,811 | ) | (b | ) | (7,624 | ) | (b | ) | |||||||||||||||||||||||||
(1,992 | ) | (c | ) | 3,634 | (c | ) | ||||||||||||||||||||||||||
7,887 | (d | ) | (74,071 | ) | (d | ) | ||||||||||||||||||||||||||
23,154 | (e | ) | | |||||||||||||||||||||||||||||
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Net loss from continuing operations attributable to Sohu.com Limited for diluted net loss per ADS |
(127,738 | ) | 34,489 | (93,249 | ) | (130,960 | ) | (75,965 | ) | (206,925 | ) | |||||||||||||||||||||
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Net loss from discontinued operations attributable to Sohu.com Limited for diluted net loss per ADS |
(22,711 | ) | | (22,711 | ) | (29,999 | ) | 50 | (b | ) | (29,949 | ) | ||||||||||||||||||||
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Net loss attributable to Sohu.com Limited for diluted net loss per ADS |
$ | (150,449 | ) | 34,489 | (115,960 | ) | $ | (160,959 | ) | (75,915 | ) | (236,874 | ) | |||||||||||||||||||
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Diluted net loss from continuing operations per ADS attributable to Sohu.com Limited |
(3.25 | ) | (2.37 | ) | (3.36 | ) | (5.31 | ) | ||||||||||||||||||||||||
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Diluted net loss from discontinued operations per ADS attributable to Sohu.com Limited |
(0.58 | ) | (0.58 | ) | (0.77 | ) | (0.77 | ) | ||||||||||||||||||||||||
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Diluted net loss per ADS attributable to Sohu.com Limited. |
$ | (3.83 | ) | $ | (2.95 | ) | $ | (4.13 | ) | $ | (6.08 | ) | ||||||||||||||||||||
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ADS used in computing diluted net loss per ADS attributable to Sohu.com Limited |
39,249 | 39,249 | 38,959 | 38,959 | ||||||||||||||||||||||||||||
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Note:
(a) | To eliminate the impact of share-based awards as measured using the fair value method. |
(b) | To adjust Sohus economic interests in Changyou and Sogou attributable to the above non-GAAP adjustments. |
(c) | To adjust for a change in the fair value of the Companys investment in Hylink and the income tax effect. |
(d) | To adjust for the effect of the U.S. TCJA. |
(e) | To adjust for the one-time impairment charge recognized for an investment unrelated to the Companys core businesses. |