UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 18, 2017
SOHU.COM INC.
(Exact name of registrant as specified in its charter)
| Delaware | 0-30961 | 98-0204667 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
Level 18, SOHU.com Media Plaza
Block 3, No. 2 Kexueyuan South Road, Haidian District
Beijing 100190
People’s Republic of China
(011) 8610-6272-6666
(Address, including zip code, of registrant’s principal executive offices and registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02 | Results of Operations and Financial Condition. |
On February 21, 2017, the registrant announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2016. A copy of the press release issued by the registrant regarding the foregoing is filed herewith as Exhibit 99.1 and is incorporated herein by reference. The attached press release replaced an earlier version of the press release issued by the registrant in error, which earlier version included certain unaudited non-GAAP information stated in RMB related to the registrant’s subsidiary Sogou, Inc. that should be disregarded by investors.
| Item 8.01 | Other Events. |
On February 18, 2017, the registrant’s Board of Directors (the “Board”) appointed Dr. Zhonghan (John) Deng, an existing independent member of the Board, to be a member of the Compensation Committee (the “Compensation Committee”) of the Board, effective as of that date. The Compensation Committee currently consists of Dr. Dave Qi, who was an existing member of the Compensation Committee, and Dr. Deng.
As previously reported in a Form 8-K filed by the registrant on January 25, 2017, Dr. Edward B. Roberts resigned from the Board effective January 31, 2017, and as a result the Compensation Committee had only one member beginning on that date, and the registrant no longer complied with Nasdaq Listing Rule 5605(d)(2), which requires companies with securities listed on Nasdaq to have a compensation committee composed of at least two directors. As previously reported in the Form 8-K filed on January 25, 2017, the registrant relied on the cure period provided by Nasdaq Listing Rule 5605(d)(4), which would have permitted the vacancy on the Compensation Committee to continue until July 30, 2017.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| 99.1 | Press Release dated February 21, 2017 | |
SIGNATURES
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.
| DATED: February 21, 2017 | SOHU.COM INC. | |||||
| By: | /s/ Joanna Lv | |||||
| Joanna Lv | ||||||
| Acting Chief Financial Officer | ||||||
Exhibit 99.1
SOHU.COM REPORTS FOURTH QUARTER AND FISCAL YEAR 2016 UNAUDITED FINANCIAL RESULTS
BEIJING, February 21, 2017 –Sohu.com Inc. (NASDAQ: SOHU), China’s leading online media, video, search and gaming business group, today reported unaudited financial results for the fourth quarter and fiscal year ended December 31, 2016.
Fourth Quarter Highlights
| • | Total revenues were US$412 million1, down 12% year-over-year and flat quarter-over-quarter. |
| • | Brand advertising revenues were US$99 million, down 30% year-over-year and 11% quarter-over-quarter. |
| • | Sogou2 revenues were US$172 million, up 4% year-over-year and 3% quarter-over-quarter. |
| • | Online game revenues were US$95 million, down 25% year-over-year and 3% quarter-over-quarter. |
| • | GAAP net loss attributable to Sohu.com Inc. was US$66 million, or US$1.71 loss per fully-diluted share. |
Non-GAAP3 net loss attributable to Sohu.com Inc. was US$69 million, or US$1.79 loss per fully-diluted share.
Fiscal Year 2016 Highlights
| • | Total revenues were US$1.65 billion, down 15% compared with 2015. |
| • | Brand advertising revenues were US$448 million, down 22% compared with 2015. |
| • | Sogou revenues were US$660 million, up 12% compared with 2015. |
| • | Online game revenues were US$396 million, down 38% compared with 2015. |
| • | GAAP net loss attributable to Sohu.com Inc. was US$226 million, or US$5.83 loss per fully-diluted share. |
Non-GAAP net loss attributable to Sohu.com Inc. was US$219 million, or US$5.65 loss per fully-diluted share.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc., commented, “Looking back at 2016, we faced a challenging operating environment. The sluggish economy, intensified competition and tightening regulatory rules on search industry impacted Sohu Group’s financial performance. However, these challenges didn’t stop us from pursuing innovation across our key products and exploring new business opportunities. We saw encouraging progress in each of our major business lines. For Sohu Media Portal, through improved content and product design, the Sohu News App gained solid user traction. For Sohu Video, we made original production one of our top priorities as we released several hit shows and the exclusive content helped us rapidly expand our subscriber base. For Sogou, mobile search traffic and revenues continued to outgrow the industry, and we have made artificial intelligence, or AI, a major cornerstone of our long-term strategic direction. And lastly, Changyou focused their efforts on building a pipeline of high quality mobile games. It now prepares to roll out a few promising titles, including the Legacy TLBB mobile game, in 2017.”
Mr. Xiaochuan Wang, CEO of Sogou, commented, “In 2016, Sogou strengthened its competitive position through product differentiation and AI-powered technology innovation. We launched and upgraded a series of vertical channels, including English, Academic and Healthcare. We also rolled out the first cross-language search engine globally that uses our proprietary machine translation technology. Sogou’s traffic and revenue share trended higher. Compared to a year ago, mobile search traffic grew 70%. As the No. 1 mobile app for voice input in China, Sogou Mobile Keyboard’s daily voice input more than doubled to over 200 million times.”
| 1 | For the fourth quarter of 2016, on a yearly basis, depreciation of the RMB against the U.S. dollar impacted our reported financial results. If the exchange rate in the fourth quarter of 2016 had been the same as it was in the fourth quarter of 2015, or RMB6.39=US$1.00, total revenues in the fourth quarter of 2016 would have been US$440 million, or US$28 million higher than GAAP total revenues, and down 6% year-over-year. |
| 2 | Sogou operates the search and search-related business and offers Internet value-added services (“IVAS”) with respect to Web games developed by third-party developers. In the statements of operations, revenues from search and search-related services are recorded as “Search and search-related” revenue, and revenues from IVAS are recorded as “Others” revenue. |
| 3 | Non-GAAP results exclude 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 and dividend and deemed dividend to non-controlling preferred shareholders of Sogou. 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.” |
1
Fourth Quarter Financial Results
Revenues
Total revenues for the fourth quarter of 2016 were US$412 million, down 12% year-over-year and flat quarter-over-quarter.
Total online advertising revenues, which include revenues from the brand advertising and search and search-related businesses, for the fourth quarter of 2016 were US$251 million, down 14% year-over-year and 4% quarter-over-quarter.
Brand advertising revenues for the fourth quarter of 2016 totaled US$99 million, down 30% year-over-year and 11% quarter-over-quarter. The year-over-year decrease was mainly attributable to a decrease in the video advertising business. The quarter-over-quarter decrease was mainly attributable to decreases in revenues from the media portal and 17173 advertising businesses.
Search and search-related revenues for the fourth quarter of 2016 were US$153 million, up 1% year-over-year and quarter-over-quarter.
Online game revenues for the fourth quarter of 2016 were US$95 million, down 25% year-over-year and 3% quarter-over-quarter.
Gross Margin
Both GAAP and non-GAAP gross margin was 44% for the fourth quarter of 2016, compared with 57% in the fourth quarter of 2015 and 46% in the third quarter of 2016.
Both GAAP and non-GAAP gross margin for the online advertising business for the fourth quarter of 2016 was 33%, compared with 47% in the fourth quarter of 2015 and 32% in the third quarter of 2016.
Both GAAP and non-GAAP gross margin for the brand advertising business in the fourth quarter of 2016 was 9%, compared with 38% in the fourth quarter of 2015 and 8% in the third quarter of 2016. The year-over-year decrease was mainly due to decreased video revenues and increased video content cost.
Both GAAP and non-GAAP gross margin for the search and search-related business in the fourth quarter of 2016 was 48%, compared with 55% in the fourth quarter of 2015 and 49% in the third quarter of 2016. The year-over-year decrease was mainly due to higher traffic acquisition cost as a percentage of search and search-related revenues.
Both GAAP and non-GAAP gross margin for online games in the fourth quarter of 2016 was 78%, compared with 78% in the fourth quarter of 2015 and 76% in the third quarter of 2016.
Operating Expenses
For the fourth quarter of 2016, GAAP operating expenses totaled US$232 million, down 6% year-over-year and 3% quarter-over-quarter. Non-GAAP operating expenses were US$229 million, up 3% year-over-year and 1% quarter-over-quarter.
Operating Profit /(Loss)
GAAP operating loss for the fourth quarter of 2016 was US$52 million, compared with an operating profit of US$19 million in the fourth quarter of 2015 and an operating loss of US$52 million in the third quarter of 2016. The year-over-year change in profitability was mainly attributable to the decrease in brand advertising and online games revenues, coupled with the increase in video content cost.
Non-GAAP operating loss for the fourth quarter of 2016 was US$49 million, compared with an operating profit of US$44 million in the fourth quarter of 2015 and an operating loss of US$38 million in the third quarter of 2016.
2
Other Income
Other income for the fourth quarter of 2016 was US$6 million, compared with other income of US$2 million in the fourth quarter of 2015 and other income of US$4 million in the third quarter of 2016.
Income Tax Expense
Both GAAP and non-GAAP income tax expense was US$6 million for the fourth quarter of 2016, compared with income tax expense of US$20 million in the fourth quarter of 2015 and income tax expense of US$1 million in the third quarter of 2016.
Net Income /(Loss)
Before deducting the share of net income pertaining to non-controlling interest, GAAP net loss for the fourth quarter of 2016 was US$37 million, compared with a net income of US$9 million in the fourth quarter of 2015 and net loss of US$42 million in the third quarter of 2016. Before deducting the share of net income pertaining to non-controlling interest, non-GAAP net loss for the fourth quarter of 2016 was US$34 million, compared with a net income of US$34 million in the fourth quarter of 2015 and net loss of US$29 million in the third quarter of 2016.
GAAP net loss attributable to Sohu.com Inc. for the fourth quarter of 2016 was US$66 million, or US$1.71 loss per fully-diluted share, compared with a net loss of US$31 million in the fourth quarter of 2015 and net loss of US$75 million in the third quarter of 2016. Non-GAAP net loss attributable to Sohu.com Inc. for the fourth quarter of 2016 was US$69 million, or US$1.79 loss per fully-diluted share, compared with a net loss of US$13 million in the fourth quarter of 2015 and net loss of US$65 million in the third quarter of 2016.
Liquidity
As of December 31, 2016, the Sohu Group had cash and cash equivalents and short-term investments of US$1.30 billion compared with US$1.42 billion as of December 31, 2015.
Fiscal Year 2016 Financial Results
Revenues
Total revenues for 2016 were US$1.65 billion, down 15% compared with 2015.
Total online advertising revenues, which include revenues from the brand advertising and search and search-related businesses, for 2016 were US$1.05 billion, down 6% compared with 2015.
Brand advertising revenues for 2016 were US$448 million, down 22% compared with 2015, mainly due to the drag of the video businesses.
Search and search-related revenues for 2016 were US$597 million, up 11% compared with 2015. The increase was mainly driven by continued growth in mobile traffic.
Online game revenues for 2016 were US$396 million, down 38% compared with 2015. The year-over-year decrease was mainly due to the natural decline in revenues of Changyou’s older games, and a decrease in Web game revenues upon the completion of the sale of the 7Road business in 2015.
Gross Margin
Both GAAP and non-GAAP gross margin was 48% for 2016, compared with 56% in 2015.
Both GAAP and non-GAAP gross margin for the online advertising business for 2016 was 37%, compared with 44% in 2015.
Both GAAP and non-GAAP gross margin for the brand advertising business for 2016 was 17%, compared with 34% in 2015. The decrease mainly reflected a decrease in advertising revenues and increasing video content cost.
3
Both GAAP and non-GAAP gross margin for the search and search-related business for 2016 was 51%, compared with 56% in 2015. The decrease in gross margin was mainly due to higher traffic acquisition costs as a percentage of search and search-related revenues.
Both GAAP and non-GAAP gross margin for online games for 2016 was 76%, compared with 75% in 2015.
Operating Expenses
For 2016, GAAP operating expenses totaled US$908 million, down 9% compared with 2015. Non-GAAP operating expenses were US$889 million, down 6% compared with 2015. The decreases were primarily due to decreases in salary and compensation expenses.
Operating Profit /(Loss)
GAAP operating loss for 2016 was US$117 million, compared with an operating profit of US$82 million in 2015.
Non-GAAP operating loss for 2016 was US$98 million, compared with an operating profit of US$136 million in 2015.
Other Income /(Expense)
Other expense for 2016 was US$11 million, mainly related to a donation of US$27.8 million made by Sogou to Tsinghua University in the second quarter of 2016, compared with other income of US$75 million in 2015, which included gain recognized from the divestment of 7Road in the third quarter of 2015.
Income Tax Expense
Both GAAP and non-GAAP income tax expense for 2016 was US$21 million, compared with income tax expense of US$77 million in 2015.
Net Income /(Loss)
Before deducting the share of net income pertaining to non-controlling interest, GAAP net loss for 2016 was US$115 million, compared with net income of US$109 million in 2015. Before deducting the share of net income pertaining to non-controlling interest, non-GAAP net loss for 2016 was US$96 million, compared with net income of US$162 million in 2015.
GAAP net loss attributable to Sohu.com Inc. for 2016 was US$226 million, or US$5.83 loss per fully-diluted share, compared with a net loss of US$51 million in 2015. Non-GAAP net loss attributable to Sohu.com Inc. for 2016 was US$219 million, or US$5.65 loss per fully-diluted share, compared with a net loss of US$4 million in 2015.
Business Outlook
For the first quarter of 2017, Sohu estimates:
| • | Total revenues to be between US$345 million and US$375 million. |
| • | Brand advertising revenues to be between US$75 million and US$85 million; this implies an annual decrease of 32% to 40% and a sequential decrease of 14% to 24%. |
| • | Sogou revenues to be between US$145 million and US$155 million; this implies an annual decrease of 2% to an annual increase of 5% and a sequential decrease of 10% to 15%. |
| • | Online game revenues to be between US$80 million and US$90 million; this implies an annual decrease of 12% to 22% and a sequential decrease of 6% to 16%. |
| • | Before deducting the share of non-GAAP net income pertaining to non-controlling interest, non-GAAP net loss to be between US$45 million and US$55 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$50 million and US$60 million. |
4
| • | Non-GAAP net loss attributable to Sohu.com Inc. to be between US$60 million and US$70 million, and non-GAAP loss per fully-diluted share to be between US$1.55 and US$1.80. Including the impact of the aforementioned share-based awards, and netting off approximately US$1 million of Sohu’s economic interests in Changyou and Sogou, GAAP net loss attributable to Sohu.com Inc. to be between US$64 million and US$74 million, and GAAP loss per fully-diluted share to be between US$1.65 and US$1.90. |
For the first quarter 2017 guidance, the Company has adopted a presumed exchange rate of RMB7.00=US$1.00, as compared with the actual exchange rate of approximately RMB6.53=US$1.00 for the first quarter of 2016, and RMB6.83=US$1.00 for the fourth quarter of 2016.
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 Inc. and diluted net income attributable to Sohu.com Inc. 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, income/expense from the adjustment of contingent consideration previously recorded for acquisitions, and dividend and deemed dividend to non-controlling preferred shareholders. 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 the 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 and dividend and deemed dividend to non-controlling preferred shareholders from its non-GAAP financial measure is useful for itself and investors. Further, the impact of 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, and dividend and deemed dividend to non-controlling preferred shareholders cannot be anticipated by management and business line leaders and these expenses were not built into the annual budgets and quarterly forecasts, which 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, 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 the 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, and dividend and deemed dividend to non-controlling preferred shareholders.
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 Inc. and diluted net income attributable to Sohu.com Inc. 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, and 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.
5
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; and Sohu’s reliance on online advertising sales, online games and mobile services for its revenues. Further information regarding these and other risks is included in Sohu’s annual report on Form 10-K for the year ended December 31, 2015, 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, February 21, 2017 (9:30 p.m. Beijing/Hong Kong time, February 21, 2017) 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 February 21 through February 28, 2017. The dial-in details for the telephone replay are:
| International: | +1-646-254-3697 | |
| Passcode: | 60086018 |
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 Inc. (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; the interactive search engine www.sogou.com; the developer and operator of online games www.changyou.com/en/ and the leading online video Website tv.sohu.com .
Sohu corporate services consist of online brand advertising on its 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 service on mobile platforms, including Sohu News App and mobile news portal m.sohu.com. Sohu’s online game subsidiary, Changyou.com (NASDAQ: CYOU) has a diverse portfolio of popular online games, such as Tian Long Ba Bu (“TLBB”), one of the most popular PC games in China, as well as a number of mobile games. Changyou also owns and operates the 17173.com Website, a leading game information portal in China. Sohu.com, established by Dr. Charles Zhang, one of China’s internet pioneers, is in its twenty-first year of operation.
6
For investor and media inquiries, please contact:
In China:
| Mr. Eric Yuan | ||
| Sohu.com Inc. | ||
| Tel: | +86 (10) 6272-6593 | |
| E-mail: | ir@contact.sohu.com | |
In the United States:
| Ms. Linda Bergkamp | ||
| Christensen | ||
| Tel: | +1 (480) 614-3004 | |
| E-mail: | lbergkamp@christensenir.com | |
7
SOHU.COM INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | ||||||||||||||||
| Revenues: |
||||||||||||||||||||
| Online advertising |
||||||||||||||||||||
| Brand advertising |
$ | 98,695 | $ | 110,871 | $ | 140,927 | $ | 447,956 | $ | 577,114 | ||||||||||
| Search and search-related |
152,500 | 150,667 | 151,251 | 597,133 | 539,521 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Subtotal |
251,195 | 261,538 | 292,178 | 1,045,089 | 1,116,635 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Online games |
95,400 | 98,553 | 127,001 | 395,709 | 636,846 | |||||||||||||||
| Others |
65,164 | 50,491 | 46,924 | 209,633 | 183,610 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total revenues |
411,759 | 410,582 | 466,103 | 1,650,431 | 1,937,091 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Cost of revenues: |
||||||||||||||||||||
| Online advertising |
||||||||||||||||||||
| Brand advertising (includes stock-based compensation expense of $-91, $265, $534, $163 and $1,381, respectively) |
89,658 | 102,137 | 87,625 | 371,085 | 383,187 | |||||||||||||||
| Search and search-related (includes stock-based compensation expense of $168, $4, $211, $172 and $330, respectively) |
79,611 | 76,457 | 68,108 | 290,158 | 238,944 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Subtotal |
169,269 | 178,594 | 155,733 | 661,243 | 622,131 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Online games (includes stock-based compensation expense of $-5, $26, $45, $31 and $37, respectively) |
20,936 | 23,719 | 28,266 | 96,168 | 156,315 | |||||||||||||||
| Others |
41,606 | 20,571 | 17,552 | 102,389 | 80,618 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total cost of revenues |
231,811 | 222,884 | 201,551 | 859,800 | 859,064 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Gross profit |
179,948 | 187,698 | 264,552 | 790,631 | 1,078,027 | |||||||||||||||
| Operating expenses: |
||||||||||||||||||||
| Product development (includes stock-based compensation expense of $3,383, $4,105, $9,665, $9,184 and $19,343, respectively) |
91,499 | 90,007 | 102,402 | 353,144 | 398,143 | |||||||||||||||
| Sales and marketing (includes stock-based compensation expense of $1,467, $752, $1,482, $2,394 and $3,055, respectively) |
116,183 | 110,584 | 98,230 | 434,780 | 383,931 | |||||||||||||||
| General and administrative (includes stock-based compensation expense of $-1,949, $8,018, $13,042, $7,176 and $29,297, respectively) |
23,914 | 38,670 | 44,946 | 119,841 | 173,160 | |||||||||||||||
| Goodwill impairment and impairment of intangibles via acquisitions of businesses |
— | — | — | — | 40,324 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total operating expenses |
231,596 | 239,261 | 245,578 | 907,765 | 995,558 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Operating (loss) /profit |
(51,648 | ) | (51,563 | ) | 18,974 | (117,134 | ) | 82,469 | ||||||||||||
| Other income /(expense) |
6,258 | 3,678 | 1,590 | (10,713 | ) | 74,526 | ||||||||||||||
| Interest income |
5,051 | 6,327 | 7,748 | 22,499 | 30,643 | |||||||||||||||
| Interest expense |
(205 | ) | (209 | ) | (1,744 | ) | (1,356 | ) | (7,184 | ) | ||||||||||
| Exchange difference |
9,257 | 702 | 1,885 | 12,803 | 5,337 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (Loss) /income before income tax expense |
(31,287 | ) | (41,065 | ) | 28,453 | (93,901 | ) | 185,791 | ||||||||||||
| Income tax expense |
5,800 | 974 | 19,656 | 21,072 | 76,936 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net (loss) /income |
(37,087 | ) | (42,039 | ) | 8,797 | (114,973 | ) | 108,855 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Less: Net income attributable to the noncontrolling interest shareholders |
28,810 | 32,775 | 39,197 | 109,048 | 146,542 | |||||||||||||||
| Deemed dividend to non-controlling Sogou series A preferred shareholders |
— | — | — | — | 11,911 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net loss attributable to Sohu.com Inc. |
(65,897 | ) | (74,814 | ) | (30,400 | ) | (224,021 | ) | (49,598 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Basic net loss per share attributable to Sohu.com Inc. |
$ | (1.70 | ) | $ | (1.93 | ) | $ | (0.79 | ) | $ | (5.79 | ) | $ | (1.28 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Shares used in computing basic net loss per share attributable to Sohu.com Inc. |
38,739 | 38,728 | 38,646 | 38,706 | 38,598 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Diluted net loss per share attributable to Sohu.com Inc. |
$ | (1.71 | ) | $ | (1.94 | ) | $ | (0.80 | ) | $ | (5.83 | ) | $ | (1.32 | ) | |||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Shares used in computing diluted net loss per share attributable to Sohu.com Inc. |
38,739 | 38,728 | 38,646 | 38,706 | 38,598 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
8
SOHU.COM INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED, IN THOUSANDS)
| As of Dec. 31, 2016 | As of Dec. 31, 2015 | |||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 1,050,957 | $ | 1,245,205 | ||||
| Restricted time deposits (a) |
— | 227,285 | ||||||
| Short-term investments |
247,926 | 174,515 | ||||||
| Accounts receivable, net |
189,167 | 273,617 | ||||||
| Prepaid and other current assets (b) |
260,133 | 154,217 | ||||||
| Assets held for sale (c) |
103,079 | — | ||||||
|
|
|
|
|
|||||
| Total current assets |
1,851,262 | 2,074,839 | ||||||
|
|
|
|
|
|||||
| Long-term investments |
74,273 | 62,093 | ||||||
| Fixed assets, net |
503,631 | 508,692 | ||||||
| Goodwill (c) |
68,290 | 154,219 | ||||||
| Intangible assets, net |
32,131 | 55,415 | ||||||
| Restricted time deposits (a) |
269 | 136,694 | ||||||
| Prepaid non-current assets |
4,734 | 6,254 | ||||||
| Other assets (b) |
29,100 | 43,988 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 2,563,690 | $ | 3,042,194 | ||||
|
|
|
|
|
|||||
| LIABILITIES |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 193,209 | $ | 129,025 | ||||
| Accrued liabilities |
324,876 | 309,657 | ||||||
| Receipts in advance and deferred revenue |
118,951 | 135,385 | ||||||
| Accrued salary and benefits |
92,475 | 99,631 | ||||||
| Taxes payable |
40,014 | 67,480 | ||||||
| Short-term bank loans (a) |
— | 344,500 | ||||||
| Other short-term liabilities |
159,315 | 154,017 | ||||||
| Liabilities held for sale (c) |
3,902 | — | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
$ | 932,742 | $ | 1,239,695 | ||||
|
|
|
|
|
|||||
| Long-term accounts payable |
744 | 4,600 | ||||||
| Long-term tax payable |
32,625 | 24,732 | ||||||
| Deferred tax liabilities (b) |
39,784 | 42,415 | ||||||
|
|
|
|
|
|||||
| Total long-term liabilities |
$ | 73,153 | $ | 71,747 | ||||
|
|
|
|
|
|||||
| Total liabilities |
$ | 1,005,895 | $ | 1,311,442 | ||||
|
|
|
|
|
|||||
| SHAREHOLDERS’ EQUITY: |
||||||||
| Sohu.com Inc. shareholders’ equity |
993,580 | 1,241,022 | ||||||
| Noncontrolling Interest |
564,215 | 489,730 | ||||||
|
|
|
|
|
|||||
| Total shareholders’ equity |
$ | 1,557,795 | $ | 1,730,752 | ||||
|
|
|
|
|
|||||
| Total liabilities and shareholders’ equity |
$ | 2,563,690 | $ | 3,042,194 | ||||
|
|
|
|
|
|||||
Note:
| (a) | Changyou had repaid all of the remaining bank loans of $345 million, and restricted time deposits of $355 million that secured these loans were released during the first quarter of 2016. |
| (b) | The Company early adopted the Accounting Standards Update 2015-17, Balance Sheet Classification of Deferred Taxes, retrospectively from the fourth quarter of 2016. The guidance requires current deferred income tax assets and liabilities to be classified as non-current assets and liabilities in balance sheet. As a result of the adoption of this guidance, $4.7 million of current deferred tax assets recorded in prepaid and other current assets, and $24.9 million of deferred tax liabilities were reclassified to non-current as of December 31, 2015. |
| (c) | Changyou’s management had an intention to divest its interest in MoboTap in the third quarter of 2016. Therefore, the assets and liabilities of MoboTap were recognized as “Assets held for sale” and “Liabilities held for sale,” respectively, since the third quarter of 2016. |
9
SOHU.COM INC.
RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATION MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES
(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
| Three Months Ended Dec. 31, 2016 | Three Months Ended Sep. 30, 2016 | Three Months Ended Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||
| GAAP | Non-GAAP Adjustments |
Non-GAAP | GAAP | Non-GAAP Adjustments |
Non-GAAP | GAAP | Non-GAAP Adjustments |
Non-GAAP | ||||||||||||||||||||||||||||||||||||||||
| (91 | ) | (a | ) | 265 | (a | ) | 534 | (a | ) | |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Brand advertising gross profit |
$ | 9,037 | $ | (91 | ) | $ | 8,946 | $ | 8,734 | $ | 265 | $ | 8,999 | $ | 53,302 | $ | 534 | $ | 53,836 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Brand advertising gross margin |
9 | % | 9 | % | 8 | % | 8 | % | 38 | % | 38 | % | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
| 168 | (a | ) | 4 | (a | ) | 211 | (a | ) | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Search and search-related gross profit |
$ | 72,889 | $ | 168 | $ | 73,057 | $ | 74,210 | $ | 4 | $ | 74,214 | $ | 83,143 | $ | 211 | $ | 83,354 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Search and search-related gross margin |
48 | % | 48 | % | 49 | % | 49 | % | 55 | % | 55 | % | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
| 77 | (a | ) | 269 | (a | ) | 745 | (a | ) | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Online advertising gross profit |
$ | 81,926 | $ | 77 | $ | 82,003 | $ | 82,944 | $ | 269 | $ | 83,213 | $ | 136,445 | $ | 745 | $ | 137,190 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Online advertising gross margin |
33 | % | 33 | % | 32 | % | 32 | % | 47 | % | 47 | % | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
| (5 | ) | (a | ) | 26 | (a | ) | 45 | (a | ) | |||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Online games gross profit |
$ | 74,464 | $ | (5 | ) | $ | 74,459 | $ | 74,834 | $ | 26 | $ | 74,860 | $ | 98,735 | $ | 45 | $ | 98,780 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Online games gross margin |
78 | % | 78 | % | 76 | % | 76 | % | 78 | % | 78 | % | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
| Others gross profit |
$ | 23,558 | $ | — | (a | ) | $ | 23,558 | $ | 29,920 | $ | — | (a | ) | $ | 29,920 | $ | 29,372 | $ | — | (a | ) | $ | 29,372 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Others gross margin |
36 | % | 36 | % | 59 | % | 59 | % | 63 | % | 63 | % | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
| 72 | (a | ) | 295 | (a | ) | 790 | (a | ) | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Gross profit |
$ | 179,948 | $ | 72 | $ | 180,020 | $ | 187,698 | $ | 295 | $ | 187,993 | $ | 264,552 | $ | 790 | $ | 265,342 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Gross margin |
44 | % | 44 | % | 46 | % | 46 | % | 57 | % | 57 | % | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
| Operating expenses |
$ | 231,596 | $ | (2,901 | ) | (a | ) | $ | 228,695 | $ | 239,261 | $ | (12,875 | ) | (a | ) | $ | 226,386 | $ | 245,578 | $ | (24,189 | ) | (a | ) | $ | 221,389 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| 2,973 | (a | ) | 13,170 | (a | ) | 24,979 | (a | ) | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Operating (loss) /profit |
$ | (51,648 | ) | $ | 2,973 | $ | (48,675 | ) | $ | (51,563 | ) | $ | 13,170 | $ | (38,393 | ) | $ | 18,974 | $ | 24,979 | $ | 43,953 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Operating margin |
-13 | % | -12 | % | -13 | % | -9 | % | 4 | % | 9 | % | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
| Income tax expense |
$ | 5,800 | $ | — | (a | ) | $ | 5,800 | $ | 974 | $ | — | (a | ) | $ | 974 | $ | 19,656 | $ | — | (a | ) | $ | 19,656 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| 2,973 | (a | ) | 13,147 | (a | ) | 25,047 | (a | ) | ||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Net (loss) /income before non-controlling interest |
$ | (37,087 | ) | $ | 2,973 | $ | (34,114 | ) | $ | (42,039 | ) | $ | 13,147 | $ | (28,892 | ) | $ | 8,797 | $ | 25,047 | $ | 33,844 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| 2,973 | (a | ) | 13,147 | (a | ) | 25,047 | (a | ) | ||||||||||||||||||||||||||||||||||||||||
| (6,051 | ) | (b | ) | (2,806 | ) | (b | ) | (7,352 | ) | (b | ) | |||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Net loss attributable to Sohu.com Inc. for diluted net loss per share |
$ | (66,411 | ) | $ | (3,078 | ) | $ | (69,489 | ) | $ | (75,286 | ) | $ | 10,341 | $ | (64,945 | ) | $ | (30,746 | ) | $ | 17,695 | $ | (13,051 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Diluted net loss per share attributable to Sohu.com Inc. |
$ | (1.71 | ) | $ | (1.79 | ) | $ | (1.94 | ) | $ | (1.68 | ) | $ | (0.80 | ) | $ | (0.34 | ) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
| Shares used in computing diluted net loss per share attributable to Sohu.com Inc. |
38,739 | 38,739 | 38,728 | 38,728 | 38,646 | 38,646 | ||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||
Note:
| (a) | To eliminate the impact of share-based awards as measured using the fair value method. |
| (b) | To adjust Sohu’s economic interests in Changyou and Sogou under the treasury stock method. |
10
SOHU.COM INC.
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, 2016 | Twelve Months Ended Dec. 31, 2015 | |||||||||||||||||||||||||||||||
| GAAP | Non-GAAP Adjustments |
Non-GAAP | GAAP | Non-GAAP Adjustments |
Non-GAAP | |||||||||||||||||||||||||||
| 163 | (a | ) | 1,381 | (a | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||||||
| Brand advertising gross profit |
$ | 76,871 | $ | 163 | $ | 77,034 | $ | 193,927 | $ | 1,381 | $ | 195,308 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Brand advertising gross margin |
17 | % | 17 | % | 34 | % | 34 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| 172 | (a | ) | 330 | (a | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||||||
| Search and search-related gross profit |
$ | 306,975 | $ | 172 | $ | 307,147 | $ | 300,577 | $ | 330 | $ | 300,907 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Search and search-related gross margin |
51 | % | 51 | % | 56 | % | 56 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| 335 | (a | ) | 1,711 | (a | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||||||
| Online advertising gross profit |
$ | 383,846 | $ | 335 | $ | 384,181 | $ | 494,504 | $ | 1,711 | $ | 496,215 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Online advertising gross margin |
37 | % | 37 | % | 44 | % | 44 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| 31 | (a | ) | 37 | (a | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||||||
| Online games gross profit |
$ | 299,541 | $ | 31 | $ | 299,572 | $ | 480,531 | $ | 37 | $ | 480,568 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Online games gross margin |
76 | % | 76 | % | 75 | % | 75 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Others gross profit |
$ | 107,244 | $ | — | (a | ) | $ | 107,244 | $ | 102,992 | $ | — | (a | ) | $ | 102,992 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Others gross margin |
51 | % | 51 | % | 56 | % | 56 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| 366 | (a | ) | 1,748 | (a | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||||||
| Gross profit |
$ | 790,631 | $ | 366 | $ | 790,997 | $ | 1,078,027 | $ | 1,748 | $ | 1,079,775 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Gross margin |
48 | % | 48 | % | 56 | % | 56 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Operating expenses |
$ | 907,765 | $ | (18,754 | ) | (a | ) | $ | 889,011 | $ | 995,558 | $ | (51,695 | ) | (a | ) | $ | 943,863 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| 19,120 | (a | ) | 53,443 | (a | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||||||
| Operating (loss) /profit |
$ | (117,134 | ) | $ | 19,120 | $ | (98,014 | ) | $ | 82,469 | $ | 53,443 | $ | 135,912 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Operating margin |
-7 | % | -6 | % | 4 | % | 7 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Income tax expense |
$ | 21,072 | $ | — | (a | ) | $ | 21,072 | $ | 76,936 | $ | — | (a | ) | $ | 76,936 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| 19,118 | (a | ) | 53,511 | (a | ) | |||||||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||||||
| Net (loss) /profit before non-controlling interest |
$ | (114,973 | ) | $ | 19,118 | $ | (95,855 | ) | $ | 108,855 | $ | 53,511 | $ | 162,366 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| 53,511 | (a | ) | ||||||||||||||||||||||||||||||
| 19,118 | (a | ) | (18,230 | ) | (b | ) | ||||||||||||||||||||||||||
| (12,260 | ) | (b | ) | 11,911 | (c | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||||||||
| Net loss attributable to Sohu.com Inc for diluted net loss per share |
$ | (225,660 | ) | $ | 6,858 | $ | (218,802 | ) | $ | (50,829 | ) | $ | 47,192 | $ | (3,637 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Diluted net loss per share attributable to Sohu.com Inc. |
$ | (5.83 | ) | $ | (5.65 | ) | $ | (1.32 | ) | $ | (0.09 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Shares used in computing diluted net loss per share attributable to Sohu.com Inc. |
38,706 | 38,706 | 38,598 | 38,693 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Note:
| (a) | To eliminate the impact of share-based awards measured using the fair value method. |
| (b) | To adjust Sohu’s economic interests in Changyou and Sogou under the treasury stock method. |
| (c) | Dividend or deemed dividend to non-controlling Sogou series A preferred shareholders. |
11