SOHU.com Inc. DATE: 2024-05-21 03:31:05
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SOHU.COM REPORTS THIRD QUARTER 2023 UNAUDITED FINANCIAL RESULTS November 13,新一码一肖100准正版资料 2023 at 12:00 AM EST
Third Quarter Highlights[1]
Total revenues wereDr.
Charles Zhang, Chairman and CEO of
[1] The bankruptcy proceedings of Changyou's wholly-owned subsidiary
[2] Non-GAAP results exclude share-based compensation expense; changes in fair value recognized in the Company's consolidated statements of operations with respect to equity investments with readily determinable fair values, and the related income tax impact; and interest expense recognized in connection with the one-time transition tax (the "Toll Charge") imposed by the
Third Quarter Financial Results
Revenues
Total revenues were
Brand advertising revenues were US$22 million, down 14% year-over-year and 8% quarter-over-quarter.
Online game revenues were
Gross Margin
Both GAAP and non-GAAP gross margin were 76%, compared with 71% in the third quarter of 2022 and 76% in the second quarter of 2023.
Both GAAP and non-GAAP gross margin for the brand advertising business were 15%, compared with 2% in the third quarter of 2022 and 30% in the second quarter of 2023.
Both GAAP and non-GAAP gross margin for online games were 87%, compared with 84% in the third quarter of 2022 and 87% in the second quarter of 2023.
Operating Expenses
GAAP operating expenses were US$132 million, down 12% year-over-year and 5% quarter-over-quarter. Non-GAAP operating expenses were US$131 million, down 12% year-over-year and 5% quarter-over-quarter. The year-over-year decrease was mainly due to a decrease in Changyou's marketing and promotional spending for online games.
Operating Loss
GAAP operating loss was
Non-GAAP operating loss was US$20 million, compared with an operating loss of
Income Tax Expense
GAAP income tax expense was US$15 million, compared with income tax expense of
Net Loss
GAAP net loss attributable to
Non-GAAP net loss attributable to
Liquidity and Capital Resources
As of
Supplementary Information for Changyou Results[3]
Third Quarter 2023 Operating Results
For PC games, total average monthly active user accounts[4] (MAU) were 2.2 million, an increase of 3% year-over-year and 2% quarter-over-quarter. Total quarterly aggregate active paying accounts[5] (APA) were 1 million, a decrease of 5% year-over-year and an increase of 12% quarter-over-quarter. The quarter-over-quarter increase in APA was mainly a result of in-game promotional activities launched for TLBB PC during the quarter.For mobile games, total average MAU were 2.3 million, a decrease of 9% year-over-year and an increase of 75% quarter-over-quarter. Total quarterly APA were 0.5 million, a decrease of 18% year-over-year and an increase of 60% quarter-over-quarter. The year-over-year decreases in MAU and APA were due to the natural decline of our older games, partially offset by the launch of New TLBB Mobile during the quarter. The quarter-over-quarter increases in MAU and APA were mainly due to the launch of New TLBB Mobile.
Third Quarter 2023 Unaudited Financial Results
Total revenues were
GAAP and non-GAAP gross profit were both
GAAP operating expenses were
Non-GAAP operating expenses were
GAAP operating profit was
Non-GAAP operating profit was
[3] "Changyou Results" consist of the results of Changyou's online game business and its 17173.com Website.
[4] Monthly active user accounts refers to the number of registered accounts that are logged in to these games at least once during the month.
[5] Quarterly aggregate active paying accounts refers to the number of accounts from which game points are utilized at least once during the quarter.
Sohu today announced that on
Business Outlook
For the fourth quarter of 2023, Sohu estimates:
Brand advertising revenues to be betweenFor the fourth quarter 2023 guidance, the Company has adopted a presumed exchange rate of
This forecast reflects Sohu's management's current and preliminary view, which is subject to substantial uncertainty.
Non-GAAP Disclosure
To supplement the unaudited consolidated financial statements presented in accordance with accounting principles generally accepted in
Sohu's management believes excluding share-based compensation expense; changes in fair value recognized in the Company's consolidated statements of operations with respect to equity investments with readily determinable fair values, and the related income tax impact; and interest expense recognized in connection with the Toll Charge from its non-GAAP financial measure is useful for itself and investors. Further, the impact of share-based compensation expense; changes in fair value recognized in the Company's consolidated statements of operations with respect to equity investments with readily determinable fair values, and the related income tax impact; 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 share-based compensation expense and changes in fair value recognized in the Company's consolidated statements of operations with respect to equity investments with readily determinable fair values, and the related income tax impact, do not involve subsequent cash outflow or are reflected in the cash flows at the equity transaction level, Sohu does not factor in their impact when evaluating and approving expenditures or when determining the allocation of its resources to its business segments. As a result, in general, the monthly financial results for internal reporting and any performance measures for commissions and bonuses are based on non-GAAP financial measures that exclude share-based compensation expense and changes in fair value recognized in the Company's consolidated statements of operations with respect to equity investments with readily determinable fair values, and the related income tax impact, and also excluded the interest expense recognized in connection with the Toll Charge.
The non-GAAP financial measures are provided to enhance investors' overall understanding of Sohu's current financial performance and prospects for the future. A limitation of using non-GAAP gross profit, operating profit, net income, net income attributable to Sohu.com Limited, and diluted net income attributable to
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 financial statements prepared in accordance with GAAP.
Safe Harbor Statement
This announcement contains forward-looking statements. It is currently expected that the Business Outlook will not be updated until release of Sohu's next quarterly earnings announcement; however, Sohu reserves right to update its Business Outlook at any time for any reason. Statements that are not historical facts, including statements about Sohu's beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, instability in global financial and credit markets and its potential impact on the Chinese economy; exchange rate fluctuations, including their potential impact on the Chinese economy and on Sohu's reported
Conference Call and Webcast
Sohu's management team will host a conference call at
The live Webcast and archive of the conference call will be available on the Investor Relations section of Sohu's website at https://investors.sohu.com/
About Sohu
Charles Zhang, one of
Sohu provides online brand advertising services as well as multiple news, information and content services on its matrix of websites and also on its mobile platforms. Sohu's online game business, conducted by its subsidiary Changyou, develops and operates a diverse portfolio of PC and mobile games, such as the well-known
Tian Long Ba Bu("TLBB") PC and Legacy TLBB Mobile.
For investor and media inquiries, please contact:
In
Ms. Huang, Pu
Tel:
+86 (10) 6272-6645
E-mail:
ir@contact.sohu.com
In
Ms. Bergkamp, Linda
Christensen
Tel:
+1 (480) 614-3004
E-mail:
linda.bergkamp@christensencomms.com
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Three Months Ended
Revenues:
Brand advertising
$
22,087
$
23,883
$
25,762
Online games
117,049
118,426
148,895
Others
6,294
9,781
10,617
Total revenues
145,430
152,090
185,274
Cost of revenues:
Brand advertising (includes share-based compensation
expense of
18,745
16,705
25,245
Online games (includes share-based compensation expense
of
15,039
15,839
24,451
Others
687
4,477
3,972
Total cost of revenues
34,471
37,021
53,668
Gross profit
110,959
115,069
131,606
Operating expenses:
Product development (includes share-based compensation
expense of
67,749
69,492
64,688
Sales and marketing (includes share-based compensation
expense of
53,040
57,153
73,347
General and administrative (includes share-based
compensation expense of
10,801
11,372
11,629
Total operating expenses
131,590
138,017
149,664
Operating loss
(20,631)
(22,948)
(18,058)
Other income, net
10,869
5,131
4,750
Interest income
11,519
11,041
4,808
Exchange difference
(478)
3,067
3,129
Income/(loss) before income tax expense
1,279
(3,709)
(5,371)
Income tax expense
15,340
17,747
16,213
Ne loss from continuing operations
(14,061)
(21,456)
(21,584)
Net income from discontinued operations, net of tax [6]
35,426
-
-
Net income/(loss)
21,365
(21,456)
(21,584)
Less: Net income/(loss) from continuing operations
attributable to the noncontrolling interest shareholders
(2)
(261)
(1)
Net loss from continuing operations attributable to
Limited
(14,059)
(21,195)
(21,583)
Net income from discontinued operations attributable to
35,426
-
-
Net income/(loss) attributable to
21,367
(21,195)
(21,583)
Basic net loss from continuing operations per share/ADS
attributable to
$
(0.41)
$
(0.62)
$
(0.63)
Basic net income from discontinued operations per share/ADS
attributable to
$
1.04
$
-
$
-
Basic net income/(loss) per share/ADS attributable to
$
0.63
$
(0.62)
$
(0.63)
Shares/ADSs used in computing basic net income/(loss) per
share/ADS attributable to
34,190
34,091
34,387
Diluted net loss from continuing operations per share/ADS
attributable to
$
(0.41)
$
(0.62)
$
(0.63)
Diluted net income from discontinued operations per
share/ADS attributable to
$
1.04
$
-
$
-
Diluted net income/(loss) per share/ADS attributable to
$
0.63
$
(0.62)
$
(0.63)
Shares/ADSs used in computing diluted net income/(loss) per
share/ADS attributable to
34,190
34,091
34,387
[6] See Footnote 1.
[7] Each ADS represents one ordinary share.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED, IN THOUSANDS)
As of
As of
ASSETS
Current assets:
Cash and cash equivalents
$
335,923
$
697,821
Restricted cash
3,176
3,641
Short-term investments
594,474
473,624
Accounts receivable, net
61,047
67,541
Prepaid and other current assets
86,736
83,093
Total current assets
1,081,356
1,325,720
Fixed assets, net
268,726
288,226
Goodwill
46,961
47,415
Long-term investments, net
44,266
26,012
Intangible assets, net
3,099
5,394
Long-term time deposits
431,864
265,802
Other assets
11,015
19,207
Total assets
$
1,887,287
$
1,977,776
LIABILITIES
Current liabilities:
Accounts payable
$
47,504
$
56,449
Accrued liabilities
112,389
126,461
Receipts in advance and deferred revenue
50,586
48,080
Accrued salary and benefits
50,672
60,754
Taxes payables
9,097
10,612
Other short-term liabilities
82,318
114,532
Total current liabilities
$
352,566
$
416,888
Long-term other payables
3,770
1,795
Long-term tax liabilities
462,193
448,043
Other long-term liabilities
485
340
Total long-term liabilities
$
466,448
$
450,178
Total liabilities
$
819,014
$
867,066
SHAREHOLDERS' EQUITY:
1,067,269
1,109,442
Noncontrolling interest
1,004
1,268
Total shareholders' equity
$
1,068,273
$
1,110,710
Total liabilities and shareholders' equity
$
1,887,287
$
1,977,776
RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES
(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
Three Months Ended
Three Months Ended
Three Months Ended
GAAP
Non-GAAP
Adjustment
Non-GAAP
GAAP
Non-GAAP
Adjustment
Non-GAAP
GAAP
Non-GAAP
Adjustment
Non-GAAP
15
(a)
(21)
(a)
19
(a)
Brand advertising gross profit
$
3,342
$
15
$
3,357
$
7,178
$
(21)
$
7,157
$
517
$
19
$
536
Brand advertising gross margin
15 %
15 %
30 %
30 %
2 %
2 %
18
(a)
18
(a)
42
(a)
Online games gross profit
$
102,010
$
18
$
102,028
$
102,587
$
18
$
102,605
$
124,444
$
42
$
124,486
Online games gross margin
87 %
87 %
87 %
87 %
84 %
84 %
-
(a)
-
(a)
-
(a)
Others gross profit
$
5,607
$
-
$
5,607
$
5,304
$
-
$
5,304
$
6,645
$
-
$
6,645
Others gross margin
89 %
89 %
54 %
54 %
63 %
63 %
33
(a)
(3)
(a)
61
(a)
Gross profit
$
110,959
$
33
$
110,992
$
115,069
$
(3)
$
115,066
$
131,606
$
61
$
131,667
Gross margin
76 %
76 %
76 %
76 %
71 %
71 %
Operating expenses
$
131,590
$
(677)
(a) $
130,913
$
138,017
$
(261)
(a) $
137,756
$
149,664
$
(1,391)
(a) $
148,273
710
(a)
258
(a)
1,452
(a)
Operating loss
$
(20,631)
$
710
$
(19,921)
$
(22,948)
$
258
$
(22,690)
$
(18,058)
$
1,452
$
(16,606)
Operating margin
-14 %
-14 %
-15 %
-15 %
-10 %
-9 %
Income tax expense
$
15,340
$
(3,149)
(d)$
12,191
$
17,747
$
(3,061)
(d)$
14,686
$
16,213
$
(1,884)
(c,d)$
14,329
710
(a)
258
(a)
1,452
(a)
-
-
891
(b)
-
-
(224)
(c)
3,149
(d)
3,061
(d)
2,108
(d)
Net loss before non-controlling interest
$
(14,061)
3,859
(10,202)
$
(21,456)
$
3,319
$
(18,137)
$
(21,584)
$
4,227
$
(17,357)
710
(a)
258
(a)
1,452
(a)
-
-
891
(b)
-
-
(224)
(c)
3,149
(d)
3,061
(d)
2,108
(d)
Net loss from continuing operations
attributable to
net loss per ADS
$
(14,059)
3,859
(10,200)
$
(21,195)
$
3,319
$
(17,876)
$
(21,583)
$
4,227
$
(17,356)
Net income from discontinued operations
attributable to
net loss per ADS [8]
$
35,426
-
$
35,426
$
-
-
$
-
$
-
-
$
-
Net income/(loss) attributable to
Limited
share/ADS
$
21,367
3,859
25,226
$
(21,195)
$
3,319
$
(17,876)
$
(21,583)
$
4,227
$
(17,356)
Diluted net loss from continuing operations
per ADS attributable to Sohu.com Limited
$
(0.41)
$
(0.30)
$
(0.62)
$
(0.52)
$
(0.63)
$
(0.50)
Diluted net income from discontinued
operations per ADS attributable to
$
1.04
$
1.04
$
-
$
-
$
-
$
-
Diluted net income/(loss) per share/ADS
attributable to
$
0.63
$
0.74
$
(0.62)
$
(0.52)
$
(0.63)
$
(0.50)
Shares/ADSs used in computing diluted
net income/(loss) per share/ADS
attributable to
34,190
34,190
34,091
34,091
34,387
34,387
Note:
(a) To eliminate the impact of share-based awards.
(b) To adjust for changes in the fair value of the Company's investments.
(c) To adjust for the impacts of income tax related to changes in the fair value of the Company's investments.
(d) To adjust for the effect of the Toll Charge.
[8] See Footnote 1.
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