Sohu.com Reports Second Quarter 2020 Unaudited Financial Results
Sohu.com Limited (NASDAQ: SOHU) reported its second-quarter financial results for 2020, showcasing total revenues of US$421 million, a decline of 9% year-over-year. Brand advertising revenues dropped 14% year-over-year, although they increased 48% quarter-over-quarter. The company experienced a GAAP net loss of US$80 million. However, excluding a one-time tax accrual, the adjusted net income stood at US$8 million. Sohu forecasts Q3 brand advertising revenues between US$37 million and US$42 million. The ongoing effects of COVID-19 remain a concern.
- Brand advertising revenue increased 48% quarter-over-quarter.
- Excluding the tax accrual, GAAP net income was US$8 million, improving from US$35 million net loss year-over-year.
- Online game revenues met prior guidance, showing resilience with 4% growth year-over-year.
- Total revenues declined 9% year-over-year.
- GAAP net loss of US$80 million, indicating ongoing financial struggles.
- Brand advertising revenues down 14% year-over-year and 21% quarter-over-quarter for online games.
BEIJING, Aug. 10, 2020 /PRNewswire/ -- Sohu.com Limited (NASDAQ: SOHU), China's leading online media, video, search and gaming business group, today reported unaudited financial results for the second quarter ended June 30, 2020.
Second Quarter Highlights[1]
The privatization of Changyou was completed on April 17, 2020. After the effectiveness of the transaction, Changyou's net income/loss was wholly attributable to Sohu.com Limited. For the second quarter of 2020, Changyou recognized an additional accrual of withholding income tax of US
- Total revenues were US
$421 million [2], down9% year-over-year and3% quarter-over-quarter. - Brand advertising revenues were US
$38 million , down14% year-over-year and up48% quarter-over-quarter. - Search and search related advertising revenues[3] were US
$241 million , down13% year-over-year and up1% quarter-over-quarter. - Online game revenues were US
$106 million , up4% year-over-year and down21% quarter-over-quarter. - GAAP net loss attributable to Sohu.com Limited was US
$80 million . Excluding the impact of the additional accrual of withholding income tax described above, GAAP net income attributable to Sohu.com Limited was US$8 million , compared with a net loss of US$35 million in the second quarter of 2019 and a net loss of US$20 million in the first quarter of 2020. - Excluding the impact of the additional accrual of withholding income tax described above, non-GAAP net income attributable to Sohu.com Limited was US
$11 million . Further excluding the loss generated by Sogou, non-GAAP net income attributable to Sohu.com Limited was US$12 million , compared with a net loss of US$41 million in the second quarter of 2019 and a net loss of US$8 million in the first quarter of 2020.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Limited, commented, "In the second quarter of 2020, our brand advertising business performed well, the brand advertising revenue had a decent increase, up
[1] As Changyou's cinema advertising business ceased operations during the third quarter of 2019, its results of operations have been excluded from the Company's 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 second quarter of 2020 had been the same as it was in the second quarter of 2019, or RMB6.81=US |
[3] Search and Search related advertising revenues exclude intra-Group transactions. |
Second Quarter Financial Results
Revenues
Total revenues for the second quarter of 2020 were US
Total online advertising revenues, which include revenues from the brand advertising and search and search-related advertising businesses, for the second quarter of 2020 were US
Brand advertising revenues for the second quarter of 2020 totaled US
Search and search-related advertising revenues for the second quarter of 2020 were US
Online game revenues for the second quarter of 2020 were US
Gross Margin
Both GAAP and non-GAAP[4] gross margin was
Both GAAP and non-GAAP gross margin for the online advertising business for the second quarter of 2020 was
Both GAAP and non-GAAP gross margin for the brand advertising business in the second quarter of 2020 were
Both GAAP and non-GAAP gross margin for the search and search-related advertising business in the second quarter of 2020 were
GAAP gross margin for online games in the second quarter of 2020 was
[4] Non-GAAP results exclude share-based compensation expense; non-cash tax benefits from excess tax deductions related to share-based awards; changes in fair value recognized in the Company's consolidated statements of operations with respect to equity investments with readily determinable fair values; a one-time impairment charge recognized for an investment unrelated to the Company's 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 Company's non-GAAP financial measures and related reconciliations to GAAP financial measures are included in the accompanying "Non-GAAP Disclosure" and "Reconciliations of Non-GAAP Results of Operation Measures to the Nearest Comparable GAAP Measures." |
Operating Expenses
For the second quarter of 2020, GAAP operating expenses totaled US
Operating Loss
GAAP operating loss for the second quarter of 2020 was US
Non-GAAP operating loss for the second quarter of 2020 was US
Income Tax Expense
GAAP income tax expense was US
Net Income/(Loss)
GAAP net loss attributable to Sohu.com Limited for the second quarter of 2020 was US
Excluding the impact of the additional accrual of withholding income tax described above, GAAP net income attributable to Sohu.com Limited for the second quarter of 2020 was US
Liquidity
As of June 30, 2020, cash and cash equivalents and short-term investments held by the Sohu Group, minus short-term bank loans, were US
Supplementary Information for Changyou Results
Second Quarter 2020 Operational Results
- For PC games, total average monthly active accounts[5] were 1.9 million, a decrease of
5% year-over-year and10% quarter-over-quarter. Total quarterly aggregate active paying accounts[6] were 0.9 million, flat year-over-year and a decrease of10% quarter-over-quarter. The quarter-over-quarter decreases were mainly due to a decrease in player engagement as a result of the resumption of work during the quarter following the easing of COVID-19 restrictions in China. - For mobile games, total average monthly active accounts were 3.1 million, an increase of
15% year-over-year and a decrease of9% quarter-over-quarter. The year-over-year increase was mainly due to the contribution of TLBB Honor, which was launched during the third quarter of 2019. Total quarterly aggregate active paying accounts were 0.6 million, flat year-over-year and a decrease of40% quarter-over-quarter. The quarter-over-quarter decreases were mainly due to a decrease in player engagement as a result of the resumption of work during the quarter following the easing of COVID-19 restrictions in China.
[5] Monthly active accounts refers to the number of registered accounts that are logged in to these games at least once during the month. |
[6] Quarterly aggregate active paying accounts refers to the number of accounts from which game points are utilized at least once during the quarter. |
Second Quarter 2020 Unaudited Financial Results
Total revenues for the second quarter of 2020 were US
GAAP and non-GAAP gross profit for the second quarter of 2020 were both US
GAAP operating expenses for the second quarter were US
Non-GAAP operating expenses for the second quarter were US
GAAP operating profit for the second quarter of 2020 was US
Non-GAAP operating profit for the second quarter of 2020 was US
Recent Developments
On July 27, 2020, Sohu's subsidiary Sogou announced that its board of directors (the "Sogou Board") received a letter containing a preliminary non-binding proposal (the "Proposal") from Tencent Holdings Limited (including its affiliates, "Tencent") for Tencent to acquire all of the outstanding ordinary shares, including ordinary shares represented by ADSs, of Sogou that are not already owned by Tencent for US
On July 31, 2020, the Sogou Board established a special committee of the Sogou Board, composed solely of independent directors, to consider the Proposal.
Sohu's board of directors has not had an opportunity to review and evaluate the Proposal in detail, or to make a determination as to how to respond to the Proposal or as to whether or not the proposed acquisition of Sogou would be in the best interests of Sohu, in its capacity as Sogou's controlling shareholder, and Sohu's shareholders for Sohu to approve or reject the Proposal or a Proposed Transaction.
Business Outlook
For the third quarter of 2020, Sohu estimates:
- Brand advertising revenues to be between US
$37 million and US$42 million ; this implies an annual decrease of9% to20% and a sequential decrease of3% to a sequential increase of11% . - Online game revenues to be between US
$85 million and US$95 million ; this implies an annual decrease of12% to21% and a sequential decrease of10% to20% . - Excluding the profit/loss generated by Sogou, non-GAAP net loss attributable to Sohu.com Limited to be between US
$10 million and US$20 million ; and GAAP net loss attributable to Sohu.com Limited to be between US$15 million and US$25 million .
For the third quarter 2020 guidance, the Company has adopted a presumed exchange rate of RMB7.00=US
This forecast reflects Sohu's management's current and preliminary view, which is subject to substantial uncertainty, particularly in view of the potential ongoing impact of the COVID-19 virus, which remains difficult to 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"), Sohu's management uses non-GAAP measures of gross profit, operating profit, net income, net income attributable to Sohu.com Limited and diluted net income attributable to Sohu.com Limited per 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 Company's 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 Company's 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.
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; the one-time impairment charge recognized for an investment unrelated to the Company's 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 Company's 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 Company's 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 Company's 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 Company's 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 Company's 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 Company's 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.
The non-GAAP financial measures are provided to enhance investors' overall understanding of Sohu's current financial performance and prospects for the future. A limitation of using non-GAAP gross profit, operating profit, net income, net income attributable to Sohu.com Limited and diluted net income attributable to Sohu.com Limited per 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 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 financial statements prepared in accordance with GAAP.
Safe Harbor Statement
This announcement contains forward-looking statements. It is currently expected that the Business Outlook will not be updated until release of Sohu's next quarterly earnings announcement; however, Sohu reserves right to update its Business Outlook at any time for any reason. Statements that are not historical facts, including statements about Sohu's beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, instability in global financial and credit markets and its potential impact on the Chinese economy; exchange rate fluctuations, including their potential impact on the Chinese economy and on Sohu's reported US dollar results; recent slow-downs in the growth of the Chinese economy; the uncertain regulatory landscape in the People's Republic of China; fluctuations in Sohu's quarterly operating results; the possibilities that Sohu will be unable to recoup its investment in video content and that Changyou will be unable to develop a series of successful games for mobile platforms or successfully monetize mobile games it develops or acquires; Sohu's reliance on online advertising sales, online games and mobile services for its revenues; the impact of the U.S. TCJA; the effects of the COVID-19 virus on the economy in China in general and on Sohu's business in particular; and the fact that there is no assurance that Tencent will make a definitive offer to acquire Sogou, that a definitive agreement relating to the Proposal will be entered into between Tencent and Sogou, or that a Proposed Transaction or any other similar transaction between Tencent and Sogou will be approved or consummated. Further information regarding these and other risks is included in Sohu's annual report on Form 20-F for the year ended December 31, 2019, and other filings with the Securities and Exchange Commission.
Conference Call and Webcast
Sohu's management team will host a conference call at 7:30 a.m. U.S. Eastern Time, August 10, 2020 (7:30 p.m. Beijing/Hong Kong time, August 10, 2020) following the quarterly results announcement. Participants can register for the conference call by navigating to https://apac.directeventreg.com/registration/event/8993497. Once preregistration has been completed, participants will receive dial-in numbers, an event passcode, and a unique registrant ID.
To join the conference, please dial the number you receive, enter the event passcode followed by your unique registrant ID, and you will be joined to the conference instantly. Please dial in 10 minutes before the call is scheduled to begin.
A telephone replay of the call will be available after the conclusion of the conference call at 10:30 a.m. Eastern Time August 10 through August 18, 2020. The dial-in details for the telephone replay are:
International: | +1-646-254-3697 |
Passcode: | 8993497 |
The live Webcast and archive of the conference call will be available on the Investor Relations section of Sohu's Website at http://investors.sohu.com/.
About Sohu.com
Sohu.com Limited (NASDAQ: SOHU) is China's premier online brand and indispensable to the daily life of millions of Chinese, providing a network of web properties and community based/web 2.0 products which offer the vast Sohu user community a broad array of choices regarding information, entertainment and communication. Sohu has built one of the most comprehensive matrices of Chinese language web properties and proprietary search engines, consisting of the mass portal and leading online media destination www.sohu.com; interactive search engine www.sogou.com; developer and operator of online games www.changyou.com/en/ and online video website tv.sohu.com.
Sohu's corporate services consist of online brand advertising on Sohu's matrix of websites as well as bid listing and home page on its in-house developed search directory and engine. Sohu also provides multiple news and information services on mobile platforms, including Sohu News App and the mobile news portal m.sohu.com. Sohu's online game subsidiary Changyou 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. Sohu's online search subsidiary Sogou (NYSE: SOGO) has grown to become the second largest search engine by mobile queries in China. It also owns and operates Sogou Input Method, the largest Chinese language input software. Sohu, established by Dr. Charles Zhang, one of China's 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: | |
In the United States:
Ms. Linda Bergkamp | |
Christensen | |
Tel: | +1 (480) 614-3004 |
E-mail: | |
SOHU.COM LIMITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS) | ||||||
Three Months Ended | ||||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | ||||
Revenues: | ||||||
Online advertising | ||||||
Brand advertising | $ | 37,969 | $ | 25,580 | $ | 43,958 |
Search and search-related advertising | 240,579 | 237,589 | 275,942 | |||
Subtotal | 278,548 | 263,169 | 319,900 | |||
Online games | 105,937 | 133,360 | 102,147 | |||
Others | 36,579 | 39,471 | 40,199 | |||
Total revenues | 421,064 | 436,000 | 462,246 | |||
Cost of revenues: | ||||||
Online advertising | ||||||
Brand advertising (includes stock-based | 22,790 | 25,519 | 31,432 | |||
Search and search-related advertising (includes | 191,150 | 212,210 | 182,593 | |||
Subtotal | 213,940 | 237,729 | 214,025 | |||
Online games (includes stock-based compensation | 23,959 | 28,389 | 18,163 | |||
Others | 12,133 | 8,568 | 19,624 | |||
Total cost of revenues | 250,032 | 274,686 | 251,812 | |||
Gross profit | 171,032 | 161,314 | 210,434 | |||
Operating expenses: | ||||||
Product development (includes stock-based | 105,022 | 103,412 | 109,048 | |||
Sales and marketing (includes stock-based | 64,579 | 62,841 | 90,580 | |||
General and administrative (includes stock-based | 24,097 | 19,296 | 21,987 | |||
Total operating expenses | 193,698 | 185,549 | 221,615 | |||
Operating loss | (22,666) | (24,235) | (11,181) | |||
Other income[7], net | 24,094 | 10,645 | 5,684 | |||
Interest income | 2,196 | 2,126 | 3,286 | |||
Interest expense | (1,431) | (2,275) | (3,737) | |||
Exchange difference | (259) | 2,225 | 3,551 | |||
Income/(loss) before income tax expense | 1,934 | (11,514) | (2,397) | |||
Income tax expense[8] | 85,023 | 13,600 | 3,941 | |||
Net loss from continuing operations | (83,089) | (25,114) | (6,338) | |||
Net loss from discontinued operations, net of tax | - | - | (27,037) | |||
Net loss | (83,089) | (25,114) | (33,375) | |||
Less: Net income/(loss) from continuing operations | (3,159) | (5,008) | 28,467 | |||
Less: Net loss from discontinued operations | - | - | (8,949) | |||
Net loss from continuing operations attributable to | (79,930) | (20,106) | (34,805) | |||
Net loss from discontinued operations attributable to | - | - | (18,088) | |||
Net loss attributable to Sohu.com Limited | (79,930) | (20,106) | (52,893) | |||
Basic net loss from continuing operations per ADS | (2.04) | (0.51) | (0.89) | |||
Basic net loss from discontinued operations per ADS | - | - | (0.46) | |||
Basic net loss per ADS attributable to Sohu.com Limited | $ | (2.04) | $ | (0.51) | $ | (1.35) |
ADS used in computing basic net loss per ADS attributable to | 39,271 | 39,270 | 39,244 | |||
Diluted net loss from continuing operations per ADS | (2.04) | (0.52) | (0.89) | |||
Diluted net loss from discontinued operations per ADS | - | - | (0.46) | |||
Diluted net loss per ADS attributable to Sohu.com Limited | $ | (2.04) | $ | (0.52) | $ | (1.35) |
ADS used in computing diluted net loss per ADS | 39,271 | 39,270 | 39,244 | |||
[7] For the second quarter of 2020, other income included a tax refund that was received by Sogou as part of the Chinese government's initiatives taken in response to COVID-19. |
[8] Following completion of the Changyou privatization, Changyou changed its policy for its PRC subsidiaries with respect to distribution of cash dividends. As a result, Changyou recognized an additional accrual of withholding income tax of US |
SOHU.COM LIMITED CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED, IN THOUSANDS) | ||||
As of Jun. 30, 2020 | As of Dec. 31, 2019 | |||
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | $ | 397,425 | $ | 305,126 |
Restricted cash[9] | 112,887 | 8,661 | ||
Short-term investments | 1,077,572 | 1,316,833 | ||
Account and financing receivables, net | 219,910 | 260,716 | ||
Prepaid and other current assets | 132,673 | 124,332 | ||
Total current assets | 1,940,467 | 2,015,668 | ||
Long-term investments, net | 107,709 | 94,332 | ||
Fixed assets, net | 410,105 | 447,688 | ||
Goodwill | 53,185 | 52,923 | ||
Intangible assets, net | 9,012 | 11,437 | ||
Restricted time deposits[9] | 25,426 | 240 | ||
Prepaid non-current assets | 1,391 | 1,882 | ||
Other assets | 63,279 | 65,620 | ||
Total assets | $ | 2,610,574 | $ | 2,689,790 |
LIABILITIES | ||||
Current liabilities: | ||||
Accounts payable | $ | 342,403 | $ | 253,403 |
Accrued liabilities | 236,849 | 249,810 | ||
Receipts in advance and deferred revenue | 114,494 | 118,222 | ||
Accrued salary and benefits | 101,289 | 110,833 | ||
Taxes payable | 77,236 | 102,686 | ||
Short-term bank loans | 128,251 | 114,528 | ||
Other short-term liabilities | 146,422 | 149,311 | ||
Total current liabilities | $ | 1,146,944 | $ | 1,098,793 |
Long-term accounts payable | 755 | 767 | ||
Long-term bank loans | 92,000 | - | ||
Long-term tax liabilities[10] | 375,714 | 277,544 | ||
Other long-term liabilities | 3,284 | 5,769 | ||
Total long-term liabilities | $ | 471,753 | $ | 284,080 |
Total liabilities | $ | 1,618,697 | $ | 1,382,873 |
SHAREHOLDERS' EQUITY: | ||||
Sohu.com Limited shareholders' equity | 288,946 | 428,454 | ||
Noncontrolling interest | 702,931 | 878,463 | ||
Total shareholders' equity | $ | 991,877 | $ | 1,306,917 |
Total liabilities and shareholders' equity | $ | 2,610,574 | $ | 2,689,790 |
[9] In the second quarter of 2020, in connection with the Company's financing of the Changyou privatization, Changyou pledged deposit certificates in the amount of US [10] Following completion of the Changyou privatization, Changyou changed its policy for its PRC subsidiaries with respect to distribution of cash dividends. As a result, Changyou recognized an additional accrual of withholding income tax of US |
SOHU.COM LIMITED RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES (UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS) | ||||||||||||||||||
Three Months Ended Jun. 30, 2020 | Three Months Ended Mar. 31, 2020 | Three Months Ended Jun. 30, 2019 | ||||||||||||||||
GAAP | Non-GAAP | Non-GAAP | GAAP | Non-GAAP | Non-GAAP | GAAP | Non-GAAP | Non-GAAP | ||||||||||
36 | (a) | (40) | (a) | (22) | (a) | |||||||||||||
Brand advertising gross profit | $ | 15,179 | $ | 36 | $ | 15,215 | $ | 61 | $ | (40) | $ | 21 | $ | 12,526 | $ | (22) | $ | 12,504 |
Brand advertising gross | ||||||||||||||||||
45 | (a) | 77 | (a) | 127 | (a) | |||||||||||||
Search and search-related | $ | 49,429 | $ | 45 | $ | 49,474 | $ | 25,379 | $ | 77 | $ | 25,456 | $ | 93,349 | $ | 127 | $ | 93,476 |
Search and search-related | ||||||||||||||||||
81 | (a) | 37 | (a) | 105 | (a) | |||||||||||||
Online advertising gross profit | $ | 64,608 | $ | 81 | $ | 64,689 | $ | 25,440 | $ | 37 | $ | 25,477 | $ | 105,875 | $ | 105 | $ | 105,980 |
Online advertising gross | ||||||||||||||||||
152 | (a) | 161 | (a) | (17) | (a) | |||||||||||||
Online games gross profit | $ | 81,978 | $ | 152 | $ | 82,130 | $ | 104,971 | $ | 161 | $ | 105,132 | $ | 83,984 | $ | (17) | $ | 83,967 |
Online games gross margin | ||||||||||||||||||
Others gross profit | $ | 24,446 | $ | - | (a) $ | 24,446 | $ | 30,903 | $ | - | (a) $ | 30,903 | $ | 20,575 | $ | - | (a) $ | 20,575 |
Others gross margin | ||||||||||||||||||
233 | (a) | 198 | (a) | 88 | (a) | |||||||||||||
Gross profit | $ | 171,032 | $ | 233 | $ | 171,265 | $ | 161,314 | $ | 198 | $ | 161,512 | $ | 210,434 | $ | 88 | $ | 210,522 |
Gross margin | ||||||||||||||||||
Operating expenses | $ | 193,698 | $ | (6,642) | (a) $ | 187,056 | $ | 185,549 | $ | (3,575) | (a) $ | 181,974 | $ | 221,615 | $ | (4,370) | (a) $ | 217,245 |
6,875 | (a) | 3,773 | (a) | 4,458 | (a) | |||||||||||||
Operating loss | $ | (22,666) | $ | 6,875 | $ | (15,791) | $ | (24,235) | $ | 3,773 | $ | (20,462) | $ | (11,181) | $ | 4,458 | $ | (6,723) |
Operating margin | - | - | - | - | - | - | ||||||||||||
Income tax expense[11] | $ | (85,023) | $ | 3,141 | (c,d)$ | (81,882) | $ | (13,600) | $ | 2,195 | (c,d)$ | (11,405) | $ | (3,941) | $ | 1,566 | (c,d)$ | (2,375) |
6,875 | (a) | 3,773 | (a) | 4,458 | (a) | |||||||||||||
(3,618) | (c) | (855) | (c) | 794 | (c) | |||||||||||||
1,934 | (d) | 1,910 | (d) | 1,831 | (d) | |||||||||||||
- | - | - | ||||||||||||||||
Net income/(loss) before non- | $ | (83,089) | 5,191 | (77,898) | $ | (25,114) | 4,828 | (20,286) | $ | (6,338) | 7,083 | 745 | ||||||
6,875 | (a) | 3,773 | (a) | 4,458 | (a) | |||||||||||||
(2,338) | (b) | (2,761) | (b) | (3,733) | (b) | |||||||||||||
(3,618) | (c) | (855) | (c) | 794 | (c) | |||||||||||||
1,934 | (d) | 1,910 | (d) | 1,831 | (d) | |||||||||||||
Net loss from continuing | $ | (79,986) | 2,853 | (77,133) | $ | (20,441) | 2,067 | (18,374) | $ | (34,932) | 3,350 | (31,582) | ||||||
Net loss from discontinued | - | - | - | - | - | - | (18,062) | - | (18,062) | |||||||||
Net loss attributable to | (79,986) | 2,853 | (77,133) | (20,441) | 2,067 | (18,374) | (52,994) | 3,350 | (49,644) | |||||||||
Diluted net loss from | $ | (2.04) | (1.96) | $ | (0.52) | (0.47) | $ | (0.89) | (0.80) | |||||||||
Diluted net loss from | - | - | - | - | (0.46) | (0.46) | ||||||||||||
Diluted net loss per ADS | (2.04) | (1.96) | (0.52) | (0.47) | (1.35) | (1.27) | ||||||||||||
Shares used in computing | 39,271 | 39,271 | 39,270 | 39,270 | 39,244 | 39,244 | ||||||||||||
[11] Following completion of the Changyou privatization, Changyou changed its policy for its PRC subsidiaries with respect to distribution of cash dividends. As a result, Changyou recognized an additional | ||||||||||||||||||
Note: | |
(a) To eliminate the impact of share-based awards as measured using the fair value method. This adjustment does not have any impact on income tax expense. | |
(b) To adjust Sohu's economic interests in Changyou and Sogou attributable to the above non-GAAP adjustments. This adjustment does not have any impact on income tax expense. | |
(c) To adjust for a change in the fair value of the Company's investment in Hylink and the income tax effect. | |
(d) To adjust for the effect of the U.S. TCJA. |
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SOURCE Sohu.com Ltd.
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