WEB NEWS Acquisitions
BEIJING, April 17, 2020 /PRNewswire / -- Sohu.com Limited (NASDAQ: SOHU) ("Sohu"), China's leading online media, video, search and gaming business group, today announced that it has completed the acquisition of all of the outstanding shares of Changyou.com Limited ("Changyou") that it did not already beneficially own, through the merger (the "Changyou Merger") of an indirect wholly-owned subsidiary ("Changyou Merger Co.") of Sohu with and into Changyou, with Changyou being the company surviving the Changyou Merger. As a result of the Changyou Merger, Changyou has become a private company wholly owned directly and indirectly by Sohu and the American depositary shares of Changyou (the "Changyou ADSs"), each of which represented two Changyou Class A ordinary shares ("Changyou Class A Ordinary Shares"), are no longer traded on the Nasdaq Global Select Market.
Pursuant to the plan of merger for the Changyou Merger, each Changyou Class A Ordinary Share issued and outstanding immediately prior to the effectiveness of the Changyou Merger, other than Changyou Class A ordinary shares owned beneficially by Sohu, was cancelled in exchange for the right to receive $5.40 in cash without interest, and each outstanding Changyou ADS was cancelled in exchange for the right to receive $10.80 in cash without interest (less $0.05 per ADS cancellation fees and other fees as applicable). Because Changyou Merger Co. owned over 90% of the voting power represented by all issued and outstanding shares of Changyou prior to the effectiveness of the Changyou Merger and the Changyou Merger was in the form of a short-form merger in accordance with section 233(7) of the Companies Law of the Cayman Islands, the Changyou Merger was not subject to a vote of the shareholders of Changyou.
In connection with the Changyou Merger, each outstanding and fully‑vested option (each, a "Vested Option") to purchase Changyou Class A Ordinary Shares under Changyou's share incentive plans was cancelled, and each holder of a Vested Option has the right to receive an amount in cash determined by multiplying (x) the excess, if any, of $5.40 over the applicable exercise price of such Vested Option by (y) the number of Changyou Class A Ordinary Shares underlying such Vested Option; and each outstanding but unvested option (each, an "Unvested Option") to purchase Changyou Class A Ordinary Shares under Changyou's share incentive plans will remain outstanding and continue to vest following the effectiveness of the Changyou Merger in accordance with the applicable Changyou share incentive plan and award agreement governing such Unvested Option in effect immediately prior to the effectiveness of the Changyou Merger.
Changyou has requested that trading of Changyou ADSs on the Nasdaq Global Select Market be suspended, and that the Nasdaq Stock Market LLC ("Nasdaq") file with the Securities and Exchange Commission (the "SEC") a Form 25 notifying the SEC of Nasdaq's withdrawal of the Changyou ADSs from listing on Nasdaq and intention to withdraw the Changyou Class A Ordinary Shares from registration under Section 12(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Changyou has informed Sohu that it intends to file with the SEC, ten days after Nasdaq files the Form 25, a Form 15 suspending Changyou's reporting obligations under the Exchange Act and withdrawing the registration of Changyou Class A Ordinary Shares under the Exchange Act. Changyou's obligations to file with or furnish to the SEC certain reports and forms, including Form 20-F and Form 6-K, will be suspended immediately as of the filing date of the Form 15 and will terminate once the deregistration of Changyou Class A Ordinary Shares becomes effective.
China Renaissance, through its subsidiary CRP-Fanya Investment Consultants (Beijing) Limited, has served as financial advisor to Sohu in connection with the Changyou Merger; Goulston & Storrs PC has served as U.S. legal counsel to Sohu; and Han Kun Law Offices has served as PRC legal counsel to Sohu.
Houlihan Lokey (China) Limited has served as financial advisor to the committee of independent and disinterested directors established by Changyou's board of directors (the "Changyou Special Committee") to review and evaluate the Changyou Merger; and Skadden, Arps, Slate, Meagher & Flom LLP has served as U.S. legal counsel to the Changyou Special Committee.
Conyers Dill & Pearman has advised as to Cayman Islands legal matters with respect to the Changyou Merger.
Acquisition Activity
BEIJING, April 14, 2020 /PRNewswire / -- Sohu.com Limited (NASDAQ: SOHU) ("Sohu"), China's leading online media, video, search and gaming business group, today announced that, as contemplated by the previously-announced Agreement and Plan of Merger (the "Merger Agreement"), dated January 24, 2020, by and among Sohu's indirect wholly-owned subsidiary Sohu.com (Game) Limited ("Sohu Game"), Sohu Game's directly wholly-owned subsidiary Changyou Merger Co. Limited ("Changyou Merger Co."), and Changyou.com Limited ("Changyou") (NASDAQ: CYOU), Changyou Merger Co. and Changyou entered into a definitive Plan of Merger (the "Plan of Merger"), which has been filed with the Registrar of Companies of the Cayman Islands, pursuant to which Sohu will acquire all outstanding shares of Changyou it does not already beneficially own, through a merger (the "Changyou Merger") in which Changyou Merger Co. will merge with and into Changyou effective April 17, 2020 (the "Effective Time") with Changyou being the surviving company.
Pursuant to the Plan of Merger, at the Effective Time, (i) each Class A ordinary share of Changyou (each, a "Changyou Class A Ordinary Share") issued and outstanding immediately prior to the Effective Time, other than shares held beneficially by Sohu (the "Excluded Shares"), will be cancelled in exchange for the right to receive $5.40 in cash without interest, and (ii) each outstanding American depositary share of Changyou (each, a "Changyou ADS," representing two Changyou Class A Ordinary Shares), other than the ADSs representing the Excluded Shares, will be cancelled in exchange for the right to receive $10.80 in cash without interest (less $0.05 per ADS cancellation fees and other fees as applicable). Pursuant to the Merger Agreement, at the Effective Time, (i) each outstanding and fully‑vested option (each, a "Vested Option") to purchase Changyou Class A Ordinary Shares under Changyou's share incentive plans will be cancelled, and each holder of a Vested Option will have the right to receive an amount in cash determined by multiplying (x) the excess, if any, of $5.40 over the applicable exercise price of such Vested Option by (y) the number of Class A Ordinary Shares underlying such Vested Option, and (ii) each outstanding but unvested option (each, an "Unvested Option") to purchase Changyou Class A Ordinary Shares under Changyou's share incentive plans will remain outstanding and continue to vest following the Effective Time in accordance with the applicable Changyou share incentive plan and award agreement governing such Unvested Option in effect immediately prior to the Effective Time.
Because Changyou Merger Co. owns over 90% of the voting power represented by all issued and outstanding shares of Changyou, the Changyou Merger will be in the form of a short-form merger of Changyou Merger Co. with and into Changyou in accordance with section 233(7) of the Companies Law of the Cayman Islands, with Changyou being the company surviving the Changyou Merger. Shareholder approval of the Changyou Merger by Changyou's shareholders is not required.
If completed at the Effective Time, the Changyou Merger will result in Changyou becoming a private company wholly owned directly and indirectly by Sohu, Changyou ADSs no longer being listed on the Nasdaq Global Select Market, and Changyou's ADS program being terminated.
Comments & Business Outlook
Fourth Quarter 2019 Financial Results
Total revenues were US$490 million[2], up 5% year-over-year and 2% quarter-over-quarter.
Excluding the impairment charge, non-GAAP net income attributable to Sohu.com Limited was US$7 million, compared with a net loss of US$51 million in the fourth quarter of 2018 and a net loss of US$17 million in the third quarter of 2019.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Limited, commented, "During 2019, China's economy continued to slow down and competition intensified. However, these challenges did not stop us from exploring new opportunities and improving operating efficiencies. As a result, our operating results further improved due to the solid performance of our business and the effective cost saving initiatives. For the fourth quarter of 2019, excluding an impairment charge recognized for an investment unrelated to our core businesses, non-GAAP net income attributable to Sohu.com Limited was US$7 million. For Sohu Media Portal, we strengthened our position as a mainstream media platform with high quality original content and various events. For Sohu Video, with the unique and high-quality dramas and other shows, we actively searched for diversified monetization sources. With improved monetization capabilities and strict budget control, Sohu video was able to further trim its losses in 2019. For Sogou, search revenue grew faster than the industry average, and revenues from Sogou's Recommendation Service that leverages Mobile Keyboard continued to experience robust growth. In 2019, Changyou's online games performed well, and it took a number of steps to enhance its capacity to create new, high-quality games."
Business Outlook
For the first quarter of 2020, Sohu estimates:
Total revenues to be between US$400 million and US$435 million.
For the first quarter 2020 guidance, the Company has adopted a presumed exchange rate of RMB7.00=US$1.00, as compared with the actual exchange rate of approximately RMB6.74=US$1.00 for the first quarter of 2019, and RMB7.03=US$1.00 for the fourth quarter of 2019.
This forecast reflects Sohu's management's current and preliminary view, which at present is subject to substantial uncertainty, particularly in view of the potential impact of the COVID-19 virus, the effects of which are difficult to analyze and predict.
Going Private News
BEIJING, Jan. 24, 2020 /PRNewswire / -- Sohu.com Limited (NASDAQ: SOHU) ("Sohu" or the "Company"), China's leading online media, video, search and gaming business group, today announced that its wholly-owned subsidiary Sohu.com (Game) Limited ("Sohu Game") and a newly-formed wholly-owned subsidiary of Sohu Game, Changyou Merger Co. Limited ("Merger Co.", and together with Sohu and Sohu Game, the "Sohu Group"), have entered into a definitive Agreement and Plan of Merger (the "Merger Agreement") with Changyou.com Limited (NASDAQ: CYOU)("Changyou"), pursuant to which the Sohu Group will acquire all outstanding shares of Changyou that Sohu does not already beneficially own in an all-cash transaction implying an equity value of Changyou of approximately $579.0 million (the "Merger").
Pursuant to the terms of the Merger Agreement, at the effective time of the Merger (the "Effective Time") each Class A ordinary share of Changyou (each, a "Changyou Class A Ordinary Share") issued and outstanding immediately prior to the Effective Time, other than the Excluded Shares (as defined in the Merger Agreement), will be cancelled and cease to exist, in exchange for the right to receive $5.40 in cash without interest, and each outstanding American depositary share of Changyou (each, a "Changyou ADS," representing two Changyou Class A Ordinary Shares), other than the ADSs representing the Excluded Shares, will be cancelled in exchange for the right to receive $10.80 in cash without interest (the "Merger Consideration").
At the Effective Time, each (i) outstanding and fully‑vested option (each, a "Vested Option") to purchase Changyou Class A Ordinary Shares under Changyou's share incentive plans will be cancelled, and each holder of a Vested Option will have the right to receive an amount in cash determined by multiplying (x) the excess, if any, of $5.40 over the applicable exercise price of such Vested Option by (y) the number of Class A Ordinary Shares underlying such Vested Option; and (ii) each outstanding but unvested option (each, an "Unvested Option") to purchase Changyou Class A Ordinary Shares under Changyou's share incentive plans will remain outstanding and continue to vest following the Effective Time in accordance with the applicable Changyou share incentive plan and award agreement governing such Unvested Option in effect immediately prior to the Effective Time.
The Merger Consideration represents a premium of 82.4% to the closing price of Changyou ADSs on September 6, 2019, the last trading day prior to Sohu's delivery to the board of directors of Changyou (the "Changyou Board") of the "going-private" proposal, and a premium of 70.1% over the average closing price of Changyou ADSs during the last 30 trading days prior to Sohu's delivery of the "going-private" proposal.
The Sohu Group intends to fund the Merger primarily with debt financing. The Sohu Group has executed a debt commitment letter with Industrial and Commercial Bank of China Limited, Tokyo Branch ("ICBC") pursuant to which ICBC will provide, subject to the terms and conditions set forth therein, an amount sufficient to fund in full the consummation of Merger and the other transactions related thereto.
Because the Sohu Group owns over 90% of the voting power represented by all issued and outstanding shares of Changyou, the Merger will be in the form of a short-form merger of Merger Co. with and into Changyou in accordance with section 233(7) of the Companies Law of the Cayman Islands, with Changyou being the company surviving the Merger. Shareholder approval of the Merger Agreement and the Merger by Changyou's shareholders is not required.
The Merger is currently expected to close in the second quarter of 2020. If completed, the Merger will result in Changyou becoming a privately‑owned company wholly owned directly and indirectly by Sohu, Changyou ADSs no longer being listed on the Nasdaq Global Select Market, and Changyou's ADS program being terminated.
China Renaissance through its subsidiary CRP-Fanya Investment Consultants (Beijing) Limited is serving as financial advisor to the Sohu Group; Goulston & Storrs PC is serving as U.S. legal counsel to the Sohu Group; and Han Kun Law Offices is serving as PRC legal counsel to the Sohu Group.
Houlihan Lokey (China) Limited is serving as financial advisor to a committee of independent and disinterested directors established by the Changyou Board (the "Changyou Special Committee"); Skadden, Arps, Slate, Meagher & Flom LLP is serving as U.S. legal counsel to the Changyou Special Committee.
The validity of the Merger and certain other legal matters with respect to the Cayman Islands law are passed upon and advised by Conyers Dill & Pearman.
Comments & Business Outlook
Third Quarter 2019 Financial Results
Total revenues were US$482 million[2], up 9% year-over-year and 4% quarter-over-quarter.
Non-GAAP net loss attributable to Sohu.com Limited was US$17 million, compared with a net loss of US$23 million in the third quarter of 2018 and a net loss of US$32 million in the second quarter of 2019.
Excluding the profit/loss generated by Sogou and Changyou, the Non-GAAP net loss attributable to Sohu.com Limited was US$53 million, compared with a net loss of US$77 million in the third quarter of 2018 and a net loss of US$68 million in the second quarter of 2019.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Limited, commented, "For the third quarter of 2019, though there is still much uncertainty in the macroeconomic environment, both of our total revenue and our bottom line exceeded our prior guidance, mainly driven by our online gaming and search businesses, as well as the continued cost saving initiatives that we are pushing through in our Sohu Media and Sohu Video segments. Sohu Media is making a comeback as a mainstream media platform with an enormous amount of high-quality original content and various events. These premium features further enhanced the reputation of Sohu Media and its sub-brands, and further strengthened our overall competitiveness. For Sohu Video, we continued to deliver unique and high-quality dramas and other shows to our users. We have been integrating various social functionality into our products to help users build and find their own unique social communities. We also strictly kept our budget under control and are actively exploring new ways to diversify our revenue streams in cooperation with advertisers. In the third quarter of 2019, Sogou experienced healthy growth and its search revenue continued to grow faster than the industry average. Besides, Sogou consistently focused on integrating its language-centric AI capabilities to fully support innovations in its search, mobile keyboard and smart hardware businesses. Lastly, Changyou's overall performance continued to be stable. In addition to the solid results delivered by TLBB PC and Legacy TLBB Mobile, TLBB Honor, a new mobile game launched during the quarter, also performed well."
Business Outlook
For the fourth quarter of 2019, Sohu estimates:
Total revenues to be between US$435 million and US$470 million.
Brand advertising revenues to be between US$40 million and US$45 million; this implies an annual decrease of 21% to 30% and a sequential decrease of 3% to 14%.
Sogou revenues to be between US$290 million and US$310 million; this implies an annual decrease of 3% to an annual increase of 4% and a sequential decrease of 2 to 8%.
Online game revenues to be between US$95 million and US$105 million; this implies an annual increase of 1% to 12% and a sequential decrease of 3% to 12%.
Non-GAAP net loss attributable to Sohu.com Limited. to be between US$12 million and US$22 million, and non-GAAP loss per fully-diluted ADS to be between US$0.30 and US$0.55. GAAP net loss attributable to Sohu.com Limited to be between US$17 million and US$27 million, and GAAP loss per fully-diluted ADS to be between US$0.45 and US$0.70.
Excluding the profit/loss generated by Sogou and Changyou, Non-GAAP net loss attributable to Sohu.com Limited. to be between US$45 million and US$50 million, GAAP net loss attributable to Sohu.com Limited to be between US$48 million and US$53 million.
For the fourth quarter 2019 guidance, the Company has adopted a presumed exchange rate of RMB7.10=US$1.00, as compared with the actual exchange rate of approximately RMB6.91=US$1.00 for the fourth quarter of 2018, and RMB6.99=US$1.00 for the third quarter of 2019.
Going Private News
BEIJING, Oct. 17, 2019 / PRNewswire / -- Changyou.com Limited ("Changyou" or the "Company") ( CY OU ), a leading online game developer and operator in China, today announced that its board of directors (the "Board") has formed a special committee (the "Special Committee") consisting of Dr. Xiao Chen and Mr. Charles Chan, each an independent director, to review and evaluate a previously-announced non-binding proposal that the Board received on September 9, 2019 from Sohu.com Limited ("Sohu") ( SOH U ), a Cayman Islands company and the ultimate controlling shareholder of Changyou, to acquire all of the outstanding Class A ordinary shares of Changyou, including Class A ordinary shares represented by American depositary shares ("ADSs"), each representing two Class A ordinary shares, that are not already owned by Sohu for a purchase price of $5.00 per Class A ordinary share, or $10.00 per ADS, in cash (the "Proposal"). The Special Committee has retained Houlihan Lokey (China) Limited as its financial advisor and Skadden, Arps, Slate, Meagher & Flom as its United States legal counsel in connection with its review and evaluation of the Proposal.
Comments & Business Outlook
BEIJING, Sept. 9, 2019 /PRNewswire / -- Sohu.com Limited (SOHU) ("Sohu" or the "Company"), China's leading online media, video, search and gaming business group, today announced that it has submitted to the board of directors of its majority-owned subsidiary Changyou.com Limited (CYOU) ("Changyou"), a leading online game developer and operator in China, a preliminary non-binding proposal to acquire all of the outstanding Class A ordinary shares of Changyou, including Class A ordinary shares represented by American Depositary Shares ("ADSs"), that are not already owned by Sohu for a purchase price of US$5.00 per Class A ordinary share, or US$10.00 per ADS, in cash. As Sohu holds all of the Class B ordinary shares of Changyou that are currently outstanding, the proposed transaction, if completed, would result in Changyou becoming a privately-held, indirect wholly-owned subsidiary of Sohu, and Changyou's ADSs would be delisted from the NASDAQ Global Select Market.
The Company expects that a special committee of the Changyou Board, composed solely of independent directors, will consider the Proposal Letter and the Proposed Transaction. The Company cautions that the Changyou Board has just received the Proposal Letter and has not made any decisions with respect to the Proposal Letter and the Proposed Transaction. There can be no assurance that Sohu will make any definitive offer to Changyou, that any definitive agreement relating to the Proposal Letter will be entered into between Changyou and Sohu, or that the Proposed Transaction or any other similar transaction will be approved or consummated.
The Company also received formal confirmation today from Dr. Charles Zhang that he is no longer pursuing his 2017 non-binding proposal to acquire Changyou himself.
The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.
Comments & Business Outlook
Second Quarter 2019 Financial Results
Non-GAAP net loss attributable to Sohu.com Limited for the second quarter of 2019 was US$50 million, or US$1.27 loss per fully-diluted ADS, compared with a net loss of US$49 million in the second quarter of 2018 and a net loss of US$55 million in the first quarter of 2019.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Limited, commented, "Under the current challenging macroeconomic environment, our total revenues stayed largely in-line with our prior guidance. Our bottom line performance, excluding the charge for impairment of assets recognized by Changyou related to its cinema advertising business, met the high-end of our prior guidance. This was mainly driven by the continued cost savings that we were able to achieve at Sohu Video, and the solid performance of our online game business. Sohu Media is making a comeback and living up to its reputation as a top tier media platform. We have been hosting high-quality events, generating and distributing premium content, and strengthening our core competitiveness and credibility among media brands. Meanwhile, Sohu Video continues to provide users with unique, high-quality dramas and shows. We have seen the positive effects of this differential development strategy and stable improvements in monetization at both Sohu Media and Sohu Video. We hope to see further progress in the coming quarters. In the second quarter of 2019, Sogou achieved steady growth in its core search business while Sogou Mobile Keyboard further expanded its user base and contributed a larger portion to total revenues. As for Changyou, both its revenue and profit exceeded expectations, excluding the aforementioned charge for impairment. Changyou is demonstrating a stable profitability while developing more games to provide a diversified product portfolio."
Business Outlook
For the third quarter of 2019, Sohu estimates:
Total revenues to be between US$445 million and US$470 million.
Brand advertising revenues to be between US$45 million and US$50 million; this implies an annual decrease of 12% to 21% and a sequential increase of 2% to 14%.
Sogou revenues to be between US$304 million and US$314 million; this implies an annual increase of 10% to 14% and a sequential increase of nil to 3%.
Online game revenues to be between US$80 million and US$90 million; this implies an annual decrease of 6% to 17 % and a sequential decrease of 12% to 22%.
Non-GAAP net loss attributable to Sohu.com Limited. to be between US$22 million and US$32 million, and non-GAAP loss per fully-diluted ADS to be between US$0.55 and US$0.80. GAAP net loss attributable to Sohu.com Limited to be between US$25 million and US$35 million, and GAAP loss per fully-diluted ADS to be between US$0.65 and US$0.90.
Excluding the profit/loss generated by Sogou and Changyou, Non-GAAP net loss attributable to Sohu.com Limited. to be between US$50 million and US$55 million, GAAP net loss attributable to Sohu.com Limited to be between US$53million and US$58 million.
Special Dividend
BEIJING, April 29, 2019 /PRNewswire / -- Sohu.com Limited (NASDAQ: SOHU) ("Sohu"), China's leading online media, video, search and gaming business group, today reported that on April 29, 2019, Changyou.com Limited (NASDAQ: CYOU) ("Changyou"), Sohu's majority-owned online game subsidiary, announced that Changyou's board of directors (the "Changyou Board") has declared a special cash dividend of US$4.70 per Changyou Class A ordinary or Class B ordinary share, or US$9.40 per American depositary share ("Changyou ADS"), each of which represents two Changyou Class A ordinary shares. The aggregate amount of the special cash dividend will be approximately US$503 million.
The Changyou Board has set May 15, 2019 as the date on which holders of record of Changyou Class A ordinary shares and Class B ordinary shares will be entitled to the dividend. In view of the amount of the dividend per Changyou ADS in relation to recent trading prices of the Changyou ADSs on NASDAQ, however, Changyou expects that applicable NASDAQ rules will require holders of Changyou ADSs to hold their Changyou ADSs as of no later than the end of the trading day before the ex-dividend date in order to be entitled to receive the dividend. Changyou expects the ex-dividend date to be no later than June 30, 2019. Once the ex-dividend date for the special cash dividend has been determined, Changyou will issue an additional press release announcing the ex-dividend date.
The amount of the dividend payable to Sohu is expected to be approximately $337 million. Sohu does not expect to pay any of such dividend to its shareholders or holders of Sohu American depositary shares, as the proceeds will be used to support Sohu's operations.
For more information about the special Changyou dividend, please refer to Changyou's separate announcement.
Comments & Business Outlook
First Quarter 2019 Financial Results
Total revenues were US$431 million[1], down 5% year-over-year and 11% quarter-over-quarter. Non-GAAP net loss attributable to Sohu.com Limited was US$55 million. Excluding the effect of the aforementioned impairment of intangibles via acquisitions of businesses, net of tax effects, Non-GAAP net loss attributable to Sohu.com Limited was US$48 million, compared with a net loss of US$97 million in the first quarter of 2018.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Limited, commented, "In the first quarter, we delivered better-than-expected revenue, mainly driven by the solid performance of our search and game businesses. Sohu Media continued to make progress upgrading its products and content on our platform and we explored new ways to diversify revenue sources. Sohu Video consistently offered appealing self-developed dramas and its financial loss continued to narrow due to strict cost controls. For Sogou, the user base of its mobile search and keyboard products further expanded while its core search revenue grew faster than the industry. In the first quarter, Changyou's revenue and profit exceeded guidance as the TLBB PC game performed very well during the Chinese New Year holidays.
" Business Outlook"
For the second quarter of 2019, Sohu estimates: Total revenues to be between US$469 million and US$494 million. Brand advertising revenues to be between US$47 million and US$52 million; this implies an annual decrease of 15% to 24% and a sequential increase of 9% to 21%. Sogou revenues to be between US$303 million and US$313 million; this implies an annual increase of 1% to 4% and a sequential increase of 20% to 24%. Online game revenues to be between US$90 million and US$100 million; this implies an annual decrease of 5% to an annual increase of 6% and a sequential decrease of 9% to a sequential increase of 1%. Non-GAAP net loss attributable to Sohu.com Limited. to be between US$38 million and US$48 million, and non-GAAP loss per fully-diluted ADS to be between US$0.95 and US$1.20. GAAP net loss attributable to Sohu.com Limited to be between US$40 million and US$50 million, and GAAP loss per fully-diluted ADS to be between US$1.00 and US$1.25. Excluding the profit/loss generated by Sogou and Changyou, Non-GAAP net loss attributable to Sohu.com Limited. to be between US$65 million and US$70 million, GAAP net loss attributable to Sohu.com Limited to be between US$67million and US$72 million. For the second quarter 2019 guidance, the Company has adopted a presumed exchange rate of RMB6.80=US$1.00, as compared with the actual exchange rate of approximately RMB6.38=US$1.00 for the second quarter of 2018, and RMB6.74=US$1.00 for the first quarter of 2019.
Comments & Business Outlook
BEIJING, March 28, 2019 /PRNewswire / -- Sohu.com Limited (SOHU) ("Sohu" or the "Company"), China's leading online media, video, search and gaming business group, announced that the Company today filed with the Securities and Exchange Commission its Annual Report on Form 20-F for the fiscal year ended December 31, 2018. The Annual Report is available on the Company's investor relations website at http://investors.sohu.com. The Company will provide a hard copy of the Annual Report containing the audited consolidated financial statements of the Company, free of charge, to a shareholder or holder of the Company's American depositary shares upon written request.
Comments & Business Outlook
Fourth Quarter 2018 Financial Results
Total revenues[1] were US$482 million[2], down 5% year-over-year and up 5% quarter-over-quarter.
Non-GAAP net loss attributable to Sohu.com Limited for the fourth quarter of 2018 was US$59 million, or US$1.50 loss per fully-diluted ADS, compared with a net loss of US$78 million in the fourth quarter of 2017 and a net loss of US$32 million in the third quarter of 2018.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Limited, commented, "During 2018, as we faced a challenging macroeconomic environment, we focused our resources on key mobile products and worked hard to improve operating efficiencies. While annual revenues were largely flat compared with 2017, our bottom line performance was meaningfully improved thanks to a variety of cost saving efforts. For Sohu Media Portal, daily active users of Sohu News App, our flagship mobile product, outpaced the industry's growth, benefitting from superior content and continued upgrades of the recommendation engine. For Sohu Video, we focused on original program production, providing users unique and high quality dramas and shows. In the meantime, we significantly cut spending on traditional TV programs and successfully lowered the segment loss over 50% from 2017. In 2018, Sogou's mobile search and mobile keyboard continued to gain user traction while its leading AI capabilities have been not only recognized in international contests, but also applied to new commercial use cases. Lastly, Changyou delivered in-line financial results supported by solid performance of TLBB PC and mobile games. For 2019, Changyou will strengthen its R&D capabilities to launch more hit games."
Business Outlook
For the first quarter of 2019, Sohu estimates:
Total revenues to be between US$390 million and US$415 million.
Comments & Business Outlook
Third Quarter 2018 Financial Results
Total revenues[1] were US$460 million[2], down 11% year-over-year and 5% quarter-over-quarter.
Non-GAAP net loss attributable to Sohu.com Limited for the third quarter of 2018 was US$32 million, or a loss of US$0.81 per fully-diluted ADS, compared with a net loss of US$93 million in the third quarter of 2017 and a net loss of US$49 million in the second quarter of 2018.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Limited, commented, "For the third quarter, while our total revenues were largely in-line with prior guidance, the bottom line performance, excluding non-operating items, came in better than we expected, mainly driven by the cost savings of Sohu Video and solid results of our online game business. For Sohu Media Portal, we focused our efforts on upgrading the content as well as optimizing our recommendation engine algorithms. Our key mobile apps gained momentum in terms of DAU and time spent by users. For Sohu Video, we remained on track to reduce content costs while develop new original programs, which tend to generate better ROI. This helped us narrow the segment's loss by more than 50% year-over-year. Sogou continuously integrated more innovative AI features into its search and mobile keyboard products, strengthening its market competiveness. Lastly, Changyou comfortably beat expectations on both revenues and profit, supported by the healthy performance of its TLBB PC and mobile games."
Business Outlook
For the fourth quarter of 2018, Sohu estimates:
Total revenues to be between US$465 million and US$495 million.
Comments & Business Outlook
Second Quarter 2018 Financial Results
Total revenues[1] were US$486 million[2], up 5% year-over-year and 7% quarter-over-quarter.
Non-GAAP net loss attributable to Sohu.com Limited for the second quarter of 2018 was US$49 million, or a loss of US$1.27 per fully-diluted ADS, compared with a net loss of US$72 million in the second quarter of 2017 and a net loss of US$97 million in the first quarter of 2018.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Limited, commented, "We saw mixed financial performance in the second quarter. While quarterly revenue was slightly soft given the continued headwinds against our brand advertising business, the bottom line performance was better than expected as we aggressively slashed content costs. For Sohu Media Portal, we continued to focus on user growth for the Sohu News App by consistently refining the product design and content quality. For Sohu Video, we maintained steady momentum with our original content and substantially narrowed the loss as a result of lowered spending on licensed content. For Sogou, in the second quarter its core search revenues posted 45% year-over-year growth and Sogou Mobile Keyboard's DAU increased by 36% from the prior year to 380 million. Changyou delivered in-line performance as its online game business continued to generate healthy cash flow."
Business Outlook
For the third quarter of 2018, Sohu estimates:
Total revenues to be between US$445 million and US$470 million.
Comments & Business Outlook
BEIJING, May 29, 2018 /PRNewswire / -- Sohu.com Inc. (SOHU) ("Sohu Delaware"), China's leading online media, video, search and gaming business group, today announced that at a special meeting held on May 29, 2018, Beijing time (the "Special Meeting"), its stockholders approved a proposal for the dissolution of Sohu Delaware (the "Liquidation") and adoption of a plan of complete liquidation and dissolution of Sohu Delaware (the "Plan of Liquidation"), pursuant to which Sohu Delaware will be dissolved; all outstanding shares of the common stock of Sohu Delaware will be cancelled, and American depositary shares (the "ADSs") representing ordinary shares of Sohu.com Limited, a Cayman Islands company ("Sohu Cayman"), will be distributed to the stockholders of Sohu Delaware on a pro rata basis.
Sohu Delaware's present intention is to proceed expeditiously with the Liquidation by filing a Certificate of Dissolution with the Secretary of State of the State of Delaware on May 31, 2018 specifying an effective time for the dissolution of Sohu Delaware on that date of 4:30 PM Eastern Time (such date and time, the "Effective Time"), although the Liquidation may be postponed or abandoned by Sohu Delaware's Board of Directors at any time prior to the Effective Time. As of the Effective Time Sohu Delaware will distribute to the stockholders of Sohu Delaware ADSs, each representing one ordinary share of Sohu Cayman, equal to the number of shares of the common stock of Sohu Delaware such stockholders held immediately prior to the Effective Time, on a share-for-shares basis.
From and after the Effective Time, as previously disclosed in the proxy statement/prospectus for the Special Meeting filed with the Securities and Exchange Commission on April 23, 2018, the business, operations, and assets of Sohu Cayman and its subsidiaries and variable interest entities will be substantially the same as the business, operations, and assets of Sohu Delaware and its subsidiaries and variable interest entities immediately prior to the Effective Time, except that Sohu Cayman will be the top-tier publicly-traded holding company of the Sohu Group instead of Sohu Delaware. The Sohu Delaware stockholders as of immediately prior to the Effective Time will be shareholders of Sohu Cayman through ownership of the ADSs, and will have the same relative economic interest in the Sohu Group as they did immediately prior to the Liquidation.
ADSs representing Sohu Cayman ordinary shares will be listed and traded on the NASDAQ Global Select Market under the "SOHU" symbol in place of the shares of the common stock of Sohu Delaware, which will be delisted as of the Effective Time and will not trade thereafter. Sohu Delaware expects trading in the ADSs representing Sohu Cayman ordinary shares on the NASDAQ Global Select Market to commence on June 1, 2018.
Shareholder Letters
BEIJING, May 17, 2018 /PRNewswire / -- Dr. Charles Zhang, the founder, Chairman, and CEO of Sohu.com Inc. (SOHU), China's leading online media, video, search and gaming business group, today issued to Sohu's stockholders the following letter regarding the special meeting of Sohu's stockholders scheduled for May 29, 2018:
Dear fellow Sohu.com Inc. stockholders,
I am the founder, Chairman, and CEO of Sohu.com Inc. (SOHU) ("Sohu Delaware"), China's leading online media, video, search, and gaming business group. By now you should have received our Notice of Special Meeting of Stockholders (the "Special Meeting") and the joint Proxy Statement/Prospectus of Sohu Delaware and our Cayman Islands subsidiary Sohu.com Limited ("Sohu Cayman"). You may also access and review the Proxy Statement/Prospectus on the SEC's EDGAR site at https://www.sec.gov/edgar/searchedgar/companysearch.html under "SOHU COM INC" and "Sohu.com Ltd."
The Proxy Statement/Prospectus is with respect to our solicitation of Sohu Delaware stockholder approval of a proposal for the dissolution of Sohu Delaware (the "Liquidation") and adoption of a plan of complete liquidation and dissolution of Sohu Delaware, pursuant to which, among other things, Sohu Delaware will be dissolved; all outstanding shares of the common stock of Sohu Delaware will be cancelled, and American depositary shares (the "ADSs") representing ordinary shares of Sohu Cayman will be distributed to the stockholders of Sohu Delaware on a pro rata basis (the "Liquidation Proposal").
As the May 29, 2018 date for the Special Meeting is fast approaching. I am writing to encourage you, if you have not already done so, to vote "FOR" the Liquidation Proposal and the related proposal to adjourn the Special Meeting to another date, time, or place, if necessary for the purpose of soliciting additional proxies to vote in favor of the Liquidation Proposal.
I expect that the implementation of the Liquidation Proposal will result in substantial benefits for Sohu and our stockholders. If it is approved by our stockholders and implemented, the Liquidation Proposal will result in the domicile of the top-tier, publicly-traded holding company of the Sohu Group changing from Delaware to the Cayman Islands. After the Liquidation Proposal is implemented, the Sohu Group's business, operations, and assets will be very much the same as they are now. Instead of shares of common stock of Sohu Delaware, you will own the ADSs, which will be listed and traded on the NASDAQ Global Select Market under the same "SOHU" symbol that is now used for the shares of the common stock of Sohu Delaware. There should be no interruption in trading, as trading in the ADSs is expected to commence on the first trading day after the Liquidation Proposal is implemented.
I want to emphasize to you that one of the core reasons for the Liquidation Proposal is to establish a more efficient holding company structure that we expect will generate significant economic benefit for the Sohu Group and our stockholders over the long term while maintaining strong corporate governance. The Sohu Group has no operations, management, or employees in the U.S. Therefore, we believe that it is quite inefficient for the top-tier holding company of the Sohu Group to be domiciled in the U.S.
Following the implementation of the Liquidation Proposal, the Sohu Group will no longer be subject to U.S. corporate income tax. I would like to highlight a few key points in this regard that I believe are very important in considering the long-term value of your investment in the Sohu Group:
If we do not implement the Liquidation Proposal, Sohu Delaware, even though it has no U.S. operations, will be subject to U.S. corporate tax on certain income of its foreign subsidiaries, such as rents, royalties, interest, dividends, and gain from disposal of investments, that falls under Subpart F of the U.S. Internal Revenue Code.
Your vote is important! We urge you to consider the likely significant financial benefits of implementing the Liquidation Proposal as summarized in this letter, and to vote "FOR" both of our proposals, in accordance with the recommendation of Sohu Delaware's Board of Directors.
Special Dividend
BEIJING, April 5, 2018 /PRNewswire / -- Sohu.com Inc. (NASDAQ: SOHU), China's leading online media, video, search and gaming business group, today reported that on April 5, 2018, Changyou.com Limited (NASDAQ: CYOU), Sohu's majority-owned online game subsidiary, announced that Changyou's board of directors has declared a special cash dividend of US$4.70 per Class A ordinary or Class B ordinary share, or US$9.40 per American depositary share ("ADS"), each of which represents two Class A ordinary shares. The aggregate amount of the special cash dividend will be approximately US$500 million.
Record holders of Changyou's ordinary shares at the close of business U.S. Eastern Time on April 20, 2018 (the "Record Date") will be entitled to receive the special cash dividend. Changyou expects The Bank of New York Mellon, the depositary bank for Changyou's ADS program, to distribute dividends to holders of ADSs as of the Record Date on or about April 26, 2018.
The amount of the dividend payable to Sohu is expected to be approximately $340 million. Sohu does not expect to pay any of such dividend to its stockholders, as the proceeds will be used to support Sohu's operations.
In order to facilitate the distribution of this special dividend, Changyou has revised its policy for its PRC subsidiaries with respect to their distribution of cash dividends. Under the revised policy, all PRC subsidiaries in the Changyou Group will be able to distribute their cumulative available and undistributed earnings to their direct overseas parent companies in the Changyou Group. The change will result in Changyou's accrual of additional withholding income taxes of approximately $47 million for the period before December 31, 2017. As the parent company of Changyou, Sohu will also recognize incremental tax expenses in its financial statements for the quarter ended March 31, 2018.
For more information about the special Changyou dividend, please refer to Changyou's separate announcement.
Comments & Business Outlook
Fourth Quarter 2017 Financial Results
Total revenues were US$510 million1, up 24% year-over-year and down 1% quarter-over-quarter.
GAAP net loss attributable to Sohu.com Inc. for the fourth quarter of 2017 was US$295 million, or US$7.57 loss per fully-diluted share, compared with a net loss of US$66 million in the fourth quarter of 2016 and net loss of US$104 million in the third quarter of 2017. Non-GAAP net loss attributable to Sohu.com Inc. for the fourth quarter of 2017 was US$78 million, or US$2.01 loss per fully-diluted share, compared with a net loss of US$69 million in the fourth quarter of 2016 and net loss of US$93 million in the third quarter of 2017.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc., commented, "We ended 2017 with an eventful quarter. After fourteen years of great effort, our search subsidiary Sogou finally completed a successful U.S. IPO in November. The IPO has strengthened Sogou's brand and balance sheet and should help us to further expand our market share in China's search industry while developing advanced AI capabilities. For Sohu Media Portal, we have built a stronger product development team and seen encouraging user metrics of Sohu News App. For Sohu Video, 2017 was a transformative year when we shifted our focus to original content and began to significantly cut spending on traditional TV programs. The initiative should generate meaningful cost savings and narrow the losses in our video business in 2018. On the online game side, in 2017 Changyou benefited from the launch of the mobile game Legacy TLBB and achieved solid year-over-year growth in revenue and adjusted net profit. At the same time, the business has not stopped its efforts in developing multiple new mobile games and diversifying its game portfolio."
Business Outlook
For the first quarter of 2018, Sohu estimates:
Total revenues to be between US$410 million and US$435 million.
Comments & Business Outlook
Third Quarter 2017 Financial Results
Total revenues were US$516 million up 26% year-over-year and 12% quarter-over-quarter.
Non-GAAP2 net loss attributable to Sohu.com Inc. was US$93 million, or US$2.38 loss per fully-diluted share.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc., commented, "We had mixed results in the third quarter. While greater efforts are needed to get our brand advertising business back on a growth track, we are pleased with the solid performance of our search and online game businesses. Total revenues reached US$516 million, up 26% year-over-year and 12% quarter-over-quarter. For the Sohu Media Portal, we focused on growing the user base by consistently enhancing the content and design of the Sohu News App. Sohu Video witnessed steady growth of its subscription business, thanks to our newly-released original dramas. Sogou's top-line comfortably exceeded its prior guidance, driven by robust growth in mobile search revenues. And for Changyou, its flagship TLBB PC and mobile games performed well and continued to generate strong cash flow for our Group."
Mr. Xiaochuan Wang, CEO of Sogou, commented, "In the third quarter, Sogou continued to expand market share in mobile search, propelled by robust traffic growth. Mobile search traffic grew by 38% year-over-year, driving a 24% increase in total search traffic. Total revenue reached $257 million, an increase of 55% a year ago and 22% from the previous quarter, continuously outpacing industry growth. We made new progress with our product collaboration with Tencent. Specifically, Tencent began testing the integration of Sogou Search into Weixin, which allows its users to access all internet information through Sogou's general search function from within Weixin. We've also advanced our AI technology research and product applications. Our proven technologies in natural language processing continued to enable the transition from search into Q&A."
Business Outlook
As Sogou has filed a registration statement on Form F-1 with the U.S. Securities and Exchange Committee relating to a proposed initial public offering, the Company is not providing fourth quarter financial guidance for Sogou, or for the Sohu Group as a whole. For Changyou, we estimate for the fourth quarter:
Total revenue to be between US$145 million and US$155 million, including online game revenue of US$110 million to US$120 million;
Research
SOHU ($50.85) reported a 10% increase in revenues, but non-GAAP losses of $72 million, for the second quarter of the year. The company said that it will launch its Sogou business on a U.S. stock market through an IPO as early as market conditions permit. Sogou operates what Sohu describes as “controlled Internet search” through its own ranking system, and is China’s second or third ranked search engine, behind market leader Baidu. Per SOHU’s latest 10-K filing, Sogou generated revenues of $660.4 million in fiscal 2016, or ~40% of SOHU total revenues.
Comments & Business Outlook
Second Quarter 2017 Financial Results
Total revenues were US$461 million1, up 10% year-over-year and 23% quarter-over-quarter.
Diluted net loss per share attributable to Sohu.com Inc. was $(2.28) vs. last years same quarter $(1.64)
Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc., commented, "I am pleased that Sohu delivered better-than-expected revenue growth in the second quarter, driven by solid performance from Changyou and Sogou. Group revenues totaled US$461 million, up 10% year-over-year and 23% quarter-over-quarter. The highlight of the quarter was Legacy TLBB, our new mobile game that is a big hit and ranked as one of the top grossing games in China between its launch in mid-May and the end of the quarter. Sogou's financial results exceeded our prior guidance as its mobile search growth maintained strong momentum. Our brand advertising business performance was relatively soft, largely due to lackluster video ad sales. Nonetheless, for Sohu Video, we have been shifting our content focus to self-developed dramas. We expect the move to generate substantial cost savings and improve our bottom-line results in 2018."
Mr. Xiaochuan Wang, CEO of Sogou, commented, "In the second quarter, Sogou Search continued to gain market share as aggregate search traffic grew 24% from a year ago, driven by over 50% growth in mobile traffic. Benefiting from strong traffic growth, quarterly revenues reached US$211 million, up 20% year-over-year, continuously outpacing the industry. We also solidified the No. 1 position for our Chinese input application Sogou Mobile Keyboard as its user base expanded 70% in a year. In the meantime, we continued to promote AI-empowered technology and product innovations by integrating our proprietary technologies, like question & answer and voice and machine translation, into our core products, including Sogou Search and Sogou Mobile Keyboard. These new capabilities also lay a solid foundation for our new products in the future."
Business Outlook
For the third quarter of 2017, Sohu estimates:
Total revenues to be between US$480 million and US$510 million.
Comments & Business Outlook
BEIJING, June 5, 2017 /PRNewswire / -- Sohu.com Inc. (SOHU), China's leading online media, video, search and gaming business group ("Sohu" or the "Company"), today announced that it is updating the outlook for the second quarter of 2017, after taking into consideration the financial impact of the newly launched Legacy TLBB mobile game, a game that is developed by Changyou.com Limited ("Changyou") (CYOU), Sohu's online game subsidiary.
The Company now expects:
Total revenues to be between US$420 million and US$450 million, compared with the prior guidance[1] of between US$390 million and US$420 million.
Of the total revenues, online game revenues to be between US$110 million and US$120 million, compared with the prior guidance of between US$75 million and US$85 million.
Non-GAAP[2] net loss attributable to Sohu.com Inc. to be between US$47 million and US$57 million, compared with the prior guidance of net loss between US$70 million and US$80 million and non-GAAP loss per fully-diluted share to be between US$1.21 and US$1.47, compared with the prior guidance of loss per fully-diluted share between US$1.80 and US$2.05.
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$11 million. Including the impact of the share-based awards, and approximately US$4 million of Sohu's economic interests in Changyou and Sogou, GAAP net loss attributable to Sohu.com Inc. to be between US$62 million and US$72 million, compared with the prior guidance of net loss between US$79 million and US$89 million, and GAAP loss per fully-diluted share to be between US$1.60 and US$1.86, compared with the prior guidance of loss per fully-diluted share between US$2.05 and US$2.30.
Mr. Dewen Chen, CEO of Changyou, commented, "We are pleased with the performance so far of our Legacy TLBB mobile game. The game has been widely embraced by both new players and returning PC game players, and has consistently ranked among the top three grossing games in the Apple App Store since its launch. Our Legacy TLBB mobile game incorporated many classic features from our flagship PC version, including various social and community functions, which re-created the PC game experience on mobile and encouraged a return of former PC game players. In addition, we simplified some of the game play, which makes it easier for brand new players to operate within the game, and extends the user base to a younger generation."
Comments & Business Outlook
First Quarter 2017 Financial Results
Total revenues were US$374 million1, down 8% year-over-year and 9% quarter-over-quarter.
Non-GAAP3 net loss attributable to Sohu.com Inc. was US$68 million, or US$1.75 loss per fully-diluted share.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc., commented, "We are off a solid start in 2017 as we delivered in-line results in the first quarter. For Sohu Media Portal, we launched a re-designed front page of our PC portal to meet the changing habits of users in the mobile era. For Sohu Video, we continued to shift more resources to self-produced content, and made subscription business one of our key priorities this year. Sogou achieved better-than-expected top line results as its mobile search traffic maintained robust growth. Changyou's online game business performed well in the first quarter and our new Legacy TLBB mobile game is set to debut in mid-May."
Mr. Xiaochuan Wang, CEO of Sogou, commented, "In the first quarter, Sogou had a good start in our search business as well as our initiatives in artificial intelligence, or AI. We continued to build our competitive edge with differentiated content for our search service, enhancing the quality of healthcare and English search results. In the AI space, our development of voice technology and machine translation progressed well. Revenues in the first quarter topped our prior expectations and were also faster than the industry growth, driven by a 50% jump in mobile search traffic from a year ago."
Business Outlook
For the second quarter of 2017, Sohu estimates:
Total revenues to be between US$390 million and US$420 million.
Brand advertising revenues to be between US$85 million and US$95 million; this implies an annual decrease of 16% to 25% and a sequential increase of 4% to 17%.
Sogou revenues to be between US$190 million and US$200 million; this implies an annual increase of 8% to 14% and a sequential increase of 17% to 23%.
Before deducting the share of non-GAAP net income pertaining to non-controlling interest, non-GAAP net loss to be between US$50 million and US$60 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$4 million. Including the impact of these share-based awards, GAAP net loss before non-controlling interest to be between US$54 million and US$64 million.
Non-GAAP net loss attributable to Sohu.com Inc. to be between US$70 million and US$80 million, and non-GAAP loss per fully-diluted share to be between US$1.80 and US$2.05. Including the impact of the aforementioned share-based awards, and approximately US$5 million of Sohu's economic interests in Changyou and Sogou, GAAP net loss attributable to Sohu.com Inc. to be between US$79 million and US$89 million, and GAAP loss per fully-diluted share to be between US$2.05 and US$2.30.
For the second 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 second quarter of 2016, and RMB6.88=US$1.00 for the first quarter of 2017.
Guidance for the second quarter excludes the impact of Changyou's Legacy TLBB Mobile game, which is scheduled to launch in May 2017.
Comments & Business Outlook
Fourth Quarter 2016 Financial Results
Total revenues were US$412 million[1], down 12% year-over-year and flat quarter-over-quarter.
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.
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."
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.
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.
Comments & Business Outlook
Third Quarter 2016 Unaudited Financial Results
Total revenues were US$411 million[1], down 21% year-over-year and 2% quarter-over-quarter.
Non-GAAP net loss attributable to Sohu.com Inc. to be between US$85 million and US$95 million, and non-GAAP loss per fully-diluted share to be between US$2.20 and US$2.45
Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc., commented, "In the third quarter, the Group total revenues reached our prior guidance amid challenging operating climate that mainly affected our online advertising businesses. By business unit, for Sohu Media Portal, we strived to bring users high quality and enriched content while continued to optimize Sohu News App design. Sohu Video accelerated investment in self-developed content that would benefit our subscription business and help improve the cost structure. For Sogou, it continued to enhance its vertical search capability while the mobile search traffic maintained strong momentum. Changyou delivered better-than-expected results as its existing games performed steadily while the development of new mobile games was well on track."
Mr. Xiaochuan Wang, CEO of Sogou, commented, "In the third quarter, Sogou continued its efforts in product differentiation and focused on AI-powered technology innovation. Traffic share and revenue were trending higher. Mobile search traffic more than doubled from a year ago and grew 16% sequentially. Financially, quarterly total revenues reached US$166 million, or RMB1.11 billion, up 9% year-over-year in RMB terms."
Business Outlook
For the fourth quarter of 2016, Sohu estimates:
Total revenues to be between US$370 million and US$400 million.
Comments & Business Outlook
Second Quarter 2016 Financial Results
Total revenues were US$420 million[1], down 15% year-over-year and up 3% quarter-over-quarter.
GAAP net loss attributable to Sohu.com Inc. was US$63 million, or US$1.64 loss per fully-diluted share. Non-GAAP[3] net loss attributable to Sohu.com Inc. was US$63 million, or US$1.62 loss per fully-diluted share.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc., commented, "In the second quarter, despite the fact that we were facing macro headwinds and a challenging operating environment, we managed to deliver a top-line result that is within the range of our prior guidance. Our brand advertising business was under pressure as large customers cut back their spending, but we did see solid growth from SME customers that helped partially offset the impact."
Dr. Zhang added, "For Sohu Media Portal, we further enhanced overall content quality and actively promoted our popular mobile Sohu News App. Sohu Video stepped up investment in content and marketing as planned and we reorganized the video sales team to improve synergies. For Sogou, mobile search traffic growth remained robust, with corresponding search revenues approaching 50% of total search revenues. For Changyou, we are glad to see that games revenues were stable from a quarter ago, while stringent expense control helped post better than expected profits."
Mr. Xiaochuan Wang, CEO of Sogou, commented, "In the second quarter, Sogou moved ahead with our ongoing product differentiation efforts, and our financial performance continued to outgrow the industry. In response to a major healthcare incident within the industry, we swiftly unveiled an ad-free service called Sogou Wise Doctor that provides users authentic and authoritative healthcare information. In addition, supported with the technology of Microsoft Bing, we were able to enrich our English and academic search results. Quarterly total revenues reached US$176 million, or RMB1.15 billion, up 27% year-over-year in RMB terms. Excluding a one-time item, non-GAAP net income would have been US$33.6 million, or RMB 220 million, up 30% from a year ago in RMB terms."
Business Outlook
For the third quarter of 2016, Sohu estimates:
Total revenues to be between US$400 million and US$430 million.
Going Private News
BEIJING , June 16, 2016 /PRNewswire / -- Sohu.com Inc. (NASDAQ: SOHU), China's leading online media, video, search and gaming business group ("Sohu" or the "Company"), today announced that the special financing committee (the "Financing Committee") of its Board of Directors (the "Board") ( which, as previously announced, was formed in response to the Company's receipt of a preliminary non-binding indicative proposal (the "Indicative Proposal") from Dr. Charles Zhang , the Company's Chairman and Chief Executive Officer, for an investment by a special purpose entity to be formed by Dr. Zhang and a third-party private equity firm to be identified by Dr. Zhang) has informed the Board that, after careful deliberation, the Financing Committee has decided to stop considering the Indicative Proposal. The Financing Committee informed the Board that it instead will seek and consider alternative financing options for the Company.
The Company cautions investors and others that there is no assurance that any alternative financing transaction or transactions will be identified or completed. The Company does not undertake any obligation to provide any updates with respect to any such possible alternative transactions, except as required under applicable law.
Comments & Business Outlook
BEIJING, June 8, 2016 /PRNewswire / -- Sohu.com Inc. (NASDAQ: SOHU), China's leading online media, video, search and gaming business group ("Sohu" or the "Company"), today announced that its President and Chief Financial Officer Ms. Carol Yu will retire effective July 31, 2016. The Company will retain Ms. Yu as a consultant for a transition period from August through the end of 2016. The Company has appointed Ms. Joanna Lv to assume the position of acting Chief Financial Officer effective upon Ms. Yu's retirement.
"I would like to thank Carol for her dedicated services and extraordinary contributions to the Sohu Group in the past 12 years. She has helped grow Sohu's portfolio of businesses, including Changyou and Sogou. Carol achieved many accomplishments, such as Changyou's IPO and bringing in Tencent as Sogou's strategic investor, that are highly regarded by the industry. We respect her decision and sincerely wish her a happy retiring life," said Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc.
"Sohu is one of the pioneers in Chinese internet, and it kept the commitment to social responsibility. My gratitude towards Charles and Sohu is beyond words. I feel so privileged to be able to work at Sohu. The past 12 years represent the most fulfilling and accomplished part of my work life. To many Sohu colleagues I am a coach and mentor, and I couldn't be prouder of the achievements by Sohu, Changyou and Sogou. I have the greatest confidence that the teams will bring the respective businesses to new heights. The finance team led by Joanna will continue to do an outstanding job and I am committed to a smooth transition," said Ms. Yu.
Ms. Joanna Lv joined Sohu in August 2000. She is currently the Senior Finance Director, in charge of day-to-day finance operations, including financial reporting, budget planning and treasury. Joanna brings extensive experience in financial management and has been involved in multiple strategic financial projects for Sohu. Ms. Lv received her bachelor's degree in economics from the Capital University of Economics and Business in Beijing and an EMBA degree from Tsinghua University.
Comments & Business Outlook
First Quarter 2016 Financial Results
Total revenues were US$408 million[1], down 10% year-over-year and 12% quarter-over-quarter.
Non-GAAP[3] net loss attributable to Sohu.com Inc. was US$22 million, or US$0.56 loss per fully-diluted share.
Mr. Xiaochuan Wang, CEO of Sogou, commented, "For the first quarter, Sogou's financial performance exceeded our previous expectations. In RMB terms, total revenues and non-GAAP net income increased 35% and 42%, respectively. Mobile search traffic more than doubled from a year ago, accounting for nearly two thirds of aggregate traffic. Looking into 2016 and beyond, we plan to step up research in cutting-edge technologies, in particular, artificial intelligence. Under the leadership of Charles, Sogou proudly joined forces with Tsinghua University, in setting up a joint research institute focusing on artificial intelligence and aim to build Sogou into a leading innovative player in this arena in China."
Business Outlook
For the second quarter of 2016, Sohu estimates:
Total revenues to be between US$420 million and US$450 million.
Going Private News
BEIJING, December 16, 2015 /PRNewswire / -- Sohu.com Inc. (NASDAQ: SOHU), China's leading online media, search, gaming, community and mobile service group ("Sohu" or the "Company"), today announced that its Board of Directors (the "Board") has received a preliminary, non-binding indicative proposal (the "Indicative Proposal") from Dr.Charles Zhang, the Company's Chairman and Chief Executive Officer, for an investment by a special purpose entity (the "Equity Purchaser") to be formed by Dr. Zhang and a third-party private equity firm to be identified by him.
Terms of the Indicative Proposal suggest a transaction between the Company and the Equity Purchaser whereby the Equity Purchaser may purchase, in equal purchase price amounts, (i) shares of Common Stock of the Company (with the purchase price per share being at the last sale price of the Common Stock as of the day before the date that a subscription is signed, but subject to a maximum of $50 per share) and (ii) notes convertible into Common Stock of the Company, with interest payable semi-annually at an interest rate, a maturity date, and a conversion price to be determined, for a total purchase price of up to US$600 million in cash. The Indicative Proposal states that the suggested terms are intended for discussion purposes only and are subject to the final expression of the terms of the transactions as set forth in definitive documentation.
A special financing committee of the Board, consisting solely of independent and disinterested directors, will consider and make recommendations to the Board regarding the Indicative Proposal. The special financing committee has retained Kirkland & Ellis as its legal counsel and Barclays Bank PLC as its financial adviser in connection with its review and evaluation of the Indicative Proposal.
The Company cautions investors and others that the Indicative Proposal is non-binding and incomplete, and that no decision has been made by the Board or the special financing committee regarding the Company's response to the Indicative Proposal. There is no assurance that any definitive proposal will be made by the Equity Purchaser; that any agreement will be reached between the Company and the Equity Purchaser; that an investment by the Equity Purchaser will be completed; or that any other financing transaction will be approved or consummated. The Company does not undertake any obligation to provide any updates with respect to this or any other transaction, except as required under applicable law.
Comments & Business Outlook
Item 8.01 Other Events.
On December 16, 2015, the registrant announced its receipt of a preliminary non-binding indicative proposal (the “Indicative Proposal”) from Dr. Charles Zhang, the registrant’s Chairman and Chief Executive Officer, for an investment by a special purpose entity to be formed by Dr. Zhang and a third-party private equity firm to be identified by him, and announced that a special financing committee of the registrant’s board of directors (the “Board”), consisting solely of independent and disinterested directors, will consider and make recommendations to the Board regarding the Indicative Proposal. 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.
Comments & Business Outlook
Third Quarter 2015 Financial Results
Total revenues were US$522 million [1] , up 21% year-over-year and 6% quarter-over-quarter.
Non-GAAP[3] net income attributable to Sohu.com Inc. was US$49 million , or US$1.27 per fully-diluted share vs. last years same quarter loss of US$(0.67)
Dr. Charles Zhang , Chairman and CEO of Sohu.com Inc., commented, "I am pleased with our quarterly results amid a sluggish economy and considerable RMB depreciation. This past quarter recorded Chinese economy growth at the slowest rate since 2009. The soft macro economy had a major impact on traditional brand advertisers who shrank their marketing budgets. In addition, the depreciation of RMB against the U.S. dollar had an adverse effect to our reported numbers. Despite these factors and excluding certain non-recurring items, we still managed to deliver in-line revenue performance and operating profit well exceeded our prior expectations."
Dr. Zhang added, "For Sohu Media Portal, in the third quarter, we continued to refine mobile news App interface to improve user experience. In the meantime, we strived to enhance our content offerings, providing users high quality news and reliable information. For Sohu Video, while we took a cautious approach to acquiring head content, we have been more aggressively investing in original content and PGC, or professionally generated content. Sogou continued to deliver strong top-line and bottom-line performance, while it prepared to ramp up investment in promoting its search brand. Changyou continued to deliver strong revenues and cash flow, and with its strong R&D capabilities as well as vast user base legacy from the legacy TLBB game, Changyou is well positioned to bring new hit games to the market."
Mr. Xiaochuan Wang , CEO of Sogou, commented, "For the third quarter, Sogou once again posted record revenue and profit and its mobile search traffic surpassed PC traffic for the first time. We further differentiated our mobile search service while we continued to deepen our cooperation with Tencent's social platforms, connecting with more unique and high-quality content. With the help of deep learning technology, we enhanced the voice and image recognition features of Sogou Mobile Keyboard, our leading language input App. Sogou's quarterly revenues reached $162 million , up 53% year-on-year. Non-GAAP net income was $34 million , more than five times the level from a year ago. Given that we have substantially widened our product range, we will be more aggressive in brand promotion to expand our user base."
Business Outlook
For the fourth quarter of 2015, Sohu estimates:
Total revenues to be between US$435 million and US$465 million .
Brand advertising revenues to be between US$135 million and US$145 million ; this implies a sequential decrease of 4% to 11% and an annual decrease of 2% to 9%. Sohu Media Portal revenues to be between 34% and 36% of total brand advertising revenues. Sohu Video revenues to be between 35% and 38% of total brand advertising revenues.
Sogou revenues to be between US$165 million and US$175 million ; this implies a sequential increase of 2% to 8% and an annual growth of 38% to 47%.
Online game revenues to be between US$115 million and US$125 million ; this implies a sequential decrease of 18% to 25% and an annual decrease of 32% to 38%.
Before deducting the share of non-GAAP net income pertaining to non-controlling interest, non-GAAP net income to be between US$10 million and US$20 million .
Non-GAAP net loss attributable to Sohu.com Inc. to be between US$15 million and US$25 million , and non-GAAP loss per fully-diluted share to be between US$0.40 and US$0.65 .
Assuming no new grants of share-based awards, we estimate that compensation expense relating to share-based awards will be around US$13 million to US$14 million .
GAAP net loss attributable to Sohu.com Inc. to be between US$25 million and US$35 million , and GAAP loss per fully-diluted share to be between US$0.65 and US$0.90 .
Comments & Business Outlook
Item 2.01 Completion of Acquisition or Disposition of Assets.
Comments & Business Outlook
Second Q uarter Financial Result s
Total revenues[1] were US$494 million , up 23% year-over-year and 8% quarter-over-quarter.
Non-GAAP net loss attributable to Sohu.com Inc. for the second quarter of 2015 was US$14 million , or a US$0.37 loss per fully-diluted share, compared with a net loss of US$34 million in the second quarter of 2014 and a net loss of US$25 million in the first quarter of 2015.
Dr. Charles Zhang , Chairman and CEO of Sohu.com Inc., commented, "We had a good second quarter as the Group's total revenues reached $494 million , up 23% year-over-year. For Sohu Media Portal, we accelerated the business transition from PC to mobile as mobile advertising contributed more than half of this segment's total revenues for the first time. Sohu Video achieved 36% growth in advertising revenue while the non-advertising business picked up steam. Sogou once again delivered better-than-expected performance as its revenues were up 62% year-over-year. For Changyou, its flagship TLBB PC and mobile games performed well and continued to generate healthy cash flows. "
Dr. Zhang added, "These solid top-line results were complemented by ongoing expense discipline which has improved our overall financial performance. We have prioritized resources to support our key growth initiatives and we continued to rationalize expenses for video content, maintain stringent control over headcount, and adopt a more cost-conscious approach to operate our business."
Mr. Xiaochuan Wang , CEO of Sogou, commented, "In the second quarter, Sogou continued to see decent growth across all operating metrics. In particular, mobile search traffic jumped by more than 110% year-over-year and nearly caught up with PC traffic. Financially, our top and bottom lines both achieved best performance in history. Second-quarter revenues reached $147 million , up 62% year over year. Non-GAAP operating income was $29 million , which more than tripled from a year ago."
Business Outlook
For the third quarter of 2015, Sohu estimates:
Total revenues to be between US$470 million and US$500 million [4].
Brand advertising revenues to be between US$150 million and US$160 million ; this implies a sequential decrease of 1% to a sequential increase of 6% and an annual increase of 1% to 8%. Sohu Media Portal revenues to be between 32% and 35% of total brand advertising revenues. Sohu Video revenues to be between 35% and 38% of total brand advertising revenues.
Sogou revenues to be between US$160 million and US$170 million ; this implies a sequential increase of 9% to 15% and an annual growth of 51% to 60%.
Online game revenues to be between US$135 million and US$145 million ; this implies a sequential decrease of 16% to 22% and an annual decrease of 4% to 10%.
Before deducting the share of non-GAAP net income pertaining to non-controlling interest, non-GAAP net income to be between US$10 million US$20 million .
Non-GAAP net loss attributable to Sohu.com Inc. to be between US$20 million and US$30 million , and non-GAAP loss per fully-diluted share to be between US$0.55 and US$0.80 .
Assuming no new grants of share-based awards, we estimate that compensation expense relating to share-based awards will be around US$17 million to US$18 million .
GAAP net loss attributable to Sohu.com Inc. to be between US$36 million and US$46 million , and GAAP loss per fully-diluted share to be between US$0.95 and US$1.20 .
Comments & Business Outlook
First Q uarter 2015 Financial Results
Total revenues were US$455 million , up 25% year-over-year and down 5% quarter-over-quarter.
GAAP net loss attributable to Sohu.com Inc. was US$31 million , or US$0.81 loss per fully-diluted share. Non-GAAP[2] net loss attributable to Sohu.com Inc. was US$25 million , or US$0.66 loss per fully-diluted share.
Dr. Charles Zhang , Chairman and CEO of Sohu.com Inc., commented, "I am pleased to report a solid quarter as our Group's total revenues reached $455 million , up 25% year-over-year, which exceeded the high end of our prior guidance by $15 million . We saw encouraging trends across all of our key business lines. For Sohu Media Portal, we were proactively expanding the customer base, as our popular mobile news products enable us to offer cross screen advertising solutions for both large brand and small customers. Sohu Video's advertising revenues grew 57% year-over-year, mainly driven by faster mobile monetization. For Sogou, its revenue performance was better than we had expected as mobile search made a greater contribution, and we continued to grow substantially faster than the overall search industry."
Dr. Zhang added, "For Changyou, in the first quarter, both top-line and bottom-line comfortably topped our prior guidance, as our major games continued to deliver solid performance. Look ahead, while TLBB PC and 3D mobile games will continue to generate steady cash flows for us, as the current portfolio is gradually maturing, our main focus is to bring out an abundant and diversified mix of new games, especially mobile games to the market."
Mr. Xiaochuan Wang , CEO of Sogou, commented, "In the first quarter, Sogou maintained its solid growth momentum. Our in-depth cooperation with Tencent , in particular with Weixin, has brought unique capabilities to our mobile search and further enhanced our competitiveness. Aggregate search traffic rose by 60% year-over-year while mobile search traffic jumped 130%. It's expected that mobile search traffic will surpass PC traffic at some point of 2015. Our financial performance was impressive as well. Quarterly revenues were $116 million , up 66% year-on-year, and we achieved non-GAAP net income of $16 million ."
Business Outlook
For the second quarter of 2015, Sohu estimates:
Total revenues to be between US$460 million and US$490 million .
Brand advertising revenues to be between US$150 million and US$160 million ; this implies a sequential increase of 12% to 20% and an annual increase of 12% to 20%. Sohu Media Portal revenues to be between 32% and 34% of total brand advertising revenues. Sohu Video revenues to be between 39% and 42% of total brand advertising revenues.
Sogou revenues to be between US$135 million and US$145 million ; this implies a sequential increase of 16% to 25% and an annual growth of 48% to 59%.
Online game revenues to be between US$155 million and US$165 million ; this implies a sequential decrease of 11% to 16% and an annual increase of 1% to 7%.
Before deducting the share of non-GAAP net loss pertaining to non-controlling interest, non-GAAP net loss to be between nil and US$10 million .
Non-GAAP net loss attributable to Sohu.com Inc. to be between US$35 million and US$45 million , and non-GAAP loss per fully-diluted share to be between US$0.90 and US$1.15 .
Assuming no new grants of share-based awards, we estimate that compensation expense relating to share-based awards will be around US15 million to US$16 million .
GAAP net loss attributable to Sohu.com Inc. to be between US$45 million and US$55 million , and GAAP loss per fully-diluted share to be between US$1.15 and US$1.40 .
Comments & Business Outlook
Fourth Quarter 2014 Unaudited Financial Results
Total revenues were US$477 million , up 24% year-over-year and 11% quarter-over-quarter, exceeding the high end of the Company's guidance by US$15 million .
GAAP net loss attributable to Sohu.com Inc. was US$20 million , or US$0.52 loss per fully-diluted share. Non-GAAP[2] net loss attributable to Sohu.com Inc. was US$14 million , or US$0.36 loss per fully-diluted share.
Dr. Charles Zhang , Chairman and CEO of Sohu.com Inc., commented, "Sohu Group ended 2014 with an encouraging quarter as total revenues comfortably topped our prior guidance. For the fourth quarter, total revenues reached $477 million , up 24% year-on-year. Sohu Media Portal saw the rapid shift of users to our mobile products, Sohu News App and Sohu WAP portal where revenues accounted about one third of total revenues. Sohu Video achieved an over 60% annual rise in revenues, also one third of which was from mobile. Sogou continued to see strong momentum as its top-line grew by 70% year-on-year with its profit hitting new high. Changyou's TLBB PC game continued to generate sustainable revenues while TLBB 3D mobile game gained initial success with booking gross revenues of over $65 million in its first two months of operation. "
Dr. Zhang added, "In 2014, we achieved solid progress on a number of key mobile initiatives for each of our business lines. Sohu News App and Sohu WAP portal now collectively have almost 50 million daily active users. More than 60% of Sohu Video's traffic comes from mobile. Sogou's mobile Keyboard is the undisputable No.1 Chinese input application on both iPhones and Android phones, while mobile search also showed strong momentum. And Changyou made a breakthrough in mobile game leveraging its extensive experience of developing hard-core MMO games on PC. On the cost side, in the second half of 2014, we took measures to re-align our cost structure and rationalize expenses. We reduced the workforce and significantly lowered marketing expenses. To date, such re-alignment has largely been completed and its effects will be reflected in our financial numbers through 2015."
Mr. Xiaochuan Wang , CEO of Sogou, commented, "In 2014, Sogou continued on its rapid growth trajectory upon the smooth integration with Soso. Sogou now provides a full range of search services for the vast number of Tencent users. Moreover, we have deepened our cooperation with Tencent's various products, in particular with Weixin. Following the launch of a unique function that allows Sogou users to search content published by Weixin's official accounts, in our latest version of our mobile search App, we added a new feature called "Weixin Headlines", which surfaces the most popular and breaking news stories being shared on Weixin. These and other innovative features differentiate Sogou search's user experience. Partly as a result, we have seen robust search traffic growth with mobile traffic growing over 150% in the past twelve months. Healthy traffic and monetization meant that for 2014, Sogou revenues reached $386 million , up 79% year-on-year. Operating leverage on the rapid revenue growth allowed Sogou to achieve over $30 million of net income on a non-GAAP basis for 2014 and made this the first profitable year in Sogou's history."
Business Outlook
For the first quarter of 2015, Sohu estimates:
Total revenues to be between US$425 million and US$440 million .
Brand advertising revenues to be between US$130 million and US$135 million ; this implies a sequential decrease of 9% to 12% and an annual increase of 17% to 22%. Sohu Media portal revenues to be between 34% and 35% of total brand advertising revenues. Sohu Video revenues to be between 37% and 38% of total brand advertising revenues.
Sogou revenues to be between US$108 million and US$113 million ; this implies a sequential decrease of 5% to 9% and an annual growth of 54% to 61%.
Online game revenues to be between US$175 million and US$180 million ; this implies a sequential decrease of 2% to 5% and an annual increase of 7% to 10%.
Before deducting the share of non-GAAP net income pertaining to non-controlling interest, non-GAAP net loss to be between US$20 million and US$25 million .
Non-GAAP net loss attributable to Sohu.com Inc. to be between US$36 million and US$40 million , and non-GAAP loss per fully-diluted share to be between US$0.95 and US$1.05 .
Assuming no new grants of share-based awards, we estimate that compensation expense relating to share-based awards will be around US$13 million to US$14 million .
GAAP net loss attributable to Sohu.com Inc. to be between US$44 million and US$48 million , and GAAP loss per fully-diluted share to be between US$1.15 and US$1.25 .
Comments & Business Outlook
Third Quarter 2014 Unaudited Financial Results
Total revenues were US$430 million , up 17% year-over-year and 8% quarter-over-quarter.
Non-GAAP net loss attributable to Sohu.com Inc. for the third quarter of 2014 was US$23 million , or US$0.61 loss per fully-diluted share, compared with net income of US$20 million in the third quarter of 2013 and net loss of US$34 million in the second quarter of 2014.
Dr. Charles Zhang , Chairman and CEO of Sohu.com Inc., commented, "We had a solid quarter, and our financial performance was largely in line with our expectations. Some of our key business lines continued to show strong momentum. Sohu Video maintained a healthy growth in users, driven by an impressive 40% sequential increase in mobile traffic. Sogou's quarterly revenue exceeded $100 million for the first time and was up 86% year-over-year. In September, Sogou's mobile Keyboard became the No.1 app on the iOS China app store's ranking table once Apple finally allowed third party input method software to work on its iOS 8 system."
Dr. Zhang added, "For Changyou, while user engagement in its PC MMO games remained resilient, what's more exciting is that we launched a couple of mobile games showing initial success. In particular TLBB 3D, which was launched last Wednesday, was reported to have become the most popular mobile game on iPhone in China . This marks Changyou's solid step in the mobile game space. In the meantime, Changyou continued to invest in its platform initiative with average monthly active users totaling 275 million in the third quarter, up 178% from a year ago."
Mr. Xiaochuan Wang , CEO of Sogou, commented, "In the third quarter, with major progress made in both search and input method, Sogou further reinforced its leading position in mobile Internet. In search, aggressive marketing initiatives helped enhance the brand recognition of Sogou. This, combined with the unique advantages based on differentiated search services, has driven the continuous growth of our search traffic. Notably, mobile search traffic grew by nearly 20% quarter-over-quarter. Meanwhile, the successful launch of Sogou mobile Keyboard on iPhone, which can run and display on the interface of every single app, will significantly grow our mobile user base. On the very first day when Sogou Keyboard was launched in Apple's App Store in China , it became No.1 free app and remained on that place for the next two weeks. Financially, Sogou revenues surpassed $100 million mark and we achieved profitability for three quarters in a row. This solid financial performance enables us to continuously step up investments in mobile to capture greater opportunities and expand market presence."
Comments & Business Outlook
Securities Times Online
September 2, Sohu announced in Beijing's Internet search easy loan financial credit platform formally launched, marking Sohu entered the Internet in the financial sector. Search easy loan CEO Dr Jie said, unlike last week extravaganza strokes Alibaba treasure, found easy loan will focus on the private small and micro lending, from the upcoming several products on-line, the stage is mainly focused on "transactional P2P service "that voted against the purchase, car and other personal consumer finance business, revenue rate remained at 8% -12%, 1 yuan investment.
In P2P concern financial security management, search easy loan responsible person, will follow the principles of micro-dispersed design platform for various types of loans and investment products. "Our target market is small investment targets, the maximum value of the subject in a couple of million, the lowest in several thousand dollars, thus avoiding the risk of some P2P companies a huge honor to carry out large investment targets because of the emergence of the business." He Jie said.
He Jie introduced the borrower to obtain audit and credit on easy loan will be applied to search the world's largest credit bureau Experian (Experian) risk decision engine, and the introduction of full life-cycle management and control concept, from pre-to post-prime loan full wind control. In addition, the search easy loan also set up a guarantee fund for the loss of principal user extreme case Xianxingpeifu limited; As for the origin and initial scale security funds, Jiang Xuan search easy loan COO introduction, funds from the transaction extract a certain percentage fee, the initial size of 1 million, raising the specific details will be announced nearly two weeks.
Sohu Internet for the future layout of finance, where the Czech Republic revealed that search easy loan will jointly Sogou, Sohu securities, Sohu payments, P2P business development in the field of buyers, car, education, etc., and is currently pending Sohu also pay license. And for investors and borrowers sources, He Jie said the search easy loan investors will come from the line, while the line because of the platform will be a small loan companies, so the borrower will also come from online and offline.
Although P2P risk events continue to be exposed, but does not seem to stop Internet companies P2P layout areas enthusiasm. According to melt 360 latest statistics show that as of the end of July 2014, China's total P2P platform for 1200, the overall number of loans net loan industry has close to 190,000, the number of over 440,000 investment from 2007 the first domestic net loan platform was established to rapid growth in 2014 at a rate of 1-2 at home on the line every day, the industry into explosive growth phase.
However, the rapid growth also continues to have "run away", the risk of events such payment, P2P industry regulation, in contrast, a number of relevant leaders also stressed the CBRC supervision P2P on different occasions, Wang Yan Xiu, director of China Banking Regulatory Commission has called for innovation, P2P platform should is the information platform for financial services, rather than the credit platform, can not participate in the transaction. In addition, many sources close to the regulatory authorities revealed, P2P industry regulations will be launched before the end of the year.
Comments & Business Outlook
Second Quarter 2014 Unaudited Financial Results
Total revenues hit record at US$400 million, up 18% year-over-year and 10% quarter-over-quarter.
Non-GAAP[2] net loss attributable to Sohu.com Inc. was US$34 million, or US$0.88 loss per fully-diluted share vs. last years US$0.66
Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc., commented, "I am pleased to report that our Group's quarterly revenues hit record high of $400 million, in line with our prior guidance. Notably, for our news and video businesses, we made solid progress in mobile monetization as our large user base successfully attracted a growing number of advertisers. Mobile ad revenues for each of them grew in triple digit from the prior quarter. For Sogou, it launched the unique WeChat official account search function as it deepened the cooperation with Tencent. And driven by strong revenue growth, for two consecutive quarters, Sogou achieved profitability that was even sooner than we had forecasted."
Dr. Zhang added, "For Changyou, its platform initiatives are well on track with the second quarter achieving 252 million average monthly active users of platforms channels, almost tripled from a year ago. In the meantime, we saw relatively soft performance of its existing portfolio of online games primarily as Changyou released a new expansion pack for TLBB to reduce the level of difficulty and make other adjustments in April. With the expansion packs of existing games and new games in the pipeline, we expect its game business will continue to generate healthy cash flow to support Changyou's long term growth objectives."
Mr. Xiaochuan Wang, CEO of Sogou, commented, "Through ten years of efforts, Sogou laid a solid foundation in developing search technology and forming a comprehensive product portfolio. Following the strategic investment from Tencent, the two parties have cooperated well in multiple aspects. Leveraging Tencent's vast user base and broad spectrum of data, we have enhanced our competitiveness in search market, especially on mobile. We are now able to provide our users better quality and differentiated search experience, as evidenced by Sogou's unique ability to index and search content within WeChat's over 4 million official accounts. Meanwhile, Sogou's revenue and profit have reached to a level that enable us to increase our investment in product innovation and brand building. Sogou is set to become an increasingly competitive challenger in the search market."
Business Outlook
For the third quarter of 2014, Sohu estimates:
Total revenues to be between US$427 million and US$442 million.
Brand advertising revenues to be between US$148 million and US$153 million; this implies a sequential increase of 11% to 15% and an annual increase of 19% to 23%.
Sogou revenues to be between US$100 million and US$105 million; this implies a sequential increase of 10% to 15% and an annual growth of 76% to 84%.
Online game revenues to be between US$158 million and US$163 million; this implies a sequential increase of 3% to 6 % and an annual decrease of 2% to an annual increase of 1%.
Before deducting the share of non-GAAP net loss pertaining to Non-Controlling interest, non-GAAP net loss to be between US$28 million and US$34 million .
Non-GAAP net loss attributable to Sohu.com Inc. to be between US$29 million and US$33 million, and non-GAAP loss per fully-diluted share to be between US$0.75 and US$0.85.
Assuming no new grants of share-based awards, we estimate that compensation expenses relating to share-based awards to be around US$22 million to US$23 million. The estimated impact of this expense is expected to increase Sohu's loss per fully-diluted share for the third quarter of 2014 under US GAAP by 57 to 59 US cents. This figure should not be used to calculate Sohu's projected GAAP loss per fully-diluted share, as there are other factors impacting such a calculation, for which no reconciliation is provided.
Comments & Business Outlook
BEIJING , July 16, 2014 /PRNewswire / -- Sohu.com Inc. (NASDAQ: SOHU), China's leading online media, search, gaming, community and mobile service group, today announced that its online game subsidiary, Changyou.com Limited ("Changyou ") (NASDAQ: CYOU) and MoboTap Inc. ("MoboTap"), a Cayman Islands company that is the mobile technology developer behind the Dolphin Browser, have entered into a definitive investment agreement pursuant to which Changyou will purchase 51% of the equity interests in MoboTap on a fully-diluted basis, for cash consideration of US$91 million. In addition, Changyou will provide US$30 million in funding to MoboTap by purchasing a zero-coupon convertible bond due in five years. Changyou will have the option, exercisable at any time when the bond is outstanding, to convert all or any part of the unpaid principal into shares of MoboTap at a conversion price that would result in Changyou's equity interest in MoboTap increasing to 60% on a fully-diluted basis, measured as of the closing under the Investment Agreement, if the option is exercised in full. The transaction is expected to close in August 2014, subject to regulatory approvals and customary closing conditions.
MoboTap is the creator of Dolphin Browser, a free mobile browser for Android and iOS devices and is one of the most popular third-party mobile browsers in terms of the total number of downloads in the month of March 2014 according to App Annie . Over 100 million users globally have used Dolphin Brower, with the vast majority of its users based in the U.S. and Europe .
Mr. Tao Wang, Changyou's chief executive officer, said, "The success of Dolphin Browser clearly reflects the MoboTap team's ability to translate their solid understanding of mobile users' needs and strong technical expertise into successful products and a global business. I am excited to work with MoboTap and we will support Dolphin Browser to grow its market share even further."
Mr. Yongzhi Yang , chief executive officer of MoboTap, said, "MoboTap went from a small startup to now a company with 100 million users worldwide. The mobile browser is the gateway to the Internet on mobile devices and our passion for creating the best mobile user experience has never changed. I am happy that Changyou also shares our vision for the future of mobile Internet and will be our strong supporter of our global expansion."
Acquisition Activity
Item 1.01 Entry into a Material Definitive Agreement.
majority-owned subsidiary Changyou.com Limited (“Changyou”), through a wholly-owned subsidiary of Changyou, entered into an investment agreement (the “Investment Agreement”) with MoboTap Inc. (“MoboTap”), a Cayman Islands company, MoboTap’s subsidiaries and variable interest entities, and MoboTap’s shareholders pursuant to which Changyou will purchase shares of MoboTap representing 51% of the equity interests in MoboTap on a fully-diluted basis for approximately $91 million in cash. Upon the closing (the “Closing”) of the transactions contemplated by the Investment Agreement, Baina Inc. (“Baina”), a Cayman Islands company through which the founders of MoboTap hold their equity interests in MoboTap, will hold 45.3% of the equity interests in MoboTap on a fully-diluted basis, and 3.7% of the equity interests in MoboTap on a fully-diluted basis will be reserved for grants of equity incentive awards to key employees of MoboTap. The Investment Agreement includes customary representations, warranties, indemnities, and covenants of the parties.
Comments & Business Outlook
First Quarter 2014 Financial Results
Total revenues were US$365 million, up 19% year-over-year and down 5% quarter-over-quarter.
Non-GAAP net loss attributable to Sohu.com Inc. was US$48 million, or US$1.26 loss per fully-diluted share vs. last years gain of US$0.12.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc., commented, "With the accelerated migration to mobile internet, I am pleased to report that Sohu Group's portfolio of mobile properties is gaining great traction. On the media front, Sohu WAP portal, Sohu News App, as well as Sohu Video App are all growing rapidly. Notably, in the first quarter, mobile video traffic has surpassed PC traffic. For Sogou, not only has our mobile Pinyin continued to pride itself as the third most popular App in China, our mobile search traffic also saw a quarter over quarter growth north of 20%."
Dr. Zhang added, "For Changyou, its MMO and web game performance was stable while its investments in new initiatives received a positive initial response. In the first quarter, total average monthly active accounts of its platforms and software applications reached 239 million, representing a 60% increase from the previous quarter."
Mr. Xiaochuan Wang, CEO of Sogou, commented, "We are pleased to deliver another quarter of solid financial performance with revenue growth that topped expectations. As an important participant in China's internet industry, in particular in online search, Sogou solidified our position on PC while demonstrating even bigger competitive advantages and faster growth on mobile. Upon the completion of integration between Sogou and Soso, in the first quarter, we took multiple measures to improve our search quality. As compared to the previous quarter, PC search traffic edged up while mobile search traffic grew at 24% as mentioned by Charles."
Business Outlook
For the second quarter of 2014, Sohu estimates:
Total revenues to be between US$397 million and US$411 million.
Brand advertising revenues to be between US$130 million and US$135 million; this implies a sequential increase of 17% to 22% and an annual increase of 30% to 35%.
Sogou revenues to be between US$86 million and US$90 million; this implies a sequential increase of 23% to 29% and an annual growth of 72% to 80%.
Online game revenues to be between US$161 million and US$166 million; this implies a sequential decrease of 1% to a sequential increase of 2% and an annual decrease of 1% to 4%.
Before deducting the share of non-GAAP net loss pertaining to Non-Controlling interest, non-GAAP net loss to be between US$47 million and US$53 million.
Non-GAAP net loss attributable to Sohu.com Inc. to be between US$48 million and US$52 million, and non-GAAP loss per fully-diluted share to be between US$1.25 and US$1.35.
Assuming no new grants of share-based awards, we estimate that compensation expenses relating to share-based awards to be around US$8 million to US$9 million. The estimated impact of this expense is expected to increase Sohu's loss per fully-diluted share for the second quarter of 2014 under US GAAP by 21 to 23 US cents. This figure should not be used to calculate Sohu's projected GAAP loss per fully-diluted share, as there are other factors impacting such a calculation, for which no reconciliation is provided.
Acquisition Activity
Item 2.01. Completion of Acquisition or Disposition of Assets.
On March 24, 2014, the registrant’s majority-owned search subsidiary Sogou Inc., a Cayman Islands company (“Sogou ”), purchased from China Web Search (HK) Limited (“China Web ”) 14,400,000 Series A Preferred Shares of Sogou held by China Web for an aggregate purchase price of $47.3 million, pursuant to a Repurchase/Put Option Agreement, dated September 16, 2013, between Sogou and China Web.
Joint Venture
BEIJING , March 3, 2014 /PRNewswire / -- Lentuo International Inc. (NYSE: LAS) ("Lentuo" or the "Company"), a leading non-state-owned automobile retailer headquartered in Beijing , today announced that it has signed an agreement ("the Agreement") with Sohu Auto, a leading online auto information provider in China and a business unit of Sohu.com Inc. (NASDAQ: SOHU), to create a fully integrated online-to-offline ("O2O") platform for pre-owned cars in China . Sohu Auto will act as online marketing partner for this platform. The platform will greatly expand Lentuo's ability to reach a larger group of car buyers and allow it to meet the growing demand from younger Chinese who increasingly shop for cars on the internet.
Under the terms of the Agreement, Lentuo will act as the exclusive after-sales service provider for pre-owned cars certified by Sohu as long as Lentuo meets Sohu's quality standards.
On the physical side of the platform, and as a first step, Lentuo announced on February 18, 2014 that it will convert an existing new car showroom in South Beijing into a fully integrated pre-owned flagship store for mid-to-high end cars that will privilege customer experience, reliability and extensive choice. The flagship store will employ state-of-the-art technological equipment and rely on Sohu's IT systems to ensure the highest level of service quality and productivity.
The online side of the platform will leverage Sohu Auto's technological know-how and extensive IT resources to continuously enhance the O2O platform and build big data analytical tools which will allow a comprehensive and highly focused leverage of its expansive user base. The two parties plan to expand the platform to the rest of the country in the future.
Mr. Hetong Guo, Founder and Chairman of Lentuo International commented, "We are excited to team up with Sohu Auto to build a fully integrated online-to-offline platform for pre-owned cars in China ."
"While sales of pre-owned cars in China have been growing faster than sales of new cars over the recent years, the market is extremely fragmented, suffers from a lack of professional and ethical standards, and makes scant use of advanced technological equipment."
"This new platform will provide a one-stop shop and high quality customer experience in a hassle-free and highly professional environment. In addition to a streamlined information gathering and transacting process, customers will benefit from reliable certification as well as modern technical facilities and services, financing, and insurance."
"Our efforts to build a pre-owned car business over the past two years have taught us a lot. We know the demand is there and will continue to grow rapidly. We understand customer behavior in this segment and we have become fully aware of the trend towards greater use of the internet to obtain information and conduct transactions. The proven quality of our technical services, relying on sophisticated equipment, our experience in providing financing,our loyal customer base, and our investment in a state-of-the-art dedicated center will provide a strong physical foundation for this platform."
"Sohu's strong track record in building online businesses , its established presence in the automobile online sector, its substantial user base, and its nationwide reach and recognized brand will ensure the technological success of the platform, attract an online audience of potential buyers and sellers, and gradually contribute to the scalability of this business."
Mr. Guo concluded: "With the market still in its very early stages and a solid partnership with Sohu Auto, we are confident in our ability to substantially expand our pre-owned car business and advance our overall strategy."
Comments & Business Outlook
SOHU.COM INC.
(In thousands, except per share data)
10-K
Year Ended December 31,
2013
2012 (Revised)
2011
Revenues:
Online advertising:
Brand advertising
$
428,526
$
290,205
$
277,327
Search and others
198,915
124,389
62,981
Subtotal of online advertising revenues
627,441
414,594
340,308
Online games
669,168
570,346
435,508
Mobile
53,547
55,893
52,015
Others
50,118
26,368
24,256
Total revenues
1,400,274
1,067,201
852,087
Cost of revenues:
Online advertising:
Brand advertising
221,659
161,195
107,391
Search and others
109,139
70,628
35,144
Subtotal of cost of online advertising revenues
330,798
231,823
142,535
Online games
93,307
76,350
49,837
Mobile
32,654
36,893
31,882
Others
23,291
24,592
16,093
Total cost of revenues
480,050
369,658
240,347
Gross profit
920,224
697,543
611,740
Operating expenses:
Product development
276,120
181,359
112,617
Sales and marketing
351,653
214,736
158,187
General and administrative
108,970
75,243
59,126
Goodwill impairment and impairment of intangible assets via acquisition of businesses
0
2,906
27,511
Total operating expenses
736,743
474,244
357,441
Operating profit
183,481
223,299
254,299
Other income
12,721
5,422
9,799
Interest income
27,829
25,277
15,800
Exchange difference
(6,660
)
(635
)
(5,003
)
Income before income tax expense
217,371
253,363
274,895
Income tax expense
50,422
76,171
46,552
Net income
166,949
177,192
228,343
Less: Net income attributable to the mezzanine-classified noncontrolling interest shareholders
17,780
11,196
2,558
Net income attributable to the noncontrolling interest shareholders
82,044
78,837
63,044
Dividend or deemed dividend to noncontrolling Sogou Series A Preferred shareholders
82,423
14,219
0
Net income /(loss) attributable to Sohu.com Inc.
$
(15,298
)
$
72,940
$
162,741
Net income
$
166,949
$
177,192
$
228,343
Other comprehensive income: Foreign currency translation adjustment, net of tax
47,125
4,413
43,545
Comprehensive income
214,074
181,605
271,888
Less: Comprehensive income attributable to the mezzanine-classified noncontrolling interest shareholders
17,780
11,196
2,558
Comprehensive income attributable to noncontrolling interest shareholders
92,407
79,927
68,598
Dividend or deemed dividend to noncontrolling Sogou series A preferred shareholders
82,423
14,219
0
Comprehensive income attributable to Sohu.com Inc.
21,464
76,263
200,732
Basic net income /(loss) per share attributable to Sohu.com Inc.
$
(0.40
)
$
1.92
$
4.26
Shares used in computing basic net income /(loss) per share attributable to Sohu.com Inc.
38,255
38,038
38,216
Diluted net income /(loss) per share attributable to Sohu.com Inc.
$
(0.47
)
$
1.66
$
3.93
Shares used in computing diluted net income /(loss) per share attributable to Sohu.com Inc.
38,502
38,392
38,761
Comments & Business Outlook
Fourth Quarter 2013 Financial Results
· Total revenues were US$385 million, up 29% year-over-year and 5% quarter-over-quarter.
· Brand advertising revenues were US$123 million, up 50% year-over-year and down 1% quarter-over-quarter.
· Sogou revenues were US$70 million, up 72% year-over-year and 23% quarter-over-quarter.
· Online game revenues were US$172 million, up 9% year-over-year and 6% quarter-over-quarter.
· GAAP net income attributable to Sohu.com Inc. was US$2 million, or US6 cents per fully-diluted share. Non-GAAP net income attributable toSohu.com Inc. was US$5 million, or US12 cents per fully-diluted share.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc. commented, "We are pleased to report that Sohu Group ended 2013 with a solid fourth quarter. The Group's total annual revenues rose 31% year-on-year to $1.4 billion. For the year of 2013, benefiting from a strong content offering and enhanced sales force, our video business more than doubled its revenues. By partnering with Tencent, Sogou has become a stronger contender inChina's search market. And Changyou delivered solid financial results while investing aggressively in multiple new initiatives for long-term growth."
Dr. Zhang added, "For the fourth quarter, Sohu Video maintained strong year-on-year revenue growth as mobile monetization was on upward trajectory. Sogou completed a smooth integration with Soso with revenues hitting the high end of our guidance. For Changyou, its core game portfolios continued to perform well. In the meantime, its platform strategy is well on track. With effective marketing campaigns, the aggregate monthly active accounts of its platform increased by 51% from the previous quarter."
Ms. Belinda Wang, Co-President and COO added, "For the fourth quarter, our brand advertising business delivered solid results with revenues up 50% year-on-year to $123 million. Auto, FMCG and real estate continued to be the key sectors, and thanks to our video efforts, FMCG grew at over 100% on a year-on-year basis. Our mobile strategy continued to execute well. The new version of Sohu News Mobile App has been well applauded by users.Cross promotion amongst our multiple dominant mobile products yielded synergies as mobile traffic for our news and video applications continued to grow quickly."
Mr. Xiaochuan Wang, CEO of Sogou commented, "We had completed a smooth integration with Soso by the end of 2013 and Soso's multiple products and many of its talented engineers have joined the Sogou family. Benefiting from incremental traffic from Soso and Tencent, on PC search, Sogou has narrowed the gap with bigger rivals. On mobile search, Sogou also secured meaningful market share and is well positioned in this important space. With continued organic growth and the support of Tencent's vast online properties, Sogou's market share on PC and mobile search is expected to further grow over time."
Business Outlook
· Total revenues to be between US$355 million and US$367 million.
· Brand advertising revenues to be between US$110 million and US$115 million; this implies a sequential decrease of 7% to 11% and an annual increase of 37% to 43%.
· Sogou revenues to be between US$67 million and US$69 million; this implies a sequential decrease of 2% to 5% and an annual growth of 70% to 76%.
· Online game revenues to be between US$160 million and US$165 million; this implies a sequential decrease of 4% to 7% and an annual decrease of 1% to 4%.
· Before deducting the share of non-GAAP net loss pertaining to Non-Controlling interest, non-GAAP net loss to be between US$50 million andUS$56 million.
· Non-GAAP net loss attributable to Sohu.com Inc. to be between US$42 million and US$46 million, and non-GAAP loss per fully-diluted share to be between US$1.10 and US$1.20.
· Assuming no new grants of share-based awards, we estimate that compensation expenses relating to share-based awards to be aroundUS$5 million to US$6 million. The estimated impact of this expense is expected to increase Sohu's loss per fully-diluted share for the first quarter of 2014 under US GAAP by 13 to 15 US cents. This figure should not be used to calculate Sohu's projected GAAP earnings per fully-diluted share, as there are other factors impacting such a calculation, for which no reconciliation is provided.
Acquisition Activity
NEW YORK, November 21, 2013 /PRNewswire/ -- Sohu.com Inc. (NASDAQ: SOHU), China's leading online media, search, gaming, community and mobile service group, today announces that its online game subsidiary, Changyou.com Limited ("Changyou") (NASDAQ: CYOU) and Kalends Inc. ("Kalends"), a provider of comprehensive Internet products and services for the global market, today jointly announce that they have entered into a definitive investment agreement (the "Investment Agreement") pursuant to which Changyou will acquire 62.5% of the equity interests, on a fully-diluted basis, of a company of Kalends outside of China that will hold all of the assets associated with Raidcall ("Raidcall"), a free social communication platform (such assets, the "Raidcall Business"), forUS$50 million in cash. The transaction is expected to close in December 2013, subject to customary closing conditions. This acquisition accelerates Changyou's progress toward creating a global gamer platform.
Mr. Dewen Chen, Changyou's president, said, "With over 20 million registered users globally, Raidcall is a popular, high-quality communication software used by gamers for real-time audio group chat while they play online games. With this transaction, Changyou offers gamers a more comprehensive selection of products and moves forward in its plan to develop a platform business. In addition, we will add a proven team of top engineers, and we are confident in their capabilities to continue to make Raidcall a popular product in new countries that we market to."
Mr. Yahui Zhou, chairman and chief executive officer of Kalends, said, "Kalends and Changyou share the same passion in providing the best-in-class products and services to gamers. With Changyou's investment in the Raidcall Business and their expertise and capabilities in marketing, we see greater chance for success and an even larger potential to grow Raidcall's presence globally."
Raidcall is a free social communication software that facilitates real-time online group activities via voice, text and video, allowing users to create and organize groups of varying size to participate in a wide range of online group activities such as online games, music, karaoke and other live performance dynamics. Raidcall has provided group communication services to over 20 million registered users to-date, including world-class professional gaming teams such as Fnatic and Evil Geniuses. Available in 14 different languages, Raidcall currently operates overseas in multiple regions, such as Taiwan, Hong Kong, Macau, Brazil, Russia, and others.
Comments & Business Outlook
Third Quarter 2013 Financial Results
Total revenues were US$368 million, up 29% year-over-year and 9% quarter-over-quarter.
Diluted net income (loss) per share attributable to Sohu.com Inc. was a loss of -$1.69 vs. last years gain of $0.56
Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc. commented, "The third quarter of 2013 sets a strategic milestone for the Sohu Group. On September 16, we formed a partnership with Tencent whereby Tencent invested in our search subsidiary Sogou. This partnership does not only bring New Sogou to be a credible, fastest growing contender in both PC and mobile search, secures a solid top 3 market position, but also enables Sogou to bring even more users, traffic and other synergies to our various businesses and enhances the overall competitiveness of the Sohu Group."
Dr. Zhang added, "As for the financial performance of the third quarter, I am glad to report our total revenues were up 29% year-on-year to $368 million. Notably, brand advertising revenues grew 60% from a year ago, which is the highest growth rate since the third quarter of 2008. In particular, Sohu Video advertising revenues tripled from last year. Sogou demonstrated another quarter of healthy growth with revenues increasing 53% year-on-year. Changyou made steady progress in core gaming business and on other initiatives, and delivered financial results in line with its expectation."
Ms. Belinda Wang, Co-President and COO added, "For the third quarter, our brand advertising revenues demonstrated strong momentum, with revenues up 60% year-on-year to $125 million. Online video ad revenue contributed most to this significant growth, whereas our auto and real estate verticals as well as 17173 also showed strength."
Mr. Xiaochuan Wang, CEO of Sogou commented, "During the past 40 days, we have been devoting a considerable amount of our efforts on the integration with Soso, which is well on track in every aspect. The New Sogou team, consisting of employees from Sogou and Soso, are very upbeat about the vast opportunities ahead. We will also be migrating Soso's traffic, service and business over the next two months, and expect to complete the transition by the end of the year."
Business Outlook
For the fourth quarter of 2013, Sohu estimates:
Total revenues to be between US$378 million and US$390 million.
Brand advertising revenues to be between $120 million and $125 million; this implies a sequential decrease of 4% to flat and an annual increase of 46% to 52%.
Sogou revenues to be between $68 million and $70 million; this implies a sequential increase of 19% to 23% and an annual growth of 66% to 71%.
Online game revenues to be between US$171 million and US$176 million.
Before deducting the share of non-GAAP net income pertaining to the Non-Controlling interest, non-GAAP net loss to be between US$6 million and US$10 million.
Non-GAAP net loss attributable to Sohu.com Inc. to be between US$11 million and US$13 million, and non-GAAP fully diluted loss per share to be between US$0.30 and US$0.35.
Assuming no new grants of share-based awards, we estimate that compensation expenses relating to share-based awards to be around US$4 million to US$5 million. The estimated impact of this expense is expected to reduce Sohu's fully diluted earnings per share for the fourth quarter of 2013 under US GAAP by 12 to 14 US cents. This figure should not be used to calculate Sohu's projected GAAP fully diluted earnings per share, as there are other factors impacting such a calculation, for which no reconciliation is provided.
Special Dividend
BEIJING, September 18, 2013 /PRNewswire/ -- Sohu.com Inc. (NASDAQ: SOHU),China's leading online media, search, gaming, community and mobile service group, announced today that its majority-owned search subsidiary Sogou Inc. ("Sogou"), has paid to the holders of Series A Preferred Shares of Sogou ("Series A Preferred Shares") a special dividend in the aggregate amount of$300,892,698. Sohu had previously reported in a Current Report on Form 8-K filed with the U.S. Securities and Exchange Commission on Monday, September 16, 2013 that the dividend had been declared by Sogou's board of directors, and that Sogou would pay the dividend using a portion of the net amount of $448 million in cash proceeds from an investment in Sogou by a wholly-owned subsidiary of Tencent Holdings Limited. Sohu's wholly-owned subsidiary Sohu.com (Search) Limited ("Sohu Search"), received its full pro rata share of the dividend based on the full number of Series A Preferred Shares it owns, which consists of 24,000,000 shares, as did China Web Search (HK) Limited ("China Web"), which holds 14,400,000 Series A Preferred Shares. Photon Group Limited ("Photon"), which is the investment vehicle of Dr.Charles Zhang, Sohu's Chairman and CEO, and which holds 38,400,000 Series A Preferred Shares of Sogou, waived receipt of the dividend with respect to all but 6,400,000 of the shares Photon holds. Thus, although Photon holds the most Series A Preferred Shares of the three holders, Photon received the smallest amount of the dividend of the three. The amount of the divided received by Sohu Search was $161,192,517; the amount received by China Web was $96,715,510; and the amount received by Photon was $42,984,671.
Joint Venture
BEIJING and SHENZHEN, September 16, 2013 /PRNewswire / -- Sohu.com Inc. ("Sohu", NASDAQ: SOHU), Sogou Inc. ("Sogou") and Tencent Holdings Limited ("Tencent", SEHK: 00700) jointly announced today the establishment of a strategic cooperation that will reinforce and strengthen Sogou as a leader in the large and fast-growing Chinamarket for search and internet services, particularly for the mobile platform.
To implement this strategic cooperation, Tencent has invested a net amount of US$448 million in cash in Sogou and merged its Soso search related businesses and certain other assets with Sogou. Immediately after the transaction, Tencent holds 36.5% of Sogou's equity capital on a fully-diluted basis, which could further increase to approximately 40% in the near future. Sohu, together with its affiliates, remains the controlling shareholder of Sogou, which will continue to operate independently as a subsidiary of Sohu. Dr. Charles Zhang, Sohu's Chairman and CEO, will remain as Chairman of Sogou. Mr. Martin Lau, President of Tencent, and Mr. Mark Ren, Chief Operating Officer of Tencent, have joined Sogou's Board of Directors. Mr. Wang Xiaochuan will continue to lead Sogou as a director and CEO.
Tencent and Sogou have agreed to jointly develop, cross-promote and integrate their respective products and services, while collaborating in areas of search technology, user insights and data sharing. Sogou's leading products, including Sogou Pinyin and Sogou Search, will have direct access to the vast user base of Tencent's online and mobile social communities.
"This partnership will immediately expand Sogou's market presence and significantly elevate its position in the highly competitive PC search market, and even more so in the rapidly evolving mobile search market," stated Dr.Charles Zhang, Chairman and CEO of Sohu. "Sogou remains a key strategic asset of the Sohu Group, generating synergies with our other businesses and creating significant value for Sohu shareholders."
"We are very excited about our combination with Soso and strategic partnership with Tencent. By accessing Tencent's strong innovation capabilities and deeply integrating with Tencent's core platform, Sogou will herald a new era of relentless innovation in the mobile world," said Mr. Wang Xiaochuan, CEO of Sogou. "For example, the optimization of Sogou Pinyin for Tencent's mobile IM services will deliver superior user experience, while the interaction between search and social network will bring a multitude of opportunities."
"We believe Sogou is the ideal partner for Tencent to further develop search opportunities within China. This reinforces our "open, win-win" philosophy of working with leading teams to create innovative products for users, and build a healthy, diversified ecosystem for the industry," said Mr. Ma Huateng, Chairman and CEO of Tencent. "We have high regard for Sogou's strong innovation capabilities and successful execution track record. We are confident that Sogou, after combination with Soso, will deliver superior search experiences to users on our social, browser and content platforms, especially on the mobile front."
Sogou has successfully executed a "Pinyin-Browser-Search" strategy and launched numerous innovative products that have gained popularity among users, including the No.1 Chinese character Pinyin input method on PC as measured by user base and on mobile devices as measured by user penetration, according to iResearch; the No.3 PC browser and No.3 PC search engine in China by page views, according to CNZZ.
The transaction signed and closed simultaneously on September 16, 2013. Credit Suisse acted as financial advisor to Sohu. Goldman Sachs acted as financial advisor to Tencent.
Comments & Business Outlook
Second Quarter 2013 Financial Results
Total revenues were US$339 million, up 33% year-over-year and 10% quarter-over-quarter.
GAAP net income attributable to Sohu.com Inc. was US$22 million, or US$0.56 per fully diluted share. Non-GAAP net income attributable to Sohu.com Inc. was US$23 million, or US$0.58 per fully diluted share.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc. commented, "We are pleased to report encouraging results across our business lines for the second quarter. Notably, for our online video business, most if not all operating metrics are ramping up fast during the first 7 months of 2013, showing robust growth in user, traffic and revenues. Sogou and Changyou businesses continued to track well, building further on their solid fundamentals. Our Group's total revenues grew 33% year-over-year to $339 million."
Dr. Zhang added, "On the mobile front, the Group has secured strong foothold in this important space. In only six months, Sogou Pinyin mobile version added 60% more users since the beginning of 2013. With its 150 million monthly active users, it solidifies its position as one of the top three mobile apps in China. During the same period, Sohu News and Sohu Video, the other two leading mobile apps, also grew the total user base rapidly. "
Ms. Belinda Wang, Co-President and COO added, "Our quarterly brand advertising revenues for the first time hit $100 millionmark, up 45% from a year ago. The growth demonstrated the overall strength of our multiple media platforms, in particular with the strong traffic and improved sales execution of the online video business, we attracted greater budget allocation from advertisers."
Business Outlook
For the third quarter of 2013, Sohu estimates:
Total revenues to be between US$358 million and US$370 million.
Brand advertising revenues to be between $120 million and $125 million; this implies a sequential increase of 20% to 25% and an annual increase of 54% to 61%.
Sogou revenues to be between $54 million and $56 million; this implies a sequential increase of 8% to 12% and an annual growth of 45% to 50%.
Online game revenues to be between US$161 million and US$166 million.
Before deducting the share of non-GAAP net income pertaining to the Non-Controlling interest, non-GAAP net income to be between US$43 million and US$46 million.
Non-GAAP net income attributable to Sohu.com Inc. to be between US$19 million and US$21 million, and non-GAAP fully diluted earnings per share to be between US$0.50 and US$0.55.
Assuming no new grants of share-based awards, we estimate that compensation expenses relating to share-based awards to be around US$3 million to US$4 million. The estimated impact of this expense is expected to reduce Sohu's fully diluted earnings per share for the third quarter of 2013 under US GAAP by 7 to 9 US cents.
Comments & Business Outlook
BEIJING , July 19, 2013 /PRNewswire / -- Sohu.com Inc. (NASDAQ: SOHU), China's leading online media, search, gaming, community and mobile service group, responded today to pervasive and often inaccurate market rumors. Sohu confirmed that in recent months it has been exploring options for its majority-owned subsidiary Sogou Inc. Options being considered for Sogou include continuing to grow its strong product offering with the existing minority shareholder base, seeking additional strategic minority investors, or pursuing a more comprehensive strategic combination. Sohu has been, and continues to be, in preliminary discussions with several potential strategic investors and partners. Ms. Carol Yu , Sohu's Co-President and Chief Financial Officer, commented, "No particular strategic partner or transaction has been selected, nor has any decision been made to proceed with a significant transaction of any kind with respect to Sogou. As has always been our practice, Sohu will inform the market of any important developments as appropriate and when required by U.S. securities laws and the NASDAQ exchange."
Comments & Business Outlook
First Quarter Financial Results
Total revenues were US$308 million, up 36% year-over-year and 3% quarter-over-quarter.
GAAP net income attributable to Sohu.com Inc. was US$23 million, or US$0.60 per fully diluted share.
Non-GAAP net income attributable to Sohu.com Inc. was US$24 million, or US$0.62 per fully diluted share.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc. commented, "I am pleased to report our Group's three key properties, namely online media, including portal and online video, Sogou and Changyou are all making strong starts into 2013. For the first quarter, the Group revenues were up 36% year-on-year, exceeding our expectations. By business unit, online video, delivered double digit sequential revenue growth in a typical slowest quarter of the year. Sogou business was solid as its core products continued to gain user traction. Changyou set new records for both top-line and bottom-line, driven by decent performance of its MMO and web games."
Dr. Zhang added, "According to iResearch, the Sohu Group now has approximately 450 million users on a monthly basis, and this puts us as a solid No.3 in China's internet industry. Traffic growth for our PC internet services is stable while our mobile products are gaining strong traction as the total user base of two of our popular mobile APPs surpassed 100 million mark."
Ms. Belinda Wang, Co-President and COO added, "Recognizing Internet sector's profound shift from PC to mobile, Sohu Group has made mobile one of the most important parts of our strategy. And thanks to our early investments, the Group now owns a number of leading mobile applications across our business lines, including Sohu News Mobile App and Sohu Video App for our online media businesses, as well as Sogou Pinyin and Sogou Voice Assistant for Sogou. Our range of products are becoming indispensable for tens of millions of China's mobile Internet users.
Business Outlook
For the second quarter of 2013, Sohu estimates:
Total revenues to be between US$333 million and US$342 million.
Brand advertising revenues to be between $98 million and $100 million; this implies a sequential increase of 22% to 25% and an annual increase of 41% to 44%.
Sogou revenues to be between $48 million and $50 million; this implies a sequential increase of 22% to 27% and an annual growth of 58% to 65%.
Online game revenues to be between US$165 million and US$170 million.
Before deducting the share of non-GAAP net income pertaining to the Non-Controlling interest, non-GAAP net income to be between US$53 million and US$56 million.
Non-GAAP net income attributable to Sohu.com Inc. to be between US$19 million and US$21 million, and non-GAAP fully diluted earnings per share to be between US$0.50 and US$0.55.
Assuming no new grants of share-based awards, we estimate that compensation expenses relating to share-based awards to be around US$2 million to US$3 million. The estimated impact of this expense is expected to reduce Sohu's fully diluted earnings per share for the second quarter of 2013 under US GAAP by 5 to 7 US cents.
Going Private News
BEIJING, China, March 6, 2013 /PRNewswire / -- Sohu.com Inc. (NASDAQ: SOHU), China's leading online media, search, gaming, community and mobile service group, responded today to rumors circulating in the market, which were apparently instigated by an article published by the South China Morning Post. The Company announced that, contrary to the assertions in the article, it is not talking to investment banks and private equity funds about a possible plan to take the company private and/or delist its common stock from the NASDAQ Global Select Market. "No such discussions are in progress or currently contemplated," confirmed Ms. Carol Yu, Co-President and Chief Financial Officer of Sohu.
Comments & Business Outlook
Third Quarter Highlights
Total revenues were US$285 million, up 23% year-over-year and 12% quarter-over-quarter.
GAAP net income attributable to Sohu.com Inc. was US$24 million, or US$0.63 per fully diluted share. Non-GAAP net income attributable to Sohu.com Inc. was US$30 million, or US$0.77 per fully diluted share.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc. commented, "We are pleased with the solid financial results we achieved in the third quarter. Total revenues surpassed our expectations, rising 23% year-on-year. Brand advertising revenues met the high end of our guidance and online gaming revenues came in well ahead of our expectations."
Dr. Zhang added, "By business unit, for online video, our newly set-up dedicated sales team is bringing in results and we expect fourth quarter advertising revenue to be back on growth track. Sogou maintained triple-digit year-on-year revenue growth which was supported by improved monetization. For Changyou, strong performance by both MMO and web games helped post new records for both revenues and profit."
Ms. Belinda Wang, Co-President and COO added, "In the third quarter, thanks to solid demand from FMCG sector and the recovery of real estate sector, our brand advertising revenues reached the high end of our prior estimate. For the fourth quarter, although we see some weakening signals from the auto sector where Japanese car makers cut spending as a result of sharp decline in their sales volume, the impact is expected to be offset by the contribution from other sectors."
Business Outlook
For the fourth quarter of 2012, Sohu estimates:
Total revenues to be between US$288 million and US$293 million.
Brand advertising revenues to be between $80 million and $82 million; this implies a sequential and annual increase of 3% to 5%.
Sogou revenues to be around US$40 million; this implies a sequential increase of 7% and an annual growth of 74%.
Online game revenues to be between US$152 million and US$155 million. This implies a sequential increase of 1% to 3% and represents an annual growth of 23% to 26%.
Before deducting the share of non-GAAP net income pertaining to the Non-Controlling interest, non-GAAP net income to be between US$48 million and US$51 million.
Non-GAAP net income attributable to Sohu.com Inc. to be between US$23 million and US$25 million, and non-GAAP fully diluted earnings per share to be between US$0.60 and US$0.65.
Assuming no new grants of share-based awards, we estimate that compensation expenses and income tax expenses relating to share-based awards to be around US$3.5 million to US$4.5 million. The estimated impact of this expense is expected to reduce Sohu's fully diluted earnings per share for the fourth quarter of 2012 under US GAAP by 9 to 11 US cents.
Comments & Business Outlook
Second Quarter Highlights
Total revenues were US$256 million, up 29% year-over-year and 13% quarter-over-quarter.
GAAP net income attributable to Sohu.com Inc. was US$11 million, or US$0.28 per fully diluted share. Non-GAAP net income attributable to Sohu.com Inc. was US$16 million , or US$0.42 per fully diluted share.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc. commented, "We had a solid second quarter with total revenues rising nearly 30% from last year, despite challenges faced in our brand advertising business. As China's economic growth continued to decelerate and we initiated some operational transitions in our online video business, revenues from brand advertising recorded only a low single-digit year-on-year increase."
Dr. Zhang added, "But overall, we are pleased with our performance at the group level as our search and online game segments both remained on a solid upward path. For search, Sogou again posted triple-digit revenue growth on a year-over-year basis. Our online game subsidiary Changyou achieved record results at both the top and bottom-line, supported by strong performance from its MMO and web-based game franchises. We believe the blended results help demonstrate the resilience of our business mix and the benefit of having diversified operations."
Ms. Belinda Wang, Co-President and COO added, "The year 2012 is a critical year of transition for the Sohu Group. As we continue to make heavy but necessary investments across our strategically important business lines, we are confident to see a payoff in 2013. "
Business Outlook
For the third quarter of 2012, Sohu estimates:
Total revenues to be between US$272 million and US$277 million .
Brand advertising revenues to be between $ 7 6 million and $78 million ; this implies a sequential increase of 10% to 13%, and flattish with the same period of last year to an annual increase of 2%. This includes revenues from 17173 of US$11 million to US$12 million, which implies a sequential increase of 21% to 32% and an annual increase of 14% to 24%.
Sogou revenues to be around US$37 million ; this implies a sequential increase of 22% and an annual growth of 101%.
Online game revenues to be between US$141 million and US$144 million . This implies a sequential increase of 3% to 5% and represents an annual growth of 22% to 24%.
Before deducting the share of non-GAAP net income pertaining to the Non-Controlling interest, non-GAAP net income to be between US$42 million and US$45 million.
Non-GAAP net income attributable to Sohu.com Inc. to be between US$19 million and US$21 million, and non-GAAP fully diluted earnings per share to be between US$0.50 and US$0.55.
Assuming no new grants of share-based awards, we estimate that compensation expenses and income tax expenses relating to share-based awards to be around US$4.5 million to US$5.5 million. The estimated impact of this expense is expected to reduce Sohu's fully diluted earnings per share for the third quarter of 2012 under US GAAP by 12 to 14 cents.
Special Dividend
Acquisition Activity
On June 27, 2012, the registrant, through its wholly-owned subsidiary Sohu.com (Search) Limited, entered into a Series A Preferred Share Purchase Agreement
(the “Share Purchase Agreement”) with Alibaba Investment Limited (“Alibaba”) pursuant to which the registrant agreed to purchase from Alibaba, and Alibaba
agreed to sell to the registrant, 24,000,000 Series A Preferred Shares of the registrant’s majority-owned online search and browser subsidiary Sogou Inc., which shares represent approximately
10.88% of the outstanding share capital of Sogou Inc., for a
purchase price of $25,800,000. The transaction contemplated by the Share Purchase Agreement closed on June 29, 2012.
Comments & Business Outlook
First Quarter Highlights
Total revenues were US$227 million, up 30% year-over-year and down 8% quarter-over-quarter.
GAAP net income attributable to Sohu.com Inc. was US$20 million, or US$0.53 per fully diluted share. Non-GAAP[2] net income attributable to Sohu.com Inc. was US$24 million, down 46% year-over-year, or US$0.61per fully diluted share.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc. commented, "In the first quarter, our financial results were mixed. Our brand advertising business got off to a slow start mainly due to the early Chinese New Yearholiday and the softening macroeconomic conditions in China."
Dr. Zhang added, "Good news is search revenues and our overall Sogou business continued to deliver solid growth. And we are pleased with the better than expected results of Changyou, our online game subsidiary. Changyou's flagship games, TLBB and DDTank, continued to rank among the top games in China in the MMO and Web-based game categories, respectively. Shen Qu, a new Web-based game, was well-received by gamers upon launch, adding to the top-line results. For the remainder of 2012, Changyou has four new games due for launch that feature different genres and graphic styles, and are expected to draw new communities of users while expanding the user base."
Business Outlook
For the second quarter of 2012, Sohu estimates:
Total revenues to be between US$244 million and US$250 million.
Brand advertising revenues to be between $68 million and $71 million; this implies a sequential increase of 12% to 16%, and a year-over-year increase of 0.4% to 5%. This includes revenues from 17173 of US$8.5 million to US$9.5 million, which implies a sequential increase of 4% to 16% and a year-over-year increase of 3% to 15%.
Sogou revenues to be around US$29 million; this implies a sequential increase of about 28% and an annual growth of about 113%.
Online game revenues to be between US$130 million and US$133 million. This implies a sequential increase of 2% to 4% and represents an annual growth of 28% to 31%.
Before deducting the share of non-GAAP net income pertaining to the Non-Controlling interest, non-GAAP net income to be between US$34 million and US$37 million.
Non-GAAP net income attributable to Sohu.com Inc. to be between US$15.5 million and US$17.5 million, and non-GAAP fully diluted earnings per share to be between US$0.40 and US$0.45.
Assuming no new grants of share-based awards, we estimate that compensation expenses and income tax expenses relating to share-based awards to be around US$3 million to US$4 million. The estimated impact of this expense is expected to reduce Sohu's fully diluted earnings per share for the second quarter of 2012 under US GAAP by 8 to 10 cents.
Comments & Business Outlook
Fourth Quarter 2011
Total revenues were US$246 million , up 42% year-over-year and 6% quarter-over-quarter.
GAAP net income attributable to Sohu.com Inc. was US$25 million , or US$0.65 per fully diluted share. GAAP net income included non-cash charges of US$27.5 million related to goodwill impairment and impairment of acquired intangibles via acquisition of businesses. Non-GAAP(2) net income attributable to Sohu.com Inc. was US$53 million , up 10% year-over-year and 8% quarter-over-quarter or US$1.36 per fully diluted share.
Dr. Charles Zhang , Chairman and CEO of Sohu.com Inc. commented, "We are pleased to report a strong fourth quarter that helped us finish a solid year for 2011. For online advertising, our conscientious efforts in growing online video and search businesses are bringing strong growth in revenues, users and traffic. These businesses, along with our portal business, are contributing to give the Sohu Group a powerful integrated online marketing platform. In 2012, we aim to make this platform even more dominant in China 's internet market."
Dr. Zhang added, "For online game business, in 2011 Changyou achieved healthy growth in its MMO game portfolio and diversified into other fast growing areas such as Web-based games. In 2012, with our leading game information portal 17173.com under its leadership, Changyou will jumpstart a platform-based initiative."
Commenting on Sohu's brand advertising business, Ms. Belinda Wang , Co-President and COO added, "We had a strong year in our brand advertising business. In 2011, the internet population in China exceeded 500 million and we witnessed a continuing trend where marketing spending by brand advertisers has been shifting from offline to online."
Fiscal Year 20 11 Financial Results
Revenues
Total revenues for fiscal year 2011 were US$852 million , up 39% compared with 2010.
Total online advertising revenues for fiscal year 2011 were US$342 million , up 48% compared with 2010.
Brand advertising revenues for fiscal year 2011 totaled US$279 million , up 32% compared with 2010.
Sogou revenues for fiscal year 2011 were US$63 million , up 238% compared with 2010.
Online game revenues for fiscal year 2011 were US$436 million , up 33% compared with 2010.
Wireless revenues for fiscal year 2011 were US$52 million , down 1% compared with 2010.
Business Outlook
For the first quarter of 2012, Sohu estimates:
Total revenues to be between US$219 million and US$225 million .
Brand advertising revenues, including those from 17173.com, to be between $60 million and $63 million ; this implies a sequential decrease of 19% to 23%, and an increase of 5% to 10% year-over-year.
Sogou revenues to be around US$21 million ; this implies a sequential decrease of about 9% and an annual growth of about 163%.
Online game revenues to be between US$121 million and US$124 million .
Before deducting the share of non-GAAP net income pertaining to the Non-Controlling interest, non-GAAP net income to be between US$38 million and US$41 million .
Non-GAAP net income attributable to Sohu.com Inc. to be between US$19.5 million and US$21.5 million , and non-GAAP fully diluted earnings per share to be between US$0.50 and US$0.55 .
Assuming no new grants of share-based awards, we estimate that compensation expenses and income tax expenses relating to share-based awards to be around US$3 million to US$4 million . The estimated impact of this expense is expected to reduce Sohu's fully diluted earnings per share for the first quarter of 2012 under US GAAP by 8 to 10 cents .
Comments & Business Outlook
Completion of Sale of 17173 Business to Changyou.com
On December 15, 2011 , the registrant (“ Sohu ”) completed its previously announced sale of the business of 17173.com, a leading game information portal in China (the “ 17173 Business ”), to Changyou.com Limited, an indirect majority-owned subsidiary of the registrant (“Changyou ”).
The sale was made pursuant to a Master Transaction Agreement (the “Transaction Agreement ”), dated as of November 29, 2011, between, on the one hand, Sohu and certain of its subsidiaries and variable interest entities as Sellers, and, on the other hand, Changyou and certain of its subsidiaries and variable interest entities as Buyers. A brief description of the terms and conditions of the Transaction Agreement may be found in the registrant’s Current Report on Form 8-K filed with the SEC on December 1, 2011, which description is qualified in its entirety by reference to the full text of the Transaction Agreement filed as Exhibit 10.1 thereto.
Comments & Business Outlook
LONGMONT, CO--(Marketwire - Dec 8, 2011 ) - DigitalGlobe (NYSE : DGI), a leading global provider of high-resolution earth imagery solutions, today announced that China's leading online media, search, gaming, community and mobile service group, Sohu.com Inc. ("Sohu"), has renewed its annual subscription for DigitalGlobe imagery and expanded its coverage from 44 cities to 100 cities.
This will enable Sohu to provide its end-users with more up-to-date maps, greater coverage of the Chinese landscape, and increased functionality in its personal navigation devices.
"Sohu is pleased to continue its partnership with DigitalGlobe to provide the most current and most extensive imagery of the Chinese landscape to our end-users," said Bill Kong, director of Sohu Map. "With this partnership, we can continue to deliver an even richer, more engaging experience across our entire portfolio of online, gaming, and mobile services."
Notable Share Transactions
Stock Purchase Program
On August 29 , 2011 , Sohu's board of directors authorized a combined share purchase program of up to US$100 million . As of September 30, 2011 , Sohu had repurchased 250,000 Sohu's ordinary shares and purchased 750,000 Changyou's ADSs at an aggregated cost of approximately US$42.3 million under the share purchase program .
Ms. Carol Yu , Co-President and CFO of Sohu commented, "We are pleased to see that our investment in new businesses, especially Sogou and Sohu video, has paid off. Sohu's strong balance sheet and ample cash balances enable us to further grow and develop these businesses."
Comments & Business Outlook
Third Quarter 2011 Results
Total revenues were US$233 million , up 42% year-over-year and 17% quarter-over-quarter.
GAAP net income attributable to Sohu.com Inc. was US$45 million , up 17% year-over-year and 6% quarter-over-quarter or US$1.17 per fully diluted share. Non-GAAP net income attributable to Sohu.com Inc. was US$49 million , up 9% year-over-year and 3% quarter-over-quarter or US$1.26 per fully diluted share.
Dr. Charles Zhang , chairman and chief executive officer of Sohu.com commented, "I am pleased to report strong third quarter results with year-over-year revenue growth of 42%, driven by solid performance of our online advertising and online gaming businesses. For online advertising, two of the fastest growing areas, Sogou and Sohu video continued to deliver exciting news. Sogou's quarterly revenue grew 244% year-over-year, comfortably exceeding our prior guidance. Sohu video, for the first time, in September, both the number of visitors and total number of video viewed rose to the second place in China , according to Comscore."
Dr. Zhang added, "For online game, our online gaming subsidiary Changyou once again exceeded its top-line and bottom-line financial goals, while making planned investments in marketing and promotion of Duke of Mount Deer. Our flagship game Tian Long Ba Bu , or TLBB, continued to expand player numbers with the release of new expansion pack. Duke of Mount Deer, or DMD, appeals to hard-core game players with its new technologies and advanced cross-server game play."
Commenting on Sohu's brand advertising business, Ms. Belinda Wang , Co-President and COO added, "Third quarter revenue for brand advertising business hit a new high, driven by revenue increases from real estate and IT-related sectors. Online video segment posted about 110% growth in revenues on a year-over-year basis while the number of advertisers grew by nearly 50% from a year ago."
Business Outlook
For the fourth quarter of 2011, Sohu expects:
Total revenues to be between US$241 million and US$246 million .
Brand advertising revenues to be between US$77 million and US$79 million . This implies sequential growth of 1% to 3%, and 28% to 32% year-over-year growth.
Sogou revenues to be around US$21 million . This implies quarter-over-quarter growth of about 14% and year-over-year growth of about 218%.
Total revenues from Changyou to be between US$122 million and US$125 million , including online game revenues of US$119 million to US$122 million .
Before deducting the share of non-GAAP net income pertaining to the Non-controlling Interest, non-GAAP net income to be between US$70.5 million and US$73.5 million .
Non-GAAP net income attributable to Sohu.com Inc. to be between US$50.5 million and US$52.5 million and non-GAAP fully diluted earnings per share to be between US$1.30 and US$1.35 .
Assuming no new grants of share-based awards, compensation expenses and income tax expenses relating to share-based awards to be around US$4 million to US$4.5 million . The estimated impact of this expense is expected to reduce Sohu's fully diluted earnings per share for the third quarter of 2011, under US GAAP, by 10 to 12 cents .
Notable Share Transactions
BEIJING , August 29, 2011 /PRNewswire-Asia / -- Sohu.com Inc. (NASDAQ: SOHU), China 's leading online media, search, gaming, community and mobile service group, today announced that its Board of Directors has authorized a combined share purchase program of up to US$100 million of the outstanding American Depositary Shares (ADS) of Changyou.com Limited (NASDAQ: CYOU) , Sohu's online game subsidiary, and/or outstanding shares of common stock of Sohu over a one-year period from September 1, 2011 to August 31, 2012 .
"This program underscores our continued confidence in Changyou's and Sohu's long term growth prospects as well as an ongoing commitment to increase Sohu shareholder value," said Dr. Charles Zhang , Chairman and Chief Executive Officer of Sohu.com. "Our Board of Directors believes that this program represents a wise use of some of our abundant cash reserves and that our consistent, healthy operating cash flow is sufficient to support our multiple growth objectives."
Comments & Business Outlook
Second Q uarter Highlights
Total revenues were US$198.7 million , up 36% year-over-year and 14% quarter-over-quarter.
GAAP net income attributable to Sohu.com Inc. was US$42.7 million , up 37% year-over-year and 9% quarter-over-quarter, or US$1.10 per fully diluted share. Non-GAAP net income attributable to Sohu.com Inc. was US$47.4 million , up 27% year-over-year and 8% quarter-over-quarter, or US$1.21 per fully diluted share.
"I am pleased to report strong financial results for the second quarter," commented Dr. Charles Zhang , chairman and chief executive officer of Sohu.com. "We set new records for total revenue as a result of strong performance in three of our core business lines -- brand ads, Sogou and Changyou, each of which set new individual highs for revenue. Sohu Video outperformed its larger competitors and expanded its audience reach, while Sogou accelerated its growth trajectory with over 250% top-line growth, driven by strong improvements in search traffic and monetization."
Dr. Zhang added, "I am also excited to report that on July 22nd , Changyou launched Duke of Mount Deer, or DMD, which is the company's second in-house developed game. The unique technological innovations brought about by the four years of development have been well received by players. Since its launch, the user base has been growing steadily and we already need to add more servers. With DMD, our flagship game Tian Long Ba Bu , and the acquisition of 7Road, a Web-based game company in China , Changyou is successfully transforming itself into a diversified gaming company and escalating our leading position in China 's online gaming industry. "
Commenting on Sohu's online brand advertising business, Ms. Belinda Wang , Co-President and COO added, "Second quarter revenue in our online brand advertising business hit a new high as we saw strong advertising demand from the Internet sector, including e-commerce companies. Among all channels, online video was the fastest growing one with over 150% increase in revenues and nearly 50% increase in the number of advertisers on a year-over-year basis."
Business Outlook
For the third quarter of 2011, Sohu expects:
Total revenues to be between US$225.0 million and US$230.0 million .
Online brand advertising revenues to be between US$75.0 million and US$77.0 million . This implies sequential growth of 11% to 14%, and 27% to 30% year-over-year growth.
Sogou revenues to be around US$16.0 million .
Total revenues from Changyou to be between US$115.0 million and US$118.0 million , including online game revenues of US$112.0 million to US$114.0 million .
Before deducting the share of non-GAAP net income pertaining to the Non-controlling Interest, non-GAAP net income to be between US$64.5 million and US$67.0 million .
Non-GAAP net income attributable to Sohu.com Inc. to be between US$47.0 million and US$49.0 million and non-GAAP fully diluted earnings per share to be between US$1.20 and US$1.25 .
Assuming no new grants of share-based awards, compensation expenses and income tax expenses relating to share-based awards to be around US$4.0 million to US$4.8 million . The estimated impact of this expense is expected to reduce Sohu's fully diluted earnings per share for the third quarter of 2011, under US GAAP, by 10 to 12 cents .
Comments & Business Outlook
First Quarter Results :
Total revenues were US$174.4 million, up 35% year-over-year and 1% quarter-over-quarter.
After deducting the share of net income pertaining to the Non-controlling Interest, GAAP net income was US$39.3 million, up 41% year-over-year and down 5% quarter-over-quarter, or US$1.01 per fully diluted share. Non-GAAP net income was US$44.0 million, up 30% year-over-year and down 8% quarter-over-quarter, or US$1.13 per fully diluted share .
Dr. Charles Zhang, Chairman and CEO of Sohu, commented, "In addition to our solid financial results, there are a few areas in particular that I would like to highlight. First, on online video, our conscientious efforts to expand our library of authorized and self-produced premium content have increased our market share in terms of total time users spent watching online video from 13% in December 2010 to 16% in March 2011. This ranks us second in the market according to iResearch. Second, Sogou's business continues its momentum, and over the first quarter of 2011 active users of Sogou's browser, search traffic and search revenue all grew north of 20% quarter-over-quarter. And third, on online games, while our leading game franchise, Tian Long Ba Bu, or TLBB, continues to attract new, existing and returning players to its community, today also marks two significant events for our online game subsidiary Changyou. First, Changyou just unveiled an updated version of its upcoming game Duke of Mount Deer, or DMD and will launch the most-anticipated game this summer. Second, we have entered into a definitive agreement to acquire a majority stake in Shenzhen 7Road Technology Co., Ltd. and its affiliates, or 7Road, a reputable web-based game developer that created DDTank, one of the most popular web-based games in China. This will expand Changyou's product portfolio to cover not only MMORPG games but also web-based games ."
For the second quarter of 2011, Sohu estimates:
Total revenues to be between US$188.0 million and US$193.0million .
Online brand Advertising revenues to be between US$65.5 million and US$67.5 million. This implies a sequential growth of 15 % to 18%, and 23% to 27% year-over-year growth.
Search revenues to be around US$11 million.
Total revenues from Changyou to be between US$97.0 million and US$100.0 million , including online games revenues of US$95.0 million to US$97.0 million.
Before deducting the share of non-GAAP net income pertaining to the Non-controlling Interest, Sohu estimates its pro forma non-GAAP net income to be between US$59.0 million and US$61.5 million.
After deducting the share of non-GAAP net income pertaining to the Non-controlling Interest, Sohu estimates non-GAAP net income to be between US$44.0 million and US$46.0 million and non-GAAP fully diluted earnings per share to be between US$1.13 and US$1.18 .
Assuming no new grants of share-based awards, Sohu estimates that compensation expenses and income tax expenses relating to share-based awards will be around US$4.0 million to US$4.8 million. The estimated impact of this expense is expected to reduce Sohu's fully diluted earnings per share for the second quarter of 2011, under US GAAP, by 10 to 12 cents.
Acquisition Activity
BEIJING, April 25, 2011 /PRNewswire-Asia / -- Sohu.com Inc. (NASDAQ: SOHU), China's leading online media, search, gaming, community and mobile service group, today announced that its massively multi-player online role-playing game ("MMORPG") subsidiary, Changyou.com Limited ("Changyou") (NASDAQ: CYOU) has recently entered into a definitive agreement with Shenzhen 7Road Technology Co., Ltd. under which it will acquire 68.258% of the equity of Shenzhen 7Road Technology Co., Ltd. and its affiliates ("7Road"), a reputable web-based game company in China. The acquisition accelerates Changyou's position in China's online games industry and adds a new category of games to its growing product portfolio.
Changyou will acquire 68.258% of the equity of 7Road for fixed cash consideration of approximately US$68.26 million, plus additional variable cash consideration of up to a maximum of US$32.76 million that is contingent upon the achievement of specified performance milestones through December 31, 2012. The acquisition is expected to be completed by June 30, 2011, subject to regulatory approvals and other customary conditions specified in the agreement.
Comments & Business Outlook
Quarter Ended December 31
2010 2009 2008 2007 2006
(in thousands, except per share data)
Statements of Operations Data:
Revenues:
Brand advertising
$ 211,821 $ 177,073 $ 169,268 $ 112,106 $ 78,993
Online game
327,151 267,585 201,845 42,096 8,525
Sponsored search
18,649 8,491 6,313 6,413 12,634
Wireless and others
55,156 62,090 51,625 28,319 34,084
Total revenues
612,777 515,239 429,051 188,934 134,236
Cost of revenues:
Brand advertising
86,684 59,451 59,443 38,733 23,211
Online game
29,852 17,505 14,567 7,113 3,895
Sponsored search
14,243 9,669 6,075 4,670 4,359
Wireless and others
29,528 36,770 27,229 14,247 16,898
Total cost of revenues
160,307 123,395 107,314 64,763 48,363
Gross profit
452,470 391,844 321,737 124,171 85,873
Operating expenses:
Product development
75,600 56,943 49,713 25,443 17,651
Sales and marketing
105,406 93,498 84,691 47,506 28,532
General and administrative
40,375 36,624 22,695 17,418 13,092
Amortization of intangible assets
558 388 796 1,093 1,993
Total operating expenses
221,939 187,453 157,895 91,460 61,268
Operating profit
230,531 204,391 163,842 32,711 24,605
Other (expense) income
(790 ) 342 (535 ) 887 477
Interest income and exchange difference
4,474 5,001 4,288 2,793 3,216
Income before income tax expense
234,215 209,734 167,595 36,391 28,298
Income tax expense
36,031 33,745 9,009 1,487 1,579
Income from continuing operations
198,184 175,989 158,586 34,904 26,719
Gain (loss) from discontinued e-commerce operations
0 446 0 (20 ) (841 )
Net income
198,184 176,435 158,586 34,884 25,878
Less: Net income (loss) attributable to the noncontrolling
interest
49,555 28,602 (51 ) (47 ) (7 )
Net income attributable to Sohu.com Inc.
$ 148,629 $ 147,833 $ 158,637 $ 34,931 $ 25,885
Basic net income per share attributable to Sohu.com Inc.
$ 3.92 $ 3.86 $ 4.16 $ 0.94 $ 0.70
Shares used in computing basic net income per share attributable to Sohu.com Inc.
Shares used in computing basic net income per share attributable to Sohu.com Inc.
37,870 38,294 38,168 37,133 36,730
Shares used in computing diluted net income per share attributable to Sohu.com Inc.
Diluted net income per share attributable to Sohu.com Inc.
$ 3.62 $ 3.57 $ 4.06 $ 0.90 $ 0.68
Shares used in computing basic net income per share attributable to Sohu.com Inc.
Shares used in computing diluted net income per share attributable to Sohu.com Inc.
38,445 38,969 39,117 38,919 39,105
Liquidity Requirements
We believe our current liquidity and capital resources are sufficient to meet anticipated working capital needs (net cash used in operating activities), commitments and capital expenditures over the next twelve month. We may, however, require additional cash resources due to changes in business conditions and other future developments, or changes in general economic conditions.
Comments & Business Outlook
Fourth Quarter Highlights
Total revenues were US$173.2 million , up 27% year-over-year and 6% quarter-over-quarter.
After deducting the share of net income pertaining to the Noncontrolling Interest, GAAP net income was US$41.5 million , up 41% year-over-year and 7% quarter-over-quarter, or US$1.07 per fully diluted share. Non-GAAP net income wasUS$47.9 million, up 34% year-over-year and 6% quarter-over-quarter, or US$1.23 per fully diluted share.
Fiscal Year 2010 Highlights
Record total revenues and record revenues in each of the Group's brand advertising, online game and search businesses.
Total revenues reached US$612.8 million , up 19% compared with 2009.
After deducting the share of net income pertaining to the Noncontrolling Interest, GAAP net income was flat compared with 2009, reaching US$139.3 million , or US$3.62 per fully diluted share. Non-GAAP net income was up 6% compared with 2009, reaching US$164.3 million, or US$4.21 per fully diluted share.
Cash balance was US$678.4 million as of December 31, 2010, representing an increase of US$114.6 million fromDecember 31, 2009.
Dr. Charles Zhang, Chairman and CEO of Sohu, commented, "While I am encouraged by these strong results across our multiple business lines, I am even more excited when we look beyond our financial performance. First, our conscientious efforts in online video and our strategy to secure high quality authorized content have brought our market share from 3.4% to 13.4% in a mere 12-month period. Second, while TLBB continues to be a strong and popular game, Changyou will unveil the full trial version of the highly anticipated Duke of Mount Deer to players once it officially kicks off the game's marketing campaign in March. And third, with its new capital structure in place, Sogou's business is quickly picking up momentum. Over the fourth quarter of 2010, active users of the Sogou browser, related search traffic and search revenue, all grew north of 20% quarter-to-quarter."
For the first quarter of 2011, Sohu estimates:
Total revenues to be between $164.5 million and $169.5 million
Brand Advertising revenues to be between $55.0 million and $57.0 million . This implies a sequential decline of 5% to 8%, and 39% to 44% year-over-year growth.
Total revenues from Changyou to be between US$92.0 million and US$95.0 million , of which revenues from online games, which are revenues exclusive of revenues from Jing Mao, are expected to be between US$91.0 million and US$93.0 million.
Search revenues to be around $6.5 million.
Before deducting the share of non-GAAP net income pertaining to the Noncontrolling Interest, Sohu estimates its pro forma non-GAAP net income to be between $54.5 million and $57.0 million.
After deducting the share of non-GAAP net income pertaining to the Noncontrolling Interest, Sohu estimates non-GAAP net income to be between $40.0 million and $42.0 million and non-GAAP fully diluted earnings per share to be between $1.03 and $1.08 .
Assuming no new grants of share-based awards, Sohu estimates that compensation expenses and income tax expenses relating to share-based awards will be around $5.0 million to $6.0 million, which includes $1.5 million to $2.0 million for Changyou. Considering Sohu's shares in Changyou, the estimated impact of this expense is expected to reduce Sohu's fully diluted earnings per share for the first quarter of 2011, under US GAAP, by 11 to 13 cents .
Comments & Business Outlook
Third Quarter 2010 Highlights
Total revenues were US$164.1 million, up 20% year-on-year, and 12% quarter-over-quarter.
After deducting the share of net income pertaining to the Non-Controlling Interest, GAAP net income was US$38.7 million, up 12% year-over-year and 24% quarter-over-quarter, or US$1.01 per fully diluted share , and non-GAAP net income was US$45.2 million, up 21% year-over-year and quarter-over-quarter, or US$ 1.16 per fully diluted share, exceeding high end of Group guidance .
Dr. Charles Zhang, Chairman and CEO of Sohu.com, commented, "I'm pleased to report that we had a record quarter, with strong growth in each of our major business segments. Online video, our potential future revenue driver, is gaining significant traction as we add high-definition content and leverage the synergies of the Sohu platform to make our video products even more attractive to both users and advertisers. Also we believed that the introduction of strategic investors to our Sogou search business leaves our search business in a more competitive position and offers great promise for future collaboration and services with China's largest e-commerce website."
"Our largest business segment, online games, powered by the successful release of new expansion packs for our proprietary flagship product and the launch of new licensed games, once again achieved solid results. The results also demonstrated the merits of using feedback to direct research and development efforts in our games. We continue to invest in employee recruitment and training. We are positive on the outlook of the industry and look to bring more proprietary games to market with an expanded team of talented engineers."
Business Outlook
For the fourth quarter of 2010, Sohu estimates:
Total revenues to be between US$163 million and US$168 million , with advertising revenues of US$64 million to US$66 million.
Non-GAAP net income before deducting the share of non-GAAP net income pertaining to the Non-Controlling Interest to be between US$59 million and US$61.5 million .
Non-GAAP net income after deducting the share of non-GAAP net income pertaining to the Non-Controlling Interest to be between US$43 million and US$45 million.
Non-GAAP fully diluted earnings per share to be between US$1.10 and US$1.15 .
Comments & Business Outlook
Dr. Charles Zhang, Chairman and CEO of Sohu.com, commented, "Our results for the second quarter of 2010 surpassed our expectations as we established record total revenues and set new highs in our brand advertising and online game businesses. For our brand advertising business, we continue to place emphasis on online video and are convinced this will be an area of significant future growth. We have successfully expanded and diversified our collection of licensed and in-house produced quality video content, and develop innovative applications that cater to various devices, including the most sought after iPad. We are very encouraged by the fast-growing user base and new advertisers. For our online game business, Changyou demonstrated that the ongoing strategic release of feedback-driven content and a diverse portfolio of games are helping retain existing users, attract new ones, and reinforce the popularity of our games. We are optimistic about our ability to build on our momentum this year and add value over the long term .
Sohu estimates total revenues for the third quarter of 2010 to be between US$153.0 million and US$158.0 million, with advertising revenues of US$61.0 million to US$63.0 million.
Sohu estimates brand advertising revenues for the third quarter of 2010 to be between US$57.0 million and US$59.0 million.
Sohu estimates online game revenues for the third quarter of 2010 to be between US$80.0 million and US$83.0 million.
Sohu estimates non-GAAP net income for the third quarter of 2010, before deducting the share of non-GAAP net income pertaining to the Non-Controlling Interest, to be between US$54.0 million to US$56.5 million. After deducting the share of non-GAAP net income pertaining to the Non-Controlling Interest, Sohu estimates non-GAAP net income for the third quarter of 2010 to be between US$39.0 million to US$41.0 million, and non-GAAP fully diluted earnings per share for the third quarter of 2010 to be between US$1.00 and US$1.05 .
Assuming no new grants of share-based awards, Sohu estimates compensation expense and income tax expense related to share-based awards for the third quarter of 2010 to be between US$6.5 million and US$7.5 million, which includes Changyou's share-based compensation expense for the third quarter of 2010 estimated to be between US$1.5 million and US$2.0 million. Considering Sohu's share in Changyou, the estimated impact of this expense under US GAAP is expected to reduce Sohu's fully diluted earnings per share for the third quarter of 2010 by 16 US cents to 18 US cents.
Comments & Business Outlook
3rd Quarter 2009 Guidance Ending September a
3rd Quarter 2009 Guidance 3rd Quarter 2008 Reported Period Change
GAAP Revenue
$133.5 to $137.5 million
120.7 Million
10.6% to 13.9%
Non-GAAP EPS b
$0.92 to $0.97
$1.08
-14.8% to -10.2
Source:
See Release , July 27, 2009
a The above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement. b Non-GAAP EPS figures generally exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information . For a more complete explanation of the company's definition of non-GAAP please refer to its financial press releases. The GeoTeam ® non-GAAP figures may, from time to time, differ from company supplied figures.
Comments & Business Outlook
2nd Quarter 2009 Guidance Ending June a
2nd Quarter 2009 Guidance 2nd Quarter 2008 Reported Period Change
GAAP Revenue
$121 to $125 million
$102.0 million
18.6% to 22.5%
Non-GAAP EPS b
$0.80 to $0.85
$1.07
-25.2% to -20.6%
Source: See Release , May 4, 2009
a The above forecasts reflect the Company's current and preliminary views and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement. b GeoTeam ® non-GAAP figures may, from time to time, differ from company supplied figures.
Comments & Business Outlook
Guidance Report:
Ms. Carol Yu, Co-President and CFO of Sohu.com, commented, 'We believe that the results for fiscal year 2008 speak for themselves, with revenues of 2.3 times 2007 revenues, non-GAAP net income 3.9 times that of 2007 , non-GAAP operating margin expansion to 41% in 2008 from 22% in 2007 , and our cash balance increasing by US$191.7 million during 2008 . These results also speak for our belief that management will have the ability to capture opportunities as they arise notwithstanding the more challenging economic environment expected in 2009 . '
First Quarter Fiscal 2009 Guidance Ending March
First Quarter 2009 Guidance
First Quarter 2008 Reported
Period Change
GAAP Revenue
$111.5 million to $115.5
$84.8 Million
31.49% to 36.20%
GAAP EPS
NA
$0.55
NA
*Non-GAAP EPS
$1.05 to $1.10
$0.64
64.06% to 71.88%
EPS figures exclude non-operating gains and losses. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information.For a more complete explanation of the company's definition of non-GAAP please refer to their Fourth Quarter financial press release .
Source: PR Newswire (February 9, 2009)
