BEIJING, May 14, 2021 /PRNewswire/ -- Sohu.com Limited
(NASDAQ: SOHU), China's leading
online media, video, gaming and search business group, today
reported unaudited financial results for the first quarter ended
March 31, 2021.
In view of the previously-announced Share Purchase
Agreement between subsidiaries of Tencent Holdings Limited ("Tencent") and the Company and its wholly-owned
subsidiary Sohu.com (Search) Limited ("Sohu Search") with respect
to Sohu Search's Sogou Inc. ("Sogou") shares (the "Sogou Share
Purchase"), the results of operations for Sogou have been
excluded from the Company's results from continuing operations in
the Company's condensed consolidated statements of operations and
are presented in separate line items as discontinued operations.
Retrospective adjustments to the historical statements have been
made in order to provide a consistent basis of comparison. Unless
indicated otherwise, results presented in this release are related
to continuing operations only.[1]
First Quarter Highlights
- Total revenues were US$222
million[2], up 24% year-over-year and down 12%
quarter-over-quarter.
- Brand advertising revenues were US$31
million, up 20% year-over-year and down 26%
quarter-over-quarter.
- Online game revenues were US$176
million, up 32% year-over-year and down 10%
quarter-over-quarter.
- GAAP net income from continuing operations attributable to
Sohu.com Limited was US$32 million,
compared with a net loss of US$10
million in the first quarter of 2020 and net income of
US$47 million in the fourth quarter
of 2020.
- Non-GAAP net income from continuing operations attributable to
Sohu.com Limited was US$37 million,
compared with a net loss of US$8
million in the first quarter of 2020 and net income of
US$53 million in the fourth quarter
of 2020.
Dr. Charles Zhang, Chairman and
CEO of Sohu.com Limited, commented, "In the first quarter of 2021,
we continued to execute the operation strategy of last year, and
delivered better-than-expected performance on the top line. In
addition, we're happy to report positive non-GAAP net income of
US$37 million, which greatly exceeded
our previous guidance. This was mainly attributable to our strict
budget control, and the solid performance of our online game
business. In summary, for Sohu Media, we kept focusing on improving
our products and technology, while at the same time stimulating
content generation and social distribution. For Sohu Video, we made
continuous progress producing both long-form original dramas and
short-form livestreaming content. Further, we integrated advanced
live broadcasting technologies into our product matrix, and applied
these technologies to our content marketing campaigns. These
campaigns not only effectively promoted the generation of premium
content, but also attracted a lot of user attention as well as
advertiser budgets. For Changyou, our online game business remained
solid during the first quarter of 2021, with its revenue greatly
exceeding our prior guidance."
|
[1] The
parties currently expect the completion of the transaction will be
after the second quarter of 2021, subject to the satisfaction or
waiver of all the conditions to the transaction, including the
receipt of regulatory approvals such as clearance of anti-trust
filings.
|
|
[2] On a
constant currency (non-GAAP) basis, if the exchange rate in the
first quarter of 2021 had been the same as it was in the first
quarter of 2020, or RMB6.97=US$1.00, US$ total revenues in the
first quarter of 2021 would have been US$206 million, or US$16
million less than GAAP total revenues, and up 15%
year-over-year.
|
First Quarter Financial Results
Revenues
Total revenues were US$222
million, up 24% year-over-year and down 12%
quarter-over-quarter.
Brand advertising revenues totaled US$31
million, up 20% year-over-year and down 26%
quarter-over-quarter. The year-over-year increase was mainly due to
increased revenues in the portal and video advertising businesses.
The quarter-over-quarter decrease was mainly due to
seasonality.
Online game revenues were US$176
million, up 32% year-over-year and down
10% quarter-over-quarter. The year-over-year and
quarter-over-quarter changes were mainly attributable to revenues
from TLBB Vintage, which was launched during the fourth quarter of
2020.
Gross Margin
Both GAAP and non-GAAP[3] gross margin was
79%, compared with 68% in the first quarter of 2020 and 79% in
the fourth quarter of 2020.
Both GAAP and non-GAAP gross margin for the brand advertising
business was 20%, compared with nil in the first quarter of
2020 and 31% in the fourth quarter of 2020. The
year-over-year and quarter-over-quarter margin changes were mainly
due to changes in brand advertising revenues.
GAAP gross margin for online games was 89%, compared with 79% in
the first quarter of 2020 and 90% in the fourth quarter of 2020.
Non-GAAP gross margin for online games was 90%, compared with 79%
in the first quarter of 2020 and 90% in the fourth quarter of 2020.
The year-over-year increase in gross margin was mainly due to a
higher percentage revenue contribution from PC games, which
typically require lower revenue-sharing payments.
Operating Expenses
For the first quarter of 2021, GAAP operating expenses
totaled US$124 million, up 18%
year-over-year and down 7% quarter-over-quarter. Non-GAAP operating
expenses were US$122 million, up 20%
year-over-year and down 7% quarter-over-quarter. The year-over-year
increase was mainly due to increases in salary and benefits
expenses. The quarter-over-quarter decrease was mainly due to
decreases in marketing expenses.
Operating Profit
GAAP operating profit was US$51
million, compared with an operating profit of US$16
million in the first quarter of 2020 and an operating profit of
US$67 million in the fourth quarter
of 2020.
Non-GAAP operating profit was US$53 million, compared with
an operating profit of US$19 million in
the first quarter of 2020 and an operating profit of
US$68 million in the fourth
quarter of 2020.
Income Tax Expense
GAAP income tax expense was US$23
million, compared with income tax expense of US$15 million in the first quarter of 2020 and
income tax expense of US$21 million
in the fourth quarter of 2020. Non-GAAP income tax expense was
US$23 million, compared with income
tax expense of US$12 million in the
first quarter of 2020 and income tax expense of US$21 million in the fourth quarter of 2020.
Net Income/(Loss)
GAAP net income from continuing operations attributable to
Sohu.com Limited was US$32 million,
or net income of US$0.80 per
fully-diluted ADS, compared with a net loss of US$10 million in the first quarter of 2020 and
net income of US$47 million in the
fourth quarter of 2020.
Non-GAAP net income from continuing
operations attributable to Sohu.com Limited was
US$37 million, or net income of US$0.93 per fully-diluted ADS, compared
with a net loss of US$8
million in the first quarter of 2020 and net
income of US$53 million in the
fourth quarter of 2020.
Liquidity
As of March 31, 2021, cash and
cash equivalents and short-term investments were US$335 million.
Supplementary Information for Changyou Results
First Quarter 2021 Operating
Results
- For PC games, total average monthly active user
accounts[4] (MAU) were 2.3 million, an
increase of 7% year-over-year and flat quarter-over-quarter. The
year-over-year increase was mainly due to the contribution of TLBB
Vintage, partially offset by termination of the operation of
Warframe. Total quarterly aggregate active paying
accounts[5] (APA) were 0.9 million, a
decrease of 11% year-over-year and 1% quarter-over-quarter. The
year-over-year decrease was mainly due to termination of the
operation of Warframe.
- For mobile games, total average MAU were 2.0 million, a
decrease of 40% year-over-year and 16% quarter-over-quarter. Total
quarterly APA were 0.5 million, a decrease of 52% year-over-year
and 20% quarter-over-quarter. The year-over-year decreases in MAU
and APA reflected the natural declining life cycles of Changyou's
older games, including Legacy TLBB Mobile and TLBB Honor. The
quarter-over-quarter decreases in MAU and APA were mainly from
Illusion Connect and TLBB Honor.
|
[3]
Non-GAAP results exclude share-based compensation expense;
changes in fair value recognized in the Company's consolidated
statements of operations with respect to equity investments with
readily determinable fair values; and interest expense recognized
in connection with the one-time transition tax (the "Toll Charge")
imposed by the U.S. Tax Cuts and Jobs Act signed into law on
December 22, 2017 (the "U.S. TCJA"). Explanation of the Company's
non-GAAP financial measures and related reconciliations to GAAP
financial measures are included in the accompanying "Non-GAAP
Disclosure" and "Reconciliations of Non-GAAP Results of Operation
Measures to the Nearest Comparable GAAP Measures."
|
|
[4] Monthly active user accounts
refers to the number of registered accounts that are logged in to
these games at least once during the month.
|
|
[5] Quarterly aggregate active paying
accounts refers to the number of accounts from which game points
are utilized at least once during the quarter.
|
First Quarter 2021 Unaudited Financial
Results
Total revenues were US$180
million, an increase of 32% year-over-year and a decrease of
10% quarter-over-quarter. Online game revenues were US$176 million, an increase of 32% year-over-year
and a decrease of 10% quarter-over-quarter. Online advertising
revenues were US$3 million, an
increase of 13% year-over-year and 16% quarter-over-quarter.
GAAP and non-GAAP gross profit were both US$160 million, an increase of 50% year-over-year
and a decrease of 10% quarter-over-quarter.
GAAP operating expenses were US$61 million, an increase of 12% year-over-year
and a decrease of 11% quarter-over-quarter. The year-over-year
increase was mainly due to an increase in salary and benefits
expenses, mainly as a result of an increase in bonus expenses
related to revenue growth, partially offset by a decrease in
marketing and promotional spending for online games, including TLBB
Honor. The quarter-over-quarter decrease was mainly due to a
decrease in marketing and promotional spending for online games,
including TLBB Vintage.
Non-GAAP operating expenses were
US$59 million, an increase of 16%
year-over-year and a decrease of 12% quarter-over-quarter.
GAAP operating profit was US$99 million, compared with an operating profit
of US$52 million for the first
quarter of 2020 and US$110 million
for the fourth quarter of 2020.
Non-GAAP operating profit was US$101 million, compared with a non-GAAP
operating profit of US$56 million for
the first quarter of 2020 and US$112
million for the fourth quarter of 2020.
Business Outlook
For the second quarter of 2021, Sohu estimates:
- Brand advertising revenues to be between US$36 million and
US$40 million; this implies an annual
decrease of 5% to an annual increase of 5% and a
sequential increase of 17% to 30%.
- Online game revenues to be between US$134 million and US$144
million; this implies an annual increase of 26% to 36% and a
sequential decrease of 18% to 24%.
- Non-GAAP net income from continuing operations attributable to
Sohu.com Limited to be between US$8
million and US$18 million; and
GAAP net income from continuing operations attributable to Sohu.com
Limited to be between US$3 million
and US$13 million.
For the second quarter 2021 guidance, the Company has
adopted a presumed exchange rate of RMB6.53=US$1.00, as
compared with the actual exchange rate of approximately
RMB7.08=US$1.00 for the second quarter of 2020, and
RMB6.48=US$1.00 for the first quarter of
2021.
This forecast reflects Sohu's management's current and
preliminary view, which is subject to substantial uncertainty,
particularly in view of the potential ongoing impact of the
worldwide COVID-19 pandemic, which remains difficult to
predict.
Non-GAAP Disclosure
To supplement the unaudited consolidated financial statements
presented in accordance with accounting principles generally
accepted in the United States of
America ("GAAP"), Sohu's management uses non-GAAP measures
of gross profit, operating profit, net income, net income
attributable to Sohu.com Limited and diluted net income
attributable to Sohu.com Limited per ADS, which are adjusted from
results based on GAAP to exclude the impact of the share-based
awards, which consist mainly of share-based compensation expense;
changes in fair value recognized in the Company's consolidated
statements of operations with respect to equity investments with
readily determinable fair values; and interest expense recognized
in connection with the Toll Charge imposed by the U.S. TCJA. These
measures should be considered in addition to results prepared in
accordance with GAAP, but should not be considered a substitute
for, or superior to, GAAP results.
Sohu's management believes excluding share-based compensation
expense, changes in fair value recognized in the Company's
consolidated statements of operations with respect to equity
investments with readily determinable fair values; and interest
recognized in connection with the Toll Charge from its non-GAAP
financial measure is useful for itself and investors. Further, the
impact of share-based compensation expense and changes in fair
value recognized in the Company's consolidated statements of
operations with respect to equity investments with readily
determinable fair values; and interest expense recognized in
connection with the Toll Charge cannot be anticipated by management
and business line leaders and these expenses were not built into
the annual budgets and quarterly forecasts that have been the basis
for information Sohu provides to analysts and investors as guidance
for future operating performance. As the impact of share-based
compensation expense and changes in fair value recognized in the
Company's consolidated statements of operations with respect to
equity investments with readily determinable fair values does
not involve subsequent cash outflow or is reflected in the cash
flows at the equity transaction level, Sohu does not factor this
impact in when evaluating and approving expenditures or when
determining the allocation of its resources to its business
segments. As a result, in general, the monthly financial results
for internal reporting and any performance measures for commissions
and bonuses are based on non-GAAP financial measures that exclude
share-based compensation expense and changes in fair value
recognized in the Company's consolidated statements of operations
with respect to equity investments with readily determinable fair
values, and also excluded the interest expense recognized in
connection with the Toll Charge.
The non-GAAP financial measures are provided to enhance
investors' overall understanding of Sohu's current financial
performance and prospects for the future. A limitation of using
non-GAAP gross profit, operating profit, net income, net income
attributable to Sohu.com Limited and diluted net income
attributable to Sohu.com Limited per ADS, excluding share-based
compensation expense, is that the impact of share-based awards has
been and will continue to be a significant recurring expense in
Sohu's business for the foreseeable future. In order to mitigate
these limitations Sohu has provided specific information regarding
the GAAP amounts excluded from each non-GAAP measure. The
accompanying tables include details on the reconciliation between
the GAAP financial measures that are most directly comparable to
the non-GAAP financial measures that have been presented.
Notes to Financial Information
Financial information in this press release other than the
information indicated as being non-GAAP is derived from Sohu's
unaudited financial statements prepared in accordance with
GAAP.
Safe Harbor Statement
This announcement contains forward-looking statements. It is
currently expected that the Business Outlook will not be updated
until release of Sohu's next quarterly earnings announcement;
however, Sohu reserves right to update its Business Outlook at any
time for any reason. Statements that are not historical facts,
including statements about Sohu's beliefs and expectations, are
forward-looking statements. These statements are based on current
plans, estimates and projections, and therefore you should not
place undue reliance on them. Forward-looking statements involve
inherent risks and uncertainties. We caution you that a number of
important factors could cause actual results to differ materially
from those contained in any forward-looking statement. Potential
risks and uncertainties include, but are not limited to,
instability in global financial and credit markets and its
potential impact on the Chinese economy; exchange rate
fluctuations, including their potential impact on the Chinese
economy and on Sohu's reported US dollar results; recent slow-downs
in the growth of the Chinese economy; the uncertain regulatory
landscape in the People's Republic of
China; fluctuations in Sohu's quarterly operating results;
the possibilities that Sohu will be unable to recoup its investment
in video content and that Changyou will be unable to develop a
series of successful games for mobile platforms or successfully
monetize mobile games it develops or acquires; Sohu's reliance on
online advertising sales, online games and mobile services for its
revenues; the impact of the U.S. TCJA; the effects of the COVID-19
virus on the economy in China in
general and on Sohu's business in particular; the possibility that
the pending Sogou Share Purchase and the pending
previously-announced merger of Sogou with a subsidiary of
Tencent (the "Sogou Merger")
contemplated by an Agreement and Plan of Merger (the "Sogou Merger
Agreement") with direct and indirect wholly-owned subsidiaries of
Tencent will not occur as planned if
events arise that result in the termination of the Share Purchase
Agreement and/or the Sogou Merger Agreement, or if one or more of
the various closing conditions to the Sogou Share Purchase and/or
the Sogou Merger, including without limitation clearance of
anti-trust filings under PRC law, are not satisfied or
waived. Further information regarding these and other risks
is included in Sohu's annual report on Form 20-F for the year ended
December 31, 2020, and other filings
with and information furnished to the Securities and Exchange
Commission.
Conference Call and Webcast
Sohu's management team will host a conference call at
7:30 a.m. U.S. Eastern Time,
May 14, 2021 (7:30 p.m. Beijing/Hong
Kong time, May 14, 2021)
following the quarterly results announcement. Participants can
register for the conference call by navigating to
http://apac.directeventreg.com/registration/event/5617318. Once
preregistration has been completed, participants will receive
dial-in numbers, an event passcode, and a unique registrant ID.
To join the conference, please dial the number you receive,
enter the event passcode followed by your unique registrant ID, and
you will be joined to the conference instantly. Please dial in 10
minutes before the call is scheduled to begin.
A telephone replay of the call will be available after the
conclusion of the conference call at 10:30
a.m. Eastern Time May 14 through May
21, 2021. The dial-in details for the telephone replay
are:
|
International:
|
+1-646-254-3697
|
|
Passcode:
|
5617318
|
The live Webcast and archive of the conference call will be
available on the Investor Relations section of Sohu's Website at
http://investors.sohu.com/.
About Sohu.com
Sohu.com Limited (NASDAQ: SOHU) is China's premier online brand and indispensable
to the daily life of millions of Chinese, providing a network of
web properties and community based/web 2.0 products which offer the
vast Sohu user community a broad array of choices regarding
information, entertainment and communication. Sohu has built one of
the most comprehensive matrices of Chinese language web properties
and proprietary search engines, consisting of the mass portal and
leading online media destination www.sohu.com; developer and
operator of online games www.changyou.com/en/; interactive
search engine www.sogou.com; and online video website tv.sohu.com.
Sohu's corporate services consist of online brand advertising on
Sohu's matrix of websites as well as bid listing and home page on
its in-house developed search directory and engine. Sohu also
provides multiple news and information services on mobile
platforms, including Sohu News App and the mobile news portal
m.sohu.com. Sohu's online game subsidiary Changyou develops and
operates a diverse portfolio of PC and mobile games, such as
Tian Long Ba Bu ("TLBB"), one of the
most popular PC games in China.
Changyou also owns and operates the 17173.com Website, a game
information portal in China.
Sohu's online search subsidiary Sogou (NYSE: SOGO) has grown to
become the second largest search engine by mobile queries in
China. It also owns and operates
Sogou Input Method, the largest Chinese language input software.
Sohu, established by Dr. Charles
Zhang, one of China's
internet pioneers, is in its twenty-fifth year of operation.
For investor and media inquiries, please contact:
In China:
|
Ms. Pu
Huang
|
|
Sohu.com
Limited
|
|
Tel:
|
+86 (10)
6272-6645
|
|
E-mail:
|
ir@contact.sohu.com
|
In the United
States:
|
Ms. Linda
Bergkamp
|
|
Christensen
|
|
Tel:
|
+1 (480)
614-3004
|
|
E-mail:
|
lbergkamp@christensenir.com
|
|
SOHU.COM
LIMITED
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(UNAUDITED, IN
THOUSANDS EXCEPT PER SHARE AMOUNTS)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
Mar. 31,
2021
|
|
Dec. 31,
2020
|
|
Mar. 31,
2020
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Brand advertising
|
$
|
30,741
|
$
|
41,810
|
$
|
25,621
|
|
|
Online games
|
|
176,495
|
|
196,063
|
|
133,360
|
|
|
Others
|
|
14,857
|
|
15,362
|
|
19,819
|
|
|
Total
revenues
|
|
222,093
|
|
253,235
|
|
178,800
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues:
|
|
|
|
|
|
|
|
|
Brand advertising (includes share-based compensation
expense of $19, $-59, and $-40,
respectively)
|
|
24,532
|
|
28,836
|
|
25,519
|
|
|
Online games (includes share-based compensation
expense of $77, $79, and $161,
respectively)
|
|
18,560
|
|
19,154
|
|
28,389
|
|
|
Others
|
|
3,784
|
|
5,086
|
|
3,798
|
|
|
Total cost of
revenues
|
|
46,876
|
|
53,076
|
|
57,706
|
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
|
175,217
|
|
200,159
|
|
121,094
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Product development
(includes share-based
compensation expense of $1,051, $966, and
$1,816,
respectively)
|
|
69,319
|
|
65,671
|
|
58,413
|
|
|
Sales and marketing
(includes share-based
compensation expense of $59, $-95, and
$-36,
respectively)
|
|
36,988
|
|
51,945
|
|
34,623
|
|
|
General and administrative
(includes share-based
compensation expense of $1,093, $459, and
$1,395,
respectively)
|
|
18,127
|
|
15,696
|
|
12,180
|
|
|
Total operating
expenses
|
|
124,434
|
|
133,312
|
|
105,216
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
50,783
|
|
66,847
|
|
15,878
|
|
|
|
|
|
|
|
|
|
|
Other income,
net
|
|
3,882
|
|
1,738
|
|
5,676
|
|
|
Interest
income
|
|
3,861
|
|
2,670
|
|
1,383
|
|
|
Interest
expense
|
|
(2,511)
|
|
(1,176)
|
|
(2,275)
|
|
|
Exchange
difference
|
|
(1,304)
|
|
(2,080)
|
|
494
|
|
|
Income before income
tax expense
|
|
54,711
|
|
67,999
|
|
21,156
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
23,177
|
21,416
|
14,562
|
|
|
Net income from
continuing operations
|
|
31,534
|
|
46,583
|
|
6,594
|
|
|
Net income/(loss)
from discontinued operations, net of
tax[6,7]
|
|
52,252
|
|
(9,212)
|
|
(31,708)
|
|
|
Net
income/(loss)
|
|
83,786
|
|
37,371
|
|
(25,114)
|
|
|
|
|
|
|
|
|
|
|
Less: Net
income/(loss) from continuing operations
attributable to the noncontrolling interest
shareholders
|
|
(1)
|
|
2
|
|
15,856
|
|
|
Less: Net
income/(loss) from discontinued
operations attributable to the noncontrolling interest
shareholders
|
|
34,591
|
|
(6,119)
|
|
(20,864)
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
from continuing operations
attributable to Sohu.com Limited
|
|
31,535
|
|
46,581
|
|
(9,262)
|
|
|
Net income/(loss)
from discontinued operations
attributable to Sohu.com Limited
|
|
17,661
|
|
(3,093)
|
|
(10,844)
|
|
|
Net income/(loss)
attributable to Sohu.com Limited
|
|
49,196
|
|
43,488
|
|
(20,106)
|
|
|
|
|
|
|
|
|
|
|
Basic net
income/(loss) from continuing operations per
share/ADS attributable to Sohu.com Limited[8]
|
$
|
0.80
|
$
|
1.18
|
$
|
(0.24)
|
|
|
Basic net
income/(loss) from discontinued operations
per share/ADS attributable to Sohu.com Limited
|
$
|
0.45
|
$
|
(0.08)
|
$
|
(0.28)
|
|
|
Basic net
income/(loss) per share/ADS attributable to
Sohu.com Limited
|
$
|
1.25
|
$
|
1.10
|
$
|
(0.51)
|
|
|
Shares/ADSs used in
computing basic net income/(loss)
per share/ADS attributable to Sohu.com Limited
|
|
39,509
|
|
39,508
|
|
39,270
|
|
|
|
|
|
|
|
|
|
|
Diluted net
income/(loss) from continuing operations
per share/ADS attributable to Sohu.com Limited
|
$
|
0.80
|
$
|
1.18
|
$
|
(0.24)
|
|
|
Diluted net
income/(loss) from discontinued operations
per share/ADS attributable to Sohu.com Limited
|
$
|
0.44
|
$
|
(0.08)
|
$
|
(0.28)
|
|
|
Diluted net
income/(loss) per share/ADS attributable to
Sohu.com Limited
|
$
|
1.24
|
$
|
1.10
|
$
|
(0.52)
|
|
|
Shares/ADSs used in
computing diluted net
income/(loss) per share/ADS attributable to Sohu.com
Limited
|
|
39,509
|
|
39,508
|
|
39,270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[6] On
September 29, 2020, the Company entered into a Share Purchase
Agreement with Tencent's subsidiary TitanSupernova Limited
("Parent"),
pursuant to which the Company's wholly-owned subsidiary Sohu.com
(Search) Limited agreed to sell all of the Sogou Class A ordinary
shares and
Sogou Class B ordinary shares owned by it to Parent at a purchase
price of $9.00 per share. In view of the Share Purchase Agreement,
the results
of operations for Sogou have been excluded from the Company's
results from continuing operations in the condensed consolidated
statements of
operations for the third quarter and are presented in separate line
items as discontinued operations. Retrospective adjustments to the
historical
statements have been made in order to provide a consistent basis of
comparison. Unless indicated otherwise, results presented are
related to
continuing operations only.
|
|
[7] For
the first quarter of 2021, the net income from discontinued
operations included a $77 million unrealized gain from a change in
the fair value of
Sogou's equity investment in Zhihu Inc. (NYSE: ZH), which completed
an IPO in March 2021.
|
|
[8] Each
share represents one ADS.
|
|
SOHU.COM
LIMITED
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
|
(UNAUDITED, IN
THOUSANDS)
|
|
|
|
|
|
|
|
|
|
As of Mar. 31,
2021
|
|
As of Dec. 31,
2020
|
|
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
243,669
|
$
|
217,057
|
|
|
Restricted
cash
|
|
479,820
|
|
330,791
|
|
|
Short-term
investments
|
|
91,491
|
|
100,745
|
|
|
Accounts receivable, net
|
|
83,220
|
|
87,521
|
|
|
Prepaid and other
current assets
|
|
110,070
|
|
106,590
|
|
|
Assets held for sale (current)
[9]
|
|
1,399,977
|
|
1,412,168
|
|
|
Total current
assets
|
|
2,408,247
|
|
2,254,872
|
|
|
Long-term
investments, net
|
|
29,624
|
|
31,634
|
|
|
Fixed assets,
net
|
|
330,449
|
|
337,674
|
|
|
Goodwill
|
|
48,320
|
|
48,434
|
|
|
Intangible assets,
net
|
|
11,855
|
|
4,842
|
|
|
Restricted time
deposits
|
|
100,802
|
|
101,519
|
|
|
Prepaid non-current
assets
|
|
-
|
|
1,006
|
|
|
Other
assets
|
|
40,972
|
|
42,140
|
|
|
Total
assets
|
$
|
2,970,269
|
$
|
2,822,121
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts payable
|
$
|
96,460
|
$
|
107,611
|
|
|
Accrued liabilities
|
|
147,242
|
|
157,513
|
|
|
Receipts in advance and deferred revenue
|
|
53,209
|
|
52,055
|
|
|
Accrued salary and benefits
|
|
95,301
|
|
100,826
|
|
|
Taxes payable
|
|
25,133
|
|
28,006
|
|
|
Short-term bank loans
|
|
468,550
|
|
315,550
|
|
|
Other short-term liabilities
|
|
109,032
|
|
106,171
|
|
|
Liabilities held for sale (current) [9]
|
|
353,182
|
|
416,998
|
|
|
Total current
liabilities
|
$
|
1,348,109
|
$
|
1,284,730
|
|
|
|
|
|
|
|
|
Long-term accounts
payable
|
|
5,226
|
|
3,202
|
|
|
Long-term bank
loans
|
|
92,000
|
|
92,000
|
|
|
Long-term tax
liabilities
|
|
411,805
|
|
406,353
|
|
|
Other long-term
liabilities
|
|
4,516
|
|
3,855
|
|
|
Total long-term
liabilities
|
$
|
513,547
|
$
|
505,410
|
|
|
Total liabilities
|
$
|
1,861,656
|
$
|
1,790,140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
|
|
Sohu.com Limited shareholders' equity
|
|
391,279
|
|
347,369
|
|
|
Noncontrolling interest
|
|
717,334
|
|
684,612
|
|
|
Total shareholders' equity
|
$
|
1,108,613
|
$
|
1,031,981
|
|
|
|
|
|
|
|
|
Total liabilities and
shareholders' equity
|
$
|
2,970,269
|
$
|
2,822,121
|
|
|
|
|
|
|
|
|
|
[9] On
September 29, 2020, the Company has entered into a Share Purchase
Agreement with Tencent's subsidiary TitanSupernova Limited
("Parent"), pursuant to which the Company's wholly-owned subsidiary
Sohu.com (Search) Limited has agreed to sell all of the Sogou Class
A o
rdinary share and Sogou Class B ordinary shares owned by it to
Parent at a purchase price of $9.00 per share. Sogou related assets
and liabilities
were classified as assets/liabilities held for sale.
|
|
SOHU.COM
LIMITED
|
|
|
RECONCILIATIONS OF
NON-GAAP RESULTS OFOPERATIONS MEASURES TO THE NEAREST
COMPARABLE GAAP MEASURES
|
|
|
(UNAUDITED, IN
THOUSANDS EXCEPT PER SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
Mar. 31, 2021
|
|
Three Months Ended
Dec. 31, 2020
|
|
Three Months Ended
Mar. 31, 2020
|
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19
|
(a)
|
|
|
|
|
(59)
|
(a)
|
|
|
|
|
(40)
|
(a)
|
|
|
|
Brand advertising
gross profit
|
$
|
6,209
|
$
|
19
|
$
|
6,228
|
$
|
12,974
|
$
|
(59)
|
$
|
12,915
|
$
|
102
|
$
|
(40)
|
$
|
62
|
|
|
Brand advertising
gross margin
|
|
20%
|
|
|
|
20%
|
|
31%
|
|
|
|
31%
|
|
0%
|
|
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
77
|
(a)
|
|
|
|
|
79
|
(a)
|
|
|
|
|
161
|
(a)
|
|
|
|
Online games gross
profit
|
$
|
157,935
|
$
|
77
|
$
|
158,012
|
$
|
176,909
|
$
|
79
|
$
|
176,988
|
$
|
104,971
|
$
|
161
|
$
|
105,132
|
|
|
Online games gross
margin
|
|
89%
|
|
|
|
90%
|
|
90%
|
|
|
|
90%
|
|
79%
|
|
|
|
79%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
(a)
|
|
|
|
|
-
|
(a)
|
|
|
|
|
-
|
(a)
|
|
|
|
Others gross
profit
|
$
|
11,073
|
$
|
-
|
$
|
11,073
|
$
|
10,276
|
$
|
-
|
$
|
10,276
|
$
|
16,021
|
$
|
-
|
$
|
16,021
|
|
|
Others gross
margin
|
|
75%
|
|
|
|
75%
|
|
67%
|
|
|
|
67%
|
|
81%
|
|
|
|
81%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96
|
(a)
|
|
|
|
|
20
|
(a)
|
|
|
|
|
121
|
(a)
|
|
|
|
Gross
profit
|
$
|
175,217
|
$
|
96
|
$
|
175,313
|
$
|
200,159
|
$
|
20
|
$
|
200,179
|
$
|
121,094
|
$
|
121
|
$
|
121,215
|
|
|
Gross
margin
|
|
79%
|
|
|
|
79%
|
|
79%
|
|
|
|
79%
|
|
68%
|
|
|
|
68%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
$
|
124,434
|
$
|
(2,203)
|
(a) $
|
122,231
|
$
|
133,312
|
$
|
(1,330)
|
(a) $
|
131,982
|
$
|
105,216
|
$
|
(3,175)
|
(a) $
|
102,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,299
|
(a)
|
|
|
|
|
1,350
|
(a)
|
|
|
|
|
3,296
|
(a)
|
|
|
|
Operating
profit
|
$
|
50,783
|
$
|
2,299
|
$
|
53,082
|
$
|
66,847
|
$
|
1,350
|
$
|
68,197
|
$
|
15,878
|
$
|
3,296
|
$
|
19,174
|
|
|
Operating
margin
|
|
23%
|
|
|
|
24%
|
|
26%
|
|
|
|
27%
|
|
9%
|
|
|
|
11%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
expense
|
$
|
23,177
|
$
|
(618)
|
(c,d)$
|
22,559
|
$
|
21,416
|
$
|
(8)
|
(c,d)$
|
21,408
|
$
|
14,562
|
$
|
(2,195)
|
(c,d)$
|
12,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,299
|
(a)
|
|
|
|
|
1,350
|
(a)
|
|
|
|
|
3,296
|
(a)
|
|
|
|
|
|
|
1,677
|
(c)
|
|
|
|
|
3,547
|
(c)
|
|
|
|
|
(855)
|
(c)
|
|
|
|
|
|
|
1,178
|
(d)
|
|
|
|
|
1,190
|
(d)
|
|
|
|
|
1,910
|
(d)
|
|
|
|
Net income before
non-controlling
interest
|
$
|
31,534
|
$
|
5,154
|
$
|
36,688
|
$
|
46,583
|
$
|
6,087
|
$
|
52,670
|
$
|
6,594
|
$
|
4,351
|
$
|
10,945
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,299
|
(a)
|
|
|
|
|
1,350
|
(a)
|
|
|
|
|
3,296
|
(a)
|
|
|
|
|
|
|
-
|
(b)
|
|
|
|
|
-
|
(b)
|
|
|
|
|
(2,446)
|
(b)
|
|
|
|
|
|
|
1,677
|
(c)
|
|
|
|
|
3,547
|
(c)
|
|
|
|
|
(855)
|
(c)
|
|
|
|
|
|
|
1,178
|
(d)
|
|
|
|
|
1,190
|
(d)
|
|
|
|
|
1,910
|
(d)
|
|
|
|
Net income/(loss)
from continuing
operations attributable to Sohu.com
Limited for diluted net loss per share/ADS
|
$
|
31,535
|
$
|
5,154
|
$
|
36,689
|
$
|
46,581
|
$
|
6,087
|
$
|
52,668
|
$
|
(9,593)
|
$
|
1,905
|
$
|
(7,688)
|
|
|
Net income/(loss)
from discontinued
operations attributable to Sohu.com
Limited for dilutednet loss per
share/ADS[10]
|
$
|
17,556
|
$
|
405
|
$
|
17,961
|
$
|
(3,093)
|
$
|
425
|
$
|
(2,668)
|
$
|
(10,848)
|
$
|
162
|
$
|
(10,686)
|
|
|
Net income/( loss)
attributable to
Sohu.com Limited for diluted net
loss per share/ADS
|
$
|
49,091
|
$
|
5,559
|
$
|
54,650
|
$
|
43,488
|
$
|
6,512
|
$
|
50,000
|
$
|
(20,441)
|
$
|
2,067
|
$
|
(18,374)
|
|
|
Diluted net
income/(loss) from
continuing operations per
share/ADS attributable to Sohu.com
Limited
|
$
|
0.80
|
|
|
$
|
0.93
|
$
|
1.18
|
|
|
$
|
1.33
|
$
|
(0.24)
|
|
|
$
|
(0.20)
|
|
|
Diluted net
income/(loss) from
discontinued operations per
share/ADS attributable to Sohu.com
Limited
|
$
|
0.44
|
|
|
$
|
0.45
|
$
|
(0.08)
|
|
|
$
|
(0.06)
|
$
|
(0.28)
|
|
|
$
|
(0.27)
|
|
|
Diluted net
income/(loss) per
share/ADS attributable to Sohu.com
Limited
|
$
|
1.24
|
|
|
$
|
1.38
|
$
|
1.10
|
|
|
$
|
1.27
|
$
|
(0.52)
|
|
|
$
|
(0.47)
|
|
|
Shares/ADSs used in
computing
diluted net income/(loss) per
share/ADS attributable to Sohu.com
Limited
|
|
39,509
|
|
|
|
39,509
|
|
39,508
|
|
|
|
39,508
|
|
39,270
|
|
|
|
39,270
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) To eliminate
the impact of share-based awards as measured using the fair value
method. This adjustment does not have an impact on income tax
expense.
|
|
|
(b) To adjust Sohu's
economic interests in Changyou attributable to the above non-GAAP
adjustments. This adjustment does not have an impact on income tax
expense.
|
|
|
(c) To adjust
for a change in the fair value of the Company's investment in
Hylink and the income tax effect.
|
|
|
(d) To adjust for the
effect of the U.S. TCJA.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
[10] On
September 29, 2020, the Company entered into a Share Purchase
Agreement with Tencent's subsidiary TitanSupernova Limited
("Parent"), pursuant to which the Company's wholly-owned
subsidiary
Sohu.com (Search) Limited has agreed to sell all of the Sogou Class
A ordinary share and Sogou Class B ordinary shares owned by it to
Parent at a purchase price of $9.00 per share. In view of the
Share
Purchase Agreement, the results of operations for Sogou have been
excluded from the Company's results from continuing operations in
the condensed consolidated statements of operations for the
third
quarter and are presented in separate line items as discontinued
operations. Retrospective adjustments to the historical statements
have been made in order to provide a consistent basis of
comparison.
Unless indicated otherwise, results presented are related to
continuing operations only.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/sohucom-reports-first-quarter-2021-unaudited-financial-results-301291461.html
SOURCE Sohu.com Ltd.
