Qihoo 360 Reports Fourth Quarter and Fiscal Year 2012 Unaudited Financial Results

BEIJING, March 5, 2013 /PRNewswire/ -- Qihoo 360 Technology Co. Ltd. ("Qihoo 360" or the "Company") (NYSE: QIHU), a leading Internet company in China, today reported its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2012.

Fourth Quarter Financial Highlights[1]

  • Revenues were $103.0 million, a 65% increase from $62.3 million in the fourth quarter of 2011.
  • Net income attributable to Qihoo 360 was $12.8 million, compared to $15.0 million in the fourth quarter of 2011.
  • Net income attributable to Qihoo 360 excluding share-based compensation (non-GAAP)[1] was $26.7 million, compared to $24.3 million in the fourth quarter of 2011.
  • Diluted earnings per ADS[2] ("EPADS") attributable to Qihoo 360 was $0.10, compared to $0.13 in the same period last year. 
  • Diluted EPADS attributable to Qihoo 360 excluding share-based compensation (non-GAAP)[1] was $0.22, compared to $0.20 in the same period last year.

Fourth Quarter Operating Metrics

  • Total monthly active users of Qihoo 360's products and services reached a record 456 million in December 2012, compared to 402 million in December 2011[3].
  • User penetration of Qihoo 360's products was 96.5% in December 2012, compared to 93.8% in December 2011[3].
  • Total smartphone users of Qihoo 360's primary mobile security product [4] reached approximately 207 million in December 2012, compared to 53 million in December 2011.
  • Monthly active users of Qihoo 360's browsers reached a record 310 million in December 2012, compared to 255 million in December 2011[3].
  • User penetration of Qihoo 360's browsers reached a record 65.6% in December 2012, compared to 59.5% in December 2011[3].
  • Average daily unique visitors to the 360 Personal Start-up Page and its sub-pages were 91 million in the fourth quarter of 2012, compared to 65 million in the fourth quarter of 2011.
  • Average daily clicks on Qihoo 360's Personal Start-up Page and its sub-pages were approximately 450 million in the fourth quarter of 2012, compared to 235 million in the fourth quarter of 2011.
  • Paying users of Qihoo 360's web game platform were approximately 238,000 in December 2012, compared to 109,000 in December 2011.

Fiscal Year 2012 Highlights[1]

  • Revenues were $329.0 million, an increase of 96% from $167.9 million in 2011.
  • Net income attributable to Qihoo 360 was $46.8 million, an increase of 200% from $15.6 million in 2011.
  • Net income attributable to Qihoo 360 excluding share-based compensation ("non-GAAP")[1] was $97.4 million, an increase of 53% from $63.6 million in 2011.
  • Diluted EPADS[2] attributable to Qihoo 360 were $0.38, compared to $0.14 in 2011. 
  • Diluted EPADS attributable to Qihoo 360 excluding share-based compensation (non-GAAP)[1] were $0.80 compared to $0.55 in 2011.

[1]

Non-GAAP measures and related reconciliations to GAAP measures are described in the accompanying sections titled "About Non-GAAP Financial Measures" and "Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Measures" at the end of the press release.

[2]

American Depositary Shares, which are traded on the NYSE. Every two ADSs represent three Class A ordinary shares of the Company.

[3]

User and market penetration data is based on data from iResearch as of December 2012.

[4]

Referring to 360 Mobile Safe, the Company's primary mobile security product.

"We are very pleased to report our eighth consecutive quarter of substantive growth. We delivered another full year of strong operating results and continued to outperform the industry, despite a challenging macro environment," commented Hongyi Zhou, Chairman and Chief Executive Officer of Qihoo 360.  "We have set several new records in our financial and operating metrics, exceeding our internal expectations. Monthly active users of our PC-based products and services, which cover over 96% of the Chinese PC Internet population, increased to 456 million at the end of 2012. We have also established substantial leadership in mobile security and the number of Chinese smartphone users of 360 Mobile Safe, our key mobile security product, has reached 207 million."

"Our company-wide focus on product development and technology innovation, attention to customer satisfaction and superior execution results continue to drive our success. A major milestone during the fourth quarter of 2012 was the launch of our search engine monetization effort through both an internal monetization system and external partnership. We believe we are well positioned to capture a significant portion of the search market and help shape the competitive landscape in China, which will have a long-lasting transformative effect on our business model," concluded Mr. Zhou.

Mr. Xiangdong Qi, President of Qihoo 360, added, "We are thrilled to have surpassed our revenue guidance and internal profitability targets for both the fourth quarter and the full year. With 80% year-over-year growth, our online advertising business continued to gain market share in 2012, supported by a strong increase in our user activities, as well as our successful initiatives to deepen our monetization process. Our Internet value-added services also outpaced the market with revenue growth of 137% year-over-year driven by strong momentum in the number of paying web game users. In 2012, we made proactive investments in product and technology development to further our leadership position and expand our footprint, particularly in mobile Internet and search technology where we see tremendous opportunity for future expansion. We believe these investments will build on our strong foundation, support sustainable growth for our company and drive long-term shareholder value."

Fourth Quarter 2012 Results

Revenues

Revenues were $103.0 million, representing an increase of 65% from $62.3 million in the fourth quarter of 2011 and an increase of 23% from $84.0 million in the third quarter of 2012. The year-over-year and quarter-over-quarter increases in revenues were mainly due to continued robust growth in both online advertising and Internet value-added services.

Online advertising revenues were $66.9 million, up 49% from the same period last year and 15% from the prior quarter. The healthy year-over-year and quarter-over-quarter growth was primarily driven by increased monetization of user activities among the Company's key products, such as the 360 browsers and Personalized Start-up Pages, despite more modest macro-level growth. Growth in online advertising revenues were partially offset by the contraction of search referral revenue from third party search engines due to the launch of Qihoo 360's proprietary search service in August 2012.

Internet value-added service revenues, which are mainly derived from web game operations, were $35.2 million, up 105% from the same period last year and 38% from the prior quarter. The strong year-over-year and quarter-over-quarter increases were mainly driven by solid growth in the Company's paying game user base and expanded game portfolio.        

Cost of Revenues

Cost of revenues were $10.6 million, compared to $7.1 million in the fourth quarter of 2011 and $7.9 million in the third quarter of 2012, representing increases of 50% and 35%, respectively.

Operating Expenses

Operating expenses were $82.6 million, compared to $40.4 million in the fourth quarter of 2011 and $63.9 million in the third quarter of 2012. Operating expenses excluding share-based compensation (non-GAAP) were $68.6 million, compared to $31.2 million in the fourth quarter of 2011 and $52.6 million in the prior quarter.

The year-over-year and sequential increases in non-GAAP operating expenses were mainly driven by increased personnel-related expenses, bandwidth expenses, equipment depreciation expenses and marketing expenses, as Qihoo 360 continued to strengthen its technology and product development capabilities, and expanded its business initiatives.

Operating Income

Operating income was $12.1 million, compared to $14.8 million in the fourth quarter of 2011 and operating income of $12.2 million in the prior quarter.   

Operating income excluding share-based compensation (non-GAAP) was $26.1 million, compared to $24.1 million in the fourth quarter of 2011 and $23.5 million in the prior quarter.

Operating margin was 11.8%, compared to 23.8% in the fourth quarter of 2011 and 14.5% in the prior quarter.

Operating margin excluding share-based compensation (non-GAAP) was 25.4%, compared to 38.6% in the fourth quarter of 2011 and 28.0% in the prior quarter.

The year-over-year and sequential decline in non-GAAP operating margin was due to increased expenses in abovementioned areas related to new business initiatives in search and mobile Internet.

Net Income

Net income attributable to Qihoo 360 was $12.8 million, compared to $15.0 million in the fourth quarter of 2011 and $12.9 million in the prior quarter.

Net income attributable to Qihoo 360 excluding share-based compensation (non-GAAP) was $26.7 million, compared to $24.3 million in the fourth quarter of 2011 and $24.2 million in the prior quarter.

Net Margin

Net margin was 12.4%, compared to 24.1% in the same period last year, and 15.4% in the prior quarter.

Net margin excluding share-based compensation (non-GAAP) was 26.0%, compared to 38.9% in the same period last year and 28.8% in the prior quarter. The year-over-year and sequential decline in non-GAAP net margin was also due to increased expenses in abovementioned areas related to new business initiatives in search and mobile Internet.

Diluted Earnings per ADS

Diluted EPADS for the fourth quarter of 2012 was $0.10, and diluted EPADS for the fourth quarter of 2012 excluding share-based compensation (non-GAAP) was $0.22. Both GAAP and non-GAAP weighted average ADS used in computing diluted EPADS was 123.6 million.

Cash Flows and Balance Sheet

Net cash generated from operations in the fourth quarter of 2012 was $53.1 million, compared to $40.2 million in the same period last year and $20.7 million in the prior quarter. Cash capital expenditures were $21.4 million.  As of December 31, 2012, the Company had cash and cash equivalents of $380.7 million.

Fiscal Year 2012 Results

Revenues

Revenues were $329.0 million, representing an increase of 96% from $167.9 million in 2011. The significant year-over-year increase in revenues was mainly due to continued robust growth in both online advertising and Internet value-added services.

Online advertising revenues were $221.5 million, representing an increase of 80% from $123.0 million in 2011. The strong growth was primarily driven by further market penetration of the Company's key products, such as the 360 browsers and the 360 Personalized Start-up Pages, increased user activity, as well as increased monetization efforts, despite the relatively challenging macro environment.

Internet value-added service revenues, which are mainly derived from web game operations, were $103.3 million, representing an increase of 137% from $43.6 million in 2011.  The strong growth was mainly driven by continued expansion of the Company's game platform and solid growth of game paying user base.

Cost of Revenues

Cost of revenues was $32.8 million, compared with $18.9 million in 2011, representing an increase of 73%.

Operating Expenses

Operating expenses were $250.1 million, compared with $130.9 million in 2011. Operating expenses excluding share-based compensation (non-GAAP) were $199.5 million, compared with $83.0 million in 2011.

Operating Income

Operating income was $48.7 million, compared with $18.1 million in 2011.   

Operating income excluding share-based compensation (non-GAAP) was $99.3 million, representing an increase of 50% from $66.1 million in 2011.

Operating margin was 14.8%, compared with 10.8% in 2011.

Operating margin excluding share-based compensation (non-GAAP) was 30.2%, compared with 39.4% in 2011. The year-over-year decline in non-GAAP operating margin was primarily due to increased expenses related to new business initiatives in search and mobile Internet.

Net Income

Net income attributable to Qihoo 360 was $46.8 million, compared with $15.6 million in 2011.

Net income attributable to Qihoo 360 excluding share-based compensation (non-GAAP) was $97.4 million, representing an increase of 53% from $63.6 million in 2011.

Net Margin

Net margin was 14.2%, compared with 9.3% in 2011.

Net margin excluding share-based compensation (non-GAAP) was 29.6%, compared with 37.9% in 2011. The year-over-year decline in non-GAAP net margin was also due to increased expenses related to new business initiatives in search and mobile Internet.

Diluted Earnings per ADS

Diluted EPADS were $0.38, and diluted EPADS excluding share-based compensation (non-GAAP) were $0.80, compared to $0.55 in 2011. Weighted average ADS used in computing diluted EPADS in 2012 was 122.4 million.

Cash Flows and Balance Sheet

Net cash flow generated from operations in 2012 was $117.8 million, compared to $82.3 million in 2011. Cash capital expenditures were $73.9 million. As of December 31, 2012, the Company had cash and cash equivalents of $380.7 million, compared with $343.7 million as of December 31, 2011.

Business Outlook

For the first quarter of 2013, the Company expects revenues to be between $104.5 million and $106.5 million, representing a year-over-year increase of 50.8% - 53.7% and quarter-over-quarter increase of 1.5% - 3.4%. These estimates reflect the Company's current and preliminary view, which is subject to possible material changes.

Conference Call

Qihoo 360's management will host a conference call to discuss the results at 7:30 p.m. Eastern Time on March 5, 2013 (8:30 a.m. Beijing time on March 6, 2013).

The dial-in details for the live conference call are:

US Toll Free Dial In:

+1 866-519-4004

US Toll / International Dial In:

+1 718-354-1231

Hong Kong Dial In:

+852-2475-0994

Passcode:

QIHU

A telephone replay of the call will be available after the conclusion of the conference call at 10:30 p.m. Eastern Time on March 5, 2013 through 08:30 a.m. Eastern Time on March 13, 2013. The dial-in details for the replay are:

International Dial In:

+1 855-452-5696

US Dial In:

+1 646-254-3697

Passcode:

14036100

A live webcast of the conference call will be available on the investor relations section of Qihoo 360's website at: http://corp.360.cn.

About Qihoo 360

Qihoo 360 Technology Co. Ltd. (NYSE: QIHU) is a leading Internet company in China. The Company is also the number one provider of Internet and mobile security products in China as measured by its user base, according to iResearch. Qihoo 360 also provides users with secure access points to the Internet via its market leading web browsers and application stores. The Company has built one of the largest open Internet platforms in China and monetizes its massive user base primarily through online advertising and through Internet value-added services on its open platform.

Forward-looking Statements

This press release contains statements of a forward-looking nature. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward- looking statements by terminology such as "will," "expects," "believes," "anticipates," "intends," "estimates" and similar statements. Among other things, the management's quotations and the "Business Outlook" section contain forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about Qihoo 360 and the industry. Potential risks and uncertainties include, but are not limited to: the Company's ability to continue to innovate and provide attractive products and services to attract and retain users; the Company's ability to keep up with rapid changes in technologies and Internet-enabled devices; the Company's ability to leverage its user base to attract customers for our revenue-generating services; and the Company's dependence on online advertising for a substantial portion of our revenues; and the Company's ability to compete effectively. All information provided in this press release is as of the date of the press release, and Qihoo 360 undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although Qihoo 360 believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Further information regarding risks and uncertainties faced by Qihoo 360 is included in Qihoo 360's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F dated April 19, 2012.

About Non-GAAP Financial Measures

To supplement our financial results presented in accordance with U.S. GAAP, we use non-GAAP financial measure, which is adjusted from results based on U.S. GAAP to exclude share-based compensation expenses. Reconciliations of our non-GAAP financial measures to our U.S. GAAP financial measures are set forth in tables at the end of this earnings release, which provide more details on the non-GAAP financial measures.

Our non-GAAP financial information is provided as additional information to help our investors compare business trends among different reporting periods on a consistent basis and to enhance investors' overall understanding of the historical and current financial performance of our continuing operations and our prospects for the future. Our non-GAAP financial information should be considered in addition to results prepared in accordance with U.S. GAAP, but should not be considered a substitute for or superior to U.S. GAAP results. In addition, our calculation of this non-GAAP financial information may be different from the calculation used by other companies, and therefore comparability may be limited.

For investor and media inquiries, please contact:

Qihoo 360 Technology Co. Ltd.
In China:
Tel: +86 10-5878-1574
E-mail: ir@360.cn

In the U.S.:
The Piacente Group, Inc.
Brandi Floberg or Lee Roth
Tel: (212) 481-2050
E-mail: qihu@tpg-ir.com

 

Qihoo 360 Technology Co. Ltd.

Condensed Consolidated Balance Sheets

(U.S. dollars in thousands, except for shares and per share data)

(Unaudited)


December 31,
2011


December 31,
2012

ASSETS




Current assets:




  Cash and cash equivalents

343,731


380,664

  Restricted Cash

-


1,905

  Trading securities

231


179

     Accounts receivable (net of allowance for doubtful accounts of $68 and
        $213 as of December 31, 2011 and December 31, 2012, respectively)

16,741


23,591

  Prepaid expenses and other current assets

12,808


26,802

  Deferred tax assets - current

858


2,131

Total current assets

374,369


435,272

Property and equipment, net

16,665


126,035

Land use rights, net

-


73,645

Acquired intangible assets, net

7,854


12,310

Goodwill

4,580


4,628

Long-term investments

15,561


27,559

Other noncurrent assets

4,415


9,335

Deferred tax assets - noncurrent

514


745

TOTAL ASSETS

423,958


689,529

LIABILITIES




Current liabilities:




  Accounts payable (including accounts payable of the consolidated




VIEs without recourse to Qihoo 360 Technology Co. Ltd. of




        $5,872 and $7,109 as of December 31, 2011 and December 31, 2012,
        respectively)

5,872


7,109

  Accrued expenses and other current liabilities (including accrued




expenses and other current liabilities of the consolidated VIEs




        without recourse to Qihoo 360 Technology Co. Ltd. of




        $9,469 and $41,636 as of December 31, 2011 and December 31, 2012, 
        respectively)

21,287


168,694

  Deferred revenue-current (including deferred revenue-current of the




        consolidated VIEs without recourse to Qihoo 360 Technology Co. Ltd.
        of $9,831 and $17,520 as of December 31, 2011 and December 31,
       
2012, respectively)

12,089


21,049

     Income tax payable (including income tax payable of the consolidated
        VIEs without recourse to Qihoo 360 Technology Co. Ltd. of $3,635
        and $2,710 as of December 31, 2011 and December 31, 2012,
        respectively)

7,312


6,862





Total current liabilities

46,560


203,714

Deferred tax liabilities - noncurrent

507


790

   Other noncurrent liabilities (including other noncurrent liabilities of the
      consolidated VIEs without recourse to Qihoo 360 Technology Co. Ltd.
      of  $286 and $nil as of December 31, 2011 and December 31, 2012, 
      respectively)

286


-





    Deferred revenue-noncurrent (including deferred revenue-noncurrent of
       the consolidated VIEs without recourse to Qihoo 360 Technology Co.
       Ltd. of $1,589 and $3,242 as of December 31, 2011 and December 31
       2012, respectively)

5,113


6,762





TOTAL LIABILITIES

52,466


211,266

EQUITY




Total Qihoo 360 Technology Co. Ltd. Shareholders' equity

370,853


478,096

Noncontrolling interest

639


167

Total equity

371,492


478,263

TOTAL LIABILITIES AND EQUITY

423,958


689,529

 

 

 

Qihoo 360 Technology Co. Ltd.

Condensed Consolidated Statements of operations

(U.S. dollars in thousands, except for shares and per share data)

(Unaudited)


Three Months Ended


Twelve Months
Ended

Twelve Months
Ended


December 31,
2011

September 30,
2012

December 31,
2012


December 31,
2011

December 31,
2012

Revenues:







  Internet services

62,169

84,028

102,951


166,961

328,882

  Sales of third party anti-virus software

152

7

-


890

150

Total revenues

62,321

84,035

102,951


167,851

329,032

Cost of revenues:







  Internet services

7,042

7,901

10,649


18,680

32,762

  Sales of third party anti-virus software

38

3

-


238

40

Total cost of revenues

7,080

7,904

10,649


18,918

32,802

Subsidy income

8

-

2,428


151

2,570

Operating expenses:







  Selling and marketing

10,251

13,909

18,616


46,836

58,178

  General and administrative

6,772

8,535

10,450


19,054

34,295

  Product development(a)

23,392

41,475

52,169


65,049

156,269

Impairment loss on intangible assets

-

-

1,348


-

1,348

Total operating expenses

40,415

63,919

82,583


130,939

250,090








Income from operations

14,834

12,212

12,147


18,145

48,710

Interest income, net

1,185

1,699

1,658


2,541

6,715

Other  income (expense)

-

54

773


(3)

1,243

Exchange gain

2,719

1,102

966


6,294

49

Impairment  loss on long-term investment

(902)

(157)

(2,145)


(902)

(2,302)

Change on fair value of trading securities

(63)

(44)

6


(220)

(52)

Gain on disposal of  subsidiaries and
   long-term investments

-

1,282

2,024


-

8,332

Income before income tax expense and
   loss from equity method investments

17,773

16,148

15,429


25,855

62,695








Income tax expense

(3,028)

(1,497)

(1,439)


(10,874)

(11,379)

Loss from equity method investments

(392)

(1,932)

(1,355)


(437)

(4,845)








Net income

14,353

12,719

12,635


14,544

46,471








Less: Net loss attributable to noncontrolling interest

681

212

117


1,059

275

Net income attributable to







  Qihoo 360 Technology Co. Ltd.

15,034

12,931

12,752


15,603

46,746

Accretion of Series A convertible participating
   redeemable preferred shares

-

-

-


203

-

Accretion of Series B convertible participating
   redeemable preferred shares

-

-

-


313

-

Accretion of Series C convertible participating  
   redeemable preferred shares

-

-

-


255

-

Net income attributable to ordinary shareholders

15,034

12,931

12,752


14,832

46,746

Net income   per ordinary share-basic

0.09

0.07

0.07


0.10

0.26

Net income  per ordinary share-diluted

0.08

0.07

0.07


0.09

0.25








Weighted average shares used in calculating
   net income per ordinary share- basic (in millions)(b)

176

176

177


149

176

Weighted average shares used in calculating
   net income per ordinary share-diluted (in millions)(b)

180

183

185


173

184


 

(a): From Q3 2011, the Company changed the "Research and development expenses" to "Product development expenses" in the statements of operations.
This is mainly because the business has been growing rapidly and along with the development of new products, the Company has devoted more resources
in enhancing its existing products, by which the Company believes using "Product development expenses" will better reflect the nature of such expenses.


The Product development expenses include costs associated with new product development and enhancement for existing products, such as salaries and
benefits, including share-based compensation expenses, costs of bandwidth and utilities, license and technical service fees, and depreciation of equipment
and amortization of acquired intangible assets.


(b): 3 Ordinary Shares = 2 ADSs

Qihoo 360 Technology Co. Ltd.

Condensed Consolidated Statements of Cash Flows

(U.S. dollars in thousands)

(Unaudited)



 

Three-months period ended


Twelve months period ended



December 31,  
2011

December 31,  
2012


December 31,
2011

December 31,
2012

Cash flows from operating activities:






Net income

14,353

12,635


14,544

46,471

Share-based compensation

9,226

13,976


47,989

50,605

Depreciation and amortization

1,635

7,074


4,227

16,597

Gain on disposal of fixed assets

-

(838)


-

(838)

Loss on equity method investment

392

1,354


437

4,844

Gain on disposal of subsidiaries and long-term investments

-

(2,024)


-

(8,332)

Loss from impairment of intangible assets

87

1,348


87

1,348

Impairment on long-term investment

902

2,145


902

2,302

Unrealized holding loss (gain) on trading securities

63

(6)


220

52

Provision of allowance for doubtful accounts

-

172


51

454

Changes in operating assets and liabilities

13,504

17,291


13,846

4,285

Net cash provided by operating activities

40,162

53,127


82,303

117,788

Cash flows from investing activities:






Purchase of property and equipment and intangible assets

(7,770)

(21,357)


(17,777)

(73,869)

Payment for the purchase of other assets

(463)

-


(1,571)

(459)

Consideration paid in connection with business acquisition

(815)

-


(487)

258

Payment for investment

(5,971)

(3,354)


(14,976)

(24,241)

Cash collected from sale of a subsidiary

-

4,004


-

13,847

Proceeds from disposal of property and equipment and intangible assets

-

1,103


-

2,126

Increase in restricted cash

-

(1,902)


-

(1,902)

Dividends received by company

-

-


-

313

Net cash used in investing activities

(15,019)

(21,506)


(34,811)

(83,927)







Cash flows from financing activities:






Proceeds from initial public offering ("IPO")

-

-


234,312

-

Capital contribution from noncontrolling interest

-

1


1,559

36

Payment for IPO cost

(1,320)

-


(2,611)

-

Prepayment for share repurchase

-

-


-

(139)

Proceeds from exercise of stock option

20

-


20

2,089

Net cash (used in)/provided by financing activities

(1,300)

1


233,280

1,986







Effect of exchange rate changes

871

1,019


2,454

1,086

INCREASE  IN CASH

24,714

32,641


283,226

36,933

CASH, BEGINNING OF PERIOD

319,017

348,023


60,505

343,731

CASH, END OF PERIOD

343,731

380,664


343,731

380,664


Reconciliations of Non-GAAP Financial Measures to Comparable GAAP Measures


 

Three Months Ended December 31, 2011


 

Three Months Ended September 30, 2012


 

Three Months Ended December 31, 2012


GAAP

Adjustment(c)

Non-GAAP


GAAP

Adjustment(c)

Non-GAAP


GAAP

Adjustment(c)

Non-GAAP













Operating expenses

$40,415

($9,219)

$31,196


$63,919

($11,299)

$52,620


$82,583

($13,976)

$68,607













Income from operations

$14,834

$9,226

$24,060


$12,212

$11,299

$23,511


$12,147

$13,976

$26,123

Operating margin

23.8%


38.6%


14.5%


28.0%


11.8%


25.4%













Net income attributable
   to Qihoo 360 Technology
   Co. Ltd.

$15,034

$9,226

$24,260


$12,931

$11,299

$24,230


$12,752

$13,976

$26,728

Net margin

24.1%


38.9%


15.4%


28.8%


12.4%


26.0%

Diluted earnings per ADS

$0.13


$0.20


$0.11


$0.20


$0.10


$0.22














Twelve Months Ended December 31, 2011


Twelve Months Ended December 31, 2012



GAAP

Adjustment(c)

Non-GAAP


GAAP

Adjustment(c)

Non-GAAP











Operating expenses

$130,939

($47,973)

$82,966


$250,090

($50,601)

$199,489











Income from operations

$18,145

$47,989

$66,134


$48,710

$50,605

$99,315


Operating margin

10.8%


39.4%


14.8%


30.2%











Net income attributable to
   Qihoo 360 Technology Co.
   Ltd.

$15,603

$47,989

$63,592


$46,746

$50,605

$97,351


Net margin

9.3%


37.9%


14.2%


29.6%


Diluted earnings per ADS

$0.14


$0.55


$0.38


$0.80



(c): Adjustment to exclude the share-based compensation expense of each period.


 

SOURCE Qihoo 360 Technology Co. Ltd.



RELATED LINKS
http://corp.360.cn

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