SINA Reports Third Quarter 2015 Financial Results

18 Nov, 2015, 16:30 ET from SINA Corporation

SHANGHAI, Nov. 18, 2015 /PRNewswire/ -- SINA Corporation (the "Company" or "SINA") (NASDAQ: SINA), a leading online media company serving China and the global Chinese communities, today announced its unaudited financial results for the third quarter ended September 30, 2015.

Third Quarter 2015 Highlights

  • Net revenues increased 14% year over year to $226.3 million. Non-GAAP net revenues increased 14% year over year to $223.7 million.
  • Advertising revenues grew 16% year over year to $193.5 million. Non-advertising revenues were $32.8 million. Non-GAAP non-advertising revenues were $30.2 million.
  • Net income attributable to SINA was $9.8 million, or $0.16 diluted net income per share attributable to SINA. Non-GAAP net income attributable to SINA was $24.4 million, or $0.39 non-GAAP diluted net income per share attributable to SINA.

"We are pleased with SINA's overall results in the macro headwinds. For Weibo's business, we continue to see strong performance on both operational and financial fronts. Weibo continues to be on track to execute its core strategies to grow user base and enhance user engagement, capitalize the shift to mobile, and optimize advertising offerings to better serve the ever-growing customer community at various dimensions. " said Charles Chao, Chairman and CEO of SINA.  

"For SINA's portal business, taking macro factors into account, our performance was largely in line with our expectation. We are encouraged by the progresses we made on monetizing mobile traffic and expanding our customer community. In addition, we will persist with our business endeavor to diversify our business models and implement the vertical strategy." Mr. Chao added.

Third Quarter 2015 Financial Results

For the third quarter of 2015, SINA reported net revenues of $226.3 million, compared to $198.6 million for the same period last year. Non-GAAP net revenues for the third quarter of 2015 totaled $223.7 million, compared to $196.0 million for the same period last year.  

Online advertising revenues for the third quarter of 2015 were $193.5 million, compared to $166.8 million for the same period last year. The year-over-year growth in online advertising revenues resulted from an increase of $40.5 million in Weibo advertising and marketing revenues, partially offset by a decline of $13.8 million in portal advertising revenues.  

Non-advertising revenues for the third quarter of 2015 were $32.8 million. Non-GAAP non-advertising revenues for the third quarter of 2015 were $30.2 million, compared to $29.2 million for the same period last year.  

Gross margin for the third quarter of 2015 was 63%, at similar level for the same period last year. Advertising gross margin for the third quarter of 2015 was 64%, compared to 62% for the same period last year. Non-advertising gross margin for the third quarter of 2015 was 60%, compared to 67% for the same period last year. The decline in non-advertising margin was primarily due to the decrease in higher margin data licensing revenue and increase in lower margin contribution of portal's early stage new business.

Operating expenses for the third quarter of 2015 totaled $128.6 million, compared to $135.7 million for the same period last year. Non-GAAP operating expenses for the third quarter of 2015 totaled $113.9 million, compared to $127.1 million for the same period last year, primarily due to the decrease in sales and marketing expenditures, decrease in general and administrative expenses, partially offset by an increase in product and development expenses.  

Income from operations for the third quarter of 2015 was $14.7 million, compared to a loss of $10.9 million for the same period last year. Non-GAAP income from operations for the third quarter of 2015 was $28.4 million, compared to a non-GAAP loss of $4.0 million for the same period last year as a result of enhanced operation efficiency.

Non-operating income for the third quarter of 2015 was $4.9 million, compared to a non-operating income of $144.3 million for the same period last year. Non-operating income for the third quarter of 2015 mainly included a $5.9 million interest and other income. Non-operating income for the third quarter of 2014 was $144.3 million, which mainly included 1) a $109.2 million gain from the sale of a portion the Company's investment in Alibaba through Yunfeng E-Commerce Funds in Alibaba's initial public offering; 2) a $19.2 million gain as a result of the initial public offering of Leju, a subsidiary of E-house, which had been excluded from non-operating income under non-GAAP measure.

Net income attributable to SINA for the third quarter of 2015 was $9.8 million, compared to $133.6 million for the same period last year. Diluted net income per share attributable to SINA for the third quarter of 2015 was $0.16, compared to $1.91 for the same period last year. Non-GAAP net income attributable to SINA for the third quarter of 2015 was $24.4 million, compared to $13.1 million for the same period last year. Non-GAAP diluted net income per share attributable to SINA for the third quarter of 2015 was $0.39, compared to $0.19 for the same period last year.  

As of September 30, 2015, SINA's cash, cash equivalents and short-term investments totaled $1.9 billion, compared to $2.2 billion as of December 31, 2014. The decrease in cash, cash equivalents, and short-term investments was mainly due to the share buyback completed in May 2015 and investments made in the past three quarters of 2015. For the third quarter of 2015, net cash provided by operating activities was $107.1 million, capital expenditures totaled $6.7 million, and depreciation and amortization expenses amounted to $8.8 million.  

Other Developments

On November 6, 2015, the Company completed an issuance of 11,000,000 ordinary shares to a special purpose vehicle owned by Mr. Charles Chao, Chairman and CEO of the Company, for an aggregate price of $456,390,000, pursuant to a legally binding subscription agreement previously announced on June 1, 2015. The per share purchase price of US$41.49 represents the average closing trading price of SINA's ordinary shares for the 30 trading days ended May 29, 2015, the last trading day before the signing of the subscription agreement. The shares acquired in this transaction are subject to a contractual lock-up restriction for six months after the closing on November 6, 2015.  

On November 6, 2015, the Company held its annual general meeting of shareholders, where the shareholders re-elected Mr. Yan Wang and Mr. Song-Yi Zhang as directors of SINA. The shareholders also approved and ratified the appointment of PricewaterhouseCoopers Zhong Tian LLP as the Company's independent auditors for the fiscal year ending December 31, 2015.  

Non-GAAP Measures

This release contains the following non-GAAP financial measures: non-GAAP net revenues, non-GAAP non-advertising revenues, non-GAAP advertising and non-advertising gross margin, non-GAAP operating expenses, non-GAAP income (loss) from operations, non-GAAP net income attributable to SINA and non-GAAP diluted net income per share attributable to SINA. These non-GAAP financial measures should be considered in addition to, not as a substitute for, measures of the Company's financial performance prepared in accordance with U.S. GAAP. The Company's non-GAAP financial measures may be defined differently than similar terms used by other companies. Accordingly, care should be exercised in understanding how the Company defines its non-GAAP financial measures.  

The Company's non-GAAP financial measures exclude recognition of deferred revenues in relation to the equity investment in E-House, stock-based compensation, amortization of intangible assets net of tax, adjustment for GAAP to non-GAAP reconciling items on the share of equity method investments, gain (loss) on the sale, deemed disposal and impairment on business, investment and non-controlling interest in a subsidiary, change in fair value of investor option liability, adjustment for GAAP to non-GAAP reconciling items for the gain (loss) attributable to non-controlling interests and amortization of convertible debt issuance cost. The Company's management uses these non-GAAP financial measures in their financial and operating decision-making, because management believes these measures reflect the Company's ongoing business operations in a manner that allows more meaningful period-to-period comparisons. The Company believes that these non-GAAP financial measures provide useful information to investors and others in the following ways: (i) in comparing the Company's current financial results with the Company's past financial results in a consistent manner, and (ii) in understanding and evaluating the Company's current operating performance and future prospects in the same manner as management does, if they so choose. The Company also believes that the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses, gains/losses and other items (i) that are not expected to result in future cash payments or (ii) that are non-recurring in nature or may not be indicative of the Company's core operating results and business outlook.

Use of non-GAAP financial measures has limitations. The Company's non-GAAP financial measures do not include all income and expense items that affect the Company's operations. They may not be comparable to non-GAAP financial measures used by other companies. Management compensates for these limitations by also considering the Company's financial results prepared in accordance with U.S. GAAP. Reconciliations of the Company's non-GAAP measures to the nearest comparable GAAP measures are set forth in the section below titled "Unaudited Reconciliation of Non-GAAP to GAAP Results."

Conference Call

SINA will host a conference call from 9:10 p.m.9:50 p.m. Eastern Time on November 18, 2015 (or 10:10 a.m.10:50 a.m. Beijing Time on November 19, 2015) to present an overview of the Company's financial performance and business operations. A live webcast of the call will be available through the Company's corporate website at http://corp.sina.com.cn. The conference call can be accessed as follows:

US:

+1 845 675 0438

Hong Kong:

+852 3018 6776

China:

400 120 0654

International:

+65 6713 5440

Passcode for all regions:

73460018

A replay of the conference call will be available through morning Eastern Time November 27, 2015. The dial-in number is +61 2 9003 4211. The passcode for the replay is 73460018.

About SINA

We are an online media company serving China and the global Chinese communities. Our digital media network of SINA.com (portal), SINA mobile (mobile portal and mobile apps) and Weibo (social media) enables Internet users to access professional media and user generated content in multi-media formats from desktop personal computers and mobile devices and share their interests with friends and acquaintances.

SINA.com offers distinct and targeted professional content on each of its region-specific websites and a full range of complementary offerings. Our mobile portal, SINA.cn, provides news information and entertainment content from SINA.com customized for mobile users in WAP (mobile browser) and mobile application format. Weibo is a leading social media platform for people to create, distribute and discover Chinese-language content. Based on an open platform architecture, Weibo allows users to create and post feeds up to 140 Chinese characters and attach multi-media content, as well as access a wide range of organically and third-party developed applications, such as online games.

Through these properties and other product lines, we offer an array of online media and social media services to our users to create a rich canvas for businesses and advertisers to effectively connect and engage with their targeted audiences.

Safe Harbor Statement

This press release contains forward-looking statements that relate to, among other things, SINA's expected financial performance and SINA's strategic and operational plans (as described, without limitation, in quotations from management in this press release). SINA may also make forward-looking statements in the Company's periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "confidence," "estimates" and similar statements. SINA assumes no obligation to update the forward-looking statements in this press release and elsewhere. Forward-looking statements involve inherent risks and uncertainties. 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 SINA's limited operating history in certain new businesses; condition of the global financial and credit market; the uncertain regulatory landscape in China; fluctuations in the Company's quarterly operating results; the Company's reliance on online advertising sales and value-added services for a majority of its revenues; failure to successfully develop, introduce, drive adoption of or monetize new features and products, including portal, Weibo and MVAS products; failure to enter and develop the small and medium enterprise market by the Company or through cooperation with other parties, such a Alibaba; the Company's reliance on mobile operators in China to provide MVAS and changes in mobile operators' policies for MVAS in China; failure to successfully integrate acquired businesses; risks associated with the Company's investments, including equity pick-up and impairment; and failure to compete successfully against new entrants and established industry competitors. Further information regarding these and other risks is included in SINA's annual report on Form 20-F for the year ended December 31, 2014 and other filings with the Securities and Exchange Commission.  

Contact:

Investor Relations SINA Corporation Phone: +86 10 5898 3336 Email: ir@staff.sina.com.cn   

 

SINA CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. Dollars in thousands, except per share data)

Three months ended

Nine months ended

September 30,

June 30,

September 30,

2015

2014

2015

2015

2014

Net revenues:

    Advertising

$              193,459

$                 166,790

$               176,258

$               520,070

$               458,351

    Non-advertising

32,835

31,823

37,340

104,409

98,753

226,294

198,613

213,598

624,479

557,104

Cost of revenues:

    Advertising  *

69,741

63,142

68,978

202,668

181,382

    Non-advertising

13,276

10,642

17,014

43,658

34,575

83,017

73,784

85,992

246,326

215,957

Gross profit

143,277

124,829

127,606

378,153

341,147

Operating expenses:

    Sales and marketing *

53,342

60,954

53,984

167,577

167,858

    Product development *

54,417

49,372

51,788

157,818

141,603

    General and administrative *

20,830

25,355

28,659

70,123

61,937

    Impairment on goodwill

-

-

-

-

14,526

128,589

135,681

134,431

395,518

385,924

Income (Loss) from operations

14,688

(10,852)

(6,825)

(17,365)

(44,777)

Non-operating income:

   Earning (Loss) from equity method investments, net

93

4,670

(2,729)

1,016

16,304

   Gain (Loss) on sale of and impairment on investments, net

(1,066)

128,599

19,032

16,881

155,150

   Change in fair value of investor option liability

-

-

-

-

(46,972)

   Interest and other income, net

5,892

11,019

6,455

18,130

21,090

4,919

144,288

22,758

36,027

145,572

Income  before income taxes

19,607

133,436

15,933

18,662

100,795

Income tax benefits (expenses)

(4,756)

(2,656)

(3,022)

(4,793)

34

Net income

14,851

130,780

12,911

13,869

100,829

   Less: Net income (loss) attributable to non-controlling interests

5,085

(2,815)

1,243

2,744

(16,222)

Net income attributable to SINA

$                   9,766

$                 133,595

$                  11,668

$                  11,125

$               117,051

Basic net income per share attributable to SINA

$                     0.17

$                        2.06

$                      0.20

$                      0.19

$                      1.78

Diluted net income per share attributable to SINA **

$                     0.16

$                        1.91

$                      0.19

$                      0.18

$                      1.74

Shares used in computing basic

   net income per share attributable to SINA

58,512

64,963

58,417

58,559

65,601

Shares used in computing diluted

   net income per share attributable to SINA

58,799

71,509

58,910

58,854

72,218

* Stock-based compensation in each category:

    Cost of revenues - advertising

$                   1,569

$                         923

$                    1,139

$                    4,131

$                    2,422

    Sales and marketing

3,121

1,465

2,594

8,337

3,715

    Product development

4,264

2,090

3,104

10,863

4,975

    General and administrative

6,437

4,164

7,689

19,960

11,846

**  Net income attributable to SINA is adjusted for diluted shares issued by our subsidiary and equity method investments.

 

 

SINA CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars in thousands)

September 30,

December 31,

2015

2014

Assets

Current assets:

Cash and cash equivalents

$                904,973

$             1,223,682

Short-term investments

1,030,556

942,856

Accounts receivable, net

230,286

259,764

Prepaid expenses and other current assets

132,478

109,214

      Subtotal

2,298,293

2,535,516

Property and equipment, net

50,441

63,729

Goodwill and intangible assets, net

61,732

64,489

Long-term investments, net

1,068,639

860,003

Other assets

312,049

179,591

Total assets

$             3,791,154

$             3,703,328

Liabilities and Shareholders' Equity

Current liabilities:

Accounts payable

$                     4,102

$                     3,853

Accrued liabilities

447,759

320,268

Short-term loan

55,062

-

Deferred revenues

66,274

50,557

Income taxes payable

12,877

17,979

     Subtotal

586,074

392,657

Convertible debt

800,000

800,000

Long-term deferred revenue

77,565

85,391

Other long-term liabilities

3,138

4,010

     Total liabilities

1,466,777

1,282,058

Shareholders' equity

SINA shareholders' equity

2,020,338

2,145,772

Non-controlling interests

304,039

275,498

     Total shareholders' equity

2,324,377

2,421,270

Total liabilities and shareholders' equity

$             3,791,154

$             3,703,328

 

 

SINA CORPORATION

UNAUDITED ADDITIONAL INFORMATION

(U.S. Dollars in thousands)

Three months ended

Nine months ended

September 30,

June 30,

September 30,

2015

2014

2015

2015

2014

Net revenues

Portal:

Portal Advertising

$                  87,598

$               101,417

$                  88,391

$               247,182

$               281,542

Other

13,962

13,066

17,365

48,431

46,602

Subtotal

101,560

114,483

105,756

295,613

328,144

Weibo

124,734

84,130

107,842

328,866

228,960

$               226,294

$               198,613

$               213,598

$               624,479

$               557,104

Cost of revenues

Portal:

Portal Advertising

$                  37,240

$                  44,811

$                  41,047

$               117,261

$               130,779

Other

8,536

8,303

11,256

29,210

27,365

Subtotal

45,776

53,114

52,303

146,471

158,144

Weibo

37,241

20,670

33,689

99,855

57,813

$                  83,017

$                  73,784

$                  85,992

$               246,326

$               215,957

 

SINA CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

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

Three months ended

September 30, 2015

September 30, 2014

June 30, 2015

Non-GAAP

Non-GAAP

Non-GAAP

Actual

Adjustments

Results

Actual

Adjustments

Results

Actual

Adjustments

Results

Advertising revenues

$    193,459

$    193,459

$      166,790

$    166,790

$    176,258

$    176,258

Non-advertising revenues

32,835

(2,609)

 (a)

30,226

31,823

(2,609)

 (a)

29,214

37,340

(2,609)

 (a)

34,731

Net revenues

$    226,294

$              (2,609)

$    223,685

$      198,613

$              (2,609)

$    196,004

$    213,598

$              (2,609)

$    210,989

(2,609)

 (a)

(2,609)

 (a)

(2,609)

 (a)

1,569

 (b)

923

 (b)

1,139

 (b)

Gross profit

$    143,277

$              (1,040)

$    142,237

$      124,829

$              (1,686)

$    123,143

$    127,606

$              (1,470)

$    126,136

(13,822)

 (b)

(7,719)

 (b)

(13,387)

 (b)

(883)

 (c)

(815)

 (c)

(906)

 (c)

Operating expenses

$    128,589

$           (14,705)

$    113,884

$      135,681

$              (8,534)

$    127,147

$    134,431

$           (14,293)

$    120,138

(2,609)

 (a)

(2,609)

 (a)

(2,609)

 (a)

15,391

 (b)

8,642

 (b)

14,526

 (b)

883

 (c)

815

 (c)

906

 (c)

Income (loss) from operations

$      14,688

$             13,665

$      28,353

$      (10,852)

$               6,848

$       (4,004)

$       (6,825)

$             12,823

$        5,998

(2,609)

 (a)

(2,609)

 (a)

(2,609)

 (a)

15,391

 (b)

8,642

 (b)

14,526

 (b)

677

 (c)

630

 (c)

697

 (c)

2,882

 (e)

2,463

 (e)

883

 (e)

1,066

 (f)

(128,599)

 (f)

(19,032)

 (f)

(3,850)

(h)

(2,373)

 (h)

(3,236)

(h)

1,094

(i)

1,398

 (i)

1,099

(i)

Net income attributable to SINA

$        9,766

$             14,651

$      24,417

$      133,595

$         (120,448)

$      13,147

$      11,668

$              (7,672)

$        3,996

Diluted net income per share attributable to SINA *

$           0.16

$           0.39

$             1.91

$           0.19

$           0.19

$           0.06

Shares used in computing diluted

   net income per share attributable to SINA

58,799

6,467

(j)

65,266

71,509

(6,468)

(j)

65,041

58,910

-

58,910

Gross margin - advertising

64%

1%

65%

62%

1%

63%

61%

1%

62%

Gross margin - non-advertising

60%

-4%

56%

67%

-3%

64%

54%

-3%

51%

 Nine months ended

September 30, 2015

September 30, 2014

Non-GAAP

Non-GAAP

Actual

Adjustments

Results

Actual

Adjustments

Results

Advertising revenues

$    520,070

$    520,070

$      458,351

$    458,351

Non-advertising revenues

104,409

(7,827)

 (a)

96,582

98,753

(9,350)

 (a)

89,403

Net revenues

$    624,479

$              (7,827)

$    616,652

$      557,104

$              (9,350)

$    547,754

(7,827)

 (a)

(9,350)

 (a)

4,131

 (b)

2,422

 (b)

Gross profit

$    378,153

$              (3,696)

$    374,457

$      341,147

$              (6,928)

$    334,219

(20,536)

 (b)

(39,160)

 (b)

(2,460)

 (c)

(2,691)

 (c)

(14,526)

 (d)

Operating expenses

$    395,518

$           (41,851)

$    353,667

$      385,924

$           (37,522)

$    348,402

(9,350)

 (a)

(7,827)

 (a)

22,958

 (b)

43,291

 (b)

2,460

 (c)

2,691

 (c)

14,526

 (d)

Income (Loss) from operations

$    (17,365)

$             38,155

$      20,790

$      (44,777)

$             30,594

$    (14,183)

(9,350)

 (a)

22,958

 (b)

(7,827)

 (a)

1,898

 (c)

43,291

 (b)

14,526

 (d)

2,068

 (c)

6,684

 (e)

6,051

 (e)

(155,150)

 (f)

(16,881)

 (f)

46,972

 (g)

(9,730)

(h)

(13,453)

 (h)

3,304

 (i)

4,194

 (i)

Net income attributable to SINA

$      11,125

$             20,276

$      31,401

$      117,051

$           (80,721)

$      36,330

Diluted net income per share attributable to SINA *

$           0.18

$           0.50

$             1.74

$           0.52

Shares used in computing diluted

   net income per share attributable to SINA

58,854

-

58,854

72,218

(6,467)

 (j)

65,751

Gross margin - advertising

61%

1%

62%

60%

1%

61%

Gross margin - non-advertising

58%

-3%

55%

65%

-4%

61%

(a)  To adjust the recognition of deferred revenue related to the license agreements granted to E-House. (b)  To adjust stock-based compensation. (c)  To adjust  amortization of intangible assets and tax provision on amortization of intangible assets. (d)  To adjust  the impairment on goodwill (e)  To adjust the Non-GAAP to GAAP reconciling items on the share of equity method investments, net of share of amortization of intangibles not on their books. (f)  To adjust gain (loss) on sale of investments, gain (loss) on deemed disposal and (impairment) on investments, net. (g)  To adjust the change in fair value of investor option liability. (h)  To adjust Non-GAAP to GAAP reconciling items for the gain (loss) attributable to non-controlling interests. (i)  To adjust convertible debt issuance cost. (j)  To adjust the number of shares for dilution resulted from convertible debt and unvested equity granted.

* Net income attributable to SINA is adjusted for diluted shares issued by our subsidiary and equity method investments.

UNAUDITED RECONCILIATION OF SINA'S SHARE OF EQUITY INVESTMENTS' NON-GAAP TO GAAP RESULTS*

Three months ended

September 30, 2015

September 30, 2014

June 30, 2015

Actual

Adjustments

Non-GAAP Results

Actual

Adjustments

Non-GAAP Results

Actual

Adjustments

Non-GAAP Results

To adjust stock-based compensation

$               1,620

$               1,657

$               1,395

To adjust amortization of intangible

  assets resulting from business acquisitions

416

497

416

To adjust the (gain) loss resulting from

  the  fair value changes in investments

551

-

(1,224)

Earning(Loss) from equity method investments, net

$            388

$               2,587

$        2,975

$          4,979

$               2,154

$        7,133

$       (2,433)

$                   587

$       (1,846)

Share of amortization of equity investments'

  intangibles not on their books

$          (295)

$                   295

$               -

$            (309)

$                   309

$               -

$          (296)

$                   296

$               -

$              93

$               2,882

$        2,975

$          4,670

$               2,463

$        7,133

$       (2,729)

$                   883

$       (1,846)

 Nine months ended

September 30, 2015

September 30, 2014

Non-GAAP

Non-GAAP

Actual

Adjustments

Results

Actual

Adjustments

Results

To adjust stock-based compensation

$               4,396

$               3,883

To adjust amortization of intangible

  assets resulting from business acquisitions

$               1,439

1,851

To adjust the (gain) loss resulting from

  the  fair value changes in investments

$                 (673)

-

Earning from equity method investments, net

$        1,905

$               5,162

$        7,067

$        17,254

$               5,734

$      22,988

Share of amortization of equity investments'

  intangibles not on their books

$          (889)

$                   889

$               -

$            (950)

$                   950

$               -

$        1,016

$               6,051

$        7,067

$        16,304

$               6,684

$      22,988

* Earning (Loss) from equity method investments is recorded one quarter in arrears.

 

SOURCE SINA Corporation



RELATED LINKS

http://www.sina.com