Sohu.com Reports Third Quarter 2011 Unaudited Financial Results

Record Total Revenues of US$233 Million, Up 42% Year-over-Year, Exceeding the High End of Group Guidance by US$3 Million;

GAAP Net Income Before Non-Controlling Interest Up 19% Year-over-Year to US$64 Million, Non-GAAP Net Income Before Non-Controlling Interest Up 13% Year-over-Year to US$69 Million, Exceeding the High End of Group Guidance by US$2 Million;

GAAP Fully Diluted EPS of US$1.17, Non-GAAP Fully Diluted EPS of US$1.26, Exceeding the High End of Group Guidance by 1 US Cent

Oct 31, 2011, 02:27 ET from Sohu.com Inc.

BEIJING, Oct. 31, 2011 /PRNewswire-Asia/ -- Sohu.com Inc. (NASDAQ: SOHU), China's leading online media, search, gaming, community and mobile service group, today reported unaudited financial results for the third quarter ended September 30, 2011.

(Logo: http://photos.prnewswire.com/prnh/20100201/CNM013LOGO )

Third Quarter Highlights(1)

  • Record total revenues and record revenues in brand advertising, Sogou(2), and online game businesses.
  • Total revenues were US$233 million, up 42% year-over-year and 17% quarter-over-quarter.
  • Total online advertising revenues which include revenues from brand advertising and Sogou business were US$95 million, up 47% year-over-year and 17% quarter-over-quarter.
  • Brand advertising revenues were US$77 million, up 30% year-over-year and 13% quarter-over-quarter.
  • Sogou revenues were US$18.4 million, up 244% year-over-year and 35% quarter-over-quarter.
  • Online game revenues reached US$116 million, up 35% year-over-year and 14% quarter-over-quarter.
  • GAAP net income attributable to Sohu.com Inc. was US$45 million, up 17% year-over-year and 6% quarter-over-quarter or US$1.17 per fully diluted share. Non-GAAP net income attributable to Sohu.com Inc. was US$49 million, up 9% year-over-year and 3% quarter-over-quarter or US$1.26 per fully diluted share.

(1) Explanation of the Group's non-GAAP financial measures and related reconciliations to GAAP financial measures are included in the accompanying "Non-GAAP Disclosure" and the "Reconciliation Of Non-GAAP Results Of Operation Measures To The Nearest Comparable GAAP Measures."

(2) Sogou operates search business and others.  Therefore, Sogou revenues include search and home page revenues.

Dr. Charles Zhang, chairman and chief executive officer of Sohu.com commented, "I am pleased to report strong third quarter results with year-over-year revenue growth of 42%, driven by solid performance of our online advertising and online gaming businesses. For online advertising, two of the fastest growing areas, Sogou and Sohu video continued to deliver exciting news. Sogou's quarterly revenue grew 244% year-over-year, comfortably exceeding our prior guidance. Sohu video, for the first time, in September, both the number of visitors and total number of video viewed rose to the second place in China, according to Comscore."

Dr. Zhang added, "For online game, our online gaming subsidiary Changyou once again exceeded its top-line and bottom-line financial goals, while making planned investments in marketing and promotion of Duke of Mount Deer. Our flagship game Tian Long Ba Bu, or TLBB, continued to expand player numbers with the release of new expansion pack. Duke of Mount Deer, or DMD, appeals to hard-core game players with its new technologies and advanced cross-server game play."

Commenting on Sohu's brand advertising business, Ms. Belinda Wang, Co-President and COO added, "Third quarter revenue for brand advertising business hit a new high, driven by revenue increases from real estate and IT-related sectors. Online video segment posted about 110% growth in revenues on a year-over-year basis while the number of advertisers grew by nearly 50% from a year ago."

Third Quarter Financial Results

Revenues

Total revenues for the third quarter of 2011 were US$232.9 million, up 42% year-over-year and 17% quarter-over-quarter.

Total online advertising revenues for the third quarter of 2011 were US$95.0 million, up 47% year-over-year and 17% quarter-over-quarter.

Brand advertising revenues for the third quarter of 2011 totaled US$76.6 million, up 30% year-over-year and 13% quarter-over-quarter. The increases were mainly due to strong advertising demand from IT-related sector and increased revenues from real estate sector toward which Sohu built a larger sales network in 2011.

Sogou revenues for the third quarter of 2011 were US$18.4 million, up 244% year-over-year and 35% quarter-over-quarter. The increases were mainly due to increased search traffic and improved monetization of traffic.

Online game revenues for the third quarter of 2011 were US$115.8 million, up 35% year-over-year and 14% quarter-over-quarter.

Wireless revenues for the third quarter of 2011 were US$14.2 million, up 5% year-over-year and 22% quarter-over-quarter.

Gross Margin

Gross margin was 71% for the third quarter of 2011, compared with 73% in the second quarter of 2011 and 74% in the third quarter of 2010. Non-GAAP gross margin for the third quarter of 2011 was 71%, compared with 74% in the second quarter of 2011 and 74% in the third quarter of 2010.

Online advertising gross margin for the third quarter of 2011 was 59%, compared with 61% in the second quarter of 2011 and 58% in the third quarter of 2010. Non-GAAP online advertising gross margin for the third quarter of 2011 was 59%, compared with 61% in the second quarter of 2011 and 60% in the third quarter of 2010.

Brand advertising gross margin for the third quarter of 2011 was 59%, compared with 62% in the second quarter of 2011 and 61% in the third quarter of 2010. Non-GAAP brand advertising gross margin for the third quarter of 2011 was 59%, compared with 63% in the second quarter of 2011 and 62% in the third quarter of 2010. The year-over-year and quarter-over-quarter decreases in gross margin for brand advertising business was primarily due to the changes in amortization method of certain video content in the third quarter of 2011 to better match and reflect viewership accumulation pattern.

In the third quarter of 2011, we noted changes of the pattern of the benefits that we derive from some of our licensed video content as reflected by the accumulative viewership pattern. As a result, the amortization of such video content was accelerated. If the Company had continued amortizing the video content costs using the old method, about US$2 million less costs would have been recorded in the third quarter of 2011. The change was considered a change in accounting estimate effective in the third quarter of 2011 and therefore was applied prospectively.

Both GAAP and non-GAAP gross margin for Sogou in the third quarter of 2011 were 59%, compared with 55% in the second quarter of 2011 and 32% in the third quarter of 2010. This rise was primarily due to improved monetization as revenue growth outpaced the growth in total costs.

Both GAAP and non-GAAP gross margin for online games in the third quarter of 2011 were 87%, compared with 90% in the second quarter of 2011 and 90% in the third quarter of 2010.

Both GAAP and non-GAAP gross margin for the wireless business for the third quarter of 2011 were 39%, compared with 39% in the first quarter of 2011 and 46% in the third quarter of 2010.

Operating Expenses

For the third quarter of 2011, Sohu's operating expenses totaled US$92.3 million, up 66% year-over-year and 20% quarter-over-quarter. The increases in operating expenses were mainly due to increases in total headcount and higher expenses associated with marketing and promotion activities in the third quarter of 2011.

Operating Profit

Operating profit for the third quarter of 2011 was US$73.6 million, up 13% year-over-year and 7% quarter-over-quarter. Operating margin was 32% for the third quarter of 2011, compared with 35% in the previous quarter and 40% in the third quarter of 2010.

Non-GAAP operating profit for the third quarter of 2011 was US$78.0 million, up 9% year-over-year and 7% quarter-over-quarter. Non-GAAP operating margin was 33% for the third quarter of 2011, compared with 37% in the previous quarter and 44% in the third quarter of 2010.

Income Tax Expense

For the third quarter of 2011, GAAP income tax expense was US$14.4 million. Excluding a non-cash income tax expense of US$0.3 million recorded for tax benefits from share-based awards, non-GAAP income tax expense was US$14.1 million, compared with US$9.3 million in the previous quarter.

Net Income

Before deducting the share of net income pertaining to the Non-controlling Interest, GAAP net income for the third quarter of 2011 was US$64.3 million, up 19% year-over-year and 4% quarter-over-quarter. Non-GAAP net income for the third quarter of 2011 was US$69.0 million, up 13% year-over-year and 3% quarter-over-quarter, exceeding the high end of the Group's expectations.

GAAP net income attributable to Sohu.com Inc. for the third quarter of 2011 was US$45.3 million, or US$1.17 per fully diluted share. Non-GAAP net income attributable to Sohu.com Inc. for the third quarter of 2011 was US$49.0 million, or US$ 1.26 per fully diluted share, up 9% year-over-year and 3% quarter-over-quarter, exceeding the high end of the Group's expectations.

Cash Balance

Sohu Group continued to maintain a debt-free balance sheet and a strong cash position of US$707.4 million as of September 30, 2011.

Stock Purchase Program

On August 29, 2011, Sohu's board of directors authorized a combined share purchase program of up to US$100 million. As of September 30, 2011, Sohu had repurchased 250,000 Sohu's ordinary shares and purchased 750,000 Changyou's ADSs at an aggregated cost of approximately US$42.3 million under the share purchase program.

Ms. Carol Yu, Co-President and CFO of Sohu commented, "We are pleased to see that our investment in new businesses, especially Sogou and Sohu video, has paid off. Sohu's strong balance sheet and ample cash balances enable us to further grow and develop these businesses."

Supplementary Information for Online Game Results

Third Quarter 2011 Operational Results

  • Aggregate registered accounts for Changyou's games(3), which exclude those of the Web-based games of Changyou's majority-owned subsidiary, Shenzhen 7Road Technology Co., Ltd. ("7Road"), increased 51% year-over-year and 21% quarter-over-quarter to 159.0 million.
  • Aggregate peak concurrent users ("PCU") for Changyou's games, which exclude those of 7Road's Web-based games, increased 17% year-over-year and 19% quarter-over-quarter to 1,150,000.
  • Aggregate active paying accounts ("APA") for Changyou's games, which exclude those of 7Road's Web-based games, increased 16% year-over-year and 4% quarter-over-quarter to 3,020,000.
  • Average revenue per active paying account ("ARPU") for Changyou's games, which exclude those of 7Road's Web-based games, increased 2% year-over-year and 3% quarter-over-quarter to RMB218, which is consistent with Changyou's intention to have ARPU within a range that keeps Changyou's games affordable for the majority of Chinese game players.

(3) Excludes Web-based games of 7Road and comprises the following games operated in China: Tian Long Ba Bu ("TLBB"), Duke of Mount Deer ("DMD"), Blade Online, Blade Hero 2, Da Hua Shui Hu, Zhong Hua Ying Xiong, Immortal Faith, San Jie Qi Yuan and Legend of Ancient World.

Third Quarter 2011 Revenues

Online game revenues for the third quarter of 2011, which includes revenues from Changyou's game operations and overseas licensing revenues and revenues from 7Road, increased 35% year-over-year and 14% quarter-over-quarter to US$115.8 million. The increases were mainly due to a full quarter of revenue contribution from 7Road, revenue contribution from the newly launched DMD, and the ongoing popularity of TLBB in China during the third quarter of 2011.

Business Outlook

For the fourth quarter of 2011, Sohu expects:

  • Total revenues to be between US$241 million and US$246 million.
  • Brand advertising revenues to be between US$77 million and US$79 million. This implies sequential growth of 1% to 3%, and 28% to 32% year-over-year growth.
  • Sogou revenues to be around US$21 million. This implies quarter-over-quarter growth of about 14% and year-over-year growth of about 218%.
  • Total revenues from Changyou to be between US$122 million and US$125 million, including online game revenues of US$119 million to US$122 million.
  • Before deducting the share of non-GAAP net income pertaining to the Non-controlling Interest, non-GAAP net income to be between US$70.5 million and US$73.5 million.
  • Non-GAAP net income attributable to Sohu.com Inc. to be between US$50.5 million and US$52.5 million and non-GAAP fully diluted earnings per share to be between US$1.30 and US$1.35.
  • Assuming no new grants of share-based awards, compensation expenses and income tax expenses relating to share-based awards to be around US$4 million to US$4.5 million. The estimated impact of this expense is expected to reduce Sohu's fully diluted earnings per share for the third quarter of 2011, under US GAAP, by 10 to 12 cents.

Non-GAAP Disclosure

To supplement the unaudited consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Sohu's management uses non-GAAP measures of gross profit, gross margin, operating profit, operating margin, income tax expense, net income and net income per share, which are adjusted from results based on GAAP to exclude the impact of share-based awards granted to employees in the consolidated statements of operations, which consists mainly of share-based compensation expense and non-cash tax benefits from excess tax deductions related to share-based awards. 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 the impact of share-based awards from its non-GAAP financial measure is useful for itself and investors. Further, the impact of share-based awards cannot be anticipated by management and business line leaders and these expenses were not built into the annual budgets and quarterly forecasts, which have been the basis for information Sohu provides to analysts and investors as guidance for future operating performance. As the impact of share-based awards does not involve any upfront or subsequent cash outflow, Sohu does not factor this 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 measure for commissions and bonuses are based on non-GAAP financial measures that exclude the impact of share-based awards.

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, gross margin, operating profit, operating margin, income tax expense, net income and net income per share, excluding the impact of share-based awards, 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 interim financial statements prepared in accordance with GAAP.

Mezzanine Equity consists of non-controlling interests in 7Road and a put option that gives the non-controlling shareholders the right to put their shares to Changyou at a pre-determined price if 7Road achieves specified performance milestones before the expiry of the put option and certain other circumstances occur. The put option will expire in 2014. Non-controlling interests of 7Road and the put option are classified as mezzanine equity in Changyou's consolidated balance sheets, as redemption of the non-controlling interests is not solely within the control of Changyou.

In accordance with ASC subtopic 480-10, Changyou accretes the balance of non-controlling interests to its redemption value over the period from the date of the 7Road acquisition to the earliest exercise date of the put right. Any subsequent changes in the redemption value are considered to be changes in accounting estimates and are also recognized over the same period as net income attributable to mezzanine classified non-controlling interests.

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, the current global financial and credit markets crisis and its potential impact on the Chinese economy, the uncertain regulatory landscape in the People's Republic of China, fluctuations in Sohu's quarterly operating results, and Sohu's reliance on online advertising sales, online games and wireless services (most wireless revenues are collected from a few mobile network operators) for its revenues. Further information regarding these and other risks is included in Sohu's annual report on Form 10-K for the year ended December 31, 2010, and other filings with the Securities and Exchange Commission.

Conference Call and Webcast

Sohu's management team will host a conference call on October 31, 2011(8:30 p.m. Beijing/Hong Kong time, October 31, 2011) at 8:30 a.m. U.S. Eastern Time.

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

US Toll-Free:

+1-866-519-4004

International:

+1-718-354-1231

Hong Kong:

+852-2475-0994

China Mainland

+86 800 819 0121 / +86 400 620 8038

Passcode:

SOHU

Please dial in 10 minutes before the call is scheduled to begin and provide the passcode to join the call.

A telephone replay of the call will be available after the conclusion of the conference call at 11:30 a.m. Eastern Time on October 31 through November 7, 2011. The dial-in details for the telephone replay are:

International:

+1-718-354-1232

Passcode:

13990173

The live webcast and archive of the conference call will be available on the Investor Relations section of Sohu's website at http://corp.sohu.com/.

About Sohu.com

Sohu.com Inc. (NASDAQ: SOHU) is China's premier online brand and indispensable to the daily life of millions of Chinese, providing a network of web properties and community based/web 2.0 products which offer the vast Sohu user community a broad array of choices regarding information, entertainment and communication. Sohu has built one of the most comprehensive matrices of Chinese language web properties and proprietary search engines, consisting of the mass portal and leading online media destination www.sohu.com; interactive search engine www.sogou.com; #1 games information portal www.17173.com; the top real estate website www.focus.cn; #1 online alumni club www.chinaren.com; wireless value-added services provider www.goodfeel.com.cn; leading online mapping service provider www.go2map.com; and developer and operator of online games www.changyou.com/en/.

Sohu corporate services consist of online brand advertising on its matrix of websites as well as bid listing and home page on its in-house developed search directory and engine. Sohu also offers wireless value-added services such as news, information, music, ringtone and picture content sent over mobile phones. Sohu's online game subsidiary, Changyou.com (NASDAQ: CYOU) and its subsidiaries currently operates over 10 online games that includes in-house developed MMORPGs, such as Tian Long Ba Bu, one of the most popular online games in China, and Duke of Mount Deer, as well as Web-based games such as DDTank. Sohu.com, established by Dr. Charles Zhang, one of China's internet pioneers, is in its fifteenth year of operation.


For investor and media inquiries, please contact:


In China:


Mr. James Deng

Sohu.com Inc.

Tel:

+86 (10) 6272-6596

E-mail:

ir@contact.sohu.com


Ms. Jenny Wu

Christensen

Tel:

+852-2232-3907

E-mail:

jwu@ChristensenIR.com

In the United States:


Mr. Jeff Bloker

Christensen

Tel:

+1 (480) 614-3003

E-mail:

jbloker@ChristensenIR.com




SOHU.COM INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)




Three Months Ended


Nine Months Ended



Sep. 30, 2011


Jun. 30, 2011


Sep. 30, 2010


Sep. 30, 2011


Sep. 30, 2010

Revenues:











   Online advertising











       Brand advertising

$

76,572

$

67,728

$

59,083

$

201,453

$

151,757

       Search and others


18,410


13,613


5,357


40,002


12,053

           Subtotal


94,982


81,341


64,440


241,455


163,810

   Online games


115,798


101,531


85,623


312,259


235,416

   Wireless


14,210


11,645


13,594


37,559


37,955

   Others


7,870


4,188


407


14,661


2,434

           Total revenues


232,860


198,705


164,064


605,934


439,615












Cost of revenues:











   Online advertising











       Brand advertising (includes stock-based compensation expense of $232, $536, $1,022, $1,470 and $3,193, respectively)


31,643


25,781


23,256


79,869


62,795

       Search and others (includes stock-based compensation expense of $0, $0, $0, $0 and $0, respectively)


7,521


6,104


3,650


18,502


9,746

           Subtotal


39,164


31,885


26,906


98,371


72,541

   Online games (includes stock-based compensation expense of $21, $19, $40, $73 and $150, respectively)


14,578


9,950


8,537


33,496


20,929

   Wireless (includes stock-based compensation expense of $0, $0, $0, $0 and $0, respectively)


8,727


7,109


7,381


22,728


20,102

   Others (includes stock-based compensation expense of $0, $0, $1, $0 and $3, respectively)


4,469


4,220


352


11,359


1,351

           Total cost of revenues


66,938


53,164


43,176


165,954


114,923












Gross profit


165,922


145,541


120,888


439,980


324,692












Operating expenses:











   Product development (includes stock-based compensation expense of $1,633, $1,421, $2,238, $4,826 and $6,901, respectively)


28,019


25,316


19,479


76,171


51,882

   Sales and marketing (includes stock-based compensation expense of $874, $872, $1,271, $2,835 and $3,402, respectively)


48,640


38,316


25,410


117,133


78,025

   General and administrative (includes stock-based compensation expense of $1,617, $1,568, $1,989, $4,857 and $5,893, respectively)


15,655


13,121


10,757


40, 912


30,267

Total operating expenses


92,314


76,753


55,646


234,216


160,174












Operating profit


73,608


68,788


65,242


205,764


164,518












Other income/(expense)


3,249


1,479


(939)


5,238


(1,294)

Interest income


4,314


3,279


1,611


10,312


4,034

Exchange difference


(2,420)


(1,658)


(561)


(4,504)


(827)

Income before income tax expenses


78,751


71,888


65,353


216,810


166,431

Income tax expense


14,441


10,281


11,340


35,724


25,632

Net Income


64,310


61,607


54,013


181,086


140,799












   Less: Net income attributable to the mezzanine classified noncontrolling interest shareholders


1,092


361


-


1,453


-

           Net income attributable to the noncontrolling interest shareholders


16,406


16,981


13,004


43,748


36,146

Net income attributable to Sohu.com Inc.


46,812


44,265


41,009


135,885


104,653












Basic net income per share attributable to Sohu.com Inc.

$

1.22

$

1.16

$

1.08

$

3.55

$

2.77

Shares used in computing basic net income per share attributable to Sohu.com Inc.


38,298


38,295


37,896


38,262


37,832












Diluted net income per share attributable to Sohu.com Inc.

$

1.17

$

1.10

$

1.01

$

3.28

$

2.55

Shares used in computing diluted net income per share attributable to Sohu.com Inc.


38,844


38,860


38,377


38,824


38,370

Note:

(a) Certain amounts from prior periods have been reclassified to conform with current period presentation.




SOHU.COM INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED, IN THOUSANDS)




As of Sep 30, 2011


As of Dec 31, 2010

ASSETS





Current assets:





   Cash and cash equivalents

$

707,423

$

678,389

   Short term investments


22,319


   Investment in debt securities


78,679


75,529

   Accounts receivable, net


99,424


62,603

   Prepaid and other current assets


38,040


19,646

       Total current assets


945,885


836,167

Fixed assets, net


149,660


120,627

Goodwill


181,273


67,761

Intangible assets, net


83,189


17,308

Prepaid non-current assets


180,101


137,999

Other assets


6,933


7,728

       Total assets

$

1,547,041

$

1,187,590






LIABILITIES





Current liabilities:





   Accounts payable

$

29,614

$

5,940

   Accrued liabilities


95,437


65,229

   Receipts in advance and deferred revenue


64,250


51,513

   Accrued salary and benefits


39,548


35,409

   Taxes payable


33,091


31,719

   Other short-term liabilities


24,758


21,862

   Contingent consideration


14,747


       Total current liabilities

$

301,445

$

211,672






   Long-term accounts payable


2,615


   Deferred tax liabilities


5,329


   Contingent consideration


18,299


1,359

       Total long-term liabilities

$

26,243

$

1,359

       Total liabilities

$

327,688

$

213,031






MEZZANINE EQUITY


55,664


SHAREHOLDERS' EQUITY:





   Sohu.com Inc. shareholders' equity


933,273


796,117

   Noncontrolling Interest


230,416


178,442

       Total shareholders' equity

$

1,163,689

$

974,559






   Total liabilities, mezzanine equity and shareholders' equity

$

$1,547,041

$

1,187,590

Note:

(a) Certain amounts from prior periods have been reclassified to conform with current period presentation.



SOHU.COM INC.

RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATION MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES

(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)


NON-GAAP NET INCOME EXCLUDING IMPACT OF SHARE-BASED AWARDS




Three Months Ended Sep. 30, 2011


Three Months Ended Jun. 30, 2011


Three Months Ended Sep. 30, 2010



GAAP


Non-GAAP 
Adjustments

(a)

Non-GAAP


GAAP


Non-GAAP 
Adjustments

(a)

Non-GAAP


GAAP


Non-GAAP 
Adjustments

(a)

Non-GAAP




















Brand advertising gross profit

$

44,929

$

232

$

45,161

$

41,947

$

536

$

42,483

$

35,827

$

1,022

$

36,849

Brand advertising gross margin


59%




59%


62%




63%


61%




62%




















Search and others gross profit

$

10,889

$

-

$

10,889

$

7,509

$

-

$

7,509

$

1,707

$

-

$

1,707

Search and others gross margin


59%




59%


55%




55%


32%




32%




















Online advertising gross profit

$

55,818

$

232

$

56,050

$

49,456

$

536

$

49,992

$

37,534

$

1,022

$

38,556

Online advertising gross margin


59%




59%


61%




61%


58%




60%




















Online games gross profit

$

101,220

$

21

$

101,241

$

91,581

$

19

$

91,600

$

77,086

$

40

$

77,126

Online games gross margin


87%




87%


90%




90%


90%




90%




















Wireless gross profit

$

5,483

$

-

$

5,483

$

4,536

$

-

$

4,536

$

6,213

$

-

$

6,213

Wireless gross margin


39%




39%


39%




39%


46%




46%




















Others gross profit

$

3,401

$

-

$

3,401

$

(32)

$

-

$

(32)

$

55

$

1

$

56

Others gross margin


43%




43%


(1%)




(1%)


14%




14%







































Gross profit

$

165,922

$

253

$

166,175

$

145,541

$

555

$

146,096

$

120,888

$

1,063

$

121,951

Gross margin


71%




71%


73%




74%


74%




74%




















Operating profit

$

73,608

$

4,377

$

77,985

$

68,788

$

4,416

$

73,204

$

65,242

$

6,561

$

71,803

Operating margin


32%




33%


35%




37%


40%




44%




















Income tax expense/(benefit)

$

14,441

$

(294)

$

14,147

$

10,281

$

(934)

$

9,347

$

11,340

$

(733)

$

10,607




















Net income before Non-Controlling Interest

$

64,310

$

4,671

$

68,981

$

61,607

$

5,350

$

66,957

$

54,013

$

7,294

$

61,307




















Net income attributable to Sohu.com Inc. 
for basic net  income per share

$

46,812

$

3,886

$

50,698

$

44,265

$

4,849

$

49,114

$

41,009

$

6,780

$

47,789




















Net income attributable to Sohu.com Inc 
for diluted net income per share (b)

$

45,254

$

3,777

$

49,031

$

42,693

$

4,698

$

47,391

$

38,654

$

6,498

$

45,152



 




 


 




 


 




 

Diluted net income per share attributable 
to Sohu.com Inc. 

$

1.17



$

1.26

$

1.10



$

1.21

$

1.01



$

1.16

Shares used in computing diluted net 
income per share attributable to Sohu.com Inc. 


38,844




39,068


38,860




39,105


38,377




39,019


Note:

(a) To eliminate the impact of share-based awards as measured using the fair value method.

(b) To adjust Sohu's economic interest in Changyou and Sogou under the treasury stock method and if-converted method, respectively.

(c) Certain amounts from prior periods have been reclassified to conform with current period presentation.




SOURCE Sohu.com Inc.



RELATED LINKS

http://corp.sohu.com