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SINA Reports First Quarter 2018 Unaudited Financial Results
"We had a good start to the year 2018." said
Adoption of New Revenue Guidance
On
The Company recorded a net reduction to opening retained earnings of
Adoption of the standards related to revenue recognition which impacted the Company's current period reported results are as follows:
Three months ended March 31, 2018 |
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Adjustments |
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Old Basis ASC 605 1 |
VAT |
Barter |
New Basis |
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($ In thousands, except for percentage) |
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Net revenues |
456,101 |
(25,161) |
9,812 |
440,752 |
|||
- Portal |
96,091 |
(5,267) |
82 |
90,906 |
|||
|
360,047 |
(19,894) |
9,730 |
349,883 |
|||
Cost of revenues |
133,868 |
(25,161) |
- |
108,707 |
|||
Operating expenses |
246,006 |
- |
12,750 |
258,756 |
|||
- Sales and marketing |
126,937 |
- |
12,750 |
139,687 |
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Income from operations |
76,227 |
- |
(2,938) |
73,289 |
|||
Gross margin |
70.6% |
75.3% |
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Operating margin |
16.7% |
16.6% |
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Note 1. This financial information for the three months ended March 31, 2018 is presented under ASC Topic 605. |
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Note 2. This financial information for the three months ended March 31, 2018 is presented under ASC Topic 606. |
First Quarter 2018 Highlights
- Both net revenues and non-GAAP net revenues increased 59% year-over-year to
$440.8 million and$438.1 million , respectively. - Advertising revenues increased 61% year-over-year to
$367.1 million . - Non-advertising revenues increased 47% year-over-year to
$73.7 million . Non-GAAP non-advertising revenues increased 50% year-over-year to$71.1 million . - Income from operations increased 63% year-over-year to
$73.3 million . Non-GAAP income from operations increased 49% year-over-year to$94.6 million . - Net income attributable to
SINA was$28.7 million , or$0.38 for diluted net income per share attributable toSINA's ordinary shareholders. Non-GAAP net income attributable toSINA was$35.2 million , or$0.47 for non-GAAP diluted net income per share attributable toSINA's ordinary shareholders.
First Quarter 2018 Financial Results
For the first quarter of 2018,
Advertising revenues for the first quarter of 2018 were
Non-advertising revenues for the first quarter of 2018 were
Gross margin for the first quarter of 2018 was 75%, compared to 69% for the same period last year. Advertising gross margin for the first quarter of 2018 was 77%, compared to 70% for the same period last year. Non-advertising gross margin for the first quarter of 2018 was 65%, compared to 62% for the same period last year. The increases in both advertising and non-advertising gross margin were a direct result of the adoption of ASC 606.
Operating expenses for the first quarter of 2018 totaled
Income from operations for the first quarter of 2018 was
Non-operating income for the first quarter of 2018 was
Income tax expenses for the first quarter of 2018 were
Net income attributable to
As of
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 from operations, non-GAAP operating margin, non-GAAP net income attributable to
The Company's non-GAAP financial measures exclude recognition of deferred revenues related to the license granted to
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
US: |
+1 845 675 0438 |
Hong Kong: |
+852 3018 6776 |
China: |
400 120 0654 |
International: |
+65 6713 5440 |
Passcode for all regions: 4788917 |
A replay of the conference call will be available through morning Eastern Time
About
SINA.com offers distinct and targeted professional content on each of its region-specific websites and a full range of complementary offerings.
Through these properties and other product lines,
Safe Harbor Statement
This press release contains forward-looking statements that relate to, among other things,
Contact:
Investor Relations
Phone: +86 10 5898 3336
Email: ir@staff.sina.com.cn
SINA CORPORATION |
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(U.S. Dollars in thousands, except per share data) |
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Three months ended |
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March 31, |
December 31, |
||||||
2018 |
2017 |
2017 |
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Net revenues(1): |
|||||||
Advertising |
$ 367,081 |
$ 227,999 |
$ 424,756 |
||||
Non-advertising |
73,671 |
50,066 |
78,982 |
||||
440,752 |
278,065 |
503,738 |
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Cost of revenues(1)(2): |
|||||||
Advertising |
83,115 |
67,668 |
99,858 |
||||
Non-advertising |
25,592 |
18,904 |
26,812 |
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108,707 |
86,572 |
126,670 |
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Gross profit |
332,045 |
191,493 |
377,068 |
||||
Operating expenses: |
|||||||
Sales and marketing (1)(2) |
139,687 |
68,083 |
143,020 |
||||
Product development (2) |
85,137 |
54,420 |
78,977 |
||||
General and administrative (2) |
33,932 |
24,023 |
26,421 |
||||
258,756 |
146,526 |
248,418 |
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Income from operations |
73,289 |
44,967 |
128,650 |
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Non-operating income: |
|||||||
Earning (Loss) from equity method investments, net |
(1,772) |
3,143 |
(2,843) |
||||
Gain on sale of investments, fair value changes and |
7,226 |
15,883 |
(740) |
||||
Interest and other income, net |
17,098 |
11,233 |
11,244 |
||||
22,552 |
30,259 |
7,661 |
|||||
Income before income taxes |
95,841 |
75,226 |
136,311 |
||||
Income tax expense |
(18,750) |
(13,826) |
(17,160) |
||||
Net income |
77,091 |
61,400 |
119,151 |
||||
Less: Net income attributable to non-controlling interests |
48,397 |
22,876 |
73,787 |
||||
Net income attributable to SINA's ordinary shareholders |
$ 28,694 |
$ 38,524 |
$ 45,364 |
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Basic net income per share |
$ 0.40 |
$ 0.54 |
$ 0.63 |
||||
Diluted net income per share (4) |
$ 0.38 |
$ 0.52 |
$ 0.60 |
||||
Shares used in computing basic net income per share |
71,440 |
70,959 |
71,516 |
||||
Shares used in computing diluted net income per share |
74,036 |
73,409 |
74,213 |
||||
(1) On January 1, 2018, the Company adopted ASC 606 Revenue from Contracts with Customers using the modified retrospective method,which means |
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(2) Stock-based compensation in each category: |
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Cost of revenues |
$ 2,541 |
$ 2,230 |
$ 2,145 |
||||
Sales and marketing |
4,880 |
4,583 |
5,370 |
||||
Product development |
7,487 |
6,990 |
6,432 |
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General and administrative |
7,408 |
7,387 |
8,237 |
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(3) The Company adopted ASU 2016-1, Classification and Measurement of Financial Instrumentsbeginning the first quarter of fiscal year 2018. After |
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(4) Net income attributable to SINA's ordinary shareholders is adjusted for diluted shares issued by our subsidiary and equity method investments. |
SINA CORPORATION |
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
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(U.S. Dollars in thousands) |
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March 31, |
December 31, |
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2018 |
2017 |
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Assets |
|||||||
Current assets: |
|||||||
Cash and cash equivalents |
$ 1,186,509 |
$ 1,990,552 |
|||||
Short-term investments |
2,251,930 |
1,381,991 |
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Restricted cash |
197,819 |
216,151 |
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Accounts receivable, net |
321,864 |
285,681 |
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Prepaid expenses and other current assets |
240,915 |
228,238 |
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Subtotal |
4,199,037 |
4,102,613 |
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Property and equipment, net |
273,460 |
262,676 |
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Goodwill and intangible assets, net |
105,426 |
104,207 |
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Long-term investments (1) |
1,370,652 |
1,288,816 |
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Other assets |
70,892 |
57,082 |
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Total assets |
$ 6,019,467 |
$ 5,815,394 |
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Liabilities and Shareholders' Equity |
|||||||
Current liabilities: |
|||||||
Accounts payable |
$ 153,884 |
$ 130,431 |
|||||
Amount due to customers |
197,819 |
216,151 |
|||||
Accrued expenses and other current liabilities |
438,358 |
446,779 |
|||||
Short-term bank loan |
93,382 |
89,309 |
|||||
Convertible debt |
153,085 |
153,092 |
|||||
Deferred revenues |
151,857 |
134,580 |
|||||
Income taxes payable |
123,727 |
102,458 |
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Subtotal |
1,312,112 |
1,272,800 |
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Convertible debt |
881,018 |
879,983 |
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Long-term deferred revenues |
51,668 |
54,372 |
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Other long-term liabilities |
8,811 |
8,510 |
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Total liabilities |
2,253,609 |
2,215,665 |
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Shareholders' equity |
|||||||
SINA shareholders' equity (1) |
2,937,920 |
2,846,842 |
|||||
Non-controlling interests |
827,938 |
752,887 |
|||||
Total shareholders' equity |
3,765,858 |
3,599,729 |
|||||
Total liabilities and shareholders' equity |
$ 6,019,467 |
$ 5,815,394 |
|||||
(1)The Company adopted ASU 2016-1, Classification and Measurement of Financial Instruments beginning the first quarter of |
SINA CORPORATION |
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UNAUDITED ADDITIONAL INFORMATION |
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(U.S. Dollars in thousands) |
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Three months ended |
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March 31, |
December 31, |
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2018 |
2017 |
2017 |
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Net revenues |
|||||||
Portal: |
|||||||
Portal Advertising |
$ 64,132 |
$ 59,791 |
$ 95,319 |
||||
Other |
26,774 |
20,162 |
33,842 |
||||
Subtotal |
90,906 |
79,953 |
129,161 |
||||
Weibo: |
|||||||
Advertising and marketing |
302,949 |
169,297 |
332,305 |
||||
Weibo VAS |
46,934 |
29,904 |
45,140 |
||||
Subtotal |
349,883 |
199,201 |
377,445 |
||||
Elimination |
(37) |
(1,089) |
(2,868) |
||||
$ 440,752 |
$ 278,065 |
$ 503,738 |
|||||
Cost of revenues |
|||||||
Portal: |
|||||||
Portal Advertising |
$ 29,373 |
$ 27,482 |
$ 35,647 |
||||
Other |
16,469 |
12,702 |
19,180 |
||||
Subtotal |
45,842 |
40,184 |
54,827 |
||||
|
62,902 |
46,450 |
72,005 |
||||
Elimination |
(37) |
(62) |
(162) |
||||
$ 108,707 |
$ 86,572 |
$ 126,670 |
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Gross margin |
|||||||
Portal |
50% |
50% |
58% |
||||
|
82% |
77% |
81% |
||||
75% |
69% |
75% |
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SINA CORPORATION |
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UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS |
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(U.S. Dollars in thousands, except per share data) |
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Three months ended |
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March 31, 2018 |
March 31, 2017 |
December 31, 2017 |
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Non-GAAP |
Non-GAAP |
Non-GAAP |
||||||||||||||||
Actual |
Adjustments |
Results |
Actual |
Adjustments |
Results |
Actual |
Adjustments |
Results |
||||||||||
Advertising revenues |
$ 367,081 |
$ 367,081 |
$ 227,999 |
$ 227,999 |
$ 424,756 |
$ 424,756 |
||||||||||||
Non-advertising revenues |
73,671 |
(2,609) |
(a) |
71,062 |
50,066 |
(2,609) |
(a) |
47,457 |
78,982 |
(2,609) |
(a) |
76,373 |
||||||
Net revenues |
$ 440,752 |
$ (2,609) |
$ 438,143 |
$ 278,065 |
$ (2,609) |
$ 275,456 |
$ 503,738 |
$ (2,609) |
$ 501,129 |
|||||||||
(2,609) |
(a) |
(2,609) |
(a) |
(2,609) |
(a) |
|||||||||||||
2,541 |
(b) |
2,230 |
(b) |
2,145 |
(b) |
|||||||||||||
Gross profit |
$ 332,045 |
$ (68) |
$ 331,977 |
$ 191,493 |
$ (379) |
$ 191,114 |
$ 377,068 |
$ (464) |
$ 376,604 |
|||||||||
(19,775) |
(b) |
(18,960) |
(b) |
(20,039) |
(b) |
|||||||||||||
(1,635) |
(c) |
(155) |
(c) |
(1,535) |
(c) |
|||||||||||||
Operating expenses |
$ 258,756 |
$ (21,410) |
$ 237,346 |
$ 146,526 |
$ (19,115) |
$ 127,411 |
$ 248,418 |
$ (21,574) |
$ 226,844 |
|||||||||
(2,609) |
(a) |
(2,609) |
(a) |
(2,609) |
(a) |
|||||||||||||
22,316 |
(b) |
21,190 |
(b) |
22,184 |
(b) |
|||||||||||||
1,635 |
(c) |
155 |
(c) |
1,535 |
(c) |
|||||||||||||
Income from operations |
$ 73,289 |
$ 21,342 |
$ 94,631 |
$ 44,967 |
$ 18,736 |
$ 63,703 |
$ 128,650 |
$ 21,110 |
$ 149,760 |
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(2,609) |
(a) |
(2,609) |
(a) |
|||||||||||||||
22,316 |
(b) |
(2,609) |
(a) |
22,184 |
(b) |
|||||||||||||
1,635 |
(c) |
21,190 |
(b) |
1,535 |
(c) |
|||||||||||||
(451) |
(d) |
155 |
(c) |
1,503 |
(d) |
|||||||||||||
(7,226) |
(e) |
224 |
(d) |
740 |
(e) |
|||||||||||||
(8,183) |
(f) |
(15,883) |
(e) |
(9,197) |
(f) |
|||||||||||||
1,035 |
(g) |
(5,494) |
(f) |
690 |
(g) |
|||||||||||||
21 |
(h) |
1,472 |
(h) |
(253) |
(h) |
|||||||||||||
Net income attributable to SINA's ordinary shareholders |
$ 28,694 |
$ 6,538 |
$ 35,232 |
$ 38,524 |
$ (945) |
$ 37,579 |
$ 45,364 |
$ 14,593 |
$ 59,957 |
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Diluted net income per share * |
$ 0.38 |
$ 0.47 |
$ 0.52 |
$ 0.50 |
$ 0.60 |
$ 0.79 |
||||||||||||
Shares used in computing diluted net income per share |
74,036 |
- |
74,036 |
73,409 |
- |
73,409 |
74,213 |
- |
74,213 |
|||||||||
Gross margin - advertising |
77% |
1% |
78% |
70% |
1% |
71% |
76% |
1% |
77% |
|||||||||
Gross margin - non-advertising |
65% |
-1% |
64% |
62% |
-2% |
60% |
66% |
-1% |
65% |
|||||||||
Operating margin |
17% |
5% |
22% |
16% |
7% |
23% |
26% |
4% |
30% |
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(a) To exclude the recognition of deferred revenue related to the license granted to Leju. |
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(b) To exclude stock-based compensation. |
||||||||||||||||||
(c) To adjust amortization of intangible assets. |
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(d) To exclude 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. |
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(e) To exclude (gain) loss on sale of investments, (gain) loss on deemed disposal, fair value changes and impairment on investments, net. |
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(f) To exclude Non-GAAP to GAAP reconciling items for the income attributable to non-controlling interests. |
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(g) To exclude the amortization of convertible debt issuance cost. |
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(h) To exclude the provision (benefit) for income tax related to item (c) and (e). Other non-GAAP to GAAP reconciling items have no income tax effect.** |
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* |
Net income attributable to SINA's ordinary shareholders is adjusted for diluted shares issued by our subsidiary and equity method investments. |
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** |
Most of the reconciliation items were recorded in entities in tax free jurisdictions hence no income tax implications. For impairment on investments, valuation allowances were |
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UNAUDITED RECONCILIATION OF SINA'S SHARE OF EQUITY INVESTMENTS' NON-GAAP TO GAAP RESULTS* |
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Three months ended |
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March 31, 2018 |
March 31, 2017 |
December 31, 2017 |
||||||||||||||||
Actual |
Adjustments |
Non-GAAP Results |
Actual |
Adjustments |
Non-GAAP Results |
Actual |
Adjustments |
Non-GAAP Results |
||||||||||
To exclude stock-based compensation |
$ 584 |
$ 320 |
$ 881 |
|||||||||||||||
To exclude amortization of intangible |
||||||||||||||||||
assets resulting from business acquisitions |
1,123 |
102 |
1,177 |
|||||||||||||||
To exclude (gain) loss on disposal and impairment on investments, net |
1,669 |
(321) |
848 |
|||||||||||||||
To exclude (gain) loss resulting from the fair value |
||||||||||||||||||
changes in investments, net |
(3,339) |
39 |
(1,426) |
|||||||||||||||
To exclude tax impacts related |
||||||||||||||||||
to amortization of intangible assets |
(178) |
(21) |
(178) |
|||||||||||||||
Earning (Loss) from equity method investments, net |
$ (2,082) |
$ (141) |
$ (2,223) |
$ 3,248 |
$ 119 |
$ 3,367 |
$ (2,642) |
$ 1,302 |
$ (1,340) |
|||||||||
Share of amortization of equity investments' |
||||||||||||||||||
intangibles not on their books |
224 |
(224) |
- |
(125) |
125 |
- |
(253) |
253 |
- |
|||||||||
Share of tax impacts related to amortization of |
||||||||||||||||||
equity investments' intangibles not on their books |
86 |
(86) |
- |
20 |
(20) |
- |
52 |
(52) |
- |
|||||||||
$ (1,772) |
$ (451) |
$ (2,223) |
$ 3,143 |
$ 224 |
$ 3,367 |
$ (2,843) |
$ 1,503 |
$ (1,340) |
||||||||||
* Earning (Loss) from equity method investments is recorded one quarter in arrears. |
View original content:http://www.prnewswire.com/news-releases/sina-reports-first-quarter-2018-unaudited-financial-results-300645252.html
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