SINA Reports Fourth Quarter and Fiscal Year 2018 Unaudited Financial Results

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SINA Reports Fourth Quarter and Fiscal Year 2018 Unaudited Financial Results

BEIJING, March 5, 2019 /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 fourth quarter and the fiscal year ended December 31, 2018.

Fourth Quarter 2018 Highlights

  • Both net revenues and non-GAAP net revenues increased 14% year-over-year to $573.0 million and $570.4 million, respectively.
  • Advertising revenues increased 14% year-over-year to $484.3 million.
  • Non-advertising revenues increased 12% year-over-year to $88.7 million. Non-GAAP non-advertising revenues increased 13% year-over-year to $86.1 million.
  • Net income attributable to SINA was $16.4 million, or $0.22 for diluted net income per share attributable to SINA's ordinary shareholders. Non-GAAP net income attributable to SINA was $57.7 million, or $0.80 for non-GAAP diluted net income per share attributable to SINA's ordinary shareholders.
  • Weibo's monthly active users ("MAUs") were 462 million in December 2018, a net addition of approximately 70 million users on a year-over-year basis. Weibo's mobile MAUs represented 93% of Weibo's MAUs.
  • Weibo's average daily active users ("DAUs") were 200 million in December 2018, a net addition of approximately 28 million users on a year-over-year basis.

Fiscal Year 2018 Highlights

  • Both net revenues and non-GAAP net revenues increased 33% year-over-year to $2.11 billion and $2.10 billion, respectively.
  • Advertising revenues increased 36% year-over-year to $1.79 billion.
  • Non-advertising revenues increased 17% year-over-year to $319.0 million. Non-GAAP non-advertising revenues increased 18% year-over-year to $308.6 million.
  • Net income attributable to SINA was $125.6 million, or $1.70 for diluted net income per share attributable to SINA's ordinary shareholders. Non-GAAP net income attributable to SINA was $227.1 million, or $3.07 for non-GAAP diluted net income per share attributable to SINA's ordinary shareholders.

Fourth Quarter 2018 Financial Results

For the fourth quarter of 2018, SINA reported net revenues of $573.0 million, an increase of 14% compared to $503.7 million for the same period last year. Non-GAAP net revenues for the fourth quarter of 2018 were $570.4 million, an increase of 14% compared to $501.1 million for the same period last year.

Advertising revenues for the fourth quarter of 2018 were $484.3 million, an increase of 14% compared to $424.8 million for the same period last year, primarily driven by an increase of $84.7 million, or 25% growth in Weibo advertising and marketing revenues.

Non-advertising revenues for the fourth quarter of 2018 were $88.7 million, an increase of 12% compared to $79.0 million for the same period last year. Non-GAAP non-advertising revenues for the fourth quarter of 2018 were $86.1 million, an increase of 13% compared to $76.4 million for the same period last year. The year-over-year growth in non-advertising revenues was mainly attributable to the newly acquired live broadcasting business by Weibo in the fourth quarter of 2018.

Gross margin for the fourth quarter of 2018 was 79%, compared to 75% for the same period last year. Advertising gross margin for the fourth quarter of 2018 was 82%, compared to 76% for the same period last year. The increase in advertising gross margin was due to our revenue reporting changed from gross basis to net basis under the new revenue guidance adopted. Non-advertising gross margin for the fourth quarter of 2018 was 57%, down from 66% for the same period last year, mainly resulted from the relatively lower margin of the acquired live broadcasting business of Weibo.   

Operating expenses for the fourth quarter of 2018 totaled $319.9 million, compared to $248.4 million for the same period last year. The increase primarily resulted from the inclusion of marketing expense related to barter transactions recorded under the new revenue guidance as illustrated below as well as goodwill and acquired intangibles impairment charge for non-core business line. Non-GAAP operating expenses for the fourth quarter of 2018 totaled $288.6 million, compared to $226.8 million for the same period last year.

Income from operations for the fourth quarter of 2018 was $130.1 million, compared to $128.7 million for the same period last year. Operating margin was 23%, down from 26% for the same period last year. Non-GAAP income from operations for the fourth quarter of 2018 was $159.6 million, compared to $149.8 million for the same period last year. Non-GAAP operating margin was 28%, slightly down from 30% for the same period last year.

Non-operating loss for the fourth quarter of 2018 was $12.6 million, compared to a non-operating income of $7.7 million for the same period last year. Non-operating loss for the fourth quarter of 2018 included (i) a $23.0 million net loss on sale of investments, fair value changes and impairment on investments, which is excluded under non-GAAP measure; (ii) a $15.1 million net interest and other income; and (iii) a $4.7 million net loss from equity-method investments, which is reported one quarter in arrears. Non-operating income for the fourth quarter of 2017 composed of an $11.2 million net interest and other income and a $2.8 million loss pick-up from equity-method investments, which is reported one quarter in arrears. 

Income tax expenses for the fourth quarter of 2018 were $14.3 million, compared to $17.2 million for the same period last year.

Net income attributable to SINA's ordinary shareholders for the fourth quarter of 2018 was $16.4 million, compared to $45.4 million for the same period last year. Diluted net income per share attributable to SINA's ordinary shareholders for the fourth quarter of 2018 was $0.22, compared to $0.60 for the same period last year. Non-GAAP net income attributable to SINA's ordinary shareholders for the fourth quarter of 2018 was $57.7 million, compared to $60.0 million for the same period last year. Non-GAAP diluted net income per share attributable to SINA's ordinary shareholders for the fourth quarter of 2018 was $0.80, compared to $0.79 for the same period last year.

As of December 31, 2018, SINA's cash, cash equivalents and short-term investments totaled $2.3 billion, compared to $3.4 billion as of December 31, 2017. The decrease of SINA's cash, cash equivalents and short-term investments mainly resulted from continued investment activities, the execution of the Company's share repurchase program and repayment of SINA's convertible senior notes. For the fourth quarter of 2018, net cash provided by operating activities was $138.9 million, capital expenditures totaled $17.1 million, and depreciation and amortization expenses amounted to $11.9 million.

Fiscal Year 2018 Financial Results

For fiscal year 2018, SINA reported net revenues of $2.11 billion, an increase of 33% compared to $1.58 billion in 2017. Non-GAAP net revenues for 2018 were $2.10 billion, an increase of 33% compared to $1.57 billion in 2017.

Advertising revenues in 2018 were $1.79 billion, an increase of 36% compared to $1.31 billion in 2017, primarily driven by an increase of $502.4 million, or 50% growth in Weibo advertising and marketing revenues.

Non-advertising revenues in 2018 were $319.0 million, an increase of 17% compared to $272.0 million in 2017. Non-GAAP non-advertising revenues in 2018 were $308.6 million, an increase of 18% compared to $261.6 million in 2017, benefiting from increased Weibo membership fees and incremental revenue contributed from the live broadcasting business of Weibo.

Gross margin in 2018 was 79%, compared to 74% in 2017. Advertising gross margin in 2018 was 81%, compared to 75% in 2017. The increase in advertising gross margin mainly resulted from our revenue reporting changed from gross basis to net basis under the new accounting standard adopted. Non-advertising gross margin in 2018 was 65%, slightly down from 67% in 2017.  

Operating expenses in 2018 totaled $1.19 billion, compared to $781.2 million in 2017. Apart from the inclusion of marketing expense related to barter transactions recorded under the new revenue guidance as illustrated below, the increase in operating expenses was also attributable to the increase in sales and marketing expenses for Weibo's user acquisition and the increase in personnel related expenses. Non-GAAP operating expenses in 2018 totaled $1.07 billion, compared to $694.6 million in 2017.

Income from operations in 2018 was $467.0 million, compared to $388.6 million in 2017. Operating margin was 22%, down from 25% in 2017. Non-GAAP income from operations in 2018 was $581.5 million, compared to $474.0 million in 2017. Non-GAAP operating margin was 28%, slightly down from 30% in 2017.

Non-operating income in 2018 was $88.5 million, compared to $35.7 million in 2017. Non-operating income in 2018 included (i) a $69.4 million net interest and other income; (ii) an $18.0 million net gain on sale of investments, fair value changes and impairment on investments, which is excluded under non-GAAP measure; and (iii) a $1.1 million net income from equity-method investments, which is reported one quarter in arrears. Non-operating income in 2017 mainly included (i) a $42.7 million net interest and other income; (ii) a $16.1 million net loss from equity-method investments, which is reported one quarter in arrears; and (iii) a $9.0 million net gain on sale of investments, fair value changes and impairment on investments, which is excluded under non-GAAP measure.   

Income tax expenses in 2018 were $129.1 million, compared to $74.7 million in 2017. The increase was primarily due to higher profits generated in 2018 and the deferred tax provision recognized in respect of the fair value changes of investments. Non-GAAP income tax expenses in 2018 were $91.0 million, compared to $73.9 million in 2017.

Net income attributable to SINA's ordinary shareholders in 2018 was $125.6 million, compared to $156.6 million in 2017. Diluted net income per share attributable to SINA's ordinary shareholders in 2018 was $1.70, compared to $2.09 in 2017. Non-GAAP net income attributable to SINA's ordinary shareholders in 2018 was $227.1 million, compared to $207.9 million in 2017. Non-GAAP diluted net income per share attributable to SINA's ordinary shareholders in 2018 was $3.07, compared to $2.77 in 2017.

For the fiscal year of 2018, net cash provided by operating activities was $311.0 million, capital expenditures totaled $262.2 million, and depreciation and amortization expenses amounted to $41.2 million.

Financial Impact from New Revenue Guidance

As the Company adopted new revenue guidance ASC Topic 606 on January 1, 2018, results for reporting periods beginning after January 1, 2018 are presented under Topic 606 ('New Basis'), while prior period amounts are not adjusted and continue to be reported under Topic 605 ('Old Basis') , which is the Company's historic accounting method.

The Company's current period reported results which reflected the impact from the adoption of the new revenue guidance are as follows:


Three months ended December 31, 2018


Adjustments


Old Basis
ASC 605

VAT


Barter
Transaction


New Basis
ASC606


($ In thousands, except for percentage)

Net revenues

556,519


(31,196)


47,691


573,014

 - Portal

99,497


(5,463)


643


94,677

 - Weibo

460,772


(25,945)


47,048


481,875

Cost of revenues

154,241


(31,196)


-


123,045

Operating expenses

276,081


-


43,834


319,915

  - Sales and marketing

147,374


-


43,834


191,208

Income from operations

126,197


-


3,857


130,054

Gross margin

72.3%






78.5%

Operating margin

22.7%






22.7%

 


Year ended December 31, 2018


Adjustments


Old Basis
ASC 605

VAT


Barter
Transaction


New Basis
ASC 606


($ In thousands, except for percentage)

Net revenues

2,113,954


(118,006)


112,379


2,108,327

 - Portal

422,835


(23,243)


2,035


401,627

 - Weibo

1,703,644


(95,470)


110,344


1,718,518

Cost of revenues

570,046


(118,006)


-


452,040

Operating expenses

1,076,520


-


112,813


1,189,333

  - Sales and marketing

587,149


-


112,813


699,962

Income from operations

467,388


-


(434)


466,954

Gross margin

73.0%






78.6%

Operating margin

22.1%






22.1%

 

Business Outlook

For the fiscal year 2019, SINA estimates that its net revenues are between RMB16.5 billion and RMB17.5 billion, or US$2.44 billion and US$2.59 billion, assuming US dollar and RMB exchange rate of 6.75. It represents an annual growth rate of 18% to 25% on a constant currency basis. Such revenue forecast includes the recognition of $10.4 million in deferred license revenues related to the license granted to Leju. This forecast reflects SINA's current and preliminary view, which is subject to change.

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 SINA's ordinary shareholders and non-GAAP diluted net income per share attributable to SINA's ordinary shareholders. 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 related to the license granted to Leju, stock-based compensation, amortization of intangible assets, goodwill and acquired intangibles impairment, adjustment for non-GAAP to GAAP reconciling items on the share of equity method investments, gain (loss) on sale of investment, deemed disposal, fair value changes and impairment on investment, and income tax effects of above non-GAAP to GAAP reconciling items and adjustment for non-GAAP to GAAP reconciling items for the income 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, gain/loss 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 7:10 a.m.7:40 a.m. Eastern Time on March 5, 2019 (or 8:10 p.m.8:40 p.m. Beijing Time on March 5, 2019) 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://ir.sina.com. 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:

4677406

A replay of the conference call will be available through morning Eastern Time March 13, 2019. The dial-in number is +61 2 9003 4211. The passcode for the replay is 4677406.

About SINA

SINA is a leading online media company serving China and the global Chinese communities. Its 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 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. SINA mobile provides news information, professional and entertainment content customized for mobile users through mobile applications and mobile portal site SINA.cn.

Weibo is a leading social media platform for people to create, distribute and discover content. Based on an open platform architecture, Weibo provides unprecedented and simple way for people and organizations to publicly express themselves in real time, interact with others on a massive global platform and stay connected with the world.

Through these properties and other product lines, SINA offer an array of online media and social media services to its 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 failure to meet internal or external expectations of future performance given the rapidly evolving markets; 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 fin-tech products; failure to enter and develop the small and medium enterprise market by the Company or through cooperation with other parties, such as Alibaba; 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 2017 annual reports on Form 20-F 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


Year ended




December 31,


September 30,


December 31,




2018


2017


2018


2018


2017


Net revenues(1):











    Advertising

$                  484,307


$                  424,756


$                  483,806


$            1,789,285


$            1,311,866


    Non-advertising

88,707


78,982


73,395


319,042


272,018




573,014


503,738


557,201


2,108,327


1,583,884


Cost of revenues(1)(2):











    Advertising  

85,048


99,858


92,407


341,153


325,494


    Non-advertising

37,997


26,812


21,408


110,887


88,643




123,045


126,670


113,815


452,040


414,137


Gross profit

449,969


377,068


443,386


1,656,287


1,169,747














Operating expenses:











    Sales and marketing (1)(2)

191,208


143,020


185,478


699,962


408,856


    Product development (2)

85,383


78,977


91,545


345,942


267,392


    General and administrative (2)

30,633


26,421


28,377


120,184


104,923


    Goodwill and acquired intangibles impairment

12,691


-


10,554


23,245


-




319,915


248,418


315,954


1,189,333


781,171


Income from operations

130,054


128,650


127,432


466,954


388,576














Non-operating income (loss):











  Earning (Loss) from equity method investments, net

(4,731)


(2,843)


10,150


1,120


(16,070)


   Gain (Loss) on sale of investments, fair value changes and impairment
     on investments, net (3)

(22,960)


(740)


50,111


17,981


9,037


   Interest and other income, net

15,090


11,244


17,051


69,355


42,696




(12,601)


7,661


77,312


88,456


35,663














Income before income taxes

117,453


136,311


204,744


555,410


424,239


Income tax expense

(14,347)


(17,160)


(68,129)


(129,084)


(74,676)














Net income

103,106


119,151


136,615


426,326


349,563


   Less: Net income attributable to non-controlling interests

86,729


73,787


91,176


300,764


192,994














Net income attributable to SINA's ordinary shareholders

$                     16,377


$                     45,364


$                     45,439


$               125,562


$               156,569


























Basic net income per share

$                         0.24


$                         0.63


$                         0.66


$                      1.79


$                      2.20


Diluted net income per share (4)

$                         0.22


$                         0.60


$                         0.62


$                      1.70


$                      2.09














Shares used in computing basic net income per share

69,235


71,516


69,332


70,296


71,284














Shares used in computing diluted net income per share

69,666


74,213


71,322


72,375


73,931


























(1)  On January 1, 2018, the Company adopted ASC 606 Revenue from Contracts with Customers using the modified retrospective method,which means that prior periods amount will be
reported on a historical basis and amounts for 2018 are reported on the new basis. Under the new accounting standard, the main impact to the Company is that it now reports revenue net of
value added tax and recognizes revenues and expenses at fair value for advertising barter transactions.














(2)  Stock-based compensation in each category:












Cost of revenues

$                            922


$                         2,145


$                         3,775


$                    10,128


$                      9,257



Sales and marketing

3,174


5,370


7,414


21,942


20,790



Product development

4,403


6,432


11,205


30,830


29,163



General and administrative

8,834


8,237


9,012


32,169


32,177














(3)  The Company adopted ASU 2016-1, Classification and Measurement of Financial Instruments beginning the first quarter of fiscal year 2018. After the adoption of this new accounting
update, the Company measures long-term investments other than those accounted for under the equity method, at fair value through earnings. For those investments without readily
determinable fair values, the Company elected to record these investments at cost, less impairment, and plus or minus subsequent adjustments for observable price changes. Changes in the
basis of these investments are reported in current earnings. The Company recognized net loss of $20.3 million and net gain of $96.5 million from fair value changes in the investments for the
three months and the year ended December 31, 2018, respectively.














(4)  Net income attributable to SINA's ordinary shareholders 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)













December 31,



December 31,





2018



2017



Assets



Current assets:








Cash and cash equivalents


$               1,545,800



$               1,990,552



Short-term investments


799,534



1,381,991



Restricted cash


97,032



216,151



Accounts receivable, net


527,897



285,681



Prepaid expenses and other current assets


362,435



228,238



      Subtotal


3,332,698



4,102,613










Property and equipment, net


262,846



262,676


Goodwill and intangible assets, net


319,575



104,207


Long-term investments (1)


1,889,843



1,288,816


Other assets


81,127



57,082


Total assets


$               5,886,089



$               5,815,394











Liabilities and Shareholders' Equity



Current liabilities:








Accounts payable


$                   172,562



$                  130,431



Amount due to customers


97,032



216,151



Accrued expenses and other current liabilities


540,807



446,779



Short-term bank loan


78,229



89,309



Convertible debt (2)


-



153,092



Deferred revenues


139,306



134,580



Income taxes payable


115,725



102,458



     Subtotal


1,143,661



1,272,800










Convertible debt


884,123



879,983


Long-term deferred revenues


43,652



54,372


Other long-term liabilities


51,781



8,510



     Total liabilities


2,123,217



2,215,665










Shareholders' equity








SINA shareholders' equity (1) 


2,717,791



2,846,842



Non-controlling interests


1,045,081



752,887



     Total shareholders' equity 


3,762,872



3,599,729










Total liabilities and shareholders' equity


$               5,886,089



$               5,815,394










1)The Company adopted ASU 2016-1, Classification and Measurement of Financial Instruments beginning the first quarter
of fiscal year 2018. After the adoption of this new accounting update, the Company measures long-term investments other
than those investments accounted for under the equity method, at fair value through earnings.  For those investments
without readily determinable fair values, the Company elected to record these investments at cost, less impairment, and plus
or minus subsequent adjustments for observable price changes. Changes in the basis of these investments are reported in
current earnings. The cumulative impact arising from the adoption was a credit to retained earnings as of January 1, 2018 of
$49.0 million.










(2)In December 2018, the Company repaid $153.1 million in aggregate principal amount of 1.00% coupon interest
convertible senior notes on its maturity date.

 

SINA CORPORATION

UNAUDITED ADDITIONAL INFORMATION

(U.S. Dollars in thousands)















Three months ended


Year ended




December 31,


September 30,


December 31,




2018


2017


2018


2018


2017














Net revenues











Portal:











Portal Advertising

$                  67,377


$                  95,319


$                  74,533


$               290,215


$               320,473


Other

27,300


33,842


26,707


111,412


122,535



Subtotal

94,677


129,161


101,240


401,627


443,008














Weibo:











Advertising and marketing

417,016


332,305


409,273


1,499,180


996,745


Weibo VAS

64,859


45,140


50,898


219,338


153,309



Subtotal

481,875


377,445


460,171


1,718,518


1,150,054














Elimination

(3,538)


(2,868)


(4,210)


(11,818)


(9,178)




$               573,014


$               503,738


$               557,201


$            2,108,327


$            1,583,884














Cost of revenues











Portal:











Portal Advertising

$                  29,180


$                  35,647


$                  30,501


$               117,600


$               121,278


Other

14,377


19,180


17,508


68,500


65,733



Subtotal

43,557


54,827


48,009


186,100


187,011














Weibo

82,940


72,005


70,016


277,648


231,255














Elimination

(3,452)


(162)


(4,210)


(11,708)


(4,129)




$               123,045


$               126,670


$               113,815


$               452,040


$               414,137














Gross margin












Portal

54%


58%


53%


54%


58%



Weibo

83%


81%


85%


84%


80%




79%


75%


80%


79%


74%














 

SINA CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

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









































Three months ended



December 31, 2018


December 31, 2017


September 30, 2018







Non-GAAP






Non-GAAP






Non-GAAP



Actual


Adjustments


Results


Actual


Adjustments


Results


Actual


Adjustments


Results




















Advertising revenues

$    484,307




$    484,307


$     424,756




$    424,756


$    483,806




$    483,806

Non-advertising revenues

88,707


(2,609)

 (a) 

86,098


78,982


(2,609)

 (a) 

76,373


73,395


(2,609)

 (a) 

70,786

Net revenues

$    573,014


$              (2,609)


$    570,405


$     503,738


$              (2,609)


$    501,129


$    557,201


$              (2,609)


$    554,592
























(2,609)

 (a) 





(2,609)

 (a) 





(2,609)

 (a) 






922

 (b) 





2,145

 (b) 





3,775

 (b) 


Gross profit

$    449,969


$              (1,687)


$    448,282


$     377,068


$                 (464)


$    376,604


$    443,386


$               1,166


$    444,552
























(16,411)

 (b) 











(27,631)

 (b) 






(2,177)

 (c) 





(20,039)

 (b) 





(1,354)

 (c) 






(12,691)

 (d) 





(1,535)

 (c) 





(10,554)

 (d) 


Operating expenses

$    319,915


$           (31,279)


$    288,636


$     248,418


$           (21,574)


$    226,844


$    315,954


$           (39,539)


$    276,415
























(2,609)

 (a) 











(2,609)

(a)






17,333

 (b) 





(2,609)

 (a) 





31,406

 (b) 






2,177

 (c) 





22,184

 (b) 





1,354

 (c) 






12,691

 (d) 





1,535

 (c) 





10,554

 (d) 


Income from operations

$    130,054


$             29,592


$    159,646


$     128,650


$             21,110


$    149,760


$    127,432


$             40,705


$    168,137
























(2,609)

 (a) 











(2,609)

(a)






17,333

 (b) 





(2,609)

 (a) 





31,406

 (b) 






2,177

 (c) 





22,184

 (b) 





1,354

 (c) 






12,691

 (d) 





1,535

 (c) 





10,554

 (d) 






4,797

 (e) 





1,503

 (e) 





(6,879)

 (e) 






22,960

 (f) 





740

 (f) 





(50,111)

(f)






(14,929)

(g)





(9,197)

 (g) 





(2,845)

 (g) 






1,035

 (h) 





690

(h)





1,035

 (h) 






(2,138)

 (i) 





(253)

 (i) 





40,311

 (i) 


Net income attributable to SINA's ordinary shareholders

$      16,377


$             41,317


$      57,694


$        45,364


$             14,593


$      59,957


$      45,439


$             22,216


$      67,655







































Diluted net income per share *

$           0.22




$           0.80


$            0.60




$           0.79


$           0.62




$           0.93




















Shares used in computing diluted net income per share

69,666


960

(j)

70,626


74,213


-


74,213


71,322


-


71,322







































Gross margin - advertising

82%


1%


83%


76%


1%


77%


81%


1%


82%

Gross margin - non-advertising

57%


-1%


56%


66%


-1%


65%


71%


-1%


70%

Operating margin

23%


5%


28%


26%


4%


30%


23%


7%


30%






















 Year ended 









December 31, 2018


December 31, 2017













Non-GAAP






Non-GAAP









Actual


Adjustments


Results


Actual


Adjustments


Results


























Advertising revenues

$1,789,285




$1,789,285


$  1,311,866




$1,311,866







Non-advertising revenues

319,042


(10,436)

 (a) 

308,606


272,018


(10,436)

 (a) 

261,582







Net revenues

$2,108,327


$           (10,436)


$2,097,891


$  1,583,884


$           (10,436)


$1,573,448






























(10,436)

 (a) 





(10,436)

 (a) 












10,128

 (b) 





9,257

 (b) 








Gross profit

$1,656,287


$                 (308)


$1,655,979


$  1,169,747


$              (1,179)


$1,168,568






























(84,941)

 (b) 


















(6,689)

 (c) 





(82,130)

 (b) 












(23,245)

 (d) 





(4,455)

 (c) 








Operating expenses

$1,189,333


$         (114,875)


$1,074,458


$     781,171


$           (86,585)


$    694,586






























(10,436)

 (a) 


















95,069

 (b) 





(10,436)

 (a) 












6,689

 (c) 





91,387

 (b) 












23,245

 (d) 





4,455

 (c) 








Income from operations

$    466,954


$           114,567


$    581,521


$     388,576


$             85,406


$    473,982






























(10,436)

 (a) 


















95,069

 (b) 





(10,436)

 (a) 












6,689

 (c) 





91,387

 (b) 












23,245

 (d) 





4,455

 (c) 












(2,493)

(e)





3,276

 (e) 












(17,981)

 (f) 





(9,037)

 (f) 












(34,806)

 (g) 





(29,827)

 (g) 












4,140

 (h) 





690

 (h) 












38,109

 (i) 





785

 (i) 








Net income attributable to SINA's ordinary shareholders

$    125,562


$           101,536


$    227,098


$     156,569


$             51,293


$    207,862













































Diluted net income per share *

$           1.70




$           3.07


$            2.09




$           2.77


























Shares used in computing diluted net income per share

72,375


-


72,375


73,931


-


73,931













































Gross margin - advertising

81%


-


81%


75%


1%


76%







Gross margin - non-advertising

65%


-1%


64%


67%


-1%


66%







Operating margin

22%


6%


28%


25%


5%


30%


























(a)  To exclude the recognition of deferred revenue related to the license granted to Leju.


















(b)  To exclude stock-based compensation.


















(c)  To adjust amortization of intangible assets.


















(d) To exclude goodwill and acquired intangibles impairment


















(e)  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.











(f)  To exclude (gain) loss on sale of investments, (gain) loss on deemed disposal, fair value changes and impairment on investments, net.













(g)  To exclude Non-GAAP to GAAP reconciling items for the income attributable to non-controlling interests.















(h)  To exclude the amortization of convertible debt issuance cost.


















(i)  To exclude the provision (benefit) for income tax related to item (c), (d) and (f). Other non-GAAP to GAAP reconciling items have no income tax effect.**











(j) To adjust the number of shares for dilution resulted from convertible debt and unvested equity granted.



































Net income attributable to SINA's ordinary shareholders is adjusted for diluted shares issued by our subsidiary and equity method investments.









**

The Company considered the tax implication arising from the reconciliation items, and those items recorded in entities in tax free jurisdictions were without relevant tax implications.
For impairment on investments, valuation allowances were made for those differences the Company does not expect they can be realized in the foreseeable future. 




























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




































Three months ended



December 31, 2018


December 31, 2017


September 30, 2018



Actual


Adjustments


Non-GAAP
Results


Actual


Adjustments


Non-GAAP
Results


Actual


Adjustments


Non-GAAP
Results





















To exclude stock-based compensation



$                   350






$                   881






$                   674




To exclude amortization of intangible 



















  assets resulting from business acquisitions



1,062






1,177






1,079




To exclude loss on disposal and impairment on investments, net



-






848






1,245




To exclude (gain) loss resulting from the fair value changes in  investments, net



4,062






(1,426)






(9,187)




To exclude tax impacts related to amortization of intangible assets



(248)






(178)






(263)




Earning (Loss) from equity method investments, net

$       (5,160)


$               5,226


$              66


$        (2,642)


$               1,302


$       (1,340)


$        9,723


$              (6,452)


$        3,271


Share of amortization of equity investments' 



















  intangibles not on their books

367


(367)


-


(253)


253


-


364


(364)


-


Share of tax impacts related to amortization of 



















  equity investments' intangibles not on their books

62


(62)


-


52


(52)


-


63


(63)


-



$       (4,731)


$               4,797


$              66


$        (2,843)


$               1,503


$       (1,340)


$      10,150


$              (6,879)


$        3,271









































 Year ended 









December 31, 2018


December 31, 2017













Non-GAAP






Non-GAAP









Actual


Adjustments


Results


Actual


Adjustments


Results



























To exclude stock-based compensation



$               2,441






$               3,759










To exclude amortization of intangible 



















  assets resulting from business acquisitions



4,379