Table of Contents

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 6-K

 


 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of November 2018

 

Commission File Number: 001-37361

 


 

Sina Corporation

(Registrant’s Name)

 


 

SINA Plaza, No. 8 Courtyard 10

the West Xibeiwang E. Road

Haidian District, Beijing 100193

People’s Republic of China

(Address of Principal Executive Offices)

 


 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

Form 20-F x      Form 40-F o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): o

 

 

 


Table of Contents

 

TABLE OF CONTENTS

 

Signatures

 

99.1 - Press Release regarding Financial Results for the Third Quarter Ended September 30, 2018 issued by Sina Corporation on November 28, 2018

 

2


Table of Contents

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

SINA CORPORATION

 

 

 

 

 

 

Date: November 29, 2018

By:

/s/ Bonnie Yi Zhang

 

 

Bonnie Yi Zhang

 

 

Chief Financial Officer

 

3


Exhibit 99.1

 

SINA Reports Third Quarter 2018 Unaudited Financial Results

 

BEIJING, China—November 28, 2018—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, 2018.

 

“We are pleased with SINA’s third quarter results. Despite intensified competition and macro headwinds, we delivered healthy growth in both revenues and profitability driven by the continued momentum of Weibo business.” said Charles Chao, Chairman and CEO of SINA.

 

Third Quarter 2018 Highlights

 

·          Both net revenues and non-GAAP net revenues increased 26% year-over-year to $557.2 million and $554.6 million, respectively.

 

·          Advertising revenues increased 33% year-over-year to $483.8 million.

 

·          Non-advertising revenues were $73.4 million. Non-GAAP non-advertising revenues were $70.8 million.

 

·          Income from operations increased 6% year-over-year to $127.4 million. Non-GAAP income from operations increased 16% year-over-year to $168.1 million.

 

·          Net income attributable to SINA was $45.4 million, or $0.62 for diluted net income per share attributable to SINA’s ordinary shareholders. Non-GAAP net income attributable to SINA was $67.7 million, or $0.93 for non-GAAP diluted net income per share attributable to SINA’s ordinary shareholders.

 

Third Quarter 2018 Financial Results

 

For the third quarter of 2018, SINA reported net revenues of $557.2 million, an increase of 26% compared to $443.1 million for the same period last year. Non-GAAP net revenues for the third quarter of 2018 were $554.6 million, an increase of 26% compared to $440.5 million for the same period last year.

 

Advertising revenues for the third quarter of 2018 were $483.8 million, an increase of 33% compared to $364.0 million for the same period last year, primarily driven by an increase of $132.5 million, or 48% growth in Weibo advertising and marketing revenues.

 

Non-advertising revenues for the third quarter of 2018 were $73.4 million, compared to $79.2 million for the same period last year. Non-GAAP non-advertising revenues for the third quarter of 2018 were $70.8 million, compared to $76.6 million for the same period last year. The year over year decline in non-advertising revenues was attributable to our revenue reporting changed from gross basis to net basis, negative currency translation impact as well as lackluster SINA fin-tech businesses due to regulatory headwind. The decrease was partially offset by increase in Weibo value-added service (“VAS”) revenues.

 


 

Gross margin for the third quarter of 2018 was 80%, compared to 76% for the same period last year. Advertising gross margin for the third quarter of 2018 was 81%, compared to 76% for the same period last year. The increase in advertising gross margin was mainly resulted from our revenue reporting changed from gross basis to net basis under the new accounting standard adopted. Non-advertising gross margin for the third quarter of 2018 was 71%, flat year over year.

 

Operating expenses for the third quarter of 2018 totaled $316.0 million, compared to $214.3 million for the same period last year. Apart from the inclusion of marketing expense related to barter transactions recorded under the new accounting standard as illustrated below, the increase in operating expenses was primarily attributable to the step up of sales and marketing expenses for Weibo’s user acquisition, the increase in personnel related costs, as well as goodwill and acquired intangibles impairment charge for non-core business line. Non-GAAP operating expenses for the third quarter of 2018 totaled $276.4 million, compared to $189.7 million for the same period last year.

 

Income from operations for the third quarter of 2018 was $127.4 million, compared to $120.3 million for the same period last year. Operating margin was 23%, down from 27% for the same period last year. Non-GAAP income from operations for the third quarter of 2018 was $168.1 million, compared to $145.0 million for the same period last year. Non-GAAP operating margin was 30%, down from 33% for the same period last year.

 

Non-operating income for the third quarter of 2018 was $77.3 million, compared to $11.1 million for the same period last year. Non-operating income for the third quarter of 2018 included (i) a $50.1 million net gain on sale of investments, fair value changes and impairment on investments, which is excluded under non-GAAP measure; (ii) a $17.1 million net interest and other income; and (iii) a $10.2 million net earnings from equity-method investments, which is reported one quarter in arrears and is mainly resulted from the earnings pick-up related to the Company’s investment in Tian Ge Interactive Holding Limited. Non-operating income for the third quarter of 2017 included (i) a $10.2 million net gain on sale of and impairment on investments, which is excluded under our non-GAAP measure; (ii) a $11.1 million loss pick-up from equity-method investments, which is accounted for under the equity-method and reported one quarter in arrears, mainly resulting from the loss pick-up from the Company’s investment in Leju Holding Limited; and (iii) a $12.0 million net interest and other income.

 

Income tax expenses for the third quarter of 2018 were $68.1 million, compared to $24.6 million for the same period last year, largely attributable to the deferred tax liability recognized from the fair value changes of investments. Non-GAAP income tax expenses for the third quarter of 2018 were $27.8 million, compared to $24.8 million for the same period last year.

 

Net income attributable to SINA’s ordinary shareholders for the third quarter of 2018 was $45.4 million, compared to $49.3 million for the same period last year. Diluted net income per share attributable to SINA’s ordinary shareholders for the third quarter of 2018 was $0.62, compared to $0.66 for the same period last year. Non-GAAP net income attributable to SINA’s ordinary shareholders for the third quarter of 2018 was $67.7 million, compared to $57.7 million for the same period last year. Non-GAAP diluted net income per share attributable to SINA’s ordinary shareholders for the third quarter of 2018 was $0.93, compared to $0.77 for the same period last year.

 


 

As of September 30, 2018, SINA’s cash, cash equivalents and short-term investments totaled $2.5 billion, compared to $3.4 billion as of December 31, 2017. The decrease of SINA’s cash, cash equivalents and short-term investments was mainly resulted from continued investment activities and the execution of the Company’s share repurchase program. For the third quarter of 2018, net cash provided by operating activities was $100.8 million, capital expenditures totaled $46.8 million, and depreciation and amortization expenses amounted to $9.9 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 September 30, 2018

 

 

 

 

 

Adjustments

 

 

 

 

 

Old Basis
ASC 605

 

VAT

 

Barter
Transaction

 

New Basis
ASC 606

 

 

 

($ In thousands, except for percentage)

 

Net revenues

 

561,228

 

(31,490

)

27,463

 

557,201

 

- Portal

 

106,459

 

(5,857

)

638

 

101,240

 

- Weibo

 

459,232

 

(25,886

)

26,825

 

460,171

 

Cost of revenues

 

145,305

 

(31,490

)

 

113,815

 

Operating expenses

 

285,794

 

 

30,160

 

315,954

 

- Sales and marketing

 

155,318

 

 

30,160

 

185,478

 

Income from operations

 

130,129

 

 

(2,697

)

127,432

 

Gross margin

 

74.1

%

 

 

 

 

79.6

%

Operating margin

 

23.2

%

 

 

 

 

22.9

%

 


 

Annual General Meeting

 

On November 23, 2018, the Company held its annual general meeting of shareholders, where the shareholders re-elected Mr. Yan Wang and Mr. James Jianzhang Liang as directors of the Company and ratified the appointment of PricewaterhouseCoopers Zhong Tian LLP as the Company’s independent auditors for the fiscal year ending December 31, 2018. The shareholders also approved the adoption of the amended and restated memorandum and articles of association (“MAA”) in substitution for and to the exclusion of the currently effective MAA of the Company.

 

Business Outlook

 

In light of macro-economic conditions and regulatory factors, we are revising our fiscal year 2018 net revenue guidance to a range of RMB 14.0 billion to RMB 14.2 billion, or $2.09 billion to $2.12 billion, assuming US dollar and RMB exchange rate of 6.70. It represents a year over year growth rate of 32% to 34% and reflects a 5% to 7% adjustment to the midpoint of the original revenue guidance.

 

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 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 November 28, 2018 (or 8:10 p.m. — 8:40 p.m. Beijing Time on November 28, 2018) 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:

7479215

 

A replay of the conference call will be available through morning Eastern Time December 6, 2018. The dial-in number is +61 2 9003 4211. The passcode for the replay is 7479215.

 

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

 

Nine months ended

 

 

 

September 30,

 

June 30,

 

September 30,

 

 

 

2018

 

2017

 

2018

 

2018

 

2017

 

Net revenues (1):

 

 

 

 

 

 

 

 

 

 

 

Advertising

 

$

483,806

 

$

363,958

 

$

454,091

 

$

1,304,978

 

$

887,110

 

Non-advertising

 

73,395

 

79,191

 

83,269

 

230,335

 

193,036

 

 

 

557,201

 

443,149

 

537,360

 

1,535,313

 

1,080,146

 

Cost of revenues (1)(2):

 

 

 

 

 

 

 

 

 

 

 

Advertising

 

92,407

 

85,757

 

80,583

 

256,105

 

225,636

 

Non-advertising

 

21,408

 

22,814

 

25,890

 

72,890

 

61,831

 

 

 

113,815

 

108,571

 

106,473

 

328,995

 

287,467

 

Gross profit

 

443,386

 

334,578

 

430,887

 

1,206,318

 

792,679

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing (1)(2)

 

185,478

 

114,345

 

183,589

 

508,754

 

265,836

 

Product development (2)

 

91,545

 

70,509

 

83,877

 

260,559

 

188,415

 

General and administrative (2)

 

28,377

 

29,443

 

27,242

 

89,551

 

78,502

 

Goodwill and acquired intangibles impairment

 

10,554

 

 

 

10,554

 

 

 

 

315,954

 

214,297

 

294,708

 

869,418

 

532,753

 

Income from operations

 

127,432

 

120,281

 

136,179

 

336,900

 

259,926

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-operating income:

 

 

 

 

 

 

 

 

 

 

 

Earning (Loss) from equity method investments, net

 

10,150

 

(11,105

)

(2,527

)

5,851

 

(13,227

)

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

 

50,111

 

10,209

 

(16,396

)

40,941

 

9,777

 

Interest and other income, net

 

17,051

 

11,994

 

20,116

 

54,265

 

31,452

 

 

 

77,312

 

11,098

 

1,193

 

101,057

 

28,002

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

204,744

 

131,379

 

137,372

 

437,957

 

287,928

 

Income tax expense

 

(68,129

)

(24,555

)

(27,858

)

(114,737

)

(57,516

)

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

136,615

 

106,824

 

109,514

 

323,220

 

230,412

 

Less: Net income attributable to non-controlling interests

 

91,176

 

57,533

 

74,462

 

214,035

 

119,207

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to SINA’s ordinary shareholders

 

$

45,439

 

$

49,291

 

$

35,052

 

$

109,185

 

$

111,205

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net income per share

 

$

0.66

 

$

0.69

 

$

0.49

 

$

1.55

 

$

1.56

 

Diluted net income per share (4)

 

$

0.62

 

$

0.66

 

$

0.47

 

$

1.48

 

$

1.48

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing basic net income per share

 

69,332

 

71,468

 

71,210

 

70,653

 

71,208

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing diluted net income per share

 

71,322

 

74,213

 

73,553

 

72,962

 

73,924

 

 


(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

 

$

3,775

 

$

2,776

 

$

2,890

 

$

9,206

 

$

7,112

 

Sales and marketing

 

7,414

 

5,568

 

6,474

 

18,768

 

15,420

 

Product development

 

11,205

 

9,073

 

7,735

 

26,427

 

22,731

 

General and administrative

 

9,012

 

8,410

 

6,915

 

23,335

 

23,940

 

 

(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.  The Company recognized $120.5 million of net gain from fair value changes in the investments for the three months ended September 30, 2018.  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.

 

(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)

 

 

 

September 30,

 

December 31,

 

 

 

2018

 

2017

 

Assets

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

1,178,966

 

$

1,990,552

 

Short-term investments

 

1,349,472

 

1,381,991

 

Restricted cash

 

106,579

 

216,151

 

Accounts receivable, net

 

458,504

 

285,681

 

Prepaid expenses and other current assets

 

415,930

 

228,238

 

Subtotal

 

3,509,451

 

4,102,613

 

 

 

 

 

 

 

Property and equipment, net

 

258,542

 

262,676

 

Goodwill and intangible assets, net

 

248,593

 

104,207

 

Long-term investments (1)

 

1,708,579

 

1,288,816

 

Other assets

 

95,687

 

57,082

 

Total assets

 

$

5,820,852

 

$

5,815,394

 

 

 

 

 

 

 

Liabilities and Shareholders’ Equity

 

Current liabilities:

 

 

 

 

 

Accounts payable

 

$

149,535

 

$

130,431

 

Amount due to customers

 

106,579

 

216,151

 

Accrued expenses and other current liabilities

 

459,823

 

446,779

 

Short-term bank loan

 

51,306

 

89,309

 

Convertible debt

 

153,085

 

153,092

 

Deferred revenues

 

146,508

 

134,580

 

Income taxes payable

 

106,475

 

102,458

 

Subtotal

 

1,173,311

 

1,272,800

 

 

 

 

 

 

 

Convertible debt

 

883,089

 

879,983

 

Long-term deferred revenues

 

46,261

 

54,372

 

Other long-term liabilities

 

48,178

 

8,510

 

Total liabilities

 

2,150,839

 

2,215,665

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

SINA shareholders’ equity (1)

 

2,701,822

 

2,846,842

 

Non-controlling interests

 

968,191

 

752,887

 

Total shareholders’ equity

 

3,670,013

 

3,599,729

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

5,820,852

 

$

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.

 


 

SINA CORPORATION

UNAUDITED ADDITIONAL INFORMATION

(U.S. Dollars in thousands)

 

 

 

Three months ended

 

Nine months ended

 

 

 

September 30,

 

June 30,

 

September 30,

 

 

 

2018

 

2017

 

2018

 

2018

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenues

 

 

 

 

 

 

 

 

 

 

 

Portal:

 

 

 

 

 

 

 

 

 

 

 

Portal Advertising

 

$

74,533

 

$

87,432

 

$

84,173

 

$

222,838

 

$

225,154

 

Other

 

26,707

 

39,785

 

30,631

 

84,112

 

88,693

 

Subtotal

 

101,240

 

127,217

 

114,804

 

306,950

 

313,847

 

 

 

 

 

 

 

 

 

 

 

 

 

Weibo:

 

 

 

 

 

 

 

 

 

 

 

Advertising and marketing

 

409,273

 

276,803

 

369,942

 

1,082,164

 

664,440

 

Weibo VAS

 

50,898

 

43,232

 

56,647

 

154,479

 

108,169

 

Subtotal

 

460,171

 

320,035

 

426,589

 

1,236,643

 

772,609

 

 

 

 

 

 

 

 

 

 

 

 

 

Elimination

 

(4,210

)

(4,103

)

(4,033

)

(8,280

)

(6,310

)

 

 

$

557,201

 

$

443,149

 

$

537,360

 

$

1,535,313

 

$

1,080,146

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

Portal:

 

 

 

 

 

 

 

 

 

 

 

Portal Advertising

 

$

30,501

 

$

30,502

 

$

28,546

 

$

88,420

 

$

85,631

 

Other

 

17,508

 

19,483

 

20,146

 

54,123

 

46,553

 

Subtotal

 

48,009

 

49,985

 

48,692

 

142,543

 

132,184

 

 

 

 

 

 

 

 

 

 

 

 

 

Weibo

 

70,016

 

62,428

 

61,790

 

194,708

 

159,250

 

 

 

 

 

 

 

 

 

 

 

 

 

Elimination

 

(4,210

)

(3,842

)

(4,009

)

(8,256

)

(3,967

)

 

 

$

113,815

 

$

108,571

 

$

106,473

 

$

328,995

 

$

287,467

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

 

 

 

 

 

 

Portal

 

53

%

61

%

58

%

54

%

58

%

Weibo

 

85

%

80

%

86

%

84

%

79

%

 

 

80

%

76

%

80

%

79

%

73

%

 


 

SINA CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

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

 

 

 

Three months ended

 

 

 

September 30, 2018

 

September 30, 2017

 

June 30, 2018

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

Non-GAAP

 

 

 

 

 

Non-GAAP

 

 

 

Actual

 

Adjustments

 

Results

 

Actual

 

Adjustments

 

Results

 

Actual

 

Adjustments

 

Results

 

Advertising revenues

 

$

483,806

 

 

 

$

483,806

 

$

363,958

 

 

 

$

363,958

 

$

454,091

 

 

 

$

454,091

 

Non-advertising revenues

 

73,395

 

(2,609

)(a)

70,786

 

79,191

 

(2,609

)(a)

76,582

 

83,269

 

(2,609

)(a)

80,660

 

Net revenues

 

$

557,201

 

$

(2,609

)

$

554,592

 

$

443,149

 

$

(2,609

)

$

440,540

 

$

537,360

 

$

(2,609

)

$

534,751

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,609

)(a)

 

 

 

 

(2,609

)(a)

 

 

 

 

(2,609

)(a)

 

 

 

 

 

 

3,775

(b)

 

 

 

 

2,776

(b)

 

 

 

 

2,890

(b)

 

 

Gross profit

 

$

443,386

 

$

1,166

 

$

444,552

 

$

334,578

 

$

167

 

$

334,745

 

$

430,887

 

$

281

 

$

431,168

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(27,631

)(b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,354

)(c)

 

 

 

 

(23,051

)(b)

 

 

 

 

(21,124

)(b)

 

 

 

 

 

 

(10,554

)(d)

 

 

 

 

(1,538

)(c)

 

 

 

 

(1,523

)(c)

 

 

Operating expenses

 

$

315,954

 

$

(39,539

)

$

276,415

 

$

214,297

 

$

(24,589

)

$

189,708

 

$

294,708

 

$

(22,647

)

$

272,061

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,609

)(a)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31,406

(b)

 

 

 

 

(2,609

)(a)

 

 

 

 

(2,609

)(a)

 

 

 

 

 

 

1,354

(c)

 

 

 

 

25,827

(b)

 

 

 

 

24,014

(b)

 

 

 

 

 

 

10,554

(d)

 

 

 

 

1,538

(c)

 

 

 

 

1,523

(c)

 

 

Income from operations

 

$

127,432

 

$

40,705

 

$

168,137

 

$

120,281

 

$

24,756

 

$

145,037

 

$

136,179

 

$

22,928

 

$

159,107

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,609

)(a)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31,406

(b)

 

 

 

 

 

 

 

 

 

 

(2,609

)(a)

 

 

 

 

 

 

1,354

(c)

 

 

 

 

(2,609

)(a)

 

 

 

 

24,014

(b)

 

 

 

 

 

 

10,554

(d)

 

 

 

 

25,827

(b)

 

 

 

 

1,523

(c)

 

 

 

 

 

 

(6,879

)(e)

 

 

 

 

1,538

(c)

 

 

 

 

40

(e)

 

 

 

 

 

 

(50,111

)(f)

 

 

 

 

1,474

(e)

 

 

 

 

16,396

(f)

 

 

 

 

 

 

(2,845

)(g)

 

 

 

 

(10,209

)(f)

 

 

 

 

(8,849

)(g)

 

 

 

 

 

 

1,035

(h)

 

 

 

 

(7,391

)(g)

 

 

 

 

1,035

(h)

 

 

 

 

 

 

40,311

(i)

 

 

 

 

(254

)(i)

 

 

 

 

(85

)(i)

 

 

Net income attributable to SINA's ordinary shareholders

 

$

45,439

 

$

22,216

 

$

67,655

 

$

49,291

 

$

8,376

 

$

57,667

 

$

35,052

 

$

31,465

 

$

66,517

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share *

 

$

0.62

 

 

 

$

0.93

 

$

0.66

 

 

 

$

0.77

 

$

0.47

 

 

 

$

0.89

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing diluted net income per share

 

71,322

 

 

71,322

 

74,213

 

 

74,213

 

73,553

 

 

73,553

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin - advertising

 

81

%

1

%

82

%

76

%

1

%

77

%

82

%

1

%

83

%

Gross margin - non-advertising

 

71

%

-1

%

70

%

71

%

-1

%

70

%

69

%

-1

%

68

%

Operating margin

 

23

%

7

%

30

%

27

%

6

%

33

%

25

%

5

%

30

%

 


 

 

 

Nine months ended 

 

 

 

September 30, 2018

 

September 30, 2017

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

Non-GAAP

 

 

 

Actual

 

Adjustments

 

Results

 

Actual

 

Adjustments

 

Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Advertising revenues

 

$

1,304,978

 

 

 

$

1,304,978

 

$

887,110

 

 

 

$

887,110

 

Non-advertising revenues

 

230,335

 

(7,827

)(a)

222,508

 

193,036

 

(7,827

)(a)

185,209

 

Net revenues

 

$

1,535,313

 

$

(7,827

)

$

1,527,486

 

$

1,080,146

 

$

(7,827

)

$

1,072,319

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,827

)(a)

 

 

 

 

(7,827

)(a)

 

 

 

 

 

 

9,206

(b)

 

 

 

 

7,112

(b)

 

 

Gross profit

 

$

1,206,318

 

$

1,379

 

$

1,207,697

 

$

792,679

 

$

(715

)

$

791,964

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(68,530

)(b)

 

 

 

 

 

 

 

 

 

 

 

 

(4,512

)(c)

 

 

 

 

(62,091

)(b)

 

 

 

 

 

 

(10,554

)(d)

 

 

 

 

(2,920

)(c)

 

 

Operating expenses

 

$

869,418

 

$

(83,596

)

$

785,822

 

$

532,753

 

$

(65,011

)

$

467,742

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,827

)(a)

 

 

 

 

 

 

 

 

 

 

 

 

77,736

(b)

 

 

 

 

(7,827

)(a)

 

 

 

 

 

 

4,512

(c)

 

 

 

 

69,203

(b)

 

 

 

 

 

 

10,554

(d)

 

 

 

 

2,920

(c)

 

 

Income from operations

 

$

336,900

 

$

84,975

 

$

421,875

 

$

259,926

 

$

64,296

 

$

324,222

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(7,827

)(a)

 

 

 

 

 

 

 

 

 

 

 

 

77,736

(b)

 

 

 

 

 

 

 

 

 

 

 

 

4,512

(c)

 

 

 

 

(7,827

)(a)

 

 

 

 

 

 

10,554

(d)

 

 

 

 

69,203

(b)

 

 

 

 

 

 

(7,290

)(e)

 

 

 

 

2,920

(c)

 

 

 

 

 

 

(40,941

)(f)

 

 

 

 

1,773

(e)

 

 

 

 

 

 

(19,877

)(g)

 

 

 

 

(9,777

)(f)

 

 

 

 

 

 

3,105

(h)

 

 

 

 

(20,630

)(g)

 

 

 

 

 

 

40,247

(i)

 

 

 

 

1,038

(i)

 

 

Net income attributable to SINA’s ordinary shareholders

 

$

109,185

 

$

60,219

 

$

169,404

 

$

111,205

 

$

36,700

 

$

147,905

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share *

 

$

1.48

 

 

 

$

2.28

 

$

1.48

 

 

 

$

1.97

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing diluted net income per share

 

72,962

 

 

72,962

 

73,924

 

 

73,924

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin - advertising

 

80

%

1

%

81

%

75

%

 

75

%

Gross margin - non-advertising

 

68

%

-1

%

67

%

68

%

-1

%

67

%

Operating margin

 

22

%

6

%

28

%

24

%

6

%

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) and (f). Other non-GAAP to GAAP reconciling items have no income tax effect.**

 

*                 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

 

 

 

September 30, 2018

 

September 30, 2017

 

June 30, 2018

 

 

 

Actual

 

Adjustments

 

Non-GAAP
Results

 

Actual

 

Adjustments

 

Non-GAAP
Results

 

Actual

 

Adjustments

 

Non-GAAP
Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

To exclude stock-based compensation

 

 

 

$

674

 

 

 

 

 

$

1,822

 

 

 

 

 

$

833

 

 

 

To exclude amortization of intangible assets resulting from business acquisitions

 

 

 

1,079

 

 

 

 

 

1,127

 

 

 

 

 

1,115

 

 

 

To exclude (gain) loss on disposal and impairment on investments, net

 

 

 

1,245

 

 

 

 

 

327

 

 

 

 

 

75

 

 

 

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

 

 

 

(9,187

)

 

 

 

 

(1,745

)

 

 

 

 

(1,313

)

 

 

To exclude tax impacts related to amortization of intangible assets

 

 

 

(263

)

 

 

 

 

(166

)

 

 

 

 

(253

)

 

 

Earning (Loss) from equity method investments, net

 

$

9,723

 

$

(6,452

)

$

3,271

 

$

(10,996

)

$

1,365

 

$

(9,631

)

$

(2,944

)

$

457

 

$

(2,487

)

Share of amortization of equity investments’ intangibles not on their books

 

364

 

(364

)

 

(130

)

130

 

 

351

 

(351

)

 

Share of tax impacts related to amortization of equity investments’ intangibles not on their books

 

63

 

(63

)

 

21

 

(21

)

 

66

 

(66

)

 

 

 

$

10,150

 

$

(6,879

)

$

3,271

 

$

(11,105

)

$

1,474

 

$

(9,631

)

$

(2,527

)

$

40

 

$

(2,487

)

 

 

 

Nine months ended

 

 

 

September 30, 2018

 

September 30, 2017

 

 

 

 

 

 

 

Non-GAAP

 

 

 

 

 

Non-GAAP

 

 

 

Actual

 

Adjustments

 

Results

 

Actual

 

Adjustments

 

Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

To exclude stock-based compensation

 

 

 

$

2,091

 

 

 

 

 

$

2,878

 

 

 

To exclude amortization of intangible assets resulting from business acquisitions

 

 

 

3,317

 

 

 

 

 

2,264

 

 

 

To exclude (gain) loss on disposal and impairment on investments, net

 

 

 

2,989

 

 

 

 

 

(1,313

)

 

 

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

 

 

 

(13,839

)

 

 

 

 

(2,343

)

 

 

To exclude tax impacts related to amortization of intangible assets

 

 

 

(694

)

 

 

 

 

(330

)

 

 

Earning (Loss) from equity method investments, net

 

$

4,697

 

$

(6,136

)

$

(1,439

)

$

(12,610

)

$

1,156

 

$

(11,454

)

Share of amortization of equity investments’ intangibles not on their books

 

939

 

(939

)

 

(778

)

778

 

 

Share of tax impacts related to amortization of equity investments’ intangibles not on their books

 

215

 

(215

)

 

161

 

(161

)

 

 

 

$

5,851

 

$

(7,290

)

$

(1,439

)

$

(13,227

)

$

1,773

 

$

(11,454

)

 


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