SINA Reports Fourth Quarter and Fiscal Year 2017 Unaudited Financial Results
SINA Reports Fourth Quarter and Fiscal Year 2017 Unaudited Financial Results
  • Yoo Mi-ja 기자
  • 승인 2018.02.14 02:08
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BEIJING, Feb. 13, 2018 /PRNewswire/KOREA IT TIMES -- 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, 2017.

Fourth Quarter 2017 Highlights

  • Net revenues increased 61% year-over-year to $503.7 million. Non-GAAP net revenues increased 61% year-over-year to $501.1 million.
  • Advertising revenues increased 58% year-over-year to $424.8 million.
  • Non-advertising revenues increased 80% year-over-year to $79.0 million. Non-GAAP non-advertising revenues increased 85% year-over-year to $76.4 million.
  • Income from operations increased 421% year-over-year to $128.7 million. Operating margin was 26%, up from 8% for the same period last year. Non-GAAP income from operations increased 82% year-over-year to $149.8 million. Non-GAAP operating margin was 30%, up from 26% for the same period last year.
  • Net income attributable to SINA was $45.4 million, or $0.60 for diluted net income per share attributable to SINA's ordinary shareholders. Non-GAAP net income attributable to SINA was $60.0 million, or $0.79 for non-GAAP diluted net income per share attributable to SINA's ordinary shareholders.
  • Weibo's monthly active users ("MAUs") had a net addition of approximately 79 million users year-over-year and reached 392 million in December 2017. Weibo's mobile MAUs represented 93% of Weibo's MAUs.
  • Weibo's average daily active users ("DAUs") had a net addition of approximately 33 million users year-over-year and reached 172 million in December 2017.

Fiscal Year 2017 Highlights

  • Net revenues increased 54% year-over-year to $1.58 billion. Non-GAAP net revenues increased 54% year-over-year to $1.57 billion, exceeding the Company's annual guidance between $1.3 billion and $1.44 billion.
  • Advertising revenues increased 51% year-over-year to $1.31 billion.
  • Non-advertising revenues increased 70% year-over-year to $272.0 million. Non-GAAP non-advertising revenues increased 75% year-over-year to $261.6 million.
  • Income from operations increased 430% year-over-year to $388.6 million. Operating margin was 25%, up from 7% in 2016. Non-GAAP income from operations increased 165% year-over-year to $474.0 million. Non-GAAP operating margin was 30%, up from 18% in 2016.
  • Net income attributable to SINA was $156.6 million, or $2.09 for diluted net income per share attributable to SINA's ordinary shareholders. Non-GAAP net income attributable to SINA was $207.9 million, or $2.77 for non-GAAP diluted net income per share attributable to SINA's ordinary shareholders.

"We closed 2017 with another strong quarter, capping off a remarkable year of growth," said Charles Chao, Chairman and CEO of SINA. "Weibo's momentum continued on the back of sustainable user growth and engagement. We have also made progresses in machine learning capability, content distribution efficiency and advertising system upgrade, which further fueled the strong growth of Weibo. Going forward, Weibo will continue to focus on user base expansion and user engagement, invest in the reinforcing content ecosystem, capture higher wallet share in social marketing and diversify monetization opportunities in the long run." said Mr. Chao.

  1. SINA business, we are delighted that it returned to the growth trajectory in 2017," Mr. Chao added. "Through improvement in content offering and effective channel marketing, SINA mobile media properties continuously expanded user scale, and improved user engagement and elevated monetization capability. Heading into 2018, we will continue to refine our mobile media products, enrich media content ecosystem and capitalize mobile opportunities. For our emerging fintech business, we will navigate through the new regulation landscape and aim to achieve growth through diversified product offerings in 2018," Mr. Chao concluded.

Fourth Quarter 2017 Financial Results

For the fourth quarter of 2017, SINA reported net revenues of $503.7 million, an increase of 61% compared to $313.4 million for the same period last year. Non-GAAP net revenues for the fourth quarter of 2017 were $501.1 million, an increase of 61% compared to $310.8 million for the same period last year.

Advertising revenues for the fourth quarter of 2017 were $424.8 million, an increase of 58% compared to $269.6 million for the same period last year. The year-over-year growth in advertising revenues was mainly resulted from an increase of $144.4 million, or 77% growth in Weibo advertising and marketing revenues and a 16% growth in portal advertising revenues in the fourth quarter.

Non-advertising revenues for the fourth quarter of 2017 were $79.0 million, an increase of 80% compared to $43.9 million for the same period last year. Non-GAAP non-advertising revenues for the fourth quarter of 2017 were $76.4 million, an increase of 85% compared to $41.3 million for the same period last year. The year-over-year growth in non-advertising revenues was driven by revenues derived from SINA fintech business, increased Weibo membership fees and revenue share from live broadcasting business.

  1. margin for the fourth quarter of 2017 was 75%, compared to 70% for the same period last year. Advertising gross margin for the fourth quarter of 2017 was 76%, compared to 72% for the same period last year. The increase in advertising gross margin was primarily due to stronger advertising demand from Weibo advertisers and the further operating leverage of Weibo business. Non-advertising gross margin for the fourth quarter of 2017 was 66%, compared to 57% for the same period last year. The increase in non-advertising gross margin was the result of higher revenue contribution from businesses with better margin profile compared with the same period last year, such as Weibo's membership services.

Operating expenses for the fourth quarter of 2017 totaled $248.4 million, compared to $194.2 million for the same period last year. The increase in operating expenses was primarily attributable to the increase in sales and marketing expenses primarily for user acquisition of Weibo and SINA News Application and the increase of product development expenses in relation to personnel-related costs. Non-GAAP operating expenses for the fourth quarter of 2017 totaled $226.8 million, compared to $136.2 million for the same period last year.

Income from operations for the fourth quarter of 2017 was $128.7 million, an increase of 421% compared to $24.7 million for the same period last year. Operating margin was 26%, up from 8% for the same period last year. Excluding the one-off recognition of goodwill and acquired intangibles impairment charge in the fourth quarter of 2016, the increase in operating margin was a result of further operating leverage of Weibo business. Non-GAAP income from operations for the fourth quarter of 2017 was $149.8 million, an increase of 82% compared to $82.1 million for the same period last year. Non-GAAP operating margin was 30%, up from 26% for the same period last year.

Non-operating income for the fourth quarter of 2017 was $7.7 million, compared to a non-operating income of $28.8 million for the same period last year. 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 and is mainly resulted from the loss pick-up related to the Company's investment in Leju Holding Limited ("Leju"). Non-operating income for the fourth quarter of 2016 included a $48.6 million net gain on sale of and impairment on investments and a $25.8 million loss in the fair value change of the Company's option liability related to E-House, which are excluded under non-GAAP measures.

Income tax expenses for the fourth quarter of 2017 were $17.2 million, compared to $5.4 million for the same period last year. The increase was primarily due to higher profitability and the change in tax status of the Weibo's PRC subsidiary in 2017 from being fully tax exempted to being subject to a reduced enterprise income tax rate of 12.5%.

Net income attributable to SINA's ordinary shareholders for the fourth quarter of 2017 was $45.4 million, compared to $19.9 million for the same period last year. Diluted net income per share attributable to SINA's ordinary shareholders for the fourth quarter of 2017 was $0.60, compared to $0.27 for the same period last year. Non-GAAP net income attributable to SINA's ordinary shareholders for the fourth quarter of 2017 was $60.0 million, compared to $48.2 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 2017 was $0.79, compared to $0.63 for the same period last year.

As of December 31, 2017, SINA's cash, cash equivalents and short-term investments totaled $3.4 billion, compared to $1.8 billion as of December 31, 2016. Aside from earnings, the increase in cash, cash equivalents and short-term investments was also attributed to the cash received from the issuance of a $900 million convertible senior notes by Weibo, which was partially offset by a share repurchase of $47.6 million from the Company, in the fourth quarter of 2017. For the fourth quarter of 2017, net cash provided by operating activities was $76.3 million, capital expenditures totaled $29.3 million, and depreciation and amortization expenses amounted to $9.3 million.

Fiscal Year 2017 Financial Results

For fiscal year 2017, SINA reported net revenues of $1.58 billion, compared to $1.03 billion in 2016. Non-GAAP net revenues for 2017 totaled $1.57 billion, compared to $1.02 billion in 2016.

Advertising revenues in 2017 were $1.31 billion, compared to $871.2 million in 2016. The year-over-year growth in advertising revenues resulted from an increase of $425.8 million in Weibo advertising revenues and a modest growth in portal advertising revenues.

Non-advertising revenues in 2017 were $272.0 million, compared to $159.7 million in 2016. The year-over-year growth in non-advertising revenues was attributable to an increase of $64.7 million in Weibo Value-Added Services revenues and an increase of $47.6 million in portal non-advertising revenues due to the new fintech business. Non-GAAP non-advertising revenues in 2017 were $261.6 million, compared to $149.3 million in 2016.

Gross margin in 2017 was 74%, up from 66% in 2016. Advertising gross margin in 2017 was 75%, up from 67% in 2016. The increase in advertising gross margin was primarily due to stronger advertising demand from advertisers and the further operating leverage of Weibo business. Non-advertising gross margin in 2017 was 67%, compared to 58% in 2016. The increase in non-advertising margin was the result of higher revenue contribution from businesses with better margin profile compared with last year, such as Weibo's membership services. Non-GAAP gross margin in 2017 was 74%, up from 66% in 2016.

Operating expenses in 2017 totaled $781.2 million, compared to $603.0 million in 2016. The increase was primarily attributable to the increase in channel marketing expenses incurred for user acquisition and overall increase in personnel related costs. Non-GAAP operating expenses in 2017 totaled $694.6 million, compared to $494.8 million in 2016.

Income from operations in 2017 was $388.6 million, compared to $73.3 million in 2016. Operating margin in 2017 was 25%, up from 7% in 2016. Non-GAAP income from operations in 2017 was $474.0 million, compared to $178.7 million in 2016. Non-GAAP operating margin was 30%, up from 18% in 2016. The increase in operating margin was a result of further operating leverage of Weibo business achieved and step-up of margin profile from non-Weibo business.

Non-operating income in 2017 was $35.7 million, compared to $231.3 million in 2016. Non-operating income in 2017 mainly included (i) a $132.0 million gains from disposing of certain marketable securities and other gains, which are excluded under non-GAAP measure; (ii) a $113.1 million of investment impairment write down of the Company's investment in Leju, which is excluded under non-GAAP measure; and (iii) a $16.1 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. Non-operating income in 2016 mainly included a $245.3 million net gain on sale of and impairment on investments and a $28.5 million loss on change in fair value of the Company's option liability related to E-House, which are excluded under non-GAAP measures.

Income tax expenses in 2017 totaled $74.7 million, compared to $27.2 million in 2016. The increase was primarily due to higher profitability and the change in tax status of the Weibo's PRC subsidiary in 2017 from being fully tax exempted to being subject to a reduced enterprise income tax rate of 12.5%.

Net income attributable to SINA's ordinary shareholders in 2017 was $156.6 million, compared to $225.1 million in 2016. Diluted net income per share attributable to SINA's ordinary shareholders in 2017 was $2.09, compared to $3.01 in 2016. Non-GAAP net income attributable to SINA's ordinary shareholders in 2017 was $207.9 million, compared to $109.1 million in 2016. Non-GAAP diluted net income per share attributable to SINA's ordinary shareholders in 2017 was $2.77, compared to $1.44 for 2016.

For the fiscal year of 2017, net cash provided by operating activities was $595.7 million, capital expenditures totaled $44.7 million, and depreciation and amortization expenses amounted to $33.2 million.

Business Outlook

For the fiscal year 2018, SINA estimates that its net revenues are between RMB14.5 billion and RMB15.5 billion, or US$2.23 billion and US$2.38 billion, assuming US dollar and RMB exchange rate of 6.50, which was the closing rate on December 31, 2017. 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 (loss) from operations, non-GAAP operating margin, non-GAAP net income (loss) attributable to SINA's ordinary shareholders and non-GAAP diluted net income (loss) 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, adjustment for non-GAAP to GAAP reconciling items on the share of equity method investments, gain(loss) on sale of investment/business, deemed disposal and impairment on investment, impairment on goodwill and acquired intangibles, change in fair value in option liability, income tax effects of above non-GAAP to GAAP reconciling items and adjustment for non-GAAP to GAAP reconciling items for the income (loss) attributable to non-controlling interests and amortization of convertible debt issuance cost. The Company's management uses these non-GAAP financial measures in their financial and operating decision-making, because management believes these measures reflect the Company's ongoing business operations in a manner that allows more meaningful period-to-period comparisons. The Company believes that these non-GAAP financial measures provide useful information to investors and others in the following ways: (i) in comparing the Company's current financial results with the Company's past financial results in a consistent manner, and (ii) in understanding and evaluating the Company's current operating performance and future prospects in the same manner as management does, if they so choose. The Company also believes that the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses, 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. – 8:00 a.m. Eastern Time on February 13, 2018 (or 8:10 p.m. – 9:00 p.m. Beijing Time on February 13, 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://corp.sina.com.cn. The conference call can be accessed as follows:

US:

+1 845 675 0438

Hong Kong:

+852 3018 6776

China:

400 120 0654

International:

+65 6713 5440

Passcode for all regions:

2298916

A replay of the conference call will be available through morning Eastern Time February 21, 2018. The dial-in number is +61 2 9003 4211. The passcode for the replay is 2298916.

About SINA

We are a leading online media company serving China and the global Chinese communities. Our digital media network of SINA.com (portal), SINA.cn (mobile portal), SINA Mobile Apps and Weibo.com (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.cn and SINA Mobile Apps provide news information, professional and entertainment content from SINA.com customized for mobile users in WAP (mobile browser) and mobile application format. Weibo is a leading social media platform for people to create, distribute and discover Chinese-language content. Based on an open platform architecture, Weibo allows users to create and post feeds and attach multi-media content, as well as access a wide range of organically and third-party developed applications, such as online games.

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

Safe Harbor Statement

This press release contains forward-looking statements that relate to, among other things, SINA's expected financial performance and SINA's strategic and operational plans (as described, without limitation, in quotations from management in this press release). SINA may also make forward-looking statements in the Company's periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "confidence," "estimates" and similar statements. SINA assumes no obligation to update the forward-looking statements in this press release and elsewhere. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to 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 MVAS 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 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,

 
   

2017

 

2016

 

2017

 

2017

 

2016

 

Net revenues:

                     

Advertising

 

$ 424,756

 

$ 269,556

 

$ 363,958

 

$ 1,311,866

 

$ 871,187

 

Non-advertising

 

78,982

 

43,868

 

79,191

 

272,018

 

159,749

 
   

503,738

 

313,424

 

443,149

 

1,583,884

 

1,030,936

 

Cost of revenues *:

                     

Advertising

 

99,858

 

75,578

 

85,757

 

325,494

 

288,044

 

Non-advertising

 

26,812

 

18,980

 

22,814

 

88,643

 

66,652

 
   

126,670

 

94,558

 

108,571

 

414,137

 

354,696

 

Gross profit

 

377,068

 

218,866

 

334,578

 

1,169,747

 

676,240

 
                       

Operating expenses:

                     

Sales and marketing *

 

143,020

 

74,295

 

114,345

 

408,856

 

247,068

 

Product development *

 

78,977

 

54,538

 

70,509

 

267,392

 

216,228

 

General and administrative *

 

26,421

 

25,166

 

29,443

 

104,923

 

99,474

 

Goodwill and acquired intangibles impairment

 

-

 

40,194

 

-

 

-

 

40,194

 
   

248,418

 

194,193

 

214,297

 

781,171

 

602,964

 

Income from operations

 

128,650

 

24,673

 

120,281

 

388,576

 

73,276

 
                       

Non-operating income:

                     

Loss from equity method investments, net

 

(2,843)

 

(546)

 

(11,105)

 

(16,070)

 

(11,766)

 

Gain on sale of investments/business and impairment on investments, net

 

(740)

 

48,603

 

10,209

 

9,037

 

245,260

 

Fair value change in option liability

 

-

 

(25,803)

 

-

 

-

 

(28,456)

 

Interest and other income, net

 

11,244

 

6,594

 

11,994

 

42,696

 

26,213

 
   

7,661

 

28,848

 

11,098

 

35,663

 

231,251

 
                       

Income before income taxes

 

136,311

 

53,521

 

131,379

 

424,239

 

304,527

 

Income tax expense

 

(17,160)

 

(5,438)

 

(24,555)

 

(74,676)

 

(27,219)

 
                       

Net income

 

119,151

 

48,083

 

106,824

 

349,563

 

277,308

 

Less: Net income attributable to non-controlling interests

 

73,787

 

28,161

 

57,533

 

192,994

 

52,221

 
                       

Net income attributable to SINA's ordinary shareholders

 

$ 45,364

 

$ 19,922

 

$ 49,291

 

$ 156,569

 

$ 225,087

 
                       
                       

Basic net income per share

 

$ 0.63

 

$ 0.28

 

$ 0.69

 

$ 2.20

 

$ 3.20

 

Diluted net income per share **

 

$ 0.60

 

$ 0.27

 

$ 0.66

 

$ 2.09

 

$ 3.01

 
                       

Shares used in computing basic net income per share

 

71,516

 

70,981

 

71,468

 

71,284

 

70,301

 
                       

Shares used in computing diluted net income per share

 

74,213

 

72,299

 

74,213

 

73,931

 

77,511

 
                       
                       

* Stock-based compensation in each category:

                     

Cost of revenues

$ 2,145

 

$ 2,021

 

$ 2,776

 

$ 9,257

 

$ 7,742

 

Sales and marketing

5,370

 

4,559

 

5,568

 

20,790

 

15,496

 

 

Product development

6,432

 

5,018

 

9,073

 

29,163

 

20,793

 

 

General and administrative

8,237

 

7,868

 

8,410

 

32,177

 

29,797

 
                       

** 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,

       

2017

   

2016

 

 

Assets

 
 

Current assets:

           
 

 

Cash and cash equivalents

 

$ 1,990,552

   

$ 1,407,625

 

 

Short-term investments

 

1,381,991

   

389,440

 

 

Restricted cash

 

216,151

   

241,306

 

 

Accounts receivable, net

 

285,681

   

210,328

 

 

Prepaid expenses and other current assets

 

228,238

   

407,373

 

 

Subtotal

 

4,102,613

   

2,656,072

             
 

Property and equipment, net

 

262,676

   

241,680

 

Goodwill and intangible assets, net

 

104,207

   

12,108

 

Long-term investments

 

1,288,816

   

1,318,207

 

Other assets

 

57,082

   

56,807

 

Total assets

 

$ 5,815,394

   

$ 4,284,874

               
 

 

Liabilities and Shareholders' Equity

 
 

Current liabilities:

           
 

 

Accounts payable

 

$ 130,431

   

$ 108,381

 

 

Amount due to customers

 

216,151

   

241,306

 

 

Accrued expenses and other current liabilities

 

446,779

   

452,751

 

 

Short-term bank loan

 

89,309

   

33,152

 

 

Convertible debt

 

153,092

   

-

 

 

Deferred revenues

 

134,580

   

95,566

 

 

Income taxes payable

 

102,458

   

40,127

 

 

Subtotal

 

1,272,800

   

971,283

               
 

Convertible debt

 

879,983

   

153,092

 

Long-term deferred revenues

 

54,372

   

65,188

 

Other long-term liabilities

 

8,510

   

4,332

 

 

Total liabilities

 

2,215,665

   

1,193,895

               
 

Shareholders' equity

         
 

 

SINA shareholders' equity

 

2,846,842

   

2,679,590

 

 

Non-controlling interests

 

752,887

   

411,389

 

 

Total shareholders' equity

 

3,599,729

   

3,090,979

               
 

Total liabilities and shareholders' equity

   

$ 5,815,394

   

$ 4,284,874

 

 

 

SINA CORPORATION

UNAUDITED ADDITIONAL INFORMATION

(U.S. Dollars in thousands)

                       
   

Three months ended

 

Year ended

 
   

December 31,

 

September 30,

 

December 31,

 
   

2017

 

2016

 

2017

 

2017

 

2016

 
                       

Net revenues

                     

Portal:

                     

Portal Advertising

 

$ 95,319

 

$ 81,820

 

$ 87,432

 

$ 320,473

 

$ 304,090

 

Other

 

33,842

 

18,990

 

39,785

 

122,535

 

74,931

 

 

Subtotal

129,161

 

100,810

 

127,217

 

443,008

 

379,021

 
                       

Weibo:

                     

 

Advertising and marketing

332,305

 

187,870

 

276,803

 

996,745

 

570,982

 

 

Weibo non-advertising

45,140

 

24,878

 

43,232

 

153,309

 

84,818

 

 

Subtotal

377,445

 

212,748

 

320,035

 

1,150,054

 

655,800

 
                       

Elimination

 

(2,868)

 

(134)

 

(4,103)

 

(9,178)

 

(3,885)

 
   

$ 503,738

 

$ 313,424

 

$ 443,149

 

$ 1,583,884

 

$ 1,030,936

 
                       

Cost of revenues

                     

Portal:

                     

Portal Advertising

$ 35,647

 

$ 31,315

 

$ 30,502

 

$ 121,278

 

$ 136,196

 

Other

 

19,180

 

13,864

 

19,483

 

65,733

 

47,555

 

 

Subtotal

54,827

 

45,179

 

49,985

 

187,011

 

183,751

 
                       

Weibo

72,005

 

49,454

 

62,428

 

231,255

 

171,231

 
                       

Elimination

 

(162)

 

(75)

 

(3,842)

 

(4,129)

 

(286)

 
   

$ 126,670

 

$ 94,558

 

$ 108,571

 

$ 414,137

 

$ 354,696

 
                       

Gross margin

                     

 

Portal

58%

 

55%

 

61%

 

58%

 

52%

 

 

Weibo

81%

 

77%

 

80%

 

80%

 

74%

 
   

75%

 

70%

 

76%

 

74%

 

66%

 
                       

 

SINA CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

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

                                     
                                     
   

Three months ended

   

December 31, 2017

 

December 31, 2016

 

September 30, 2017

           

Non-GAAP

         

Non-GAAP

         

Non-GAAP

   

Actual

 

Adjustments

 

Results

 

Actual

 

Adjustments

 

Results

 

Actual

 

Adjustments

 

Results

                                     

Advertising revenues

$ 424,756

     

$ 424,756

 

$ 269,556

     

$ 269,556

 

$ 363,958

     

$ 363,958

Non-advertising revenues

78,982

 

(2,609)

(a)

76,373

 

43,868

 

(2,609)

(a)

41,259

 

79,191

 

(2,609)

(a)

76,582

Net revenues

$ 503,738

 

$ (2,609)

 

$ 501,129

 

$ 313,424

 

$ (2,609)

 

$ 310,815

 

$ 443,149

 

$ (2,609)

 

$ 440,540

                                     
       

(2,609)

(a)

       

(2,609)

(a)

       

(2,609)

(a)

 
       

2,145

(b)

       

2,021

(b)

       

2,776

(b)

 

Gross profit

$ 377,068

 

$ (464)

 

$ 376,604

 

$ 218,866

 

$ (588)

 

$ 218,278

 

$ 334,578

 

$ 167

 

$ 334,745

                                     
                   

(17,445)

(b)

             
       

(20,039)

(b)

       

(399)

(c)

       

(23,051)

(b)

 
       

(1,535)

(c)

       

(40,194)

(d)

       

(1,538)

(c)

 

Operating expenses

$ 248,418

 

$ (21,574)

 

$ 226,844

 

$ 194,193

 

$ (58,038)

 

$ 136,155

 

$ 214,297

 

$ (24,589)

 

$ 189,708

                                     
                   

(2,609)

(a)

             
       

(2,609)

(a)

       

19,466

(b)

       

(2,609)

(a)

 
       

22,184

(b)

       

399

(c)

       

25,827

(b)

 
       

1,535

(c)

       

40,194

(d)

       

1,538

(c)

 

Income from operations

$ 128,650

 

$ 21,110

 

$ 149,760

 

$ 24,673

 

$ 57,450

 

$ 82,123

 

$ 120,281

 

$ 24,756

 

$ 145,037

                                     
                   

(2,609)

(a)

             
                   

19,466

(b)

             
       

(2,609)

(a)

       

399

(c)

             
       

22,184

(b)

       

40,194

(d)

       

(2,609)

(a)

 
       

1,535

(c)

       

3,243

(e)

       

25,827

(b)

 
       

1,503

(e)

       

(48,603)

(f)

       

1,538

(c)

 
       

740

(f)

       

25,803

(g)

       

1,474

(e)

 
       

(9,197)

(h)

       

(9,302)

(h)

       

(10,209)

(f)

 
       

690

(i)

       

699

(i)

       

(7,391)

(h)

 
       

(253)

(j)

       

(964)

(j)

       

(254)

(j)

 

Net income attributable to SINA's ordinary shareholders

$ 45,364

 

$ 14,593

 

$ 59,957

 

$ 19,922

 

$ 28,326

 

$ 48,248

 

$ 49,291

 

$ 8,376

 

$ 57,667

                                     
                                     

Diluted net income per share *

$ 0.60

     

$ 0.79

 

$ 0.27

     

$ 0.63

 

$ 0.66

     

$ 0.77

                                     

Shares used in computing diluted net income per share

74,213

 

-

 

74,213

 

72,299

 

5,022

(k)

77,321

 

74,213

 

-

 

74,213

                                     
                                     

Gross margin - advertising

76%

 

1%

 

77%

 

72%

 

1%

 

73%

 

76%

 

1%

 

77%

Gross margin - non-advertising

66%

 

-1%

 

65%

 

57%

 

-3%

 

54%

 

71%

 

-1%

 

70%

Operating margin

26%

 

4%

 

30%

 

8%

 

18%

 

26%

 

27%

 

6%

 

33%

                                     
   

Year ended

           
   

December 31, 2017

 

December 31, 2016

           
           

Non-GAAP

         

Non-GAAP

           
   

Actual

 

Adjustments

 

Results

 

Actual

 

Adjustments

 

Results

           
                                     

Advertising revenues

$1,311,866

     

$1,311,866

 

$ 871,187

     

$ 871,187

           

Non-advertising revenues

272,018

 

(10,436)

(a)

261,582

 

159,749

 

(10,436)

(a)

149,313

           

Net revenues

$1,583,884

 

$ (10,436)

 

$1,573,448

 

$ 1,030,936

 

$ (10,436)

 

$1,020,500

           
                                     
       

(10,436)

(a)

       

(10,436)

(a)

             
       

9,257

(b)

       

7,742

(b)

             

Gross profit

$1,169,747

 

$ (1,179)

 

$1,168,568

 

$ 676,240

 

$ (2,694)

 

$ 673,546

           
                                     
                   

(66,086)

(b)

             
       

(82,130)

(b)

       

(1,874)

(c)

             
       

(4,455)

(c)

       

(40,194)

(d)

             

Operating expenses

$ 781,171

 

$ (86,585)

 

$ 694,586

 

$ 602,964

 

$ (108,154)

 

$ 494,810

           
                                     
                   

(10,436)

(a)

             
       

(10,436)

(a)

       

73,828

(b)

             
       

91,387

(b)

       

1,874

(c)

             
       

4,455

(c)

       

40,194

(d)

             

Income from operations

$ 388,576

 

$ 85,406

 

$ 473,982

 

$ 73,276

 

$ 105,460

 

$ 178,736

           
                                     
                   

(10,436)

(a)

             
                   

73,828

(b)

             
       

(10,436)

(a)

       

1,874

(c)

             
       

91,387

(b)

       

40,194

(d)

             
       

4,455

(c)

       

7,221

(e)

             
       

3,276

(e)

       

(245,260)

(f)

             
       

(9,037)

(f)

       

28,456

(g)

             
       

(29,827)

(h)

       

(30,117)

(h)

             
       

690

(i)

       

4,266

(i)

             
       

785

(j)

       

13,944

(j)

             

Net income attributable to SINA's ordinary shareholders

$ 156,569

 

$ 51,293

 

$ 207,862

 

$ 225,087

 

$ (116,030)

 

$ 109,057

           
                                     
                                     

Diluted net income per share *

$ 2.09

     

$ 2.77

 

$ 3.01

     

$ 1.44

           
                                     

Shares used in computing diluted net income per share

73,931

 

-

 

73,931

 

77,511

 

-

 

77,511

           
                                     
                                     

Gross margin - advertising

75%

 

1%

 

76%

 

67%

 

1%

 

68%

           

Gross margin - non-advertising

67%

 

-1%

 

66%

 

58%

 

-3%

 

55%

           

Operating margin

25%

 

5%

 

30%

 

7%

 

11%

 

18%

           
                                     

(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/business, (gain) loss on deemed disposal and impairment on investments, net.

(g) To exclude the change in fair value of option liability.

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

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

(j) 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.**

               

(k) 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.

               

**

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 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, 2017

 

December 31, 2016

 

September 30, 2017

   

Actual

 

Adjustments

 

Non-GAAP Results

 

Actual

 

Adjustments

 

Non-GAAP Results

 

Actual

 

Adjustments

 

Non-GAAP Results

                                     
 

To exclude stock-based compensation

   

$ 881

         

$ 3,421

         

$ 1,822

   
 

To exclude amortization of intangible

                                 
 

assets resulting from business acquisitions

   

1,177

         

1,213

         

1,127

   
 

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

   

848

         

89

         

327

   
 

To exclude gain resulting from the fair value

                                 
 

changes in investments, net

   

(1,426)

         

(1,340)

         

(1,745)

   
 

To exclude tax impacts related

                                 
 

to amortization of intangible assets

   

(178)

         

(275)

         

(166)

   
 

Earning (Loss) from equity method investments, net

$ (2,642)

 

$ 1,302

 

$ (1,340)

 

$ (411)

 

$ 3,108

 

$ 2,697

 

$ (10,996)

 

$ 1,365

 

$ (9,631)

 

Share of amortization of equity investments'

                                 
 

intangibles not on their books

(253)

 

253

 

-

 

(166)

 

166

 

-

 

(130)

 

130

 

-

 

Share of tax impacts related to amortization of

                                 
 

equity investments' intangibles not on their books

52

 

(52)

 

-

 

31

 

(31)

 

-

 

21

 

(21)

 

-

   

$ (2,843)

 

$ 1,503

 

$ (1,340)

 

$ (546)

 

$ 3,243

 

$ 2,697

 

$ (11,105)

 

$ 1,474

 

$ (9,631)

                                     
                                     
   

Year ended

           
   

December 31, 2017

 

December 31, 2016

           
           

Non-GAAP

         

Non-GAAP

           
   

Actual

 

Adjustments

 

Results

 

Actual

 

Adjustments

 

Results

           
                                     
 

To exclude stock-based compensation

   

$ 3,759

         

$ 7,741

               
 

To exclude amortization of intangible

                                 
 

assets resulting from business acquisitions

   

3,441

         

3,209

               
 

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

   

(465)

         

(1,470)

               
 

To exclude gain resulting from the fair value

                                 
 

changes in investments, net

   

(3,769)

         

(2,189)

               
 

To exclude tax impacts related

                                 
 

to amortization of intangible assets

   

(508)

         

(821)

               
 

Loss from equity method investments, net

$ (15,252)

 

$ 2,458

 

$ (12,794)

 

$ (11,015)

 

$ 6,470

 

$ (4,545)

           
 

Share of amortization of equity investments'

                                 
 

intangibles not on their books

(1,031)

 

1,031

 

-

 

(954)

 

954

 

-

           
 

Share of tax impacts related to amortization of

                                 
 

equity investments' intangibles not on their books

213

 

(213)

 

-

 

203

 

(203)

 

-

           
   

$ (16,070)

 

$ 3,276

 

$ (12,794)

 

$ (11,766)

 

$ 7,221

 

$ (4,545)

           
                                     
                                     
 

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


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