Sohu Q1 total revenue of $455 million increased by 22% over the same period

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 Sohu Q1 total revenue of $455 million increased by 22% over the same period


Total revenue was $455 million, an increase of 22% over the same period in 2017, down 11% from the previous quarter. Brand advertising revenue was $56 million, down 31% from the same period in 2017, down 22% from the previous quarter. Online gaming revenue was $105 million, an increase of 24% over the same period in 2017, down 4% from the previous quarter. Dr. Zhang Zhaoyang, chairman and CEO of Sohu, commented: Sohu started smoothly in the first quarter of 2018. With better search and game business performance, the quarters earnings are higher than expected. The groups total revenue reached 455 million US dollars, up 22% over the same period last year. For Sohu media and Sohu video, we focus on core mobile products, with the goal of expanding user groups and enhancing liquidity. At the same time, we are streamlining our organizational structure and substantially reducing the cost of video content. The above measures will help to improve our profit and loss situation in the next few quarters. Sogou core search revenue grew by more than 50% over the same period, and its mobile phone input method added 30 million users in the quarter, with 362 million active users per day. Benefiting from the contribution of Yu Tianlongs eight games, the first quarters revenue and adjusted profits exceeded expectations. In early April, Changyou announced that it would distribute a special cash dividend of $500 million to shareholders. First quarter group performance income Total revenue in the first quarter of 2018 was $455 million, an increase of 22% over the same period in 2017, down 11% from the previous quarter. Total online advertising revenue in the first quarter of 2018 was $277 million, an increase of 24% over the same period in 2017, down 13% from the previous quarter. Total online advertising revenue includes brand advertising and search and search related advertising revenue. Brand advertising revenue in the first quarter of 2018 was $56 million, down 31% from the same period in 2017, down 22% from the previous quarter. The decrease in year-on-year and annulus ratio was mainly due to the decline in video and real estate advertising revenues. Search and search related advertising revenue in the first quarter of 2018 was $220 million, an increase of 55% over the same period in 2017, down 11% from the previous quarter. The year-on-year growth was mainly due to the continuous growth of traffic and the upgrading of mobile terminal commercialization capability. The decline of the ring ratio is mainly due to the seasonality. Online game revenue in the first quarter of 2018 was $105 million, an increase of 24% over the same period in 2017, down 4% from the previous quarter. The year-on-year growth was mainly due to the contribution of the classic version of Tianlong hand tour which was successfully launched in the second quarter of 2017. The decline is mainly due to the natural decay of the old games, including the classic version of the Dragon tour. Gross interest rate In the first quarter of 2018, the gross margin of GAAP was 43%, compared to 41% in the same period in 2017, and 46% in the previous quarter. The gross profit margin of non US GAAP in the first quarter of 2018 was 43%, which was 42% in the same period in 2017 and 46% in the first quarter. In the first quarter of 2018, the gross interest rate of the United States general accounting standards and non American general accounting standards was 29% in the first quarter of 2018, 27% in the same period in 2017, and 37% in the last quarter. In the first quarter of 2018, the gross margin of the United States general accounting standards for brand advertising business was 10%, compared with 1% in 2017, and the last quarter was -16%. In the first quarter of 2018, the gross margin of brand advertising business was 9%, compared with 2% in the same period in 2017 and -17% in the previous quarter. The increase in the year-on-year and annulus ratio is mainly due to the increase in video costs. In the fourth quarter of 2017, the company reduced the content of video copyright, amounting to about 26 million US dollars. The reduction results in a drop in the gross interest rate of the last quarter. In the first quarter of 2018, the gross profit rate of general accounting standards and non US general accounting standards was 34% in the first quarter of 2018, 42% in the same period in 2017, and 52% in the last quarter. The year-on-year decline was mainly due to the increase in traffic procurement costs over revenue growth. The decline is mainly due to the increase in the cost of purchasing traffic and the seasonal decrease in income. In the first quarter of 2018, the gross interest rate of the United States general accounting standards and non American general accounting standards was 84% in the first quarter of 2018, 81% in the same period in 2017, and 84% in the last quarter. Operating expenses The first quarter of 2018, US GAAP operating expenses amounted to $226 million, an increase of 11% over the same period in 2017, down 18% from the previous quarter. Non US GAAP operating expenses amounted to $228 million, an increase of 16% over the same period in 2017, down 11% from the previous quarter. The year-on-year increase was mainly due to the increase in salary. The decline was mainly due to the drop in marketing expenses and salaries. Business loss In the first quarter of 2018, the operating loss of the US general accounting standards was $31 million, and the operating loss of the same period was $47 million in the same period in 2017, and the operating loss of the last quarter was $41 million. In the first quarter of 2018, the operating loss of non US general accounting standards was $34 million, and the operating loss of the same period was $40 million in the same period in 2017, and the operating loss of the last quarter was $22 million. Income tax costs In the first quarter of 2018, the United States general accounting standard income tax cost was $63 million, and the income tax cost of the same period in 2017 was $11 million, and the last quarter income tax cost was $234 million. In the first quarter of 2018, the non US general accounting standard income tax cost was $63 million, and the income tax cost of the same period in 2017 was $11 million, and the last quarter income tax cost was $19 million. The United States general accounting standards and non U. S. general accounting standard income tax increases are mainly due to the income tax costs of free travel including the amount of $47 million raised by December 31, 2017 for the advance income tax costs by the policy of amending the distribution of dividends in Chinas subsidiaries. For more information, please see other parts of the company. In the fourth quarter of 2017, the U. S. general accounting standard income tax costs included US $4 million for a one-off $TollCharge2.19 and deferred income tax liabilities arising from the reform of the new income tax law of the United States. The actual impact of US tax reform on Sohu will vary according to managements estimate. Net loss Prior to the net profit attributable to minority shareholders, the net loss of the US general accounting standard was $87 million in the first quarter of 2018 and a net loss of $50 million in the same period in 2017, with a net loss of $270 million in the last quarter. Prior to the net profit attributable to minority shareholders, the net loss of non US general accounting standards was $90 million in the first quarter of 2018 and a net loss of $43 million in the same period in 2017, with a net loss of $36 million in the last quarter. The net loss of us general accounting standards attributable to Sohu in the first quarter of 2018 was $93 million, and the net loss of us general accounting standards per share was $2.39, and the net loss of the same period was $69 million in 2017, and the net loss of the last quarter was $295 million. The net loss of non US general accounting standards attributable to Sohu in the first quarter of 2018 was $97 million, and the net loss per share of non US general accounting standards was $2.50, and the net loss of the same period was $68 million in 2017, and the net loss of the last quarter was $78 million. Liquidity As of March 31, 2018, the Sohu group held a total of $2 billion 170 million in cash and cash equivalents and short-term investment in short term bank loans, with a balance of $2 billion 120 million as of December 31, 2017. Other company dynamics In April 5, 2018, Sohu online gaming subsidiary Changyou announced that a special cash dividend was announced to shareholders, 4.7 dollars per share of A shares or B share ordinary shares, or 9.4 dollars per share of us depositary vouchers (hereinafter referred to as ADS) per share, and ADS equal to 2 A-share common shares. The total cash dividend is estimated to be about $500 million. Bank of New York Mellon bank, ADS, will distribute dividends to holders of American depositary receipts on the 26 day of April 2018. Sohu expects to earn about $340 million from this dividend. The company expects the money to be used to support its business operations, rather than distributing dividends to Sohu shareholders. Business outlook The Sohu expects the second quarter of 2018: Total revenue is between $485 million and $510 million. Brand advertising revenue ranged from $65 million to $70 million, down 19% to 24% over the same period in 2017, rising 16% to 24% over the first quarter of 2018. Sogou revenues ranged from $295 million to $305 million, an increase of 40% to 45% over the same period in 2017, an increase of 19% to 23% over the first quarter of 2018. Online gaming revenues ranged from $85 million to $95 million, down 22% to 31% over the same period in 2017, down 10% to 19% compared with the first quarter of 2018. The net loss of non US general accounting standards is between $28 million and $38 million before deducting the net profit of non US general accounting standards attributable to minority shareholders. The Sohu expects an equity incentive cost to be about $4 million, assuming no new equity incentives, the stock price and the impact of this quarters free dividend and dividend. The net loss of us general accounting standards is between $32 million and $42 million, which includes the impact of these equity incentives and before the interests of minority shareholders are deducted. The net loss of non US general accounting standards attributable to Sohu is between $55 million and $65 million, and the net loss per share of non US general accounting standards is between $1.40 and $1.65. A net loss to Sohus US general accounting standards is between $56 million and $66 million, with a net loss of $1.44 to $1.70 per share in the US general accounting standards, which includes the above equity incentive fees and about $3 million to counteract the equity interest of the Sohu to the Sohu. In the second quarter of 2018, the assumed expected exchange rate was 6.40 RMB =1.00, the actual exchange rate was about 6.86 RMB =1.00 in the second quarter of 2017, and the actual exchange rate was about 6.36 RMB =1.00 in the first quarter of 2018. Source: NetEase science and technology report editor: Bai Xin _NT4464