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SINA Reports First Quarter 2017 Financial Results

2017-05-16 17:13
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BEIJING, May 16, 2017 /PRNewswire/ -- SINA Corporation (the "Company" or "SINA") (NASDAQ: SINA), a leading online media company serving China and the global Chinese communities, today announced its unaudited financial results for the first quarter ended March 31, 2017.

First Quarter 2017 Highlights

  • Both net revenues and non-GAAP net revenues increased 40% year over year to $278.1 million and $275.5 million, respectively.
  • Advertising revenues increased 40% year over year to $228.0 million.
  • Non-advertising revenues increased 40% year over year to $50.1 million. Non-GAAP non-advertising revenues was $47.5 million.
  • Income from operations was $45.0 million. Non-GAAP income from operations increased approximately ten folds year over year to $63.7 million. Non-GAAP operating margin was 23%, up from 3% for the same period last year.
  • Net income attributable to SINA was $38.5 million, or $0.52 diluted net income per share attributable to SINA. Non-GAAP net income attributable to SINA was $37.6 million, or $0.50 non-GAAP diluted net income per share attributable to SINA.
  • Weibo's monthly active users ("MAUs") increased from 261 million in March 2016 to 340 million in March 2017, an increase of 30% year over year. Weibo's mobile MAUs represents 91% of Weibo's MAUs.
  • Weibo's average daily active users ("DAUs") have a net addition of approximately 34 million users year over year and reached 154 million in March 2017.

"We started the year 2017 with a great quarter." said Charles Chao, Chairman and CEO of SINA. "Weibo continued its strong momentum with accelerated growth in revenues and impressive expansion of user base." said Mr. Chao. "On the SINA media business, our performance was in line with our expectation, taking seasonality factor into account. We have further restructured our mobile media business to accelerate the pace for the mobile transition." Mr. Chao added.

First Quarter 2017 Financial Results

For the first quarter of 2017, SINA reported net revenues of $278.1 million, compared to $198.7 million for the same period last year. Non-GAAP net revenues for the first quarter of 2017 totaled $275.5 million, compared to $196.1 million for the same period last year.

Online advertising revenues for the first quarter of 2017 were $228.0 million, compared to $163.0 million for the same period last year. The year-over-year growth in online advertising revenues was mainly resulted from an increase of $70.1 million, or 71% growth in Weibo advertising and marketing revenues.

Non-advertising revenues for the first quarter of 2017 were $50.1 million. Non-GAAP non-advertising revenues for the first quarter of 2017 were $47.5 million, compared to $33.1 million for the same period last year. The year-over-year growth in non-advertising revenues was largely driven by an increase of $9.9 million in Weibo non-advertising revenues. 

Gross margin for the first quarter of 2017 was 69%, compared to 59% for the same period last year. Advertising gross margin for the first quarter of 2017 was 70%, compared to 58% for the same period last year. The increase in advertising gross margin was primarily due to strong advertising demand from Weibo advertisers and the further optimization of cost structure for both Weibo and portal business. Non-advertising gross margin for the first quarter of 2017 was 62%, compared to 64% for the same period last year.

Operating expenses for the first quarter of 2017 totaled $146.5 million, compared to $126.3 million for the same period last year. Non-GAAP operating expenses for the first quarter of 2017 totaled $127.4 million, compared to $111.1 million for the same period last year. The increase of non-GAAP operating expenses was primarily due to the increase in Weibo's promotional and marketing activities. 

Income from operations for the first quarter of 2017 was $45.0 million, compared to a loss of $8.5 million for the same period last year. Non-GAAP income from operations for the first quarter of 2017 was $63.7 million, compared to $5.6 million for the same period last year. Non-GAAP operating margin was 23%, up from 3% for the same period last year. The significant improvement in non-GAAP income from operations and operation margin was a result of the operational leverage and margin expansion achieved by Weibo.

Non-operating income for the first quarter of 2017 was $30.3 million, compared to $24.3 million for the same period last year. Non-operating income for the first quarter of 2017 included (i) a $15.9 million net gain on sale of and impairment on investments, which is excluded under non-GAAP measure; (ii) a $5.0 million of dividend income from certain investments; and (iii) a $3.1 million earnings pick-up from equity-method investments, which are accounted for under the equity-method and reported one quarter in arrears, and mainly resulted from earnings pick-up from the Company's investment in Tian Ge Interactive Holdings Limited. Non-operating income for the first quarter of 2016 included (i) a one-off deconsolidation gain amounted $14.8 million as a result of the Company's disposing of partial ownership in non-core business, which is excluded under non-GAAP measure; (ii) a $15.3 million net gain on disposing of certain investments, which is excluded under non-GAAP measure; and (iii) a $10.6 million loss pick-up from equity-method investments, which are accounted for under the equity-method and reported one quarter in arrears and mainly resulted from loss pick-up from the Company's investment in E-House.

Net income attributable to SINA for the first quarter of 2017 was $38.5 million, compared to $15.3 million for the same period last year. Diluted net income per share attributable to SINA for the first quarter of 2017 was $0.52, compared to $0.22 for the same period last year. Non-GAAP net income attributable to SINA for the first quarter of 2017 was $37.6 million, compared to a net loss of $2.8 million for the same period last year. Non-GAAP diluted net income per share attributable to SINA for the first quarter of 2017 was $0.50 compared to a net loss per share of $0.04 for the same period last year.

As of March 31, 2017, SINA's cash, cash equivalents and short-term investments totaled $1.8 billion, at similar level as of December 31, 2016. For the first quarter of 2017, net cash provided by operating activities was $93.0 million, capital expenditures totaled $5.3 million, and depreciation and amortization expenses amounted to $7.0 million.  

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 net income (loss) attributable to SINA and non-GAAP diluted net income (loss) per share attributable to SINA. 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 in relation to the license agreements 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 8:10 a.m. - 9:00 a.m. Eastern Time on May 16, 2017 (or 8:10 p.m. - 9:00 p.m. Beijing Time on May 16, 2017) 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:

18467087

A replay of the conference call will be available through morning Eastern Time May 24, 2017. The dial-in number is +61 2 9003 4211. The passcode for the replay is 18467087.

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 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.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 report on Form 20-F for the year ended December 31, 2016 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



March 31,


December 31,



2017


2016


2016

Net revenues:






    Advertising

$              227,999


$                 162,967


$               269,556

    Non-advertising

50,066


35,708


43,868



278,065


198,675


313,424

Cost of revenues *:






    Advertising  

67,668


68,189


75,578

    Non-advertising

18,904


12,705


18,980



86,572


80,894


94,558

Gross profit

191,493


117,781


218,866








Operating expenses:






    Sales and marketing *

68,083


51,702


74,295

    Product development *

54,420


52,494


54,538

    General and administrative *

24,023


22,134


25,166

    Goodwill and acquired intangibles impairment

-


-


40,194



146,526


126,330


194,193

Income (Loss) from operations

44,967


(8,549)


24,673








Non-operating income:






   Earning (Loss) from equity method investments, net

3,143


(10,564)


(546)

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

15,883


28,227


48,603

   Fair value change in option liability

-


-


(25,803)

   Interest and other income, net

11,233


6,608


6,594



30,259


24,271


28,848








Income before income taxes

75,226


15,722


53,521

Income tax benefit (expense)

(13,826)


16


(5,438)








Net income

61,400


15,738


48,083

   Less: Net income attributable to non-controlling interests

22,876


418


28,161








Net income attributable to SINA

$                 38,524


$                   15,320


$                  19,922















Basic net income per share attributable to SINA

$                     0.54


$                        0.22


$                      0.28

Diluted net income per share attributable to SINA **

$                     0.52


$                        0.22


$                      0.27








Shares used in computing basic






   net income per share attributable to SINA

70,959


69,857


70,981

Shares used in computing diluted






   net income per share attributable to SINA

73,409


70,296


72,299















* Stock-based compensation in each category:







Cost of revenues - advertising

$                   2,230


$                      1,566


$                    2,021


Sales and marketing

4,583


2,843


4,559


Product development

6,990


4,922


5,018


General and administrative

7,387


6,911


7,868








**

Net income attributable to SINA 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)













March 31,



December 31,





2017



2016



Assets



Current assets:








Cash and cash equivalents


$             1,375,464



$             1,407,625



Short-term investments


436,189



389,440



Restricted cash


281,722



241,306



Accounts receivable, net


216,978



210,328



Prepaid expenses and other current assets 


399,172



407,373



      Subtotal


2,709,525



2,656,072










Property and equipment, net


241,674



241,680


Goodwill and intangible assets, net


12,185



12,108


Long-term investments


1,395,886



1,318,207


Other assets


48,079



56,807


Total assets


$             4,407,349



$             4,284,874











Liabilities and Shareholders' Equity



Current liabilities:








Accounts payable


$                108,659



$                108,381



Amount due to customers


281,722



241,306



Accrued expenses and other current liabilities


431,490



452,751



Short-term bank loan


7,286



33,152



Deferred revenues


98,051



95,566



Income taxes payable


52,049



40,127



     Subtotal


979,257



971,283










Convertible debt


153,092



153,092


Long-term deferred revenues


62,484



65,188


Other long-term liabilities


4,325



4,332



     Total liabilities


1,199,158



1,193,895










Shareholders' equity








SINA shareholders' equity


2,761,376



2,679,590



Non-controlling interests


446,815



411,389



     Total shareholders' equity 


3,208,191



3,090,979










Total liabilities and shareholders' equity


$             4,407,349



$             4,284,874

 

 

SINA CORPORATION

UNAUDITED ADDITIONAL INFORMATION

(U.S. Dollars in thousands)










Three months ended



March 31,


December 31,



2017


2016


2016








Net revenues






Portal:






Portal Advertising

$                  59,791


$                  63,721


$                  81,820

Other

20,162


15,664


18,990


Subtotal

79,953


79,385


100,810








Weibo:






    Advertising and marketing

169,297


99,246


187,870

    Weibo non-advertising

29,904


20,044


24,878


Subtotal

199,201


119,290


212,748








Elimination

(1,089)


-


(134)



$               278,065


$               198,675


$               313,424








Cost of revenues






Portal:






Portal Advertising

$                  27,482


$                  35,537


$                  31,315

Other

12,702


8,731


13,864


Subtotal

40,184


44,268


45,179








Weibo

46,450


36,626


49,454








Elimination

(62)


-


(75)



$                  86,572


$                  80,894


$                  94,558








Gross margin







Portal

50%


44%


55%


Weibo

77%


69%


77%



69%


59%


70%

 

 

SINA CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

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




Three months ended                                                                                                                                  



March 31, 2017


March 31, 2016


December 31, 2016







Non-GAAP






Non-GAAP






Non-GAAP



Actual


Adjustments


Results


Actual


Adjustments


Results


Actual


Adjustments


Results




















Advertising revenues

$    227,999




$    227,999


$     162,967




$    162,967


$    269,556




$    269,556

Non-advertising revenues

50,066


(2,609)

 (a) 

47,457


35,708


(2,609)

 (a) 

33,099


43,868


(2,609)

 (a) 

41,259

Net revenues

$    278,065


$              (2,609)


$    275,456


$     198,675


$              (2,609)


$    196,066


$    313,424


$              (2,609)


$    310,815
























(2,609)

 (a) 





(2,609)

 (a) 





(2,609)

 (a) 






2,230

 (b) 





1,566

 (b) 





2,021

 (b) 


Gross profit

$    191,493


$                 (379)


$    191,114


$     117,781


$              (1,043)


$    116,738


$    218,866


$                 (588)


$    218,278




































(17,445)

 (b) 






(18,960)

 (b) 





(14,676)

 (b) 





(399)

 (c) 






(155)

 (c) 





(557)

 (c) 





(40,194)

 (d) 


Operating expenses

$    146,526


$           (19,115)


$    127,411


$     126,330


$           (15,233)


$    111,097


$    194,193


$           (58,038)


$    136,155




































(2,609)

 (a) 






(2,609)

 (a) 





(2,609)

 (a) 





19,466

 (b) 






21,190

 (b) 





16,242

 (b) 





399

 (c) 






155

 (c) 





557

 (c) 





40,194

 (d) 


Income (Loss) from operations

$      44,967


$             18,736


$      63,703


$        (8,549)


$             14,190


$        5,641


$      24,673


$             57,450


$      82,123




































(2,609)

 (a) 


















19,466

 (b) 












(2,609)

 (a) 





399

 (c) 






(2,609)

 (a) 





16,242

 (b) 





40,194

 (d) 






21,190

 (b) 





557

 (c) 





3,243

 (e) 






155

 (c) 





(481)

 (e) 





(48,603)

(f)






224

 (e) 





(28,227)

 (f) 





25,803

 (g) 






(15,883)

 (f) 





(4,519)

 (h) 





(9,302)

 (h) 






(5,494)

(h)





1,084

 (i) 





699

 (i) 






1,472

 (j) 





(123)

 (j) 





(964)

 (j) 


Net income (loss) attributable to SINA

$      38,524


$                 (945)


$      37,579


$        15,320


$           (18,076)


$       (2,756)


$      19,922


$             28,326


$      48,248







































Diluted net income (loss) per share attributable to SINA *

$           0.52




$           0.50


$            0.22




$         (0.04)


$           0.27




$           0.63

Shares used in computing diluted


















   net income (loss) per share attributable to SINA

73,409


-


73,409


70,296


(439)

 (k) 

69,857


72,299


5,022

 (k) 

77,321







































Gross margin - advertising

70%


1%


71%


58%


1%


59%


72%


1%


73%

Gross margin - non-advertising

62%


-2%


60%


64%


-2%


62%


57%


-3%


54%







































(a)  To exclude the recognition of deferred revenue related to the license agreements 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 (loss) attributable to SINA 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                                                                                                                                    



March 31, 2017


March 31, 2016


December 31, 2016



Actual


Adjustments


Non-GAAP
Results


Actual


Adjustments


Non-GAAP
Results


Actual


Adjustments


Non-GAAP
Results





















To exclude stock-based compensation



$                   320






$               1,555






$               3,421




To exclude amortization of intangible 



















  assets resulting from business acquisitions



102






791






1,213




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



(321)






(808)






89




To exclude (gain)loss resulting from the fair value 



















  changes in investments



39






(2,126)






(1,340)




To exclude tax impacts related 



















  to amortization of intangible assets



(21)






(187)






(275)




Earning (Loss) from equity method investments, net

$        3,248


$                   119


$        3,367


$      (10,270)


$                 (775)


$    (11,045)


$          (411)


$               3,108


$        2,697


Share of amortization of equity investments' 



















  intangibles not on their books

(125)


125


-


(392)


392


-


(166)


166


-


Share of tax impacts related to amortization of 



















  equity investments' intangibles not on their books

20


(20)


-


98


(98)


-


31


(31)


-



$        3,143


$                   224


$        3,367


$      (10,564)


$                 (481)


$    (11,045)


$          (546)


$               3,243


$        2,697








































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















 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/sina-reports-first-quarter-2017-financial-results-300458271.html

Source: SINA Corporation

Related stocks: NASDAQ-NMS:SINA

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