¡¡¡¡SHANGHAI, China¡ªMarch 10, 2015¡ªSINA 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 ended December 31, 2014.
¡¡¡¡Fourth Quarter 2014 Highlights
¡¡¡¡• Net revenues increased 7% year over year to $211.1 million. Non-GAAP net revenues increased 8% year over year to $208.5 million, within the Company¡¯s guidance of between $204 million and $210 million.
¡¡¡¡• Advertising revenues grew 14% year over year to $181.9 million. Non-advertising revenues were $29.2 million. Non-GAAP non-advertising revenues were $26.6 million.
¡¡¡¡• Net income attributable to SINA was $59.8 million, or $0.90 diluted net income per share attributable to SINA. Non-GAAP net income attributable to SINA was $15.9 million, or $0.24 non-GAAP diluted net income per share attributable to SINA.
¡¡¡¡Fiscal Year 2014 Highlights
¡¡¡¡• Net revenues increased 16% year over year to $768.2 million. Non-GAAP net revenues increased 17% year over year to $756.3 million.
¡¡¡¡• Advertising revenues grew 22% year over year to $640.3 million. Non-advertising revenues were $128.0 million. Non-GAAP non-advertising revenues were $116.0 million.
¡¡¡¡• Net income attributable to SINA was $176.8 million, or $2.63 diluted net income per share attributable to SINA. Non-GAAP net income attributable to SINA was $52.3 million, or $0.76 non-GAAP diluted net income per share attributable to SINA.
¡¡¡¡¡°We are delighted that Weibo closed the year 2014 with solid performance on both operational and financial fronts¡± said Charles Chao, Chairman and CEO of SINA. ¡°As we enter into 2015, we are excited about the various opportunities unfolding ahead of us on both Weibo and portal sides. We are also confident that our initiatives in revamping our legacy business will start to take shape and form the foundation for longer term growth.¡± Mr. Chao added.
¡¡¡¡Fourth Quarter 2014 Financial Results
¡¡¡¡For the fourth quarter of 2014, SINA reported net revenues of $211.1 million, compared to $197.0 million for the same period last year. Non-GAAP net revenues for the fourth quarter of 2014 totaled $208.5 million, compared to $192.3 million for the same period last year.
¡¡¡¡Online advertising revenues for the fourth quarter of 2014 were $181.9 million, compared to $160.1 million for the same period last year. The year-over-year growth in online advertising revenues resulted from an increase of $31.9 million in Weibo advertising revenues, offset by a decline of $10.1 million in portal advertising revenues.
¡¡¡¡Non-advertising revenues for the fourth quarter of 2014 were $29.2 million. Non-GAAP non-advertising revenues for the fourth quarter of 2014 were $26.6 million, compared to $32.3 million for the same period last year. The year-over-year change in non-GAAP non-advertising revenues was mainly due to a decrease of $4.8 million in mobile value added services ("MVAS") revenues, partially offset by an increase of $1.9 million in Weibo value added services (¡°VAS¡±) revenues.
¡¡¡¡Gross margin for the fourth quarter of 2014 was 65%, compared to 64% for the same period last year. Advertising gross margin for the fourth quarter of 2014 was 65%, compared to 64% for the same period last year. Non-advertising gross margin for the fourth quarter of 2014 was 62%. Non-GAAP non-advertising gross margin for the fourth quarter of 2014 was 58%, compared to 61% for the same period last year, resulting from a decline in the margin of Weibo VAS.
¡¡¡¡Operating expenses for the fourth quarter of 2014 totaled $132.9 million, compared to $99.5 million for the same period last year. Non-GAAP operating expenses for the fourth quarter of 2014 totaled $123.3 million, compared to $94.3 million for the same period last year, primarily due to higher personnel costs, marketing expenditures and bad debt expenses.
¡¡¡¡Income from operations for the fourth quarter of 2014 was $3.9 million, compared to $27.4 million for the same period last year. Non-GAAP income from operations for the fourth quarter of 2014 was $11.7 million, compared to $28.6 million for the same period last year.
¡¡¡¡Non-operating income for the fourth quarter of 2014 was $64.1 million, compared to $24.5 million for the same period last year. Non-operating income for the fourth quarter included (i) a $49.2 million gain as a result of the initial public offering of Tian Ge, a live social video company that we invested in; (ii) a $7.8 million dividend from Aicai.com, an online lottery marketing platform that we invested in; and(iii) $3.2 million, or $5.6 million on a non-GAAP basis, in earnings from equity-method investments, which are accounted for under the equity-method and reported one quarter in arrears. Non-operating income for the fourth quarter of 2013 included (i) a $19.5 million gain from the change in fair value of investor option liability in connection with Alibaba's investment in Weibo; and (ii) $3.5 million, or $5.8 million on a non-GAAP basis, in earnings from equity investments.
¡¡¡¡Net income attributable to SINA for the fourth quarter of 2014 was $59.8 million, compared to $44.5 million for the same period last year. Diluted net income per share attributable to SINA for the fourth quarter of 2014 was $0.90, compared to $0.59 for the same period last year. Non-GAAP net income attributable to SINA for the fourth quarter of 2014 was $15.9 million, compared to $33.0 million for the same period last year. Non-GAAP diluted net income per share attributable to SINA for the fourth quarter of 2014 was $0.24, compared to $0.47 for the same period last year.
¡¡¡¡As of December 31, 2014, SINA¡¯s cash, cash equivalents and short-term investments totaled $2.2 billion, compared to $1.9 billion as of December 31, 2013. The increase in cash, cash equivalents, and short term investments was mainly due to cash received from Alibaba¡¯s exercise of its option in Weibo and proceeds received from Weibo¡¯s initial public offering in the second quarter of 2014, partially offset by investments and repurchases made in 2014. For the fourth quarter of 2014, net cash provided by operating activities was $4.7 million, capital expenditures totaled $34.9 million, and depreciation and amortization expenses amounted to $11.1 million.
¡¡¡¡Changes in Management Roles
¡¡¡¡The Company also announced changes in management roles, whereby Mr. Herman Yu, the Company¡¯s Chief Financial Officer, will assume a new role as the Chief Financial Officer of Weibo Corporation, one of the Company¡¯s subsidiaries, and Ms. Bonnie Yi Zhang, Weibo¡¯s Chief Financial Officer, will serve as the Chief Financial Officer of the Company. Both changes are effective immediately.
¡¡¡¡As of March 10, 2015, the Company has repurchased approximately 8.1 million shares under its repurchase program, returning approximately $311 million of cash to stockholders. The Company expects to continue to execute the repurchase program for up to $500 million, which was approved in April 2014 by the Company's board of directors.
¡¡¡¡In the year 2015, the Company will continue to execute a number of major initiatives to renovate its portal business in order to build a solid foundation for long term growth. Many of these transformative endeavors may take time to become meaningful revenue contributors, making it difficult for Management to predict the inflection point for a sustainable growth. As a result, the Company believes that an estimated range of annual revenue targets would be more reliable than quarterly revenue guidance. For the year 2015, SINA estimates that its non-GAAP net revenues will be between $800 million and $900 million, which exclude the recognition of $10.4 million in deferred license revenues from E-House. This forecast reflects SINA¡¯s current and preliminary view, which is subject to change.
¡¡¡¡This release contains the following non-GAAP financial measures: non-GAAP net revenues, non-GAAP non-advertising revenues, non-GAAP non-advertising gross margin, non-GAAP operating expenses, non-GAAP income (loss) from operations, non-GAAP net income attributable to SINA and non-GAAP diluted net income 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 equity investment in E-House, stock-based compensation, amortization of intangible assets net of tax, adjustment for GAAP to non-GAAP reconciling items on the share of equity method investments, gain (loss) on the sale, deemed disposal and impairment on business, investment and non-controlling interest in a subsidiary, change in fair value of investor option liability, adjustment for GAAP to non-GAAP reconciling items for the gain (loss) attributable to non-controlling interests, convertible debt issuance cost and impairment of goodwill. 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, gains/losses 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 GAAP measures to the nearest non-GAAP measures are set forth in the section below titled ¡°Unaudited Reconciliation of GAAP to Non-GAAP Results.¡±
¡¡¡¡SINA will host a conference call from 10:10 p.m. ¨C 10:50 p.m. Eastern Time on March 10, 2015 (or 10:10 a.m. ¨C 10:50 a.m. Beijing Time on March 11, 2015) 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 corp.sina.com. The conference call can be accessed as follows:
¡¡¡¡US: +1 845 675 0438
¡¡¡¡Hong Kong: +852 3018 6776
¡¡¡¡Passcode for all regions: 98098820
¡¡¡¡A replay of the conference call will be available through morning Eastern Time March 18, 2015. The dial-in number is +61 2 9003 4211. The passcode for the replay is 98098820.
¡¡¡¡We are an 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 desktop 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. Our mobile portal, SINA.cn, provides news information 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 up to 140 Chinese characters 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 the ¡°Business Outlook¡± section and 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 SINA¡¯s limited operating history in certain new businesses; 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 a Alibaba; the Company¡¯s reliance on mobile operators in China to provide MVAS and changes in mobile operators' policies for MVAS in China; 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, 2013 and other filings with the Securities and Exchange Commission.
¡¡¡¡Phone: 8610-82628888 x 3112