¡¡¡¡SHANGHAI, China¡ªNovember 18, 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 third quarter ended September 30, 2015.
¡¡¡¡Third Quarter 2015 Highlights
¡¡¡¡•Net revenues increased 14% year over year to $226.3 million. Non-GAAP net revenues increased 14% year over year to $223.7 million.
¡¡¡¡•Advertising revenues grew 16% year over year to $193.5 million. Non-advertising revenues were $32.8 million. Non-GAAP non-advertising revenues were $30.2 million.
¡¡¡¡•Net income attributable to SINA was $9.8 million, or $0.16 diluted net income per share attributable to SINA. Non-GAAP net income attributable to SINA was $24.4 million, or $0.39 non-GAAP diluted net income per share attributable to SINA.
¡¡¡¡¡°We are pleased with SINA¡¯s overall results in the macro headwinds. For Weibo¡¯s business, we continue to see strong performance on both operational and financial fronts. Weibo continues to be on track to execute its core strategies to grow user base and enhance user engagement, capitalize the shift to mobile, and optimize advertising offerings to better serve the ever-growing customer community at various dimensions. ¡± said Charles Chao, Chairman and CEO of SINA.
¡¡¡¡¡°For SINA¡¯s portal business, taking macro factors into account, our performance was largely in line with our expectation. We are encouraged by the progresses we made on monetizing mobile traffic and expanding our customer community. In addition, we will persist with our business endeavor to diversify our business models and implement the vertical strategy.¡± Mr. Chao added.
¡¡¡¡Third Quarter 2015 Financial Results
¡¡¡¡For the third quarter of 2015, SINA reported net revenues of $226.3 million, compared to $198.6 million for the same period last year. Non-GAAP net revenues for the third quarter of 2015 totaled $223.7 million, compared to $196.0 million for the same period last year.
¡¡¡¡Online advertising revenues for the third quarter of 2015 were $193.5 million, compared to $166.8 million for the same period last year. The year-over-year growth in online advertising revenues resulted from an increase of $40.5 million in Weibo advertising and marketing revenues, partially offset by a decline of $13.8 million in portal advertising revenues.
¡¡¡¡Non-advertising revenues for the third quarter of 2015 were $32.8 million. Non-GAAP non-advertising revenues for the third quarter of 2015 were $30.2 million, compared to $29.2 million for the same period last year.
¡¡¡¡Gross margin for the third quarter of 2015 was 63%, at similar level for the same period last year. Advertising gross margin for the third quarter of 2015 was 64%, compared to 62% for the same period last year. Non-advertising gross margin for the third quarter of 2015 was 60%, compared to 67% for the same period last year. The decline in non-advertising margin was primarily due to the decrease in higher margin data licensing revenue and increase in lower margin contribution of portal¡¯s early stage new business.
¡¡¡¡Operating expenses for the third quarter of 2015 totaled $128.6 million, compared to $135.7 million for the same period last year. Non-GAAP operating expenses for the third quarter of 2015 totaled $113.9 million, compared to $127.1 million for the same period last year, primarily due to the decrease in sales and marketing expenditures, decrease in general and administrative expenses, partially offset by an increase in product and development expenses.
¡¡¡¡Income from operations for the third quarter of 2015 was $14.7 million, compared to a loss of $10.9 million for the same period last year. Non-GAAP income from operations for the third quarter of 2015 was $28.4 million, compared to a non-GAAP loss of $4.0 million for the same period last year as a result of enhanced operation efficiency.
¡¡¡¡Non-operating income for the third quarter of 2015 was $4.9 million, compared to a non-operating income of $144.3 million for the same period last year. Non-operating income for the third quarter of 2015 mainly included a $5.9 million interest and other income. Non-operating income for the third quarter of 2014 was $144.3 million, which mainly included 1) a $109.2 million gain from the sale of a portion the Company¡¯s investment in Alibaba through Yunfeng E-Commerce Funds in Alibaba's initial public offering; 2) a $19.2 million gain as a result of the initial public offering of Leju, a subsidiary of E-house, which had been excluded from non-operating income under non-GAAP measure.
¡¡¡¡Net income attributable to SINA for the third quarter of 2015 was $9.8 million, compared to $133.6 million for the same period last year. Diluted net income per share attributable to SINA for the third quarter of 2015 was $0.16, compared to $1.91 for the same period last year. Non-GAAP net income attributable to SINA for the third quarter of 2015 was $24.4 million, compared to $13.1 million for the same period last year. Non-GAAP diluted net income per share attributable to SINA for the third quarter of 2015 was $0.39, compared to $0.19 for the same period last year.
¡¡¡¡As of September 30, 2015, SINA¡¯s cash, cash equivalents and short-term investments totaled $1.9 billion, compared to $2.2 billion as of December 31, 2014. The decrease in cash, cash equivalents, and short-term investments was mainly due to the share buyback completed in May 2015 and investments made in the past three quarters of 2015. For the third quarter of 2015, net cash provided by operating activities was $107.1 million, capital expenditures totaled $6.7 million, and depreciation and amortization expenses amounted to $8.8 million.
¡¡¡¡On November 6, 2015, the Company completed an issuance of 11,000,000 ordinary shares to a special purpose vehicle owned by Mr. Charles Chao, Chairman and CEO of the Company, for an aggregate price of $456,390,000, pursuant to a legally binding subscription agreement previously announced on June 1, 2015. The per share purchase price of US$41.49 represents the average closing trading price of SINA¡¯s ordinary shares for the 30 trading days ended May 29, 2015, the last trading day before the signing of the subscription agreement. The shares acquired in this transaction are subject to a contractual lock-up restriction for six months after the closing on November 6, 2015.
¡¡¡¡On November 6, 2015, the Company held its annual general meeting of shareholders, where the shareholders re-elected Mr. Yan Wang and Mr. Song-Yi Zhang as directors of SINA. The shareholders also approved and ratified the appointment of PricewaterhouseCoopers Zhong Tian LLP as the Company's independent auditors for the fiscal year ending December 31, 2015.
¡¡¡¡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 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 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, 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 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.¡±
¡¡¡¡SINA will host a conference call from 9:10 p.m. ¨C 9:50 p.m. Eastern Time on November 18, 2015 (or 10:10 a.m. ¨C 10:50 a.m. Beijing Time on November 19, 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.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:73460018
¡¡¡¡A replay of the conference call will be available through morning Eastern Time November 27, 2015. The dial-in number is +61 2 9003 4211. The passcode for the replay is 73460018.
¡¡¡¡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 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, 2014 and other filings with the Securities and Exchange Commission.
¡¡¡¡Phone: +86 10 5898 3336