SOHU.COM REPORTS FOURTH QUARTER AND FISCAL YEAR 2022 UNAUDITED FINANCIAL RESULTS

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SOHU.COM REPORTS FOURTH QUARTER AND FISCAL YEAR 2022 UNAUDITED FINANCIAL RESULTS

BEIJING, Feb. 21, 2023 /PRNewswire/ -- Sohu.com Limited (NASDAQ: SOHU) ("Sohu" or the "Company"), China's leading online media, video, and game business group, today reported unaudited financial results for the fourth quarter and fiscal year ended December 31, 2022.

Fourth Quarter Highlights

  • Total revenues were US$160 million, down 17% year-over-year and 13% quarter-over-quarter.
  • Brand advertising revenues were US$29 million, down 14% year-over-year and up 12% quarter-over-quarter.
  • Online game revenues were US$121 million, down 16% year-over-year and 18% quarter-over-quarter.
  • GAAP net loss attributable to Sohu.com Limited was US$7 million, compared with net income of US$4 million in the fourth quarter of 2021 and a net loss of US$22 million in the third quarter of 2022.
  • Non-GAAP[1] net loss attributable to Sohu.com Limited was US$2 million, compared with net income of US$0.2 million in the fourth quarter of 2021 and a net loss of US$17 million in the third quarter of 2022.

Fiscal Year 2022 Highlights

  • Total revenues were US$734 million, down 12% compared with 2021. 
  • Brand advertising revenues were US$103 million, down 24% compared with 2021. 
  • Online game revenues were US$585 million, down 8% compared with 2021.
  • GAAP net loss[2] attributable to Sohu.com Limited was US$17 million, compared with net income of US$69 million in 2021.
  • Non-GAAP net income attributable to Sohu.com Limited was US$2 million, compared with net income of US$79 million in 2021.

[1] Non-GAAP results exclude share-based compensation expense; changes in fair value recognized in the Company's consolidated statements of operations with respect to equity investments with readily determinable fair values, and the related income tax impact; an impairment charge recognized for an investment unrelated to the Company's core businesses; and interest expense recognized in connection with the one-time transition tax (the "Toll Charge") imposed by the U.S. Tax Cuts and Jobs Act signed into law on December 22, 2017 (the "U.S. TCJA"). Explanation of the Company's non-GAAP financial measures and related reconciliations to GAAP financial measures are included in the accompanying "Non-GAAP Disclosure" and "Reconciliations of Non-GAAP Results of Operation Measures to the Nearest Comparable GAAP Measures."

[2] Following the completion on September 23, 2021 of the transaction with Tencent related to Sogou, Sohu no longer has any ownership interest in Sogou. Unless indicated otherwise, results presented in this release exclude results from Sogou operations. For historical statements, the results of operations of Sogou and the gain from its disposal are presented in separate line items as discontinued operations.

Dr. Charles Zhang, Chairman and CEO of Sohu.com Limited, commented, "In the fourth quarter and full year of 2022, we continued to refine our products and optimize operating efficiency with strict budget control, despite the negative impact of COVID-19 and macroeconomic challenges. Thanks to our efforts, brand advertising revenue and bottom line performance both exceeded our prior guidance for the fourth quarter of 2022. At Sohu Media Portal, we continued to dedicate ourselves to improving user experience by providing rich premium content and making significant improvements in both product and technology. At Sohu Video, based on our 'Twin Engine' strategy, we continued to develop both original content and science-based live broadcasting with our advanced live broadcasting technology. Meanwhile, we proactively explored a range of monetization opportunities with our differentiated content marketing campaigns. Online games delivered stable performance, with revenues in line with our prior guidance."

Fourth Quarter Financial Results 

Revenues

Total revenues were US$160 million, down 17% year-over-year and 13% quarter-over-quarter.

Brand advertising revenues were US$29 million, down 14% year-over-year and up 12% quarter-over-quarter.

Online game revenues were US$121 million, down 16% year-over-year and 18% quarter-over-quarter. The year-over-year decrease was mainly due to the natural decline of our older games, including Little Raccoon: Heroes and TLBB PC. The quarter-over-quarter decrease was mainly due to fewer in-game promotional activities launched for TLBB PC during the quarter, as well as the natural decline of Sea of Dawn, which was launched during the third quarter of 2022. 

Gross Margin

Both GAAP and non-GAAP gross margin were 78%, compared with 73% in the fourth quarter of 2021 and 71% in the third quarter of 2022.

Both GAAP and non-GAAP gross margin for the brand advertising business were 51%, compared with 28% in the fourth quarter of 2021 and 2% in the third quarter of 2022. The margin increase was mainly due to a waiver of unpaid long-term accounts payable of approximately US$10 million recognized during the quarter.

Both GAAP and non-GAAP gross margin for online games were 84%, compared with 84% in the fourth quarter of 2021 and 84% in the third quarter of 2022.

Operating Expenses

GAAP operating expenses were US$130 million, down 10% year-over-year and 13% quarter-over-quarter. Non-GAAP operating expenses were US$130 million, down 10% year-over-year and 13% quarter-over-quarter. The decreases were mainly due to Changyou's decrease in marketing and promotional spending for online games.

Operating Loss

GAAP operating loss was US$6 million, compared with an operating loss of US$3 million in the fourth quarter of 2021 and an operating loss of US$18 million in the third quarter of 2022.

Non-GAAP operating loss was US$5 million, compared with an operating loss of US$3 million in the fourth quarter of 2021 and an operating loss of US$17 million in the third quarter of 2022.

Income Tax Expense

GAAP income tax expense was US$7 million, compared with income tax expense of US$9 million in the fourth quarter of 2021 and income tax expense of US$16 million in the third quarter of 2022. Non-GAAP income tax expense was US$5 million, compared with income tax expense of US$6 million in the fourth quarter of 2021 and income tax expense of US$14 million in the third quarter of 2022. Income tax expense in the fourth quarter of 2022 included a one-time tax benefit of US$7 million recognized by Changyou as a result of pre-adjustment of its income tax due for 2022, as well as some of Changyou's subsidiaries having been granted preferential tax rates upon their receipt of Software Enterprise status for 2021.

Net Income/(Loss)

GAAP net loss attributable to Sohu.com Limited was US$7 million, or a net loss of US$0.21 per fully-diluted ADS, compared with net income of US$4 million in the fourth quarter of 2021 and a net loss of US$22 million in the third quarter of 2022.

Non-GAAP net loss attributable to Sohu.com Limited was US$2 million, or a net loss of US$0.06 per fully-diluted ADS, compared with net income of US$0.2 million in the fourth quarter of 2021 and a net loss of US$17 million in the third quarter of 2022.

Liquidity and Capital Resources

As of December 31, 2022, cash and cash equivalents, short-term investments and long-term time deposits totaled approximately US$1.44 billion.

Fiscal Year 2022 Financial Results

Revenues

Total revenues were US$734 million, down 12% compared with 2021. 

Brand advertising revenues were US$103 million, down 24% compared with 2021. 

Online game revenues were US$585 million, down 8% compared with 2021.

Gross Margin

Both GAAP and non-GAAP gross margin was 74%, compared with 76% in 2021.

Both GAAP and non-GAAP gross margin for the brand advertising business was 16%, compared with 26% in 2021.

Both GAAP and non-GAAP gross margin for online games was 84%, compared with 86% in 2021.

Operating Expenses

For 2022, GAAP operating expenses totaled US$543 million, up 2% compared with 2021. Non-GAAP operating expenses were US$538 million, up 3% compared with 2021.

Operating Profit/(Loss)

GAAP operating loss was US$1 million, compared with an operating profit of US$97 million in 2021.

Non-GAAP operating profit was US$4 million, compared with an operating profit of US$106 million in 2021. 

Income Tax Expense

GAAP income tax expense was US$58 million, compared with income tax expense of US$62 million in 2021. Non-GAAP income tax expense was US$53 million, compared with income tax expense of US$56 million in 2021.

Net Income/(Loss)

GAAP net loss attributable to Sohu.com Limited was US$17 million, or a net loss of US$0.50 per fully-diluted ADS, compared with net income of US$69 million in 2021.

Non-GAAP net income attributable to Sohu.com Limited was US$2 million, or net income of US$0.07 per fully-diluted ADS, compared with net income of US$79 million in 2021.

Supplementary Information for Changyou Results[3]

Fourth Quarter 2022 Operating Results 

  • For PC games, total average monthly active user accounts[4] (MAU) were 2.3 million, an increase of 11% year-over-year and 6% quarter-over-quarter. The increases were mainly due to improved performance of some of our older games, including TLBB PC, as a result of content updates launched during the quarter. Total quarterly aggregate active paying accounts[5] (APA) were 0.9 million, an increase of 2% year-over-year and a decrease of 10% quarter-over-quarter. The quarter-over-quarter decrease was mainly due to fewer in-game promotional activities launched for TLBB PC during the quarter.

  • For mobile games, total average MAU were 1.8 million, a decrease of 30% year-over-year and 31% quarter-over-quarter. Total quarterly APA were 0.4 million, a decrease of 24% year-over-year and 29% quarter-over-quarter. The year-over-year decreases in both MAU and APA were mainly from Little Raccoon: Heroes. The quarter-over-quarter decreases in both MAU and APA were mainly from Sea of Dawn.

[3] "Changyou Results" consist of the results of Changyou's online game business and its 17173.com Website.

[4] Monthly active user accounts refers to the number of registered accounts that are logged in to these games at least once during the month.

[5] Quarterly aggregate active paying accounts refers to the number of accounts from which game points are utilized at least once during the quarter.

Fourth Quarter 2022 Unaudited Financial Results 

Total revenues were US$122 million, a decrease of 16% year-over-year and 18% quarter-over-quarter. Online game revenues were US$121 million, a decrease of 16% year-over-year and 18% quarter-over-quarter. Online advertising revenues were US$1 million, a decrease of 27% year-over-year and 7% quarter-over-quarter.

GAAP and non-GAAP gross profit were both US$103 million, a decrease of 15% year-over-year and 18% quarter-over-quarter.

GAAP operating expenses were US$50 million, a decrease of 26% year-over-year and 27% quarter-over-quarter.

Non-GAAP operating expenses were US$50 million, a decrease of 26% year-over-year and quarter-over-quarter. The year-over-year decrease was mainly due to a decrease in marketing and promotional spending for online games, as well as a decrease in bonus expenses. The quarter-over-quarter decrease was mainly due to a decrease in marketing and promotional spending for online games.

GAAP operating profit was US$53 million, compared with an operating profit of US$53 million for the fourth quarter of 2021 and US$57 million for the third quarter of 2022.

Non-GAAP operating profit was US$54 million, compared with a non-GAAP operating profit of US$55 million for the fourth quarter of 2021 and US$58 million for the third quarter of 2022.

Fiscal Year 2022 Unaudited Financial Results

Total revenues were US$592 million, a decrease of 9% year-over-year. Online game revenues were US$585 million, a decrease of 8% year-over-year. Online advertising revenues were US$7 million, a decrease of 36% year-over-year.

GAAP and non-GAAP gross profit were both US$499 million, a decrease of 11% year-over-year.

GAAP operating expenses were US$222 million, a decrease of 13% year-over-year.

Non-GAAP operating expenses were US$218 million, a decrease of 13% year-over-year.

GAAP operating profit was US$277 million, compared with an operating profit of US$302 million for 2021.

Non-GAAP operating profit was US$282 million, compared with a non-GAAP operating profit of US$310 million for 2021.

Business Outlook

For the first quarter of 2023, Sohu estimates:

  • Brand advertising revenues to be between US$20 million and US$23 million; this implies an annual decrease of 3% to 16%, and a sequential decrease of 20% to 31%.
  • Online game revenues to be between US$121 million and US$131 million; this implies an annual decrease of 17% to 23%, and a sequential increase of nil to 8%.
  • Non-GAAP net loss attributable to Sohu.com Limited to be between US$15 million and US$25 million; and GAAP net loss attributable to Sohu.com Limited to be between US$20 million and US$30 million.

For the first quarter 2023 guidance, the Company has adopted a presumed exchange rate of RMB6.80=US$1.00, as compared with the actual exchange rate of approximately RMB6.35=US$1.00 for the first quarter of 2022, and RMB7.09=US$1.00 for the fourth quarter of 2022.

This forecast reflects Sohu's management's current and preliminary view, which is subject to substantial uncertainty particularly in view of the ongoing impact of the COVID-19 pandemic and the general macroeconomic environment in China.

Non-GAAP Disclosure

To supplement the unaudited consolidated financial statements presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"), Sohu's management uses non-GAAP measures of gross profit, operating profit, net income, net income attributable to Sohu.com Limited and diluted net income attributable to Sohu.com Limited per ADS, which are adjusted from results based on GAAP to exclude the impact of share-based compensation expense; changes in fair value recognized in the Company's consolidated statements of operations with respect to equity investments with readily determinable fair values, and the related income tax impact; an impairment charge recognized for an investment unrelated to the Company's core businesses; and interest expense recognized in connection with the Toll Charge imposed by the U.S. TCJA. These measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results.

Sohu's management believes excluding share-based compensation expense; changes in fair value recognized in the Company's consolidated statements of operations with respect to equity investments with readily determinable fair values, and the related income tax impact; the impairment charge recognized for an investment unrelated to the Company's core businesses; and interest expense recognized in connection with the Toll Charge from its non-GAAP financial measure is useful for itself and investors. Further, the impact of share-based compensation expense; changes in fair value recognized in the Company's consolidated statements of operations with respect to equity investments with readily determinable fair values, and the related income tax impact; the impairment charge recognized for an investment unrelated to the Company's core businesses; and interest expense recognized in connection with the Toll Charge cannot be anticipated by management and business line leaders and these expenses were not built into the annual budgets and quarterly forecasts that have been the basis for information Sohu provides to analysts and investors as guidance for future operating performance. As the impact of share-based compensation expense, changes in fair value recognized in the Company's consolidated statements of operations with respect to equity investments with readily determinable fair values, and the related income tax impact, and the impairment charge recognized for an investment unrelated to the Company's core businesses does not involve subsequent cash outflow or is reflected in the cash flows at the equity transaction level, Sohu does not factor this impact in when evaluating and approving expenditures or when determining the allocation of its resources to its business segments. As a result, in general, the monthly financial results for internal reporting and any performance measures for commissions and bonuses are based on non-GAAP financial measures that exclude share-based compensation expense, and changes in fair value recognized in the Company's consolidated statements of operations with respect to equity investments with readily determinable fair values, and the related income tax impact; the impairment charge recognized for an investment unrelated to the Company's core businesses, and also excluded the interest expense recognized in connection with the Toll Charge.

The non-GAAP financial measures are provided to enhance investors' overall understanding of Sohu's current financial performance and prospects for the future. A limitation of using non-GAAP gross profit, operating profit, net income, net income attributable to Sohu.com Limited and diluted net income attributable to Sohu.com Limited per ADS excluding share-based compensation expense; changes in fair value recognized in the Company's consolidated statements of operations with respect to equity investments with readily determinable fair values, and the related income tax impact; the impairment charge recognized for an investment unrelated to the Company's core businesses; and interest expense recognized in connection with the Toll Charge is that these excluded items have been and will continue to be significant recurring expenses in Sohu's business for the foreseeable future and similar impairment charges may also recur. In order to mitigate these limitations Sohu has provided specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables include details on the reconciliation between the GAAP financial measures that are most directly comparable to the non-GAAP financial measures that have been presented.

Notes to Financial Information

Financial information in this press release other than the information indicated as being non-GAAP is derived from Sohu's unaudited financial statements prepared in accordance with GAAP.

Safe Harbor Statement

This announcement contains forward-looking statements. It is currently expected that the Business Outlook will not be updated until release of Sohu's next quarterly earnings announcement; however, Sohu reserves right to update its Business Outlook at any time for any reason. Statements that are not historical facts, including statements about Sohu's beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that 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, instability in global financial and credit markets and its potential impact on the Chinese economy; exchange rate fluctuations, including their potential impact on the Chinese economy and on Sohu's reported U.S. dollar results; recent slow-downs in the growth of the Chinese economy; the uncertain regulatory landscape in the People's Republic of China; fluctuations in Sohu's quarterly operating results; the possibilities that Sohu will be unable to recoup its investment in video content and will be unable to develop a series of successful games for mobile platforms or successfully monetize mobile games it develops or acquires; Sohu's reliance on online advertising sales and online games for its revenues; the impact of the U.S. TCJA; the effects of the COVID-19 pandemic on the economy in China in general and on Sohu's business in particular; and the possibility that the agreement governing inspections and investigations of audit firms based in China that was entered into in August 2022 between the U.S. Public Company Accounting Oversight Board (the "PCAOB") and the China Securities Regulatory Commission and the Ministry of Finance of China does not continue to be implemented to the satisfaction of the PCAOB and Securities and Exchange Commission (the "SEC"), which could result in the SEC's prohibiting trading of Sohu's ADSs on Nasdaq, any other U.S. stock exchange, or the U.S. over-the-counter markets Further information regarding these and other risks is included in Sohu's annual report on Form 20-F for the year ended December 31, 2021, and other filings with and information furnished to the SEC.

Conference Call and Webcast 

Sohu's management team will host a conference call at 7:30 a.m. U.S. Eastern Time, February 21, 2023 (8:30 p.m. Beijing/Hong Kong time, February 21, 2023) following the quarterly results announcement. Participants can register for the conference call by clicking here, which will lead them to the conference registration website. Upon registration, participants will receive details for the conference call, including the dial-in numbers and a unique access PIN. Please dial in 10 minutes before the call is scheduled to begin.

The live Webcast and archive of the conference call will be available on the Investor Relations section of Sohu's website at https://investors.sohu.com/

About Sohu.com

Sohu.com Limited (NASDAQ: SOHU) was established by Dr. Charles Zhang, one of China's internet pioneers, in the 1990s. As a mainstream media platform in China, Sohu is indispensable to the daily life of millions of Chinese, providing a network of web properties and community based products which continually offer a broad array of choices regarding information, entertainment and communication to the vast number of Sohu users. Sohu has built one of the most comprehensive matrices of Chinese language web properties, consisting of the leading online media destinations Sohu News App, mobile news portal m.sohu.com, PC portal www.sohu.com; online video website tv.sohu.com; and the online games platform www.changyou.com/en/.

Sohu provides online brand advertising services as well as multiple news, information and content services on its matrix of websites and also on its mobile platforms. Sohu's online game business, conducted by its subsidiary Changyou, develops and operates a diverse portfolio of PC and mobile games, such as Tian Long Ba Bu, one of the most popular PC games in China. Changyou also owns and operates the 17173.com Website, a game information portal in China.

For investor and media inquiries, please contact:

In China:

Ms. Pu Huang

Sohu.com Limited

Tel:

+86 (10) 6272-6645

E-mail:

ir@contact.sohu.com

In the United States:

Ms. Linda Bergkamp

Christensen

Tel:

+1 (480) 614-3004

E-mail:

linda.bergkamp@christensencomms.com

 

 

SOHU.COM LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)











Three Months Ended



Twelve Months Ended



Dec. 31, 2022


Sep. 30, 2022


Dec. 31, 2021



Dec. 31, 2022


Dec. 31, 2021

Revenues:












    Brand advertising

$

28,778

$

25,762

$

33,638


$

103,233

$

134,967

    Online games


121,381


148,895


143,708



585,424


638,225

    Others


10,241


10,617


15,645



45,215


62,384

Total revenues


160,400


185,274


192,991



733,872


835,576













Cost of revenues:












Brand advertising (includes share-based
compensation expense of $-8,  $19, $-115, $48, and $1,
respectively)[6]


14,020


25,245


24,214



86,642


99,522

Online games (includes share-based compensation
expense of $18,  $42, $43, $143, and $276,
respectively)


18,888


24,451


23,053



91,001


87,616

Others 


2,888


3,972


4,477



13,930


17,533

Total cost of revenues


35,796


53,668


51,744



191,573


204,671













Gross profit


124,604


131,606


141,247



542,299


630,905













Operating expenses:












Product development (includes share-based
compensation expense of $217, $613, $437, $2,026,
and $3,904, respectively) 


67,147


64,688


68,392



260,772


268,863

Sales and marketing (includes share-based
compensation expense of  $-21, $58, $-186, $128, and
$168, respectively) 


47,067


73,347


54,793



225,480


182,690

General and administrative (includes share-based
compensation expense of $332, $720, $110, $2,594,
and $4,229, respectively)


15,970


11,629


20,970



56,920


81,880

Total operating expenses


130,184


149,664


144,155



543,172


533,433













Operating profit/(loss)


(5,580)


(18,058)


(2,908)



(873)


97,472













Other income, net


779


4,750


12,982



17,643


29,416

Interest income


6,190


4,808


3,359



17,311


15,641

Interest expense


-


-


-



-


(7,500)

Exchange difference


(1,071)


3,129


(1,150)



6,524


(3,462)

Income/(loss) before income tax expense


318


(5,371)


12,283



40,605


131,567













Income tax expense

7,413


16,213


8,695



57,946


62,296

Net income/(loss) from continuing operations


(7,095)


(21,584)


3,588



(17,341)


69,271

Net income from discontinued operations, net of tax[7]


-


-


-



-


864,902

Net income/(loss)


(7,095)


(21,584)


3,588



(17,341)


934,173













Less: Net income/(loss) from continuing operations
attributable to the noncontrolling interest
shareholders


(1)


(1)


(1)



2


(3)

Less: Net loss from discontinued operations
attributable to the noncontrolling interest
shareholders


-


-


-



-


6,451













Net income/(loss) from continuing operations
attributable to Sohu.com Limited


(7,094)


(21,583)


3,589



(17,343)


69,274

Net income from discontinued operations attributable
to Sohu.com Limited


-


-


-



-


858,451

Net income/(loss) attributable to Sohu.com Limited


(7,094)


(21,583)


3,589



(17,343)


927,725













Basic net income/(loss) from continuing operations per
share/ADS attributable to Sohu.com Limited[8]

$

(0.21)


(0.63)

$

0.09


$

(0.50)

$

1.75

Basic net income from discontinued operations per
share/ADS attributable to Sohu.com Limited

$

-


-

$

-


$

-

$

21.74

Basic net income/(loss) per share/ADS attributable to
Sohu.com Limited

$

(0.21)

$

(0.63)

$

0.09


$

(0.50)

$

23.49

Shares/ADSs used in computing basic net
income/(loss) per share/ADS attributable to Sohu.com
Limited


34,091


34,387


39,373



34,945


39,501













Diluted net income/(loss) from continuing operations
per share/ADS attributable to Sohu.com Limited

$

(0.21)


(0.63)

$

0.09


$

(0.50)

$

1.75

Diluted net income from discontinued operations per
share/ADS attributable to Sohu.com Limited

$

-


-

$

-


$

-

$

21.74

Diluted net income/(loss) per share/ADS attributable to
Sohu.com Limited

$

(0.21)

$

(0.63)

$

0.09


$

(0.50)

$

23.49

Shares/ADSs used in computing diluted net
income/(loss) per share/ADS attributable to Sohu.com
Limited


34,091


34,387


39,373



34,945


39,501

























[6] The cost of brand advertising revenues for the fourth quarter of 2022 included a waiver of unpaid long-term accounts payable of approximately US$10 million recognized during the quarter. 

[7] Following the completion on September 23, 2021 of the transaction with Tencent related to Sogou, Sohu no longer has any ownership interest in Sogou. Unless indicated otherwise, results presented in this release exclude results from Sogou operations. For historical statements, the results of operations of Sogou and the gain from its disposal are presented in separate line items as discontinued operations.

[8] Each ADS represents one ordinary share.

















 

SOHU.COM LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS 

(UNAUDITED, IN THOUSANDS)








As of Dec. 31, 2022


As of Dec. 31, 2021

ASSETS





Current assets:





           Cash and cash equivalents

$

697,821

$

998,949

           Restricted cash


3,641


1,969

           Short-term investments


473,624


399,345

           Accounts receivable, net


67,541


82,550

           Prepaid and other current assets 


83,093


107,311

Total current assets


1,325,720


1,590,124

Fixed assets, net


288,226


329,997

Goodwill 


47,415


48,811

Long-term investments, net


26,012


53,121

Intangible assets, net


5,394


9,136

Long-term time deposits


265,802


189,007

Other assets


19,207


25,589

Total assets

$

1,977,776

$

2,245,785






LIABILITIES 





Current liabilities:





           Accounts payable 

$

56,449

$

87,447

           Accrued liabilities


126,461


138,196

           Receipts in advance and deferred revenue


48,080


57,041

           Accrued salary and benefits


60,754


91,485

           Taxes payables


10,612


16,714

           Other short-term liabilities


114,532


112,568

Total current liabilities

$

416,888

$

503,451






Long-term other payables


1,795


3,922

Long-term tax liabilities


448,043


443,083

Other long-term liabilities


340


3,142

Total long-term liabilities

$

450,178

$

450,147

                         Total liabilities

$

867,066

$

953,598











SHAREHOLDERS' EQUITY:





          Sohu.com Limited shareholders' equity


1,109,442


1,290,869

          Noncontrolling interest


1,268


1,318

                     Total shareholders' equity

$

1,110,710

$

1,292,187






Total liabilities and shareholders' equity  

$

1,977,776

$

2,245,785

 

SOHU.COM LIMITED

RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES

(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)






















Three Months Ended Dec. 31, 2022


Three Months Ended Sep. 30, 2022


Three Months Ended Dec. 31, 2021



GAAP


Non-GAAP Adjustments


Non-GAAP


GAAP


Non-GAAP Adjustments


Non-GAAP


GAAP


Non-GAAP Adjustments


Non-GAAP
























(8)

(a)





19

(a)





(115)

(a)


Brand advertising gross profit

$

14,758

$

(8)

$

14,750

$

517

$

19

$

536

$

9,424

$

(115)

$

9,309

Brand advertising gross margin


51 %




51 %


2 %




2 %


28 %




28 %
























18

(a)





42

(a)





43

(a)


Online games gross profit 

$

102,493

$

18

$

102,511

$

124,444

$

42

$

124,486

$

120,655

$

43

$

120,698

Online games gross margin


84 %




84 %


84 %




84 %


84 %




84 %
























-

(a)





-

(a)





-

(a)


Others gross profit 

$

7,353

$

-

$

7,353

$

6,645

$

-

$

6,645

$

11,168

$

-

$

11,168

Others gross margin


72 %




72 %


63 %




63 %


71 %




71 %
























10

(a)





61

(a)





(72)

(a)


Gross profit

$

124,604

$

10

$

124,614

$

131,606

$

61

$

131,667

$

141,247

$

(72)

$

141,175

Gross margin


78 %




78 %


71 %




71 %


73 %




73 %







































Operating expenses

$

130,184

$

(528)

(a) $

129,656

$

149,664

$

(1,391)

(a) $

148,273

$

144,155

$

(361)

(a) $

143,794
























538

(a)





1,452

(a)





289

(a)


Operating loss

$

(5,580)

$

538

$

(5,042)

$

(18,058)

$

1,452

$

(16,606)

$

(2,908)

$

289

$

(2,619)

Operating margin


-3 %




-3 %


-10 %




-9 %


-2 %




-1 %




















Income tax expense

$

7,413

$

(1,954)

(c,d)$

5,459

$

16,213

$

(1,884)

(c,d)$

14,329

$

8,695

$

(2,863)

(c,d)$

5,832
























538

(a)





1,452

(a)





289

(a)






2,442

(b)





891

(b)





(6,532)

(b)






(610)

(c)





(224)

(c)





1,632

(c)






2,564

(d)





2,108

(d)





1,230

(d)


Net income/(loss) before non-
controlling interest

$

(7,095)

$

4,934

$

(2,161)

$

(21,584)

$

4,227

$

(17,357)

$

3,588

$

(3,381)

$

207
























538

(a)





1,452

(a)





289

(a)






2,442

(b)





891

(b)





(6,532)

(b)






(610)

(c)





(224)

(c)





1,632

(c)






2,564

(d)





2,108

(d)





1,230

(d)


Net income/(loss) attributable to
Sohu.com Limited for diluted net
income/(loss) per share/ADS

$

(7,094)

$

4,934

$

(2,160)

$

(21,583)

$

4,227

$

(17,356)

$

3,589

$

(3,381)

$

208

Diluted net income/(loss) per
share/ADS attributable to Sohu.com
Limited

$

(0.21)



$

(0.06)

$

(0.63)



$

(0.50)

$

0.09



$

0.01

Shares/ADSs used in computing
diluted net income/(loss) per
share/ADS attributable to Sohu.com
Limited


34,091




34,091


34,387




34,387


39,373




39,373







































Note:



















(a) To eliminate the impact of share-based awards.

(b) To adjust for changes in the fair value of the Company's investments.

(c) To adjust for the impacts of income tax related to changes in the fair value of the Company's investments.










(d) To adjust for the effect of the Toll Charge.

 

SOHU.COM LIMITED

RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATION MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES

(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
















Twelve Months Ended Dec. 31, 2022


Twelve Months Ended Dec. 31, 2021



GAAP


Non-GAAP Adjustments


Non-GAAP


GAAP


Non-GAAP Adjustments


Non-GAAP


















48

(a)





1

(a)


Brand advertising gross profit

$

16,591

$

48

$

16,639

$

35,445

$

1

$

35,446

Brand advertising gross margin


16 %




16 %


26 %




26 %


















143

(a)





276

(a)


Online games gross profit

$

494,423

$

143

$

494,566

$

550,609

$

276

$

550,885

Online games gross margin


84 %




84 %


86 %




86 %


















-

(a)





-

(a)


Others gross profit 

$

31,285

$

-

$

31,285

$

44,851

$

-

$

44,851

Others gross margin


69 %




69 %


72 %




72 %


















191

(a)





277

(a)


Gross profit

$

542,299

$

191

$

542,490

$

630,905

$

277

$

631,182

Gross margin


74 %




74 %


76 %




76 %














Operating expenses

$

543,172

$

(4,748)

(a)$

538,424

$

533,433

$

(8,301)

(a)$

525,132


















4,939

(a)





8,578

(a)


Operating profit/(loss)

$

(873)

$

4,939

$

4,066

$

97,472

$

8,578

$

106,050

Operating margin


0 %




1 %


12 %




13 %














Income tax expense

$

57,946

$

(5,118)

(c,d)$

52,828

$

62,296

$

(6,101)

(c,d)$

56,195































4,939

(a)





8,578

(a)






9,659

(b)





(5,102)

(b)






(2,416)

(c)





1,274

(c)






7,534

(d)





4,827

(d)






-

(e)





156

(e)


Net income/(loss) before non-controlling
interest

$

(17,341)

$

19,716

$

2,375

$

69,271

$

9,733

$

79,004































4,939

(a)





8,578

(a)






9,659

(b)





(5,102)

(b)






(2,416)

(c)





1,274

(c)






7,534

(d)





4,827

(d)






-

(e)





156

(e)















Net income/(loss) from continuing
operations attributable to Sohu.com
Limited for diluted net income/(loss) per
ADS

$

(17,343)

$

19,716

$

2,373

$

69,274

$

9,733

$

79,007

Net income from discontinued operations
attributable to Sohu.com Limited for
diluted net income per ADS [9]

$

-

$

-

$

-

$

858,431


1,216

$

859,647

Net income/(loss) attributable to
Sohu.com Limited for diluted net
income/(loss) per ADS

$

(17,343)

$

19,716

$

2,373

$

927,705


10,949

$

938,654














Diluted net income/(loss) from
continuing operations per ADS
attributable to Sohu.com Limited

$

(0.50)



$

0.07

$

1.75



$

2.00

Diluted net income from discontinued
operations per ADS attributable to
Sohu.com Limited

$

-




-

$

21.74



$

21.76

Diluted net income/(loss) per ADS
attributable to Sohu.com Limited

$

(0.50)




0.07

$

23.49



$

23.76

ADS used in computing diluted net
income/(loss) per ADS attributable to
Sohu.com Limited 


34,945




34,945


39,501




39,501














Note:













(a) To eliminate the impact of share-based awards.

(b) To adjust for changes in the fair value of the Company's investments.

(c) To adjust for the impacts of income tax related to changes in the fair value of the Company's investments.

(d) To adjust for the effect of the U.S. TCJA.

(e) To adjust for the one-time impairment charge recognized for an investment unrelated to the Company's core businesses.














[9]  Following the completion on September 23, 2021 of the transaction with Tencent related to Sogou, Sohu no longer has any ownership interest in Sogou. Unless indicated otherwise, results presented in this release exclude results from Sogou operations. For historical statements, the results of operations of Sogou and the gain from its disposal are presented in separate line items as discontinued operations.

 


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Source: Sohu.com Limited Related Stocks: NASDAQ:SOHU

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