Changyou.com (CYOU) Tops Q1 EPS by 5c

Changyou.com (NASDAQ: CYOU) reported Q1 EPS of $0.66, $0.05 better than the analyst estimate of $0.61. Revenue for the quarter came in at $120 million versus the consensus estimate of $120.47 million.

• Total revenue was US$120 million1, representing a decrease of 8% both year-over-year and quarter-over-quarter, meeting the top end of the Company's guidance.
• Online game revenue was US$85 million, representing a decrease of 17% year-over-year and 11% quarter-over-quarter, in line with the Company's guidance.
• GAAP net income attributable to Changyou.com Limited was US$30 million, in line with the Company's guidance. This compares with US$32 million in the first quarter of 2016 and US$41 million in the fourth quarter of 2016.
• Non-GAAP2 net income attributable to Changyou.com Limited was US$35 million, meeting the top end of the Company's guidance. This compares with US$31 million in the first quarter of 2016 and US$40 million in the fourth quarter of 2016.

Mr. Dewen Chen, CEO, commented, "We got off to a good start in 2017 as we recorded total revenue of US$120 million and non-GAAP net income of US$35 million for the first quarter, both meeting the top end of our guidance. Revenue from TLBB PC and TLBB 3D for the first quarter both exceeded our previous expectations. We will continue to launch new expansion packs in order to maintain user stability and extend the life spans of both games. In terms of new games, we are more determined than ever to develop popular games that resonate with users by producing content with innovative game play, premium graphics, cutting-edge technology, and other high quality features."

Mr. Qing Wei, Chief Games Development Officer added, "We conducted a second round of tests on Legacy TLBB mobile game in March. The results were in line with our expectations and improved greatly over the first round of tests in many aspects. Our team will continue to modify the game and make incremental improvements based on the latest test results as we get ready for the open beta test in mid-May. We hope to give this game the greatest possible chance of becoming a hit."

Ms. Jasmine Zhou, CFO of Changyou added, "Before we officially launch Legacy TLBB mobile game, our revenue projections for the game remain uncertain. Given the significance of this game to Changyou and the uncertainty inherent at this time, we believe that it is best to take a conservative approach and not include any projections for the game in our second quarter guidance. In the mid to long term, with new game launches such as Legacy TLBB mobile game in 2017, we expect our revenue to pick up in the second half of the year."

For earnings history and earnings-related data on Changyou.com (CYOU) click here.

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