SINA Reports First Quarter 2020 Unaudited Financial Results

BEIJING, May 19, 2020 /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, 2020.

First Quarter 2020 Highlights

• Net revenues decreased 8% year-over-year to $435.1 million. Non-GAAP net revenues decreased 8% year-over-year to $432.4 million, representing a decrease of 4% on a constant currency basis [1].
• Advertising revenues decreased 20% year-over-year to $310.0 million.
• Non-advertising revenues increased 44% year-over-year to $125.1 million. Non-GAAP non-advertising revenues increased 45% year-over-year to $122.4 million.
• Net income attributable to SINA was $82.4 million, or $1.21 for diluted net income per share attributable to SINA's ordinary shareholders. Non-GAAP net income attributable to SINA was $17.0 million, or $0.25 for non-GAAP diluted net income per share attributable to SINA's ordinary shareholders.

First Quarter 2020 Financial Results

For the first quarter of 2020, SINA reported net revenues of $435.1 million, a decrease of 8% compared to $475.1 million for the same period last year. Non-GAAP net revenues for the first quarter of 2020 were $432.4 million, a decrease of 8% compared to $472.5 million for the same period last year.

Advertising revenues for the first quarter of 2020 were $310.0 million, a decrease of 20% compared to $388.0 million for the same period last year, primarily due to the adverse impact of the coronavirus pandemic on the overall advertising demand, as well as negative currency translation impact.

Non-advertising revenues for the first quarter of 2020 were $125.1 million, an increase of 44% compared to $87.1 million for the same period last year. Non-GAAP non-advertising revenues for the first quarter of 2020 were $122.4 million, an increase of 45% compared to $84.5 million for the same period last year. The year-over-year growth in non-advertising revenues was mainly attributable to increased revenues generated from SINA Fintech businesses, due to growth in loan facilitation volume as well as gross reporting of certain Fintech revenues as required by ASU 2016-13, "Financial Instruments—Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments".

Gross margin for the first quarter of 2020 was 66%, compared to 76% for the same period last year. Advertising gross margin for the first quarter of 2020 was 75%, compared to 78% for the same period last year. Non-advertising gross margin for the first quarter of 2020 was 44%, compared to 64% for the same period last year, primarily attributable to the adoption of the current expected credit losses methodology in estimating allowances for credit losses for Fintech businesses and reporting revenue and cost on a gross basis for certain Fintech businesses in accordance with ASU 2016-13.

Operating expenses for the first quarter of 2020 totaled $257.9 million, compared to $272.7 million for the same period last year. Non-GAAP operating expenses for the first quarter of 2020 totaled $231.7 million, compared to $245.3 million for the same period last year.

Income from operations for the first quarter of 2020 was $30.8 million, compared to $86.9 million for the same period last year. Operating margin was 7%, compared to 18% for the same period last year, as reduced expenses resulting from coronavirus pandemic disruption could not fully offset the revenue impact of the pandemic. Non-GAAP income from operations for the first quarter of 2020 was $57.1 million, compared to $114.2 million for the same period last year. Non-GAAP operating margin was 13%, compared to 24% for the same period last year.

Non-operating income for the first quarter of 2020 was $126.7 million, compared to $77.7 million for the same period last year. Non-operating income for the first quarter of 2020 included (i) a $153.5 million gain on deemed disposal and a $47.1 million net loss on sale of investments, fair value changes and impairment on investments, which are excluded under non-GAAP measure; (ii) a $15.0 million net earnings from equity method investments, which is reported one quarter in arrears; and (iii) a $5.2 million net interest and other income. Non-operating income for the first quarter of 2019 included (i) an $80.8 million net gain on sale of investments, fair value changes and impairment on investments, which is excluded under non-GAAP measure; (ii) a $13.1 million net interest and other income; and (iii) a $16.3 million net loss from equity method investments, which is reported one quarter in arrears.    

Income tax expenses for the first quarter of 2020 were $25.8 million, compared to $65.2 million for the same period last year, largely attributable to a decrease in deferred tax charges recognized from the fair value changes of investments as well as reduced profitability in the first quarter of 2020 compared with the same period last year.  

Net income attributable to SINA's ordinary shareholders for the first quarter of 2020 was $82.4 million, compared to $33.1 million for the same period last year. Diluted net income per share attributable to SINA's ordinary shareholders for the first quarter of 2020 was $1.21, compared to $0.46 for the same period last year. Non-GAAP net income attributable to SINA's ordinary shareholders for the first quarter of 2020 was $17.0 million, compared to $28.9 million for the same period last year. Non-GAAP diluted net income per share attributable to SINA's ordinary shareholders for the first quarter of 2020 was $0.25, compared to $0.40 for the same period last year.

As of March 31, 2020, SINA's cash, cash equivalents and short-term investments totaled $2.7 billion, compared to $2.9 billion as of December 31, 2019. For the first quarter of 2020, net cash provided by operating activities was $77.3 million, capital expenditures totaled $11.1 million, and depreciation and amortization expenses amounted to $11.5 million.

Other Development

As of March 31, 2020, the Company has repurchased approximately 3.2 million shares at an average cost of $30.59 under the 2020 New Program. There were 65,384,161 ordinary shares outstanding as of March 31, 2020.

Non-GAAP Measures

This release contains the following non-GAAP financial measures: non-GAAP net revenues, non-GAAP advertising revenues, non-GAAP non-advertising revenues, non-GAAP advertising and non-advertising gross margin, non-GAAP operating expenses, non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income (loss) attributable to SINA's ordinary shareholders and non-GAAP diluted net income (loss) per share. 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 related to the license granted to Leju, stock-based compensation, amortization of intangible assets, litigation reserve for arbitration, adjustment for non-GAAP to GAAP reconciling items on the share of equity method investments (net of share of amortization of intangibles not on their books), gain (loss) on sale of investment, gain (loss) on deemed disposal, fair value changes and impairment on investment, adjustment for non-GAAP to GAAP reconciling items for the income attributable to non-controlling interests, amortization of convertible debt and senior notes issuance cost, and income tax effects of above non-GAAP to GAAP reconciling items. 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. – 8:40 a.m. Eastern Time on May 19, 2020 (or 8:10 p.m. – 8:40 p.m. Beijing Time on May 19, 2020) to present an overview of the Company's financial performance and business operations.

Please register in advance of the conference call using the link provided below. Upon registering, you will be provided with a calendar invite with participant dial-in numbers, passcode, and a unique access pin by email.

PRE-REGISTER LINK: https://s1.c-conf.com/diamondpass/10006810-invite.html

To join the conference, simply dial the number in the calendar invite you receive after preregistering, enter the passcode followed by your pin, and you will join the conference instantly. A replay of the conference call may be accessed by phone at the following number until May 27, 2020:

Additionally, a live and archived webcast of this conference call will be available at http://ir.sina.com.

About SINA

SINA is a leading online media company serving China and the global Chinese communities. Its 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 mobile provides news information, professional and entertainment content customized for mobile users through mobile applications and mobile portal site SINA.cn.

Weibo is a leading social media platform for people to create, distribute and discover content. Based on an open platform architecture, Weibo provides unprecedented and simple way for people and organizations to publicly express themselves in real time, interact with others on a massive global platform and stay connected with the world.

Through these properties and other product lines, SINA offer an array of online media and social media services to its 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 Fintech 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 adverse impacts on our financial results from equity pick-up, fair value changes 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 2019 annual reports on Form 20-F and other filings with the Securities and Exchange Commission.

Contact:

Investor RelationsSINA CorporationPhone: +86 10 5898 3336 Email: [email protected]

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SOURCE SINA Corporation