Changyou.com (NASDAQ: CYOU) reported Q1 EPS of $0.69, $0.18 better than the analyst estimate of $0.51. Revenue for the quarter came in at $123 million versus the consensus estimate of $115.85 million.

• Total revenue was US$123 million, a decrease of 10% year-over-year and an increase of 5% quarter-over-quarter, exceeding the Company's guidance.
• Online game revenue was US$99 million, a decrease of 6% year-over-year and an increase of 5% quarter-over-quarter, exceeding the Company's guidance.
• GAAP net income attributable to Changyou.com Limited was US$37 million, compared with a net loss of US$13 million[1] in the first quarter of 2018 and net income of US$10 million[2] in the fourth quarter of 2018.
• Non-GAAP[3] net income attributable to Changyou.com Limited was US$37 million, compared with a net loss of US$16 million[1] in the first quarter of 2018 and net income of US$11 million[2] in the fourth quarter of 2018.

Mr. Dewen Chen, CEO, commented, "During the quarter, TLBB PC performed better than our expectations, which demonstrates that players are happy with the current in-game environment and the long-term outlook for the game. Legacy TLBB Mobile also showed its resilience and did better than we expected due to new content and other improvements that we made to the game. In 2019, we will continue to manage player engagement through our long-term oriented operational strategies. With our tireless efforts to improve game quality, we believe we are well prepared to roll out exciting new games in the future."

Mr. Qing Wei, Chief Games Development Officer, added, "During the quarter, Legacy TLBB Mobile's revenue remained relatively stable, mainly due to the various in-game holiday events and promotions that we launched. We also reduced the number of daily quests so that players did not have to commit as much time to repetitive tasks. For the second quarter of 2019, we will launch an expansion pack for Legacy TLBB Mobile's 2-year anniversary with a new clan and various celebratory events to further promote player engagement."

Mr. Yaobin Wang, CFO of Changyou, added, "We got off to a good start in 2019 thanks to the solid performance of our online games. For the first quarter of 2019, both our total revenue and net income came in ahead of our expectations. Given our ongoing profitability and strong operating cash flow, we will continue to invest in the development of high-end games as we look to enhance our leading position in the industry."

GUIDANCE:

Changyou.com sees Q2 2019 EPS of $0.41-$0.50, versus the consensus of $0.46. Changyou.com sees Q2 2019 revenue of $110-120 million, versus the consensus of $106.11 million.

Business Outlook

For the second quarter of 2019, Changyou expects:

• Total revenue to be between US$110 million and US$120 million, including online game revenue of US$90 million to US$100 million;
• Non-GAAP net income attributable to Changyou.com Limited to be between US$22 million and US$27 million, and non-GAAP net income per fully-diluted ADS to be between US$0.41 and US$0.50. Gain on share-based compensation to be around US$1 million, assuming no new grants of share-based awards, and considering the impact of the payment of special cash dividend. Taking into account the elimination of the impact of these share-based awards, GAAP net income attributable to Changyou.com Limited to be between US$23 million and US$28 million, and GAAP net income per fully-diluted ADS to be between US$0.43 and US$0.52.

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