BEIJING, April 29, 2019 /PRNewswire/ -- Changyou.com
Limited ("Changyou" or the "Company") (NASDAQ: CYOU), a leading
online game developer and operator in China, today announced its unaudited financial
results for the first quarter ended March
31, 2019.
First Quarter 2019 Highlights
- 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.
[1] GAAP and non-GAAP
net loss attributable to Changyou.com Limited included the accrual
of additional withholding income taxes of US$47 million recognized
in relation to a change in policy for the Company's PRC
subsidiaries with respect to their distribution of cash
dividends.
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[2] GAAP and non-GAAP
net income attributable to Changyou.com Limited included impairment
charges of US$16 million on goodwill recognized in relation to the
17173.com Website business.
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[3] Non-GAAP
results exclude share-based compensation expense. 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 Operations Measures to the Nearest Comparable GAAP
Measures".
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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."
First Quarter 2019 Operational Results
- Total average monthly active accounts[4] of the
Company's PC games were 1.9 million, a decrease of 24%
year-over-year and 5% quarter-over-quarter. The year-over-year and
quarter-over-quarter decreases reflected the natural declining
life cycles of the Company's older games, including TLBB PC.
- Total average monthly active accounts of the Company's mobile
games were 2.7 million, flat year-over-year and a decrease of 7%
quarter-over-quarter. The quarter-over-quarter decrease reflected
the natural declining life cycles of the Company's older games,
including Legacy TLBB Mobile.
- Total quarterly aggregate active paying accounts[5]
of the Company's PC games were 0.9 million, an increase of 13%
year-over-year and flat quarter-over-quarter. The year-over-year
increase was mainly driven by the greater willingness of TLBB PC
players to pay as the Company launched some anticipated in-game
promotional events in the first quarter of 2019.
- Total quarterly aggregate active paying accounts of the
Company's mobile games were 0.6 million, a decrease of 25%
year-over-year and 14% quarter-over-quarter. The year-over-year and
quarter-over-quarter decreases reflected the natural declining life
cycles of the Company's older games.
[4] Monthly Active
Accounts refers to the number of registered accounts that are
logged in to these games at least once during the month.
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[5] Quarterly
Aggregate Active Paying Accounts refers to the number of accounts
from which game points are utilized at least once during the
quarter.
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First Quarter 2019 Unaudited Financial Results
Revenue
Total revenue was US$123 million,
a decrease of 10% year-over-year and an increase of 5%
quarter-over-quarter.
Online game revenue was US$99
million, a decrease of 6% year-over-year and an increase of
5% quarter-over-quarter. The year-over-year decrease was due to the
natural decline in revenue of the Company's older games, including
Legacy TLBB Mobile. The quarter-over-quarter increase was largely
due to better-than-expected performance of TLBB PC as a result of
in-game promotional events that were launched around the Chinese
Spring Festival in the first quarter of 2019.
Online advertising revenue was US$3
million, a decrease of 33% year-over-year and 19%
quarter-over-quarter. The year-over-year and quarter-over-quarter
decreases were mainly due to fewer games being marketed on the
17173.com Website.
Cinema advertising revenue was US$20
million, a decrease of 19% year-over-year and an increase of
12% quarter-over-quarter. The year-over-year decrease reflected the
impact of a strategy adjustment in the second quarter of 2018
related to the acquisition and sale of advertising resources. The
quarter-over-quarter increase was a result of a recovery in revenue
following the strategy adjustment, as well as the release of
several popular movies in the first quarter of 2019.
Internet value-added services ("IVAS") revenue was US$1 million, a decrease of 58% year-over-year
and 51% quarter-over-quarter. The year-over-year and
quarter-over-quarter decreases were mainly because the RaidCall
business was wound down in the first quarter of 2019.
Gross profit/ (loss)
GAAP and non-GAAP gross profit were both US$88 million, a decrease of 7% year-over-year
and an increase of 14% quarter-over-quarter. GAAP and non-GAAP
gross margin were both 71%, compared with 69% in the first quarter
of 2018, and 66% in the fourth quarter of 2018.
GAAP and non-GAAP gross profit of the online games business were
both US$85 million, a decrease of 4%
year-over-year and an increase of 6% quarter-over-quarter. GAAP and
non-GAAP gross margin of the online games business were both 86%,
compared with 84% in the first quarter of 2018 and 85% in the
fourth quarter of 2018.
GAAP and non-GAAP gross profit of the online advertising
business were both US$2 million, a
decrease of 39% year-over-year and 26% quarter-over-quarter. GAAP
and non-GAAP gross margin of the online advertising business were
both 65%, compared with 71% in the first quarter of 2018 and 70% in
the fourth quarter of 2018. The year-over-year and
quarter-over-quarter decreases in gross margin were mainly due
to lower online advertising revenue in the first quarter of
2019.
GAAP and non-GAAP gross profit of the cinema advertising
business were both US$1 million,
compared with a gross profit of US$2
million in the first quarter of 2018 and a gross loss of
US$6 million in the fourth quarter of
2018. GAAP and non-GAAP gross margin of the cinema advertising
business were both 7%, compared with 9% in the first quarter of
2018 and negative 31% in the fourth quarter of 2018. The
quarter-over-quarter increase in gross margin was mainly due to a
decrease in cinema advertising costs as the Company partnered with
fewer cinemas, as well as an increase in cinema advertising revenue
in the first quarter of 2019. In the coming months the Company will
look to add a number of additional higher-quality cinema
resources.
GAAP and non-GAAP gross loss of the IVAS business were both
US$0.3 million, compared with gross
profit of US$0.2 million in the first
quarter of 2018 and gross profit of US$0.2
million in the fourth quarter of 2018.
Operating expenses
Total operating expenses were US$47
million, a decrease of 18% year-over-year and 32%
quarter-over-quarter.
Product development expenses were US$31
million, a decrease of 8% year-over-year and 5%
quarter-over-quarter. The year-over-year and
quarter-over-quarter decreases were mainly due to a decline in
salary and benefit expenses as a result of a reduction in bonus
expenses that mainly related to Legacy TLBB Mobile.
Sales and marketing expenses were US$11
million, a decrease of 31% year-over-year and 12%
quarter-over-quarter. The year-over-year and quarter-over-quarter
decreases were mainly because of lower marketing and promotional
spending for online games in the first quarter of 2019.
General and administrative expenses were US$5 million, a decrease of 33% year-over-year
and 35% quarter-over-quarter. The year-over-year decrease was
mainly due to a decline in salary and benefit expenses as a result
of a reduction in bonus expenses and workforce. The
quarter-over-quarter decrease was mainly due to a decline in
salary and benefit expenses as a result of a reduction in bonus
expenses.
Operating profit
Operating profit was US$41
million, compared with an operating profit of US$37 million in the first quarter of 2018 and an
operating profit of US$8 million in
the fourth quarter of 2018.
Non-GAAP operating profit was US$41
million, compared with a non-GAAP operating profit of
US$35 million in the first quarter of
2018 and a non-GAAP operating profit of US$9
million in the fourth quarter of 2018.
The quarter-over-quarter change in operating profit due in part
to impairment charges related to the 17173.com Website
business that were recognized during the fourth quarter of
2018.
Other income, net
Other income was US$4 million,
compared with US$5 million in the
first quarter of 2018 and US$3
million in the fourth quarter of 2018.
Income tax expense
Income tax expense was US$11
million, compared with income tax expense of US$61 million in the first quarter of 2018 and
income tax expense of US$8 million in
the fourth quarter of 2018.
The income tax expense for the first quarter of 2018 included
the accrual of additional withholding income taxes of US$47 million that were recognized in relation to
a change in policy for the Company's PRC subsidiaries with respect
to their distribution of cash dividends.
Net income/ (loss)
Net income was US$37 million,
compared with a net loss of US$13
million in the first quarter of 2018 and net income of
US$10 million in the fourth quarter
of 2018.
Non-GAAP net income was US$37
million, compared with a non-GAAP net loss of US$16 million in the first quarter of 2018 and
non-GAAP net income of US$11 million
in the fourth quarter of 2018.
Net loss attributable to non-controlling
interests
GAAP and non-GAAP net loss attributable to non-controlling
interests were both US$0.2 million.
This compares with a GAAP and non-GAAP net loss of US$0.3 million in the first quarter of 2018 and
US$0.1 million in the fourth quarter
of 2018. Non-controlling interests include the non-controlling
interests in RaidCall, which provides online music and
entertainment services primarily in Taiwan; a joint venture that operates Korean
comics online in China; and a
joint venture that is engaged in intellectual property
authorization, game production and distribution in China.
Net income/ (loss) attributable to Changyou.com
Limited
Net income attributable to Changyou.com Limited was US$37 million, compared with a net loss of
US$13 million1 in the
first quarter of 2018 and net income of US$10 million2 in the fourth quarter
of 2018. Fully-diluted net income attributable to Changyou.com
Limited per ADS[6] was US$0.69, compared with a net loss of US$0.25 in the first quarter of 2018 and net
income of US$0.19 in the fourth
quarter of 2018.
Non-GAAP net income attributable to Changyou.com Limited was
US$37 million, compared with a net
loss of US$16 million1 in
the first quarter of 2018 and net income of US$11 million2 in the fourth quarter
of 2018. Non-GAAP fully-diluted net income attributable to
Changyou.com Limited per ADS was US$0.69, compared with a net loss of US$0.30 in the first quarter of 2018 and net
income of US$0.21 in the fourth
quarter of 2018.
Liquidity
As of March 31, 2019, Changyou had
net cash[7] of US$676 million, compared with
US$673 million as of December 31, 2018.
Operating cash flow for the first quarter of 2019 was a net
inflow of US$31 million.
[6] Each ADS
represents two Class A ordinary shares.
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[7] Net cash is
calculated as the sum of cash and cash equivalents, short-term
investments, current restricted cash and non-current restricted
time deposits, minus long-term bank loans.
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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 the second quarter of 2019 guidance, the Company has adopted
a presumed exchange rate of RMB6.80 =
US$1.00, which compares with the
actual exchange rate of approximately RMB6.38 = US$1.00
for the second quarter of 2018, and RMB6.74 = US$1.00
for the first quarter of 2019.
Non-GAAP Disclosure
To supplement the unaudited consolidated financial information
prepared in accordance with generally accepted accounting
principles in the United States of
America ("GAAP"), Changyou's management uses non-GAAP
measures of gross profit, operating profit, net income, net income
attributable to Changyou.com Limited and diluted net income
attributable to Changyou.com Limited per ADS, which are adjusted
from results based on GAAP to exclude the compensation cost of
share-based awards granted, non-cash tax benefits from excess tax
deductions related to share-based awards and income/expense from
the adjustment of contingent consideration previously recorded for
acquisitions. 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.
Changyou's management believes that excluding share-based
compensation expense, non-cash tax benefits from excess tax
deductions related to share-based awards and income/expense from
the adjustment of contingent consideration previously recorded for
acquisitions from its non-GAAP financial measures is useful for
itself and investors. Further, the amount of share-based
compensation expense, non-cash tax benefits from excess tax
deductions related to share-based awards and income/expense from
the adjustment of contingent consideration previously recorded for
acquisitions cannot be anticipated by management, and these
expenses and benefits are not built into the Company's annual
budgets and quarterly forecasts, which generally will be the basis
for information Changyou provides to analysts and investors as
guidance for future operating performance. As share-based
compensation expense, non-cash tax benefits from excess tax
deductions related to share-based awards and income/expense from
the adjustment of contingent consideration previously recorded for
acquisitions do not involve subsequent cash outflow, Changyou does
not factor these in when evaluating and approving expenditures or
when determining the allocation of its resources to its business
operations. As a result, in general, the monthly financial results
for internal reporting and any performance measure for commissions
and bonuses are based on non-GAAP financial measures that exclude
share-based compensation expense, non-cash tax benefits from excess
tax deductions related to share-based awards and income/expense
from the adjustment of contingent consideration previously recorded
for acquisitions.
The non-GAAP financial measures are provided to enhance
investors' overall understanding of Changyou'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 Changyou.com Limited and diluted net income
attributable to Changyou.com Limited per ADS, excluding share-based
compensation expense, non-cash tax benefits from excess tax
deductions related to share-based awards and income/expense from
the adjustment of contingent consideration previously recorded for
acquisitions, is that the share-based compensation charge has been
and will continue to be a significant recurring expense in the
Company's business for the foreseeable future, non-cash tax
benefits from excess tax deductions related to share-based awards
and income/expense from the adjustment of contingent consideration
previously recorded for acquisitions may recur in the future. In
order to mitigate these limitations, the Company has provided
specific information regarding the GAAP amounts excluded from each
non-GAAP measure. The accompanying tables include details on the
reconciliation of GAAP financial measures that are most directly
comparable to the non-GAAP financial measures the Company has
presented.
Notes to Financial Information
Financial information in this press release other than the
information indicated as being non-GAAP is derived from Changyou's
unaudited financial statements prepared in accordance with
GAAP.
Safe Harbor Statement
It is currently expected that the Business Outlook will not be
updated until the release of Changyou's next quarterly earnings
announcement; however, Changyou reserves the right to update its
Business Outlook at any time for any reason.
This announcement contains forward-looking statements.
Statements that are not historical facts, including statements
about the Company'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. The Company cautions 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, continuing
volatility in global financial and credit markets and its potential
impact on the Chinese economy; exchange rate fluctuations in
general and possible continued devaluation of the RMB in
particular, including their potential impact on the Chinese economy
and on the Company's reported U.S. dollar results; slowing growth
in the Chinese economy; the uncertain regulatory landscape in
the People's Republic of China;
fluctuations in Changyou's quarterly operating results; the
possibility that Changyou will be unable to develop a series of
successful games for mobile platforms or successfully monetize
mobile games it develops or acquires; the possibility that the
Company's margins will decline as a result of the need for
revenue-sharing with mobile game platform operators; and the
Company's reliance on TLBB as its major revenue source. Further
information regarding these and other risks is included in
Changyou's Annual Report on Form 20-F filed on March 28, 2019, and other filings with the
Securities and Exchange Commission.
Conference Call Information
Changyou's management team will host an earnings conference call
today at 6:30 a.m. U.S. Eastern Time,
April 29, 2019 (6:30 p.m. Beijing/Hong
Kong, April 29, 2019).
The dial-in details for the live conference call are:
US:
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1-866-519-4004
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Hong Kong:
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800-906-601
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China
Mainland:
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400-620-8038
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International:
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+1-845-675-0437
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Passcode:
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CYOU
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Please dial in 10 minutes before the call is scheduled to begin
and provide the passcode to join the call.
A telephone replay of the call will be available after the
conclusion of the conference call at 9:30
a.m. U.S. Eastern Time on April 29,
2019 through May 5, 2019. The
dial-in details for the telephone replay are:
International:
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+61-2-8199-0299
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Passcode:
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4339549
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The live Webcast and archive of the conference call will be
available on the Investor Relations section of Changyou's Website
at http://ir.changyou.com/.
About Changyou
Changyou.com Limited (NASDAQ: CYOU) is a leading developer and
operator of online games in China
with a diverse portfolio of popular online games, such as
Tian Long Ba Bu ("TLBB"), one of the
most popular PC games in China, as
well as a number of mobile games. Changyou also owns and operates
the 17173.com Website, a leading game information portal in
China. Changyou began operations
as a business unit within Sohu.com Limited (NASDAQ: SOHU) in 2003,
and was carved out as a separate, stand-alone company in
December 2007. It completed an
initial public offering on April 7,
2009. Changyou has an advanced technology platform that
includes advanced 2.5D and 3D graphics engines, a uniform game
development platform, effective anti-cheating and anti-hacking
technologies, proprietary cross-networking technology and advanced
data protection technology. For more information, please visit
http://ir.changyou.com/.
For investor and media inquiries, please contact:
In China:
Mr. Yujia Zhao
Investor Relations
Phone: +86 (10) 6192-0800
E-mail: ir@cyou-inc.com
In the United
States:
Ms. Linda Bergkamp
Christensen
Phone: +1-480-614-3004
E-mail: lbergkamp@ChristensenIR.com
CHANGYOU.COM
LIMITED
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN
THOUSANDS EXCEPT PER ADS AMOUNTS)
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Three Months
Ended
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Mar. 31,
2019
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Dec. 31,
2018
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Mar. 31,
2018
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Revenue:
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Online game
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$
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99,054
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$
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94,106
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$
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105,461
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Online
advertising
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3,382
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4,198
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5,077
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Cinema
advertising
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20,109
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17,917
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24,870
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IVAS
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763
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1,550
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1,797
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Total revenue
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123,308
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117,771
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137,205
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Cost of
revenue:
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|
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Online game (includes
share-based compensation expense/
(benefit) of
$0, $7 and $(12), respectively)
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14,362
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14,499
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17,119
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Online
advertising
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1,194
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1,239
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1,491
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Cinema
advertising
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18,683
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23,520
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22,729
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IVAS
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1,043
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|
1,310
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1,603
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Total cost of
revenue
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35,282
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40,568
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42,942
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Gross
profit
|
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88,026
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77,203
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|
94,263
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|
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|
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Operating
expenses:
|
|
|
|
|
|
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Product development
(includes share-based
compensation expense/ (benefit) of $0, $492
and $(935), respectively)
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30,961
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|
32,566
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|
33,793
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Sales and marketing
(includes share-based
compensation expense/ (benefit) of $0,
$121 and $(199), respectively)
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10,579
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11,990
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15,237
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General and
administrative (includes share-based
compensation expense/ (benefit) of $9, $620
and $(1,279), respectively)
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5,311
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|
8,129
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7,890
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Goodwill impairment
and impairment of intangible
assets acquired as part of acquisition of
a
business
|
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-
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16,369
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|
-
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Total
operating expenses
|
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46,851
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|
69,054
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|
56,920
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|
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|
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Operating
profit
|
|
41,175
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|
8,149
|
|
37,343
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Interest income,
net
|
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2,473
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|
6,655
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|
7,647
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Foreign currency
exchange gain/ (loss)
|
|
137
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|
67
|
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(2,811)
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Other income,
net
|
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3,609
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|
3,172
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|
5,441
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Income before
income tax expense
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47,394
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|
18,043
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47,620
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Income tax
expense
|
|
10,698
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|
7,981
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|
61,059
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Net income/
(loss)
|
|
36,696
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|
10,062
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(13,439)
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Less: Net loss
attributable to non-controlling interests
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(203)
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(84)
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(281)
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Net income/ (loss)
attributable to Changyou.com Limited
|
$
|
36,899
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$
|
10,146
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$
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(13,158)
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Basic net income/
(loss) attributable to Changyou.com Limited
per ADS
|
$
|
0.69
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$
|
0.19
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$
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(0.25)
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|
|
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ADSs used in
computing basic net income/ (loss) attributable to
Changyou.com Limited per
ADS
|
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53,251
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|
53,233
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|
52,734
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|
|
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Diluted net income/
(loss) attributable to Changyou.com Limited
per ADS
|
$
|
0.69
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$
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0.19
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$
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(0.25)
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|
|
|
|
|
|
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ADSs used in
computing diluted net income/ (loss) attributable to
Changyou.com Limited per
ADS
|
|
53,665
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|
53,656
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|
52,734
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|
|
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CHANGYOU.COM
LIMITED
CONDENSED
CONSOLIDATED BALANCE SHEETS
(UNAUDITED, IN
THOUSANDS)
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As of Mar. 31,
2019
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As of Dec. 31,
2018
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ASSETS
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Current
assets:
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|
|
|
Cash and cash
equivalents
|
$
|
439,211
|
$
|
454,534
|
Restricted
cash
|
|
4,866
|
|
4,775
|
Accounts receivable,
net
|
|
56,363
|
|
57,389
|
Short-term
investments
|
|
193,925
|
|
190,068
|
Prepaid and other
current assets
|
|
904,148
|
|
721,059
|
Total current
assets
|
|
1,598,513
|
|
1,427,825
|
Non-current
assets:
|
|
|
|
|
Fixed assets,
net
|
|
171,870
|
|
170,746
|
Goodwill
|
|
10,257
|
|
10,257
|
Intangible assets,
net
|
|
12,673
|
|
13,904
|
Deferred tax
assets
|
|
13,721
|
|
13,467
|
Restricted time
deposits
|
|
178,213
|
|
243,910
|
Other assets,
net
|
|
60,387
|
|
85,375
|
Total non-current
assets
|
|
447,121
|
|
537,659
|
TOTAL
ASSETS
|
$
|
2,045,634
|
$
|
1,965,484
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Receipts in advance
and deferred revenue
|
$
|
41,045
|
$
|
45,343
|
Accounts payable and
accrued liabilities
|
|
845,600
|
|
753,071
|
Tax
payables
|
|
21,908
|
|
18,211
|
Total current
liabilities
|
|
908,553
|
|
816,625
|
Long-term
liabilities:
|
|
|
|
|
Deferred tax
liabilities
|
|
86,039
|
|
83,026
|
Long-term tax
payable
|
|
13,696
|
|
13,438
|
Long-term bank
loans
|
|
139,980
|
|
220,000
|
Other long-term
liabilities
|
|
2,461
|
|
751
|
Total long-term
liabilities
|
|
242,176
|
|
317,215
|
Total
liabilities
|
|
1,150,729
|
|
1,133,840
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
Changyou.com Limited
shareholders' equity
|
|
893,199
|
|
829,735
|
Non-controlling
interests
|
|
1,706
|
|
1,909
|
Total
shareholders' equity
|
|
894,905
|
|
831,644
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
$
|
2,045,634
|
$
|
1,965,484
|
CHANGYOU.COM
LIMITED
RECONCILIATIONS OF
NON-GAAP RESULTS OF OPERATIONS MEASURES TO THE NEAREST
COMPARABLE GAAP MEASURES
(UNAUDITED, IN
THOUSANDS, EXCEPT PER ADS AMOUNTS)
|
|
|
|
|
|
Three Months Ended
Mar. 31, 2019
|
|
|
|
|
|
Non-GAAP adjustments
(a)
|
|
|
|
|
|
GAAP
|
|
Share-based
compensation
expense (b)
|
|
Non-GAAP
|
|
Online game gross
profit
|
$
|
84,692
|
|
-
|
|
84,692
|
|
Online advertising
gross profit
|
|
2,188
|
|
-
|
|
2,188
|
|
Cinema advertising
gross profit
|
|
1,426
|
|
-
|
|
1,426
|
|
IVAS gross
loss
|
|
(280)
|
|
-
|
|
(280)
|
|
Gross
profit
|
$
|
88,026
|
|
-
|
|
88,026
|
|
Gross
margin
|
|
71%
|
|
|
|
71%
|
|
Operating
expenses
|
|
46,851
|
|
(9)
|
|
46,842
|
|
Operating
profit
|
$
|
41,175
|
|
9
|
|
41,184
|
|
Operating
margin
|
|
33%
|
|
|
|
33%
|
|
Income tax
expense
|
|
10,698
|
|
|
|
10,698
|
|
Net income
|
$
|
36,696
|
|
9
|
|
36,705
|
|
Less: Net loss
attributable to non-controlling interests
|
|
(203)
|
|
-
|
|
(203)
|
|
Net income
attributable to Changyou.com Limited
|
$
|
36,899
|
|
9
|
|
36,908
|
|
Net margin
attributable to Changyou.com Limited
|
|
30%
|
|
|
|
30%
|
|
Diluted net income
attributable to Changyou.com Limited per ADS
|
$
|
0.69
|
|
|
|
0.69
|
|
ADSs used in
computing diluted net income attributable to
Changyou.com Limited per ADS
|
|
53,665
|
|
|
|
53,680
|
|
|
|
Note:
(a) The Non-GAAP
adjustment does not have an impact on income tax
expense.
(b) To eliminate
share-based compensation expense measured using the fair value
method.
|
|
|
CHANGYOU.COM
LIMITED
RECONCILIATIONS OF
NON-GAAP RESULTS OF OPERATIONS MEASURES TO THE NEAREST
COMPARABLE GAAP MEASURES
(UNAUDITED, IN
THOUSANDS, EXCEPT PER ADS AMOUNTS)
|
|
|
|
Three Months Ended
Dec. 31, 2018
|
|
|
|
|
|
Non-GAAP adjustments
(a)
|
|
|
|
|
|
GAAP
|
|
Share-based
compensation
expense (b)
|
|
Non-GAAP
|
|
Online game gross
profit
|
$
|
79,607
|
|
7
|
|
79,614
|
|
Online advertising
gross profit
|
|
2,959
|
|
-
|
|
2,959
|
|
Cinema advertising
gross loss
|
|
(5,603)
|
|
-
|
|
(5,603)
|
|
IVAS gross
profit
|
|
240
|
|
-
|
|
240
|
|
Gross profit
|
$
|
77,203
|
|
7
|
|
77,210
|
|
Gross
margin
|
|
66%
|
|
|
|
66%
|
|
Operating
expenses
|
|
69,054
|
|
(1,233)
|
|
67,821
|
|
Operating
profit
|
$
|
8,149
|
|
1,240
|
|
9,389
|
|
Operating
margin
|
|
7%
|
|
|
|
8%
|
|
Income tax
expense
|
|
7,981
|
|
|
|
7,981
|
|
Net income
|
$
|
10,062
|
|
1,240
|
|
11,302
|
|
Less: Net loss
attributable to non-controlling interests
|
|
(84)
|
|
-
|
|
(84)
|
|
Net income
attributable to Changyou.com Limited
|
$
|
10,146
|
|
1,240
|
|
11,386
|
|
Net margin
attributable to Changyou.com Limited
|
|
9%
|
|
|
|
10%
|
|
Diluted net income
attributable to Changyou.com Limited per ADS
|
$
|
0.19
|
|
|
|
0.21
|
|
ADSs used in
computing diluted net income attributable to
Changyou.com Limited per
ADS
|
|
53,656
|
|
|
|
53,682
|
|
CHANGYOU.COM
LIMITED
RECONCILIATIONS OF
NON-GAAP RESULTS OF OPERATIONS MEASURES TO THE NEAREST
COMPARABLE GAAP MEASURES
(UNAUDITED, IN
THOUSANDS, EXCEPT PER ADS AMOUNTS)
|
|
|
|
|
|
Three Months Ended
Mar. 31, 2018
|
|
|
|
|
|
Non-GAAP adjustments
(a)
|
|
|
|
|
|
GAAP
|
|
Share-based
compensation
expense (c)
|
|
Non-GAAP
|
|
Online game gross
profit
|
$
|
88,342
|
|
(12)
|
|
88,330
|
|
Online advertising
gross profit
|
|
3,586
|
|
-
|
|
3,586
|
|
Cinema advertising
gross profit
|
|
2,141
|
|
-
|
|
2,141
|
|
IVAS gross
profit
|
|
194
|
|
-
|
|
194
|
|
Gross
profit
|
$
|
94,263
|
|
(12)
|
|
94,251
|
|
Gross
margin
|
|
69%
|
|
|
|
69%
|
|
Operating
expenses
|
|
56,920
|
|
2,413
|
|
59,333
|
|
Operating
profit
|
$
|
37,343
|
|
(2,425)
|
|
34,918
|
|
Operating
margin
|
|
27%
|
|
|
|
25%
|
|
Income tax
expense
|
|
61,059
|
|
|
|
61,059
|
|
Net loss
|
$
|
(13,439)
|
|
(2,425)
|
|
(15,864)
|
|
Less: Net loss
attributable to non-controlling interests
|
|
(281)
|
|
-
|
|
(281)
|
|
Net loss attributable
to Changyou.com Limited
|
$
|
(13,158)
|
|
(2,425)
|
|
(15,583)
|
|
Net margin
attributable to Changyou.com Limited
|
|
(10%)
|
|
|
|
(11%)
|
|
Diluted net loss
attributable to Changyou.com Limited per ADS
|
$
|
(0.25)
|
|
|
|
(0.30)
|
|
ADSs used in
computing diluted net loss attributable to
Changyou.com Limited per ADS
|
|
52,734
|
|
|
|
52,734
|
|
|
Note:
(c) To eliminate
share-based compensation expense measured using the fair value
method. The downward adjustment of share-based
compensation expense in the current period was a result of
fluctuations in the market price for the Company's ADS.
|
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SOURCE Changyou.com Limited