Sohu.com Inc 2008 financial report
Total revenues for fiscal year 2008 were US$429.1 million, 2.3 times that of fiscal year 2007 revenues of US$188.9 million. Gross margin was 75% in fiscal year 2008, compared with 66% in fiscal year 2007. Non-GAAP gross margin was 75% in fiscal year 2008, an increase from 67% in fiscal year 2007.
Advertising revenues for fiscal year 2008 totaled US$175.9 million, up 48% from US$119.2 million in fiscal year 2007. Advertising revenues consisted of US$169.3 million in brand advertising and US$6.6 million in sponsored search. Brand advertising revenues increased 51% year-on-year, primarily as a result of successful execution of the Company’s Olympic strategy.
In fiscal year 2008, Sohu’s non-advertising revenues totaled US$253.1 million, 3.6 times US$69.7 million in fiscal year 2007. Online game revenues of US$201.8 million for fiscal year 2008 were 4.8 times US$42.1 million in fiscal year 2007. TLBB generated revenue of US$188.9 million in fiscal year 2008 compared with US$35.2 million in fiscal year 2007. Blade Online generated revenue of US$12.9 million in fiscal year 2008 compared with revenue of US$6.9 million in fiscal year 2007. Wireless revenues of US$47.0 million in fiscal year 2008 increased 79% over US$26.3 million in fiscal year 2007.
GAAP net income for fiscal year 2008 totaled US$158.6 million or US$4.06 per fully diluted share. Non-GAAP net income for fiscal year 2008 totaled US$169.3 million or US$4.29 per fully diluted share as compared with non-GAAP net income of US$43.7 million and US$1.12 per fully diluted share for fiscal year 2007.
Non-GAAP operating margin for fiscal year 2008 was 41%, up from 22% in fiscal year 2007. Non-GAAP net margin was 39%, compared with 23% in fiscal year 2007.
Under the US$150 million share repurchase program approved by our Board of Directors in October 2008, we purchased 501,686 shares in the open market during the fourth quarter, at an average price of US$39.86 and total consideration of US$20 million. These purchases speak to management’s great confidence in Sohu’s business and growth prospects. Sohu will continue to execute this program on an opportunistic basis in 2009.
Ms. Carol Yu, Co-President and CFO of Sohu.com, commented, “We believe that the results for fiscal year 2008 speak for themselves, with revenues of 2.3 times 2007 revenues, non-GAAP net income 3.9 times that of 2007, non-GAAP operating margin expansion to 41% in 2008 from 22% in 2007, and our cash balance increasing by US$191.7 million during 2008. These results also speak for our belief that management will have the ability to capture opportunities as they arise notwithstanding the more challenging economic environment expected in 2009.”