SHANGHAI, November 14, 2014 /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 third quarter ended September 30, 2014.

Third Quarter 2014 Highlights

  • Net revenues increased 8% year over year to $198.6 million. Non-GAAP net revenues increased 9% year over year to $196.0 million, within the Company’s guidance of between $193 million and $199 million.
  • Advertising revenues grew 10% year over year to $166.8 million. Non-advertising revenues were $31.8 million. Non-GAAP non-advertising revenues grew 3% year over year to $29.2 million.
  • Net income attributable to SINA was $133.6 million, or $1.91 diluted net income per share attributable to SINA. Non-GAAP net income attributable to SINA was $13.1 million, or $0.19 non-GAAP diluted net income per share attributable to SINA.

“In the third quarter of 2014, Weibo continued to show strong momentum in both revenue and user growth. Weibo’s third-quarter revenues grew 58% year over year to $84.1 million, while monthly active users in September grew 36% from a year ago to 167 million,” said Charles Chao, Chairman and CEO of SINA. “On the portal side, we are making strides to revamp our online business with particular emphasis in business verticalization and mobile,” Mr. Chao added.

Third Quarter 2014 Financial Results

For the third quarter of 2014, SINA reported net revenues of $198.6 million, compared to $184.6 million for the same period last year. Non-GAAP net revenues for the third quarter of 2014 totaled $196.0 million, compared to $179.9 million for the same period last year.

Online advertising revenues for the third quarter of 2014 were $166.8 million, compared to $151.6 million for the same period last year. The year-over-year growth in online advertising revenues resulted from an increase of $21.7 million in Weibo advertising revenues, offset by a decline of $6.5 million in portal advertising revenues.

Non-advertising revenues for the third quarter of 2014 were $31.8 million. Non-GAAP non-advertising revenues for the third quarter of 2014 were $29.2 million, compared to $28.4 million for the same period last year. The year-over-year change in non-GAAP non-advertising revenues was mainly due to an increase of $9.1 million in Weibo value added services (“VAS”) revenues, partially offset by a decline of $7.4 million in mobile value added services (“MVAS”) revenues.

Gross margin for the third quarter of 2014 was 63%, compared to 64% for the same period last year. Advertising gross margin for the third quarter of 2014 was 62%, compared to 64% for the same period last year. Non-advertising gross margin for the third quarter of 2014 was 67%. Non-GAAP non-advertising gross margin for the third quarter of 2014 was 64%, compared to 58% for the same period last year, resulting from a shift in revenue mix from low-margin MVAS to higher margin Weibo VAS.

Operating expenses for the third quarter of 2014 totaled $135.7 million, compared to $94.9 million for the same period last year. Non-GAAP operating expenses for the third quarter of 2014 totaled $127.1 million, compared to $90.5 million for the same period last year, primarily due to higher personnel costs, marketing expenditures and bad debt expenses.

Loss from operations for the third quarter of 2014 was $10.9 million, compared to an income from operations of $23.2 million for the same period last year. Non-GAAP loss from operations for the third quarter of 2014 was $4.0 million, compared to a non-GAAP income from operations of $23.4 million for the same period last year.

Non-operating income for the third quarter of 2014 was $144.3 million, compared to $7.7 million for the same period last year. Non-operating income for the third quarter included 1) a $109.2 million gain from the sale of a portion the Company’s investment in Alibaba through Yunfeng E-Commerce Funds in Alibaba’s initial public offering; 2) a $19.2 million gain as a result of the initial public offering of Leju, a subsidiary of E-house; and 3) $4.7 million, or $7.1 million on a non-GAAP basis, in earnings from equity-method investments, which are accounted for under the equity-method and reported one quarter in arrears. Non-operating income for the third quarter of 2013 included $3.2 million, or $5.7 million on a non-GAAP basis, in earnings from equity-method investments.

Net income attributable to SINA for the third quarter of 2014 was $133.6 million, compared to $25.4 million for the same period last year. Diluted net income per share attributable to SINA for the third quarter of 2014 was $1.91, compared to $0.37 for the same period last year. Non-GAAP net income attributable to SINA for the third quarter of 2014 was $13.1 million, compared to $28.5 million for the same period last year. Non-GAAP diluted net income per share attributable to SINA for the third quarter of 2014 was $0.19, compared to $0.42 for the same period last year.

As of September 30, 2014, SINA’s cash, cash equivalents and short-term investments totaled $2.3 billion, compared to $1.9 billion as of December 31, 2013. The increase in cash, cash equivalents, and short term investments was mainly due to cash received from Alibaba’s exercise of its option in Weibo and proceeds received from Weibo’s IPO in the second quarter of 2014, partially offset by investments and repurchases made during the first three quarters of 2014. For the third quarter of 2014, net cash provided by operating activities was $100.4 million, capital expenditures totaled $26.5 million, and depreciation and amortization expenses amounted to $11.6 million.

Other Developments

As of November 13, 2014, the Company has repurchased approximately 2.8 million shares under its repurchase program, returning approximately $116 million of cash to stockholders. The Company expects to continue to execute the repurchase program, which was approved by the Company’s board of directors for up to $500 million in April 2014, when appropriate.

Business Outlook

SINA estimates that its non-GAAP net revenues for the fourth quarter of 2014 will be between $204 million and $210 million, which exclude the recognition of $2.6 million in deferred license revenues from E-House. The foregoing forecast reflects SINA’s current and preliminary view, which is subject to change.

Non-GAAP Measures

This release contains the following non-GAAP financial measures: non-GAAP net revenues, non-GAAP non-advertising revenues, non-GAAP non-advertising gross margin, non-GAAP operating expenses, non-GAAP income (loss) from operations, non-GAAP net income (loss) attributable to SINA and non-GAAP diluted net income (loss) per share attributable to SINA. 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 in relation to the equity investment in E-House, stock-based compensation, amortization of intangible assets net of tax, adjustment for GAAP to non-GAAP reconciling items on the share of equity method investments, gain (loss) on the sale, deemed disposal and impairment on business, investment and non-controlling interest in a subsidiary, change in fair value of investor option liability, adjustment for GAAP to non-GAAP reconciling items for the gain (loss) attributable to non-controlling interests, convertible debt issuance cost and impairment of goodwill. 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, gains/losses 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 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 9:10 p.m.9:50 p.m. Eastern Time on November 13, 2014 (or 10:10 a.m.10:50 a.m. Beijing Time on November 14, 2014) to present an overview of the Company’s financial performance and business operations. A live webcast of the call will be available through the Company’s corporate website at http://corp.sina.com. The conference call can be accessed as follows:

US:

+1 845 675 0438

Hong Kong:

+852 3018 6776

Passcode for all regions:

31268045

A replay of the conference call will be available through morning Eastern Time November 21, 2014. The dial-in number is +61 2 9003 4211. The passcode for the replay is 31268045.

About SINA

We are an online media company serving China and the global Chinese communities. Our 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 desktop 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. Our mobile portal, SINA.cn, provides news information and entertainment content from SINA.com customized for mobile users in WAP (mobile browser) and mobile application format. Weibo is a leading social media platform for people to create, distribute and discover Chinese-language content. Based on an open platform architecture, Weibo allows users to create and post feeds up to 140 Chinese characters and attach multi-media content, as well as access a wide range of organically and third-party developed applications, such as online games.

Through these properties and other product lines, we offer an array of online media and social media services to our 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 the “Business Outlook” section and 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 SINA’s limited operating history in certain new businesses; 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 MVAS products; failure to enter and develop the small and medium enterprise market by the Company or through cooperation with other parties, such a Alibaba; the Company’s reliance on mobile operators in China to provide MVAS and changes in mobile operators’ policies for MVAS in China; failure to successfully integrate acquired businesses; risks associated with the Company’s investments, including equity pick-up 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 annual report on Form 20-F for the year ended December 31, 2013 and other filings with the Securities and Exchange Commission.

Contact:

Investor Relations
SINA Corporation
Phone: 8610-82628888 x 3112
Email: ir@staff.sina.com.cn

SINA CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(U.S. Dollars in thousands, except per share data)

Three months ended

Nine months ended

September 30,

June 30,

September 30,

2014

2013

2014

2014

2013

Net revenues:

Advertising

$ 166,790

$ 151,556

$ 155,835

$ 458,351

$ 366,424

Non-advertising

31,823

33,074

31,178

98,753

101,664

198,613

184,630

187,013

557,104

468,088

Cost of revenues:

Advertising *

63,142

54,585

63,384

181,382

159,015

Non-advertising

10,642

11,929

10,258

34,575

41,996

73,784

66,514

73,642

215,957

201,011

Gross profit

124,829

118,116

113,371

341,147

267,077

Operating expenses:

Sales and marketing *

60,954

43,803

56,944

167,858

113,946

Product development *

49,372

36,851

47,696

141,603

108,926

General and administrative *

25,355

14,271

19,406

61,937

49,059

Impairment on goodwill

14,526

14,526

135,681

94,925

138,572

385,924

271,931

Income (Loss) from operations

(10,852)

23,191

(25,201)

(44,777)

(4,854)

Non-operating income:

Earning from equity method investments, net

4,670

3,201

2,912

16,304

6,016

Gain (loss) on sale of and impairment on investments, net

128,599

(1,607)

26,932

155,150

(10,609)

Change in fair value of investor option liability

665

(6,784)

(46,972)

1,529

Interest and other income, net

11,019

5,396

8,116

21,090

14,375

144,288

7,655

31,176

145,572

11,311

Income before income taxes

133,436

30,846

5,975

100,795

6,457

Income tax benefits (expenses)

(2,656)

(5,297)

1,474

34

(8,507)

Net income (loss)

130,780

25,549

7,449

100,829

(2,050)

Less: Net income (loss) attributable to non-controlling interests

(2,815)

163

(9,173)

(16,222)

(2,732)

Net income attributable to SINA

$ 133,595

$ 25,386

$ 16,622

$ 117,051

$ 682

Basic net income per share attributable to SINA

$ 2.06

$ 0.38

$ 0.25

$ 1.78

$ 0.01

Diluted net income (loss) per share attributable to SINA **

$ 1.91

$ 0.37

$ 0.25

$ 1.74

$ (0.00)

Shares used in computing basic

net income per share attributable to SINA

64,963

66,918

65,806

65,601

66,806

Shares used in computing diluted

net income (loss) per share attributable to SINA

71,509

67,330

65,918

72,218

66,806

* Stock-based compensation in each category:

Cost of revenues – advertising

$ 923

$ 565

$ 724

$ 2,422

$ 5,593

Sales and marketing

1,465

789

1,103

3,715

7,802

Product development

2,090

864

1,530

4,975

10,449

General and administrative

4,164

2,437

4,072

11,846

17,710

** Net income (loss) attributable to SINA is adjusted for diluted shares issued by our subsidiary and equity method investments.

SINA CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(U.S. Dollars in thousands)

September 30,

December 31,

2014

2013

Assets

Current assets:

Cash and cash equivalents

$ 1,328,989

$ 916,276

Short-term investments

992,564

951,963

Accounts receivable, net

214,749

193,381

Prepaid expenses and other current assets

231,791

57,182

Subtotal

2,768,093

2,118,802

Property and equipment, net

70,091

80,920

Goodwill and intangible assets, net

59,882

58,189

Long-term investments, net

716,192

526,587

Other assets

164,831

113,345

Total assets

$ 3,779,089

$ 2,897,843

Liabilities and Shareholders’ Equity

Current liabilities:

Accounts payable

$ 3,080

$ 6,988

Accrued liabilities

296,089

220,837

Deferred revenues

47,668

49,200

Income taxes payable

12,705

21,577

Investor option liability

29,504

Subtotal

359,542

328,106

Convertible debt

800,000

800,000

Long-term deferred revenue

87,999

89,039

Other long-term liabilities

3,963

5,080

Total liabilities

1,251,504

1,222,225

Shareholders’ equity

SINA shareholders’ equity

2,257,805

1,191,210

Non-controlling interests

269,780

484,408

Total shareholders’ equity

2,527,585

1,675,618

Total liabilities and shareholders’ equity

$ 3,779,089

$ 2,897,843

SINA CORPORATION

UNAUDITED ADDITIONAL INFORMATION

(U.S. Dollars in thousands)

Three months ended

Nine months ended

September 30,

June 30,

September 30,

2014

2013

2014

2014

2013

Net revenues

Portal:

Portal Advertising

$ 101,417

$ 107,894

$ 96,252

$ 281,542

$ 274,043

Other

13,066

23,370

13,441

46,602

77,156

Subtotal

114,483

131,264

109,693

328,144

351,199

Weibo

84,130

53,366

77,320

228,960

116,889

$ 198,613

$ 184,630

$ 187,013

$ 557,104

$ 468,088

Cost of revenues

Portal:

Portal Advertising

$ 44,811

$ 41,458

$ 46,512

$ 130,779

$ 117,999

Other

8,303

10,532

7,430

27,365

39,363

Subtotal

53,114

51,990

53,942

158,144

157,362

Weibo

20,670

14,524

19,700

57,813

43,649

$ 73,784

$ 66,514

$ 73,642

$ 215,957

$ 201,011

SINA CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

(U.S. Dollars in thousands, except per share data)

Three months ended

September 30, 2014

September 30, 2013

June 30, 2014

Non-GAAP

Non-GAAP

Non-GAAP

Actual

Adjustments

Results

Actual

Adjustments

Results

Actual

Adjustments

Results

Advertising revenues

$ 166,790

$ 166,790

$ 151,556

$ 151,556

$ 155,835

$ 155,835

Non-advertising revenues

31,823

(2,609)

(a)

29,214

33,074

(4,687)

(a)

28,387

31,178

(2,609)

(a)

28,569

Net revenues

$ 198,613

$ (2,609)

$ 196,004

$ 184,630

$ (4,687)

$ 179,943

$ 187,013

$ (2,609)

$ 184,404

(2,609)

(a)

(4,687)

(a)

(2,609)

(a)

923

(b)

565

(b)

724

(b)

Gross profit

$ 124,829

$ (1,686)

$ 123,143

$ 118,116

$ (4,122)

$ 113,994

$ 113,371

$ (1,885)

$ 111,486

(6,705)

(b)

(7,719)

(b)

(4,090)

(b)

(474)

(c)

(815)

(c)

(288)

(c)

(14,526)

(i)

Operating expenses

$ 135,681

$ (8,534)

$ 127,147

$ 94,925

$ (4,378)

$ 90,547

$ 138,572

$ (21,705)

$ 116,867

(2,609)

(a)

(2,609)

(a)

(4,687)

(a)

7,429

(b)

8,642

(b)

4,655

(b)

474

(c)

815

(c)

288

(c)

14,526

(i)

Income (loss) from operations

$ (10,852)

$ 6,848

$ (4,004)

$ 23,191

$ 256

$ 23,447

$ (25,201)

$ 19,820

$ (5,381)

(2,609)

(a)

7,429

(b)

(2,609)

(a)

(4,687)

(a)

369

(c)

8,642

(b)

4,655

(b)

2,279

(d)

630

(c)

219

(c)

(26,932)

(e)

2,463

(d)

2,496

(d)

6,784

(f)

(128,599)

(e)

1,607

(e)

(7,791)

(g)

(2,373)

(g)

(665)

(f)

1,398

(h)

1,398

(h)

(515)

(g)

14,526

(i)

Net income attributable to SINA

$ 133,595

$ (120,448)

$ 13,147

$ 25,386

$ 3,110

$ 28,496

$ 16,622

$ (4,547)

$ 12,075

Diluted net income per share attributable to SINA *

$ 1.91

$ 0.19

$ 0.37

$ 0.42

$ 0.25

$ 0.17

Shares used in computing diluted

net income per share attributable to SINA

71,509

(6,468)

(j)

65,041

67,330

67,330

65,918

65,918

Gross margin – advertising

62%

1%

63%

64%

0%

64%

59%

1%

60%

Gross margin – non-advertising

67%

-3%

64%

64%

-6%

58%

67%

-3%

64%

Nine months ended

September 30, 2014

September 30, 2013

Non-GAAP

Non-GAAP

Actual

Adjustments

Results

Actual

Adjustments

Results

Advertising revenues

$ 458,351

$ 458,351

$ 366,424

$ 366,424

Non-advertising revenues

98,753

(9,350)

(a)

89,403

101,664

(14,059)

(a)

87,605

Net revenues

$ 557,104

$ (9,350)

$ 547,754

$ 468,088

$ (14,059)

$ 454,029

(9,350)

(a)

(14,059)

(a)

2,422

(b)

5,593

(b)

Gross profit

$ 341,147

$ (6,928)

$ 334,219

$ 267,077

$ (8,466)

$ 258,611

(20,536)

(b)

(2,460)

(c)

(35,961)

(b)

(14,526)

(i)

(312)

(c)

Operating expenses

$ 385,924

$ (37,522)

$ 348,402

$ 271,931

$ (36,273)

$ 235,658

(9,350)

(a)

22,958

(b)

(14,059)

(a)

2,460

(c)

41,554

(b)

14,526

(i)

312

(c)

Income (loss) from operations

$ (44,777)

$ 30,594

$ (14,183)

$ (4,854)

$ 27,807

$ 22,953

(9,350)

(a)

22,958

(b)

1,898

(c)

(14,059)

(a)

6,684

(d)

41,554

(b)

(155,150)

(e)

243

(c)

46,972

(f)

8,645

(d)

(13,453)

(g)

10,609

(e)

4,194

(h)

(1,529)

(f)

14,526

(i)

(1,876)

(g)

Net income attributable to SINA

$ 117,051

$ (80,721)

$ 36,330

$ 682

$ 43,587

$ 44,269

Diluted net income (loss) per share attributable to SINA *

$ 1.74

$ 0.52

$ (0.00)

$ 0.65

Shares used in computing diluted

net income (loss) per share attributable to SINA

72,218

(6,467)

(j)

65,751

66,806

316

(j)

67,122

Gross margin – advertising

60%

1%

61%

57%

1%

58%

Gross margin – non-advertising

65%

-4%

61%

59%

-7%

52%

(a) To adjust the recognition of deferred revenue related to the license agreements granted to E-House.

(b) To adjust stock-based compensation.

(c) To adjust amortization of intangible assets and tax provision on amortization of intangible assets.

(d) To adjust the GAAP to Non-GAAP reconciling items on the share of equity method investments, net of share of amortization of intangibles not on their books.

(e) To adjust gain (loss) on sale of investments, gain (loss) on deemed disposal and (impairment) on investments, net.

(f) To adjust the change in fair value of investor option liability.

(g) To adjust GAAP to Non-GAAP reconciling items for the gain (loss) attributable to non-controlling interests.

(h) To adjust convertible debt issuance cost.

(i) To adjust impairment on goodwill.

(j) To adjust the number of shares for dilution resulted from convertible debt and unvested equity granted.

* Net income (loss) attributable to SINA is adjusted for diluted shares issued by our subsidiary and equity method investments.

UNAUDITED RECONCILIATION OF SINA’S SHARE OF EQUITY INVESTMENTS’ GAAP TO NON-GAAP RESULTS*

Three months ended

September 30, 2014

September 30, 2013

June 30, 2014

Actual

Adjustments

Non-GAAP Results

Actual

Adjustments

Non-GAAP Results

Actual

Adjustments

Non-GAAP Results

To adjust stock-based compensation

$ 1,657

$ 1,118

$ 1,183

To adjust amortization of intangible

assets resulting from business acquisitions

497

941

778

Earning from equity method investments, net

$ 4,979

$ 2,154

$ 7,133

$ 3,638

$ 2,059

$ 5,697

$ 3,230

$ 1,961

$ 5,191

Share of amortization of equity investments’

intangibles not on their books

$ (309)

$ 309

$ –

$ (437)

$ 437

$ –

$ (318)

$ 318

$ –

$ 4,670

$ 2,463

$ 7,133

$ 3,201

$ 2,496

$ 5,697

$ 2,912

$ 2,279

$ 5,191

Nine months ended

September 30, 2014

September 30, 2013

Non-GAAP

Non-GAAP

Actual

Adjustments

Results

Actual

Adjustments

Results

To adjust stock-based compensation

$ 3,883

$ 4,158

To adjust amortization of intangible

assets resulting from business acquisitions

1,851

3,193

Earning from equity method investments, net

$ 17,254

$ 5,734

$ 22,988

$ 7,310

$ 7,351

$ 14,661

Share of amortization of equity investments’

intangibles not on their books

$ (950)

$ 950

$ –

$ (1,294)

$ 1,294

$ –

$ 16,304

$ 6,684

$ 22,988

$ 6,016

$ 8,645

$ 14,661

* Earning from equity method investments is recorded one quarter in arrears.