SINA Reports Third Quarter 2019 Unaudited Financial Results

Published

BEIJING, Nov. 14, 2019 /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, 2019.

Third Quarter 2019 Highlights

  • Net revenues increased 1% year-over-year to $561.4 million. Non-GAAP net revenues increased 1% year-over-year to $558.8 million, representing an increase of 5% on a constant currency basis [1].
  • Advertising revenues decreased 5% year-over-year to $461.1 million.
  • Non-advertising revenues increased 37% year-over-year to $100.4 million. Non-GAAP non-advertising revenues increased 38% year-over-year to $97.7 million.
  • Net income attributable to SINA was $20.4 million, or $0.28 for diluted net income per share attributable to SINA's ordinary shareholders. Non-GAAP net income attributable to SINA was $67.0 million, or $0.94 for non-GAAP diluted net income per share attributable to SINA's ordinary shareholders.

[1] On a constant currency (non-GAAP) basis, we assume that the exchange rate in the third quarter of 2019 had been the same as it was in the third quarter of 2018, or RMB6.80=US$1.00.

Third Quarter 2019 Financial Results

For the third quarter of 2019, SINA reported net revenues of $561.4 million, an increase of 1% compared to $557.2 million for the same period last year. Non-GAAP net revenues for the third quarter of 2019 were $558.8 million, an increase of 1% compared to $554.6 million for the same period last year.

Advertising revenues for the third quarter of 2019 were $461.1 million, a decrease of 5% compared to $483.8 million for the same period last year, primarily due to a decline in portal advertising revenues and negative currency translation impact.

Non-advertising revenues for the third quarter of 2019 were $100.4 million, an increase of 37% compared to $73.4 million for the same period last year. Non-GAAP non-advertising revenues for the third quarter of 2019 were $97.7 million, an increase of 38% compared to $70.8 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 fin-tech businesses and revenues derived from Weibo's live streaming business acquired in the fourth quarter of 2018.

Gross margin for the third quarter of 2019 was 79%, compared to 80% for the same period last year. Advertising gross margin for the third quarter of 2019 was 83%, compared to 81% for the same period last year. Non-advertising gross margin for the third quarter of 2019 was 63%, down from 71% for the same period last year, resulted from the relatively lower gross margin of the acquired live streaming business of Weibo.

Operating expenses for the third quarter of 2019 totaled $305.4 million, compared to $316.0 million for the same period last year. Non-GAAP operating expenses for the third quarter of 2019 totaled $274.9 million, compared to $276.4 million for the same period last year.    

Income from operations for the third quarter of 2019 was $138.7 million, compared to $127.4 million for the same period last year. Operating margin was 25%, compared to 23% for the same period last year. Non-GAAP income from operations for the third quarter of 2019 was $170.0 million, compared to $168.1 million for the same period last year. Non-GAAP operating margin was 30%, flat year over year.

Non-operating loss for the third quarter of 2019 was $4.0 million, compared to a non-operating income of $77.3 million for the same period last year. Non-operating loss for the third quarter of 2019 included (i) a $25.5 million net loss on sale of investments, fair value changes and impairment on investments, which is excluded under non-GAAP measures; (ii) a $19.9 million net interest and other income; and (iii) a $1.6 million net earning from equity method investments, which is reported one quarter in arrears. Non-operating income for the third quarter of 2018 included (i) a $50.1 million net gain on sale of investments, fair value changes and impairment on investments, which is excluded under non-GAAP measures; (ii) a $17.1 million net interest and other income; and (iii) a $10.2 million net earning from equity method investments, which is reported one quarter in arrears and is mainly resulted from the earnings pick-up related to the Company's investment in Tian Ge Interactive Holding Limited.    

Income tax expenses for the third quarter of 2019 were $27.9 million, compared to $68.1 million for the same period last year, largely attributable to reversal of deferred tax charges recognized from the fair value changes of investments.

Net income attributable to SINA's ordinary shareholders for the third quarter of 2019 was $20.4 million, compared to $45.4 million for the same period last year. Diluted net income per share attributable to SINA's ordinary shareholders for the third quarter of 2019 was $0.28, compared to $0.62 for the same period last year. Non-GAAP net income attributable to SINA's ordinary shareholders for the third quarter of 2019 was $67.0 million, compared to $67.7 million for the same period last year. Non-GAAP diluted net income per share attributable to SINA's ordinary shareholders for the third quarter of 2019 was $0.94, compared to $0.93 for the same period last year.

As of September 30, 2019, SINA's cash, cash equivalents and short-term investments totaled $2.9 billion, compared to $2.3 billion as of December 31, 2018, mainly due to net proceeds received from Weibo's senior notes offering. For the third quarter of 2019, net cash provided by operating activities was $220.2 million, capital expenditures totaled $6.0 million, and depreciation and amortization expenses amounted to $10.9 million.

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 attributable to SINA's ordinary shareholders and non-GAAP diluted net income 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, goodwill and acquired intangibles impairment, 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, 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 7:10 a.m.7:40 a.m. Eastern Time on November 14, 2019 (or 8:10 p.m.8:40 p.m. Beijing Time on November 14, 2019) 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://ir.sina.com. The conference call can be accessed as follows:

US: +1 845 675 0437
Hong Kong:  +852 3018 6771
Mainland China: 400 620 8038
International:  +65 6713 5090
Passcode for all regions: 9785475

A replay of the conference call will be available through morning Eastern Time November 22, 2019. The dial-in number is +61 2 8199 0299. The passcode for the replay is 9785475.

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 fin-tech 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 2018 annual reports on Form 20-F and other filings with the Securities and Exchange Commission.

Contact:

Investor RelationsSINA CorporationPhone: +86 10 5898 3336 Email: ir@staff.sina.com.cn

 

US: +1 845 675 0437 SINA CORPORATION
Hong Kong:  +852 3018 6771 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Mainland China: 400 620 8038 (U.S. Dollars in thousands, except per share data)
International:  +65 6713 5090
Passcode for all regions: 9785475 Three months ended Nine months ended
September 30, June 30, September 30,
2019 2018 2019 2019 2018
Net revenues:
    Advertising $                461,095 $              483,806 $                  433,633 $            1,282,753 $           1,304,978
    Non-advertising 100,353 73,395 99,421 286,888 230,335
561,448 557,201 533,054 1,569,641 1,535,313
Cost of revenues(1):
    Advertising   80,297 92,407 85,589 250,265 256,105
    Non-advertising 37,055 21,408 38,722 106,921 72,890
117,352 113,815 124,311 357,186 328,995
Gross profit 444,096 443,386 408,743 1,212,455 1,206,318
Operating expenses:
    Sales and marketing (1) 169,423 185,478 147,721 462,622 508,754
    Product development (1) 91,150 91,545 91,981 277,180 260,559
    General and administrative (1) 44,854 28,377 43,016 121,030 89,551
    Goodwill and acquired intangibles impairment - 10,554 - - 10,554
305,427 315,954 282,718 860,832 869,418
Income from operations 138,669 127,432 126,025 351,623 336,900
Non-operating income (loss):
    Earning (loss) from equity method investments, net 1,608 10,150 4,316 (10,329) 5,851
    Gain (loss) on sale of investments, fair value changes and impairment        on investments, net (25,549) 50,111 (315) 54,942 40,941
    Interest and other income, net 19,895 17,051 15,744 48,741 54,265
(4,046) 77,312 19,745 93,354 101,057
Income before income taxes 134,623 204,744 145,770 444,977 437,957
  Income tax expenses (27,930) (68,129) (46,720) (139,885) (114,737)
Net income 106,693 136,615 99,050 305,092 323,220
     Less: Net income attributable to non-controlling interests 86,296 91,176 47,626 200,188 214,035
Net income attributable to SINA's ordinary shareholders $                  20,397 $                45,439 $                     51,424 $               104,904 $               109,185
Basic net income per share $                      0.29 $                    0.66 $                         0.74 $                     1.50 $                     1.55
Diluted net income per share (2) $                      0.28 $                    0.62 $                         0.73 $                     1.49 $                     1.48
Shares used in computing basic net income per share 69,936 69,332 69,709 69,704 70,653
Shares used in computing diluted net income per share 70,019 71,322 69,944 69,909 72,962
(1)Stock-based compensation in each category:
Cost of revenues $                    3,448 $                  3,775 $                        2,620 $                   8,604 $                   9,206
Sales and marketing 6,426 7,414 6,031 18,077 18,768
Product development 10,655 11,205 8,415 28,724 26,427
General and administrative 12,342 9,012 11,200 34,520 23,335
(2)Net income attributable to SINA's ordinary shareholders is adjusted for diluted shares issued by our subsidiary and equity method investments.

 

US: +1 845 675 0437 SINA CORPORATION SINA CORPORATION
Hong Kong:  +852 3018 6771 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
Mainland China: 400 620 8038 (U.S. Dollars in thousands, except per share data) (U.S. Dollars in thousands)
International:  +65 6713 5090
Passcode for all regions: 9785475 Three months ended Nine months ended September 30, December 31,
September 30, June 30, September 30, 2019 2018
2019 2018 2019 2019 2018 Assets
Net revenues: Current assets:
    Advertising $                461,095 $              483,806 $                  433,633 $            1,282,753 $           1,304,978  Cash and cash equivalents $               2,272,871 $               1,545,800
    Non-advertising 100,353 73,395 99,421 286,888 230,335  Short-term investments 593,272 799,534
561,448 557,201 533,054 1,569,641 1,535,313  Restricted cash 137,629 97,032
Cost of revenues(1):  Accounts receivable, net 639,994 527,897
    Advertising   80,297 92,407 85,589 250,265 256,105  Financing receivables, net (1) 222,175 -
    Non-advertising 37,055 21,408 38,722 106,921 72,890  Prepaid expenses and other current assets 592,287 362,435
117,352 113,815 124,311 357,186 328,995       Subtotal 4,458,228 3,332,698
Gross profit 444,096 443,386 408,743 1,212,455 1,206,318
Property and equipment, net 246,023 262,846
Operating expenses: Operating lease right-of-use assets, net (2) 27,231 -
    Sales and marketing (1) 169,423 185,478 147,721 462,622 508,754 Goodwill and intangible assets, net 301,381 319,575
    Product development (1) 91,150 91,545 91,981 277,180 260,559 Long-term investments 2,288,849 1,889,843
    General and administrative (1) 44,854 28,377 43,016 121,030 89,551 Other assets 97,089 81,127
    Goodwill and acquired intangibles impairment - 10,554 - - 10,554 Total assets $               7,418,801 $               5,886,089
305,427 315,954 282,718 860,832 869,418
Income from operations 138,669 127,432 126,025 351,623 336,900 Liabilities and Shareholders' Equity
Current liabilities:
Non-operating income (loss): Accounts payable $                  177,261 $                  172,562
    Earning (loss) from equity method investments, net 1,608 10,150 4,316 (10,329) 5,851 Amount due to customers 107,198 97,032
    Gain (loss) on sale of investments, fair value changes and impairment        on investments, net (25,549) 50,111 (315) 54,942 40,941 Accrued expenses and other current liabilities 678,728 540,807
    Interest and other income, net 19,895 17,051 15,744 48,741 54,265 Short-term bank loan 79,096 78,229
(4,046) 77,312 19,745 93,354 101,057 Deferred revenues 169,501 139,306
Short-term operating lease liabilities (2) 11,967 -
Income before income taxes 134,623 204,744 145,770 444,977 437,957 Funding debts  (1) 179,080 -
  Income tax expenses (27,930) (68,129) (46,720) (139,885) (114,737) Income taxes payable 126,012 115,725
      Subtotal 1,528,843 1,143,661
Net income 106,693 136,615 99,050 305,092 323,220
     Less: Net income attributable to non-controlling interests 86,296 91,176 47,626 200,188 214,035 Convertible debt 887,230 884,123
Senior notes 793,682 -
Net income attributable to SINA's ordinary shareholders $                  20,397 $                45,439 $                     51,424 $               104,904 $               109,185 Long-term deferred revenues 35,826 43,652
Long-term operating lease liabilities(2) 16,255 -
Other long-term liabilities 103,643 51,781
Basic net income per share $                      0.29 $                    0.66 $                         0.74 $                     1.50 $                     1.55       Total liabilities 3,365,479 2,123,217
Diluted net income per share (2) $                      0.28 $                    0.62 $                         0.73 $                     1.49 $                     1.48
Shareholders' equity
Shares used in computing basic net income per share 69,936 69,332 69,709 69,704 70,653 SINA shareholders' equity  2,806,686 2,717,791
Non-controlling interests 1,246,636 1,045,081
Shares used in computing diluted net income per share 70,019 71,322 69,944 69,909 72,962       Total shareholders' equity  4,053,322 3,762,872
Total liabilities and shareholders' equity $               7,418,801 $               5,886,089
(1)Stock-based compensation in each category: (1)In 2019, the Company set up trusts, which were administered by third-party trust company to invest in consumer loans to the individual borrowers recommended by the Company. The trusts are considered as variable interest entities under ASC 810. Accordingly, the financing receivables due from the borrowers and the loan payables to the third party investors of the trust units are recorded on the Company's consolidated balance sheet as financing receivables and funding debts, respectively.  
Cost of revenues $                    3,448 $                  3,775 $                        2,620 $                   8,604 $                   9,206
Sales and marketing 6,426 7,414 6,031 18,077 18,768 (2)The Company adopted the new leasing guidance (ASU 2016-2) started from January 1, 2019, which requires that a lessee recognize the assets and liabilities that arise from operating leases. The Company recognized a right-of-use asset and a liability relating to lease payments (the Lease Liability) in the statements of financial position for lease contracts having terms beyond 12 months period.
Product development 10,655 11,205 8,415 28,724 26,427
General and administrative 12,342 9,012 11,200 34,520 23,335
(2)Net income attributable to SINA's ordinary shareholders is adjusted for diluted shares issued by our subsidiary and equity method investments.

 

US: +1 845 675 0437 SINA CORPORATION SINA CORPORATION SINA CORPORATION
Hong Kong:  +852 3018 6771 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS UNAUDITED ADDITIONAL INFORMATION
Mainland China: 400 620 8038 (U.S. Dollars in thousands, except per share data) (U.S. Dollars in thousands) (U.S. Dollars in thousands)
International:  +65 6713 5090
Passcode for all regions: 9785475 Three months ended Nine months ended September 30, December 31, Three months ended Nine months ended
September 30, June 30, September 30, 2019 2018 September 30, June 30, September 30,
2019 2018 2019 2019 2018 Assets 2019 2018 2019 2019 2018
Net revenues: Current assets:
    Advertising $                461,095 $              483,806 $                  433,633 $            1,282,753 $           1,304,978  Cash and cash equivalents $               2,272,871 $               1,545,800 Net revenues
    Non-advertising 100,353 73,395 99,421 286,888 230,335  Short-term investments 593,272 799,534 Portal:
561,448 557,201 533,054 1,569,641 1,535,313  Restricted cash 137,629 97,032     Portal Advertising $               50,105 $              74,533 $               62,973 $              159,974 $              222,838
Cost of revenues(1):  Accounts receivable, net 639,994 527,897     Other 50,365 26,707 43,740 129,021 84,112
    Advertising   80,297 92,407 85,589 250,265 256,105  Financing receivables, net (1) 222,175 -     Subtotal 100,470 101,240 106,713 288,995 306,950
    Non-advertising 37,055 21,408 38,722 106,921 72,890  Prepaid expenses and other current assets 592,287 362,435
117,352 113,815 124,311 357,186 328,995       Subtotal 4,458,228 3,332,698 Weibo:
Gross profit 444,096 443,386 408,743 1,212,455 1,206,318     Advertising and marketing 412,489 409,273 370,660 1,124,290 1,082,164
Property and equipment, net 246,023 262,846     Weibo VAS 55,264 50,898 61,176 174,476 154,479
Operating expenses: Operating lease right-of-use assets, net (2) 27,231 -         Subtotal 467,753 460,171 431,836 1,298,766 1,236,643
    Sales and marketing (1) 169,423 185,478 147,721 462,622 508,754 Goodwill and intangible assets, net 301,381 319,575
    Product development (1) 91,150 91,545 91,981 277,180 260,559 Long-term investments 2,288,849 1,889,843 Elimination (6,775) (4,210) (5,495) (18,120) (8,280)
    General and administrative (1) 44,854 28,377 43,016 121,030 89,551 Other assets 97,089 81,127 $             561,448 $            557,201 $             533,054 $           1,569,641 $           1,535,313
    Goodwill and acquired intangibles impairment - 10,554 - - 10,554 Total assets $               7,418,801 $               5,886,089
305,427 315,954 282,718 860,832 869,418 Cost of revenues
Income from operations 138,669 127,432 126,025 351,623 336,900 Liabilities and Shareholders' Equity Portal:
Current liabilities:     Portal Advertising $               22,996 $              30,501 $               25,011 $                69,667 $                88,420
Non-operating income (loss): Accounts payable $                  177,261 $                  172,562     Other 26,161 17,508 22,823 65,868 54,123
    Earning (loss) from equity method investments, net 1,608 10,150 4,316 (10,329) 5,851 Amount due to customers 107,198 97,032     Subtotal 49,157 48,009 47,834 135,535 142,543
    Gain (loss) on sale of investments, fair value changes and impairment        on investments, net (25,549) 50,111 (315) 54,942 40,941 Accrued expenses and other current liabilities 678,728 540,807
    Interest and other income, net 19,895 17,051 15,744 48,741 54,265 Short-term bank loan 79,096 78,229 Weibo 73,471 70,016 81,972 238,260 194,708
(4,046) 77,312 19,745 93,354 101,057 Deferred revenues 169,501 139,306
Short-term operating lease liabilities (2) 11,967 - Elimination (5,276) (4,210) (5,495) (16,609) (8,256)
Income before income taxes 134,623 204,744 145,770 444,977 437,957 Funding debts  (1) 179,080 - $             117,352 $            113,815 $             124,311 $              357,186 $              328,995
  Income tax expenses (27,930) (68,129) (46,720) (139,885) (114,737) Income taxes payable 126,012 115,725
      Subtotal 1,528,843 1,143,661 Gross margin
Net income 106,693 136,615 99,050 305,092 323,220          Portal 51% 53% 55% 53% 54%
     Less: Net income attributable to non-controlling interests 86,296 91,176 47,626 200,188 214,035 Convertible debt 887,230 884,123          Weibo 84% 85% 81% 82% 84%
Senior notes 793,682 - 79% 80% 77% 77% 79%
Net income attributable to SINA's ordinary shareholders $                  20,397 $                45,439 $                     51,424 $               104,904 $               109,185 Long-term deferred revenues 35,826 43,652
Long-term operating lease liabilities(2) 16,255 -
Other long-term liabilities 103,643 51,781
Basic net income per share $                      0.29 $                    0.66 $                         0.74 $                     1.50 $                     1.55       Total liabilities 3,365,479 2,123,217
Diluted net income per share (2) $                      0.28 $                    0.62 $                         0.73 $                     1.49 $                     1.48
Shareholders' equity
Shares used in computing basic net income per share 69,936 69,332 69,709 69,704 70,653 SINA shareholders' equity  2,806,686 2,717,791
Non-controlling interests 1,246,636 1,045,081
Shares used in computing diluted net income per share 70,019 71,322 69,944 69,909 72,962       Total shareholders' equity  4,053,322 3,762,872
Total liabilities and shareholders' equity $               7,418,801 $               5,886,089
(1)Stock-based compensation in each category: (1)In 2019, the Company set up trusts, which were administered by third-party trust company to invest in consumer loans to the individual borrowers recommended by the Company. The trusts are considered as variable interest entities under ASC 810. Accordingly, the financing receivables due from the borrowers and the loan payables to the third party investors of the trust units are recorded on the Company's consolidated balance sheet as financing receivables and funding debts, respectively.  
Cost of revenues $                    3,448 $                  3,775 $                        2,620 $                   8,604 $                   9,206
Sales and marketing 6,426 7,414 6,031 18,077 18,768 (2)The Company adopted the new leasing guidance (ASU 2016-2) started from January 1, 2019, which requires that a lessee recognize the assets and liabilities that arise from operating leases. The Company recognized a right-of-use asset and a liability relating to lease payments (the Lease Liability) in the statements of financial position for lease contracts having terms beyond 12 months period.
Product development 10,655 11,205 8,415 28,724 26,427
General and administrative 12,342 9,012 11,200 34,520 23,335
(2)Net income attributable to SINA's ordinary shareholders is adjusted for diluted shares issued by our subsidiary and equity method investments.

 

US: +1 845 675 0437 SINA CORPORATION SINA CORPORATION SINA CORPORATION SINA CORPORATION
Hong Kong:  +852 3018 6771 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS UNAUDITED ADDITIONAL INFORMATION UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS
Mainland China: 400 620 8038 (U.S. Dollars in thousands, except per share data) (U.S. Dollars in thousands) (U.S. Dollars in thousands) (U.S. Dollars in thousands, except per share data)
International:  +65 6713 5090
Passcode for all regions: 9785475 Three months ended Nine months ended September 30, December 31, Three months ended Nine months ended
September 30, June 30, September 30, 2019 2018 September 30, June 30, September 30, Three months ended
2019 2018 2019 2019 2018 Assets 2019 2018 2019 2019 2018 September 30, 2019 September 30, 2018 June 30, 2019
Net revenues: Current assets: Non-GAAP Non-GAAP Non-GAAP
    Advertising $                461,095 $              483,806 $                  433,633 $            1,282,753 $           1,304,978  Cash and cash equivalents $               2,272,871 $               1,545,800 Net revenues Actual Adjustments Results Actual Adjustments Results Actual Adjustments Results
    Non-advertising 100,353 73,395 99,421 286,888 230,335  Short-term investments 593,272 799,534 Portal:
561,448 557,201 533,054 1,569,641 1,535,313  Restricted cash 137,629 97,032     Portal Advertising $               50,105 $              74,533 $               62,973 $              159,974 $              222,838 Advertising revenues $    461,095 $    461,095 $    483,806 $    483,806 $    433,633 $    433,633
Cost of revenues(1):  Accounts receivable, net 639,994 527,897     Other 50,365 26,707 43,740 129,021 84,112 Non-advertising revenues 100,353 (2,609)  (a)  97,744 73,395 (2,609)  (a)  70,786 99,421 (2,609)  (a)  96,812
    Advertising   80,297 92,407 85,589 250,265 256,105  Financing receivables, net (1) 222,175 -     Subtotal 100,470 101,240 106,713 288,995 306,950 Net revenues $    561,448 $         (2,609) $    558,839 $    557,201 $        (2,609) $    554,592 $    533,054 $        (2,609) $    530,445
    Non-advertising 37,055 21,408 38,722 106,921 72,890  Prepaid expenses and other current assets 592,287 362,435
117,352 113,815 124,311 357,186 328,995       Subtotal 4,458,228 3,332,698 Weibo: (2,609)  (a)  (2,609)  (a)  (2,609)  (a) 
Gross profit 444,096 443,386 408,743 1,212,455 1,206,318     Advertising and marketing 412,489 409,273 370,660 1,124,290 1,082,164 3,448  (b)  3,775  (b)  2,620  (b) 
Property and equipment, net 246,023 262,846     Weibo VAS 55,264 50,898 61,176 174,476 154,479 Gross profit $    444,096 $             839 $    444,935 $    443,386 $         1,166 $    444,552 $    408,743 $              11 $    408,754
Operating expenses: Operating lease right-of-use assets, net (2) 27,231 -         Subtotal 467,753 460,171 431,836 1,298,766 1,236,643
    Sales and marketing (1) 169,423 185,478 147,721 462,622 508,754 Goodwill and intangible assets, net 301,381 319,575 (27,631)  (b) 
    Product development (1) 91,150 91,545 91,981 277,180 260,559 Long-term investments 2,288,849 1,889,843 Elimination (6,775) (4,210) (5,495) (18,120) (8,280) (29,423)  (b)  (1,354)  (c)  (25,646)  (b) 
    General and administrative (1) 44,854 28,377 43,016 121,030 89,551 Other assets 97,089 81,127 $             561,448 $            557,201 $             533,054 $           1,569,641 $           1,535,313 (1,073)  (c)  (10,554)  (d)  (1,107)  (c) 
    Goodwill and acquired intangibles impairment - 10,554 - - 10,554 Total assets $               7,418,801 $               5,886,089 Operating expenses $    305,427 $       (30,496) $    274,931 $    315,954 $     (39,539) $    276,415 $    282,718 $      (26,753) $    255,965
305,427 315,954 282,718 860,832 869,418 Cost of revenues
Income from operations 138,669 127,432 126,025 351,623 336,900 Liabilities and Shareholders' Equity Portal: (2,609)  (a) 
Current liabilities:     Portal Advertising $               22,996 $              30,501 $               25,011 $                69,667 $                88,420 (2,609)  (a)  31,406  (b)  (2,609)  (a) 
Non-operating income (loss): Accounts payable $                  177,261 $                  172,562     Other 26,161 17,508 22,823 65,868 54,123 32,871  (b)  1,354  (c)  28,266  (b) 
    Earning (loss) from equity method investments, net 1,608 10,150 4,316 (10,329) 5,851 Amount due to customers 107,198 97,032     Subtotal 49,157 48,009 47,834 135,535 142,543 1,073  (c)  10,554  (d)  1,107  (c) 
    Gain (loss) on sale of investments, fair value changes and impairment        on investments, net (25,549) 50,111 (315) 54,942 40,941 Accrued expenses and other current liabilities 678,728 540,807 Income from operations $    138,669 $        31,335 $    170,004 $     127,432 $       40,705 $    168,137 $    126,025 $        26,764 $    152,789
    Interest and other income, net 19,895 17,051 15,744 48,741 54,265 Short-term bank loan 79,096 78,229 Weibo 73,471 70,016 81,972 238,260 194,708
(4,046) 77,312 19,745 93,354 101,057 Deferred revenues 169,501 139,306 (2,609)  (a) 
Short-term operating lease liabilities (2) 11,967 - Elimination (5,276) (4,210) (5,495) (16,609) (8,256) (2,609)  (a)  31,406  (b)  (2,609) (a)
Income before income taxes 134,623 204,744 145,770 444,977 437,957 Funding debts  (1) 179,080 - $             117,352 $            113,815 $             124,311 $              357,186 $              328,995 32,871  (b)  1,354  (c)  28,266  (b) 
  Income tax expenses (27,930) (68,129) (46,720) (139,885) (114,737) Income taxes payable 126,012 115,725 1,073  (c)  10,554  (d)  1,107  (c) 
      Subtotal 1,528,843 1,143,661 Gross margin 4,279  (e)  (6,879)  (e)  (4,881)  (e) 
Net income 106,693 136,615 99,050 305,092 323,220          Portal 51% 53% 55% 53% 54% 25,549  (f)  (50,111)  (f)  315 (f)
     Less: Net income attributable to non-controlling interests 86,296 91,176 47,626 200,188 214,035 Convertible debt 887,230 884,123          Weibo 84% 85% 81% 82% 84% (12,047) (g) (2,845)  (g)  (39,281)  (g) 
Senior notes 793,682 - 79% 80% 77% 77% 79% 1,360  (h)  1,035 (h) 1,037  (h) 
Net income attributable to SINA's ordinary shareholders $                  20,397 $                45,439 $                     51,424 $               104,904 $               109,185 Long-term deferred revenues 35,826 43,652 (3,832)  (i)  40,311  (i)  18,605  (i) 
Long-term operating lease liabilities(2) 16,255 - Net income attributable to SINA's ordinary shareholders $      20,397 $        46,644 $      67,041 $       45,439 $       22,216 $      67,655 $      51,424 $          2,559 $      53,983
Other long-term liabilities 103,643 51,781
Basic net income per share $                      0.29 $                    0.66 $                         0.74 $                     1.50 $                     1.55       Total liabilities 3,365,479 2,123,217
Diluted net income per share (2) $                      0.28 $                    0.62 $                         0.73 $                     1.49 $                     1.48 Diluted net income per share * $          0.28 $          0.94 $           0.62 $          0.93 $          0.73 $          0.76
Shareholders' equity
Shares used in computing basic net income per share 69,936 69,332 69,709 69,704 70,653 SINA shareholders' equity  2,806,686 2,717,791 Shares used in computing diluted net income  per share 70,019 - 70,019 71,322 - 71,322 69,944 - 69,944
Non-controlling interests 1,246,636 1,045,081
Shares used in computing diluted net income per share 70,019 71,322 69,944 69,909 72,962       Total shareholders' equity  4,053,322 3,762,872
Gross margin - advertising 83% 0% 83% 81% 1% 82% 80% 1% 81%
Total liabilities and shareholders' equity $               7,418,801 $               5,886,089 Gross margin - non-advertising 63% -1% 62% 71% -1% 70% 61% -1% 60%
Operating margin 25% 5% 30% 23% 7% 30% 24% 5% 29%
(1)Stock-based compensation in each category: (1)In 2019, the Company set up trusts, which were administered by third-party trust company to invest in consumer loans to the individual borrowers recommended by the Company. The trusts are considered as variable interest entities under ASC 810. Accordingly, the financing receivables due from the borrowers and the loan payables to the third party investors of the trust units are recorded on the Company's consolidated balance sheet as financing receivables and funding debts, respectively.  
Cost of revenues $                    3,448 $                  3,775 $                        2,620 $                   8,604 $                   9,206  Nine months ended 
Sales and marketing 6,426 7,414 6,031 18,077 18,768 (2)The Company adopted the new leasing guidance (ASU 2016-2) started from January 1, 2019, which requires that a lessee recognize the assets and liabilities that arise from operating leases. The Company recognized a right-of-use asset and a liability relating to lease payments (the Lease Liability) in the statements of financial position for lease contracts having terms beyond 12 months period. September 30, 2019 September 30, 2018
Product development 10,655 11,205 8,415 28,724 26,427 Non-GAAP Non-GAAP
General and administrative 12,342 9,012 11,200 34,520 23,335 Actual Adjustments Results Actual Adjustments Results
(2)Net income attributable to SINA's ordinary shareholders is adjusted for diluted shares issued by our subsidiary and equity method investments. Advertising revenues $  1,282,753 $  1,282,753 $   1,304,978 $  1,304,978
Non-advertising revenues 286,888 (7,827)  (a)  279,061 230,335 (7,827)  (a)  222,508
Net revenues $  1,569,641 $         (7,827) $  1,561,814 $   1,535,313 $        (7,827) $  1,527,486
(7,827)  (a)  (7,827)  (a) 
8,604  (b)  9,206  (b) 
Gross profit $  1,212,455 $             777 $  1,213,232 $   1,206,318 $         1,379 $  1,207,697
(68,530)  (b) 
(81,321)  (b)  (4,512)  (c) 
(3,304)  (c)  (10,554)  (d) 
Operating expenses $     860,832 $       (84,625) $     776,207 $      869,418 $     (83,596) $     785,822
(7,827)  (a) 
(7,827)  (a)  77,736  (b) 
89,925  (b)  4,512  (c) 
3,304  (c)  10,554  (d) 
Income from operations $     351,623 $        85,402 $     437,025 $      336,900 $       84,975 $     421,875
(7,827)  (a) 
(7,827)  (a)  77,736  (b) 
89,925  (b)  4,512  (c) 
3,304  (c)  10,554  (d) 
14,705 (e) (7,290)  (e) 
(54,942)  (f)  (40,941)  (f) 
(58,764)  (g)  (19,877)  (g) 
3,432  (h)  3,105  (h) 
55,140  (i)  40,247  (i) 
Net income attributable to SINA's ordinary shareholders $      104,904 $        44,973 $     149,877 $      109,185 $       60,219 $     169,404
Diluted net income per share * $            1.49 $           2.10 $            1.48 $           2.28
Shares used in computing diluted net income per share 69,909 - 69,909 72,962 - 72,962
Gross margin - advertising 80% 1% 81% 80% 1% 81%
Gross margin - non-advertising 63% -1% 62% 68% -1% 67%
Operating margin 22% 6% 28% 22% 6% 28%
(a)  To exclude the recognition of deferred revenue related to the license granted to Leju.
(b)  To exclude stock-based compensation.
(c)  To adjust amortization of intangible assets.
(d)  To exclude goodwill and acquired intangibles impairment.
(e)  To exclude non-GAAP to GAAP reconciling items on the share of equity method investments, net of share of amortization        of intangibles not on their books.
(f)   To exclude (gain) loss on sale of investments, (gain) loss on deemed disposal, fair value changes and impairment on investments, net.
(g)  To exclude non-GAAP to GAAP reconciling items for the income attributable to non-controlling interests.
(h)  To exclude the amortization of convertible debt and senior notes issuance cost.
(i)   To exclude the provision (benefit) for income tax related to item (c), (d) and (f). Other non-GAAP to GAAP reconciling items have no        income tax effect.**
*   Net income attributable to SINA's ordinary shareholders is adjusted for diluted shares issued by our subsidiary and     equity method investments.
** The Company considered the tax implication arising from the reconciliation items, and those items recorded in entities     in tax free jurisdictions were without relevant tax implications. For impairment on investments, valuation allowances     were made for those differences the Company does not expect they can be realized in the foreseeable future. 

 

US: +1 845 675 0437 SINA CORPORATION SINA CORPORATION SINA CORPORATION SINA CORPORATION UNAUDITED RECONCILIATION OF SINA'S SHARE OF EQUITY INVESTMENTS' NON-GAAP TO GAAP RESULTS*
Hong Kong:  +852 3018 6771 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS UNAUDITED ADDITIONAL INFORMATION UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS
Mainland China: 400 620 8038 (U.S. Dollars in thousands, except per share data) (U.S. Dollars in thousands) (U.S. Dollars in thousands) (U.S. Dollars in thousands, except per share data) Three months ended
International:  +65 6713 5090 September 30, 2019 September 30, 2018 June 30, 2019
Passcode for all regions: 9785475 Three months ended Nine months ended September 30, December 31, Three months ended Nine months ended Actual Adjustments Non-GAAP Results Actual Adjustments Non-GAAP Results Actual Adjustments Non-GAAP Results
September 30, June 30, September 30, 2019 2018 September 30, June 30, September 30, Three months ended
2019 2018 2019 2019 2018 Assets 2019 2018 2019 2019 2018 September 30, 2019 September 30, 2018 June 30, 2019 To exclude stock-based compensation $               259 $                674 $              178
Net revenues: Current assets: Non-GAAP Non-GAAP Non-GAAP To exclude amortization of intangible assets resulting     from business acquisitions   1,048   1,079   1,048
    Advertising $                461,095 $              483,806 $                  433,633 $            1,282,753 $           1,304,978  Cash and cash equivalents $               2,272,871 $               1,545,800 Net revenues Actual Adjustments Results Actual Adjustments Results Actual Adjustments Results To exclude loss on disposal and impairment on investments, net 815 1,245 90
    Non-advertising 100,353 73,395 99,421 286,888 230,335  Short-term investments 593,272 799,534 Portal: To exclude (gain) loss resulting from the fair value changes in    investments, net 2,837 (9,187) (5,525)
561,448 557,201 533,054 1,569,641 1,535,313  Restricted cash 137,629 97,032     Portal Advertising $               50,105 $              74,533 $               62,973 $              159,974 $              222,838 Advertising revenues $    461,095 $    461,095 $    483,806 $    483,806 $    433,633 $    433,633 To exclude tax impacts related to amortization of intangible assets (245) (263) (244)
Cost of revenues(1):  Accounts receivable, net 639,994 527,897     Other 50,365 26,707 43,740 129,021 84,112 Non-advertising revenues 100,353 (2,609)  (a)  97,744 73,395 (2,609)  (a)  70,786 99,421 (2,609)  (a)  96,812 Earning (loss) from equity method investments, net $     1,173 $            4,714 $      5,887 $      9,723 $           (6,452) $      3,271 $      3,888 $          (4,453) $        (565)
    Advertising   80,297 92,407 85,589 250,265 256,105  Financing receivables, net (1) 222,175 -     Subtotal 100,470 101,240 106,713 288,995 306,950 Net revenues $    561,448 $         (2,609) $    558,839 $    557,201 $        (2,609) $    554,592 $    533,054 $        (2,609) $    530,445 Share of amortization of equity investments' intangibles      not on their books 375 (375) - 364 (364) - 365 (365) -
    Non-advertising 37,055 21,408 38,722 106,921 72,890  Prepaid expenses and other current assets 592,287 362,435 Share of tax impacts related to amortization of     equity investments' intangibles not on their books 60 (60) - 63 (63) - 63 (63) -
117,352 113,815 124,311 357,186 328,995       Subtotal 4,458,228 3,332,698 Weibo: (2,609)  (a)  (2,609)  (a)  (2,609)  (a)  $     1,608 $            4,279 $     5,887 $     10,150 $           (6,879) $      3,271 $      4,316 $          (4,881) $        (565)
Gross profit 444,096 443,386 408,743 1,212,455 1,206,318     Advertising and marketing 412,489 409,273 370,660 1,124,290 1,082,164 3,448  (b)  3,775  (b)  2,620  (b) 
Property and equipment, net 246,023 262,846     Weibo VAS 55,264 50,898 61,176 174,476 154,479 Gross profit $    444,096 $             839 $    444,935 $    443,386 $         1,166 $    444,552 $    408,743 $              11 $    408,754
Operating expenses: Operating lease right-of-use assets, net (2) 27,231 -         Subtotal 467,753 460,171 431,836 1,298,766 1,236,643  Nine months ended 
    Sales and marketing (1) 169,423 185,478 147,721 462,622 508,754 Goodwill and intangible assets, net 301,381 319,575 (27,631)  (b)  September 30, 2019 September 30, 2018
    Product development (1) 91,150 91,545 91,981 277,180 260,559 Long-term investments 2,288,849 1,889,843 Elimination (6,775) (4,210) (5,495) (18,120) (8,280) (29,423)  (b)  (1,354)  (c)  (25,646)  (b)  Non-GAAP Non-GAAP
    General and administrative (1) 44,854 28,377 43,016 121,030 89,551 Other assets 97,089 81,127 $             561,448 $            557,201 $             533,054 $           1,569,641 $           1,535,313 (1,073)  (c)  (10,554)  (d)  (1,107)  (c)  Actual Adjustments Results Actual Adjustments Results
    Goodwill and acquired intangibles impairment - 10,554 - - 10,554 Total assets $               7,418,801 $               5,886,089 Operating expenses $    305,427 $       (30,496) $    274,931 $    315,954 $     (39,539) $    276,415 $    282,718 $      (26,753) $    255,965
305,427 315,954 282,718 860,832 869,418 Cost of revenues To exclude stock-based compensation $               724 $             2,091
Income from operations 138,669 127,432 126,025 351,623 336,900 Liabilities and Shareholders' Equity Portal: (2,609)  (a)  To exclude amortization of intangible assets resulting     from business acquisitions 3,158 3,317
Current liabilities:     Portal Advertising $               22,996 $              30,501 $               25,011 $                69,667 $                88,420 (2,609)  (a)  31,406  (b)  (2,609)  (a)  To exclude loss on disposal and impairment on investments, net 7,618 2,989
Non-operating income (loss): Accounts payable $                  177,261 $                  172,562     Other 26,161 17,508 22,823 65,868 54,123 32,871  (b)  1,354  (c)  28,266  (b)  To exclude (gain) loss resulting from the fair value changes in     investments, net 5,227 (13,839)
    Earning (loss) from equity method investments, net 1,608 10,150 4,316 (10,329) 5,851 Amount due to customers 107,198 97,032     Subtotal 49,157 48,009 47,834 135,535 142,543 1,073  (c)  10,554  (d)  1,107  (c)  To exclude tax impacts related to amortization of intangible assets (737) (694)
    Gain (loss) on sale of investments, fair value changes and impairment        on investments, net (25,549) 50,111 (315) 54,942 40,941 Accrued expenses and other current liabilities 678,728 540,807 Income from operations $    138,669 $        31,335 $    170,004 $     127,432 $       40,705 $    168,137 $    126,025 $        26,764 $    152,789 Earning (loss) from equity method investments, net $  (11,614) $          15,990 $     4,376 $       4,697 $           (6,136) $     (1,439)
    Interest and other income, net 19,895 17,051 15,744 48,741 54,265 Short-term bank loan 79,096 78,229 Weibo 73,471 70,016 81,972 238,260 194,708 Share of amortization of equity investments' intangibles     not on their books 1,098 (1,098) - 939 (939) -
(4,046) 77,312 19,745 93,354 101,057 Deferred revenues 169,501 139,306 (2,609)  (a)  Share of tax impacts related to amortization of     equity investments' intangibles not on their books 187 (187) - 215 (215) -
Short-term operating lease liabilities (2) 11,967 - Elimination (5,276) (4,210) (5,495) (16,609) (8,256) (2,609)  (a)  31,406  (b)  (2,609) (a) $  (10,329) $          14,705 $     4,376 $       5,851 $           (7,290) $     (1,439)
Income before income taxes 134,623 204,744 145,770 444,977 437,957 Funding debts  (1) 179,080 - $             117,352 $            113,815 $             124,311 $              357,186 $              328,995 32,871  (b)  1,354  (c)  28,266  (b) 
  Income tax expenses (27,930) (68,129) (46,720) (139,885) (114,737) Income taxes payable 126,012 115,725 1,073  (c)  10,554  (d)  1,107  (c) 
      Subtotal 1,528,843 1,143,661 Gross margin 4,279  (e)  (6,879)  (e)  (4,881)  (e)  * Earning (loss) from equity method investments is recorded one quarter in arrears.
Net income 106,693 136,615 99,050 305,092 323,220          Portal 51% 53% 55% 53% 54% 25,549  (f)  (50,111)  (f)  315 (f)
     Less: Net income attributable to non-controlling interests 86,296 91,176 47,626 200,188 214,035 Convertible debt 887,230 884,123          Weibo 84% 85% 81% 82% 84% (12,047) (g) (2,845)  (g)  (39,281)  (g) 
Senior notes 793,682 - 79% 80% 77% 77% 79% 1,360  (h)  1,035 (h) 1,037  (h) 
Net income attributable to SINA's ordinary shareholders $                  20,397 $                45,439 $                     51,424 $               104,904 $               109,185 Long-term deferred revenues 35,826 43,652 (3,832)  (i)  40,311  (i)  18,605  (i) 
Long-term operating lease liabilities(2) 16,255 - Net income attributable to SINA's ordinary shareholders $      20,397 $        46,644 $      67,041 $       45,439 $       22,216 $      67,655 $      51,424 $          2,559 $      53,983
Other long-term liabilities 103,643 51,781
Basic net income per share $                      0.29 $                    0.66 $                         0.74 $                     1.50 $                     1.55       Total liabilities 3,365,479 2,123,217
Diluted net income per share (2) $                      0.28 $                    0.62 $                         0.73 $                     1.49 $                     1.48 Diluted net income per share * $          0.28 $          0.94 $           0.62 $          0.93 $          0.73 $          0.76
Shareholders' equity
Shares used in computing basic net income per share 69,936 69,332 69,709 69,704 70,653 SINA shareholders' equity  2,806,686 2,717,791 Shares used in computing diluted net income  per share 70,019 - 70,019 71,322 - 71,322 69,944 - 69,944
Non-controlling interests 1,246,636 1,045,081
Shares used in computing diluted net income per share 70,019 71,322 69,944 69,909 72,962       Total shareholders' equity  4,053,322 3,762,872
Gross margin - advertising 83% 0% 83% 81% 1% 82% 80% 1% 81%
Total liabilities and shareholders' equity $               7,418,801 $               5,886,089 Gross margin - non-advertising 63% -1% 62% 71% -1% 70% 61% -1% 60%
Operating margin 25% 5% 30% 23% 7% 30% 24% 5% 29%
(1)Stock-based compensation in each category: (1)In 2019, the Company set up trusts, which were administered by third-party trust company to invest in consumer loans to the individual borrowers recommended by the Company. The trusts are considered as variable interest entities under ASC 810. Accordingly, the financing receivables due from the borrowers and the loan payables to the third party investors of the trust units are recorded on the Company's consolidated balance sheet as financing receivables and funding debts, respectively.  
Cost of revenues $                    3,448 $                  3,775 $                        2,620 $                   8,604 $                   9,206  Nine months ended 
Sales and marketing 6,426 7,414 6,031 18,077 18,768 (2)The Company adopted the new leasing guidance (ASU 2016-2) started from January 1, 2019, which requires that a lessee recognize the assets and liabilities that arise from operating leases. The Company recognized a right-of-use asset and a liability relating to lease payments (the Lease Liability) in the statements of financial position for lease contracts having terms beyond 12 months period. September 30, 2019 September 30, 2018
Product development 10,655 11,205 8,415 28,724 26,427 Non-GAAP Non-GAAP
General and administrative 12,342 9,012 11,200 34,520 23,335 Actual Adjustments Results Actual Adjustments Results
(2)Net income attributable to SINA's ordinary shareholders is adjusted for diluted shares issued by our subsidiary and equity method investments. Advertising revenues $  1,282,753 $  1,282,753 $   1,304,978 $  1,304,978
Non-advertising revenues 286,888 (7,827)  (a)  279,061 230,335 (7,827)  (a)  222,508
Net revenues $  1,569,641 $         (7,827) $  1,561,814 $   1,535,313 $        (7,827) $  1,527,486
(7,827)  (a)  (7,827)  (a) 
8,604  (b)  9,206  (b) 
Gross profit $  1,212,455 $             777 $  1,213,232 $   1,206,318 $         1,379 $  1,207,697
(68,530)  (b) 
(81,321)  (b)  (4,512)  (c) 
(3,304)  (c)  (10,554)  (d) 
Operating expenses $     860,832 $       (84,625) $     776,207 $      869,418 $     (83,596) $     785,822
(7,827)  (a) 
(7,827)  (a)  77,736  (b) 
89,925  (b)  4,512  (c) 
3,304  (c)  10,554  (d) 
Income from operations $     351,623 $        85,402 $     437,025 $      336,900 $       84,975 $     421,875
(7,827)  (a) 
(7,827)  (a)  77,736  (b) 
89,925  (b)  4,512  (c) 
3,304  (c)  10,554  (d) 
14,705 (e) (7,290)  (e) 
(54,942)  (f)  (40,941)  (f) 
(58,764)  (g)  (19,877)  (g) 
3,432  (h)  3,105  (h) 
55,140  (i)  40,247  (i) 
Net income attributable to SINA's ordinary shareholders $      104,904 $        44,973 $     149,877 $      109,185 $       60,219 $     169,404
Diluted net income per share * $            1.49 $           2.10 $            1.48 $           2.28
Shares used in computing diluted net income per share 69,909 - 69,909 72,962 - 72,962
Gross margin - advertising 80% 1% 81% 80% 1% 81%
Gross margin - non-advertising 63% -1% 62% 68% -1% 67%
Operating margin 22% 6% 28% 22% 6% 28%
(a)  To exclude the recognition of deferred revenue related to the license granted to Leju.
(b)  To exclude stock-based compensation.
(c)  To adjust amortization of intangible assets.
(d)  To exclude goodwill and acquired intangibles impairment.
(e)  To exclude non-GAAP to GAAP reconciling items on the share of equity method investments, net of share of amortization        of intangibles not on their books.
(f)   To exclude (gain) loss on sale of investments, (gain) loss on deemed disposal, fair value changes and impairment on investments, net.
(g)  To exclude non-GAAP to GAAP reconciling items for the income attributable to non-controlling interests.
(h)  To exclude the amortization of convertible debt and senior notes issuance cost.
(i)   To exclude the provision (benefit) for income tax related to item (c), (d) and (f). Other non-GAAP to GAAP reconciling items have no        income tax effect.**
*   Net income attributable to SINA's ordinary shareholders is adjusted for diluted shares issued by our subsidiary and     equity method investments.
** The Company considered the tax implication arising from the reconciliation items, and those items recorded in entities     in tax free jurisdictions were without relevant tax implications. For impairment on investments, valuation allowances     were made for those differences the Company does not expect they can be realized in the foreseeable future. 

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SOURCE SINA Corporation

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