Unaudited revenues for Sohu.com's (SOHU) the second quarter ended June 30, 2005 totaled US$25.9 million, compared to revenues of US$23.7 million for the first quarter ended March 31, 2005, and US$27.3 million for the second quarter ended June 30, 2004.

Gross margin of 67% in Q2 2005 was down slightly from 68% in the previous quarter and slightly up from 66% in Q2 2004. Net income for the second quarter of 2005 was US$7.1 million or US$0.18 per fully diluted share. This compares to net income of US$5.7 million or US$0.15 per fully diluted share for the first quarter of 2005 and US$9.9 million or US$0.25 per fully diluted share for the second quarter of 2004.

Sohu's advertising revenues for the second quarter of 2005 totaled US$17.0 million, a 27% year-on-year improvement and 14% increase quarter-on-quarter. Advertising revenues, consisting of US$13.9 million in brand advertising and US$3.1 million in sponsored search, accounted for 66% of total revenues in the second quarter of 2005. Advertising gross margin was 75%, compared to 76% in Q1 2005 and 75% in Q2 2004.

For the second quarter of 2005 Sohu's non-advertising revenues, which are derived from wireless value-added services, online games and e-commerce, decreased by 36% year-on-year but stayed unchanged quarter-on-quarter at US$8.9 million, representing 34% of total revenues.

The year-on-year decline was caused primarily by a reduction in wireless revenue of 44% year-on-year. Wireless revenue posted its second consecutive quarter of sequential growth, however, increasing 7% over the first quarter, reflecting a continuing recovery in Sohu's wireless business.

Online games revenue was unchanged compared to the first quarter. A decline in e-commerce revenue due to a change in the company's e-commerce business model offset the growth in wireless revenue, resulting in overall flat quarter-on-quarter non-advertising revenue.

Non-advertising gross margin was 53% compared to 55% in Q1 2005 and 58% in Q2004, mostly due to Unicom's increasing its percentage share of SMS revenue and charging additional service fees for its marketing services.

For the second quarter of 2005, Sohu's operating expenses totaled US$10.7 million, largely unchanged quarter-on-quarter, but an increase of 27% year-on-year. Operating profit margin of 26% was up from 23% in Q1 2005 and down from 35% in the second quarter last year. The year-on-year increase in operating expenses is mostly due to Sohu's investment in long-term growth opportunities, the rise in sales and marketing spending, and the consolidation of operating expenses from the wireless services provider Goodfeel that Sohu acquired in May 31 2004 and the mapping services provider Go2Map that Sohu acquired in May 31 2005.

LEAVE A REPLY

Please enter your comment!
Please enter your name here