Chinese Internet portal Sohu.com (SOHU) has reported its unaudited financial results for the first quarter ended March 31, 2008, and showed total revenues of US$84.8 million, up 156% year-on-year and 30% quarter-on-quarter.
Dr. Charles Zhang, chairman and CEO of Sohu.com, said in a press statement, "We believe that these results are made possible only by our long-term strategic vision regarding the Chinese Internet space, such as our sponsorship of the 2008 Beijing Olympics, and by our continued technological development and advancement, such as with our in-house developed online game Tian Long Ba Bu. All of these achievements demonstrate the strength and power of the Sohu brand and our ability to continue to execute on our plan to lead the Chinese Internet space."
Gross margin for the first quarter of 2008 was 76%, increased from 71% in the previous quarter and 60% in the same period of 2007. Non-GAAP gross margin was 76% in the first quarter of 2008, up from 72% in the previous quarter and 61% in the same period of 2007. The gross margin expansion was primarily due to the contribution from Tian Long Ba Bu. Net income for the first quarter of 2008 was US$21.6 million or US$0.55 per fully diluted share.
Advertising revenues for the first quarter of 2008 totaled US$34.8 million, a 3% quarter-on-quarter increase and a 36% year-on-year increase. For the first quarter of 2008, Sohu's non-advertising revenues, which are derived mainly from online game and wireless value-added services, were US$50.1 million, representing 59% of total revenues. Online game revenues for first quarter of 2008 increased 71% quarter-on-quarter and 24 times year-on-year. Wireless revenue increased 17% quarter-on-quarter and 54% year-on-year. Non-advertising gross margin was 85%, compared to 79% in the previous quarter and 52% in first quarter of 2007. Non-GAAP non-advertising gross margin was 85%, compared to 79% in the previous quarter and 52% in first quarter of 2007.
For first quarter of 2008, Sohu's operating expenses totaled US$34.0 million. Income tax expense was US$9.2 million, compared to US$0.7 million for the previous quarter and US$0.3 million for the same period last year.
Sohu estimates total revenues for the second quarter of 2008 to be between US$93 million to US$96 million.