Chinese Internet portal Sohu.com has reported its unaudited financial results for the first quarter ended March 31, 2009, showing total revenues of USD115.7 million, up 36% year-on-year.
Dr. Charles Zhang, chairman and CEO of Sohu.com, stated, "For Sohu's portal business, as always, we are extremely focused on our long-term strategic vision to make Sohu one of the most powerful mainstream media platforms in China. With some indications of the potential recovery of the overall economy underway, we believe a modest macro environment provides great media-driven opportunities for Sohu. Bolstered by a rapidly growing Internet population, we will put to use our unparalleled media platform to further strengthen our position as a leading Internet company in China in 2009."
Gross margin was 76% in the first quarter of 2009, up from 75% in the fourth quarter of 2008, and equivalent to 76% in the first quarter of 2008. Non-GAAP gross margin for the first quarter of 2009 was also 76%, up from 75% in the fourth quarter of 2008, and equivalent to 76% in the first quarter of 2008.
Brand advertising revenues were USD39.1 million, up 18% year-on-year, and online game revenues hit USD61.6 million, up 50% year-on-year and up 6% quarter-on-quarter. Brand advertising gross margin for the first quarter of 2009 was 65%, compared with 66% in the fourth quarter of 2008 and 66% in the first quarter of 2008. Non-GAAP brand advertising gross margin for the first quarter of 2009 was 65%, compared with 67% in both the fourth quarter of 2008 and the first quarter of 2008. Online game gross margin for the first quarter of 2009 was 94%, up from 93% in the fourth quarter of 2008 and 92% in the first quarter of 2008. Non-GAAP non-advertising gross margin for the first quarter of 2009 was 85%, up from 83% in the fourth quarter of 2008 and at the same level as in the first quarter of 2008.
For the first quarter of 2009, Sohu's operating expenses totaled USD38.1 million. Non-GAAP operating expenses totaled USD36.1 million, down 9% from USD39.6 million for the fourth quarter of 2008 and up 17% year-on-year. The quarter-on-quarter decrease was primarily attributable to lower sales commission and bonuses in the first quarter of 2009. The year-on-year increase was primarily due to continued investment in product development, marketing expenses for Sohu's branding initiatives and an increase in salaries and bonuses.
Sohu estimates total revenues for the second quarter of 2009 to be between USD121 million and USD125 million, with advertising revenues of USD43.5 million to USD45.5 million and non-advertising revenues of USD77.5 million to USD79.5 million.
