Chinese Internet company Sohu.com Inc. today reported its unaudited financial results for the third quarter ended September 30, 2009, and showed increases in both revenue and profit.
Total revenues reached record USD136.6 million, up 13% year-on-year, and brand advertising revenues were USD48.5 million of that total. Online game revenues accounted for USD68.7 million, up 26% year-on-year and 3% quarter-on-quarter. Wireless revenues for the third quarter of 2009 were USD16.8 million, representing increases of 12% sequentially and 16% year-on-year.
Gross margin was 76% in the third quarter of 2009, compared with 77% in the second quarter of 2009 and 74% in the third quarter of 2008. Non-GAAP gross margin for the third quarter of 2009 was 76%, compared with 78% in the second quarter of 2009 and 74% in the third quarter of 2008.
For the third quarter of 2009, Sohu's operating expenses totaled USD50.8 million. Non-GAAP operating expenses totaled USD46.7 million, up 7% sequentially from USD43.5 million and up 9% year-on-year. The quarter-on-quarter and year-on-year increases primarily reflect increases in salaries and compensation expenses as a result of increased headcount and an increase in professional fees. For the third quarter of 2009, income tax expense was USD7.0 million, compared with USD8.0 million in the previous quarter.
Before deducting the share of net income pertaining to the non-controlling interest in the Chinese online gaming company Changyou, GAAP net income for the third quarter of 2009 was USD47.1 million, up 11% quarter-on-quarter and 17% year-on-year. Non-GAAP net income for the third quarter of 2009 was USD51.6 million, up 5% quarter-on-quarter and 21% year-on-year, in line with the Company's guidance. After deducting the share of net income pertaining to Changyou, GAAP net income for the third quarter of 2009 was USD34.4 million.
Sohu.com states it continues to maintain a debt-free balance sheet and a strong cash position of USD596.4 million as of September 30, 2009.