2018Q3搜狗财报（英文）-2018.11-4页

报告摘要

Total Revenues: $276.6 million, a 7% year-over-year increase.
Net Income Attributable to Sogou Inc.: $23.9 million, a 23% decrease year-over-year.
Non-GAAP Net Income: $28.0 million, a 10% decrease year-over-year.
Earnings Per ADS: $0.06 (both basic and diluted).
Non-GAAP Earnings Per ADS: $0.07.

Search and Search-Related Revenues: $255.3 million, up 13% year-over-year.
- Driven by growth in auction-based pay-for-click services.
- 82.7% of search and search-related revenues came from auction-based services.
Other Revenues: $21.3 million, a 33% decrease year-over-year.
- Due to reduced smart hardware sales as the company shifted focus to AI-integrated products.
Gross Profit: $102.9 million, a 19% decrease year-over-year.
- Non-GAAP gross profit remained at $103.2 million, a 19% decrease.
Operating Loss: $6.8 million, compared to operating income of $35.7 million in the same period of 2017.
- Non-GAAP operating loss was $2.7 million, compared to non-GAAP operating income of $36.0 million in 2017.
Other Income, Net: $24.0 million, up from $0 in the same period of 2017.
- Primarily due to a $17.8 million gain from an equity investment under a new accounting standard.

Cost of Revenues: $173.6 million, a 33% increase year-over-year.
- Traffic acquisition cost rose to $135.2 million, up 58% year-over-year, accounting for 48.9% of total revenues.
Total Operating Expenses: $109.7 million, a 20% increase year-over-year.
- Research and Development Expenses: $50.6 million, up 26% year-over-year (18.3% of total revenues).
- Sales and Marketing Expenses: $43.6 million, a 3% decrease year-over-year (15.8% of total revenues).
- General and Administrative Expenses: $15.5 million, a 149% increase year-over-year (5.6% of total revenues).
  - Due to increased loan losses and inventory impairment.

Cash and Cash Equivalents + Short-Term Investments: $1.1 billion as of September 30, 2018, up from $1.0 billion as of December 31, 2017.
Net Operating Cash Inflow: $85.3 million for the quarter.
Capital Expenditures: $22.2 million.

Sogou Mobile Keyboard: Achieved 405 million daily active users (DAUs), a 32% increase year-over-year.
Voice App: Processed up to 500 million daily voice requests, making it the largest voice app in China.
AI Integration: The company continued to integrate AI technologies into its core products and services, including Sogou Search and smart hardware.

Smart Hardware Strategy: The company upgraded its strategy to better leverage AI capabilities and improve product competitiveness.
Product Focus: Phased out non-AI-enabled hardware and focused on AI-integrated products.

Board Resignation: Joseph Chen resigned from the Board and Audit Committee on October 19, 2018.
New Board Member: Jinmei He was appointed as a Sohu designee to the Board and Audit Committee, effective October 19, 2018 and November 3, 2018, respectively.

Total Revenues Guidance: $292 million to $307 million, a 5% to 11% increase year-over-year.
RMB Terms: Expected to be 11% to 17% increase year-over-year.
Exchange Rate Assumption: Presumed rate of RMB 7.00 = $1.00, compared to RMB 6.61 = $1.00 in Q4 2017.

Non-GAAP results exclude share-based compensation expenses.
Share-based compensation expenses are not included in the company's annual budgets or quarterly forecasts.
The reconciliation tables show the adjustments made to convert GAAP to Non-GAAP figures.

The document includes forward-looking statements, and Sogou reserves the right to update its business outlook at any time.
Risks include intense competition, regulatory changes, and reliance on Tencent platforms.

Date: November 5, 2018, at 7:30 am U.S. Eastern Time (8:30 pm Beijing/Hong Kong time).
Dial-in Details:
- U.S. Toll Free: +1-888-317-6003
- Mainland China: 4001-206115
- Hong Kong: 800-963976 or +852-580-81995
- International: +1-412-317-6061
- Passcode: 7311232
Replay Access: Until November 12, 2018.
Webcast: Available on Sogou's Investor Relations website: http://ir.sogou.com

Sogou is an innovator in search and a leader in China's internet industry.
It offers a wide range of products, including the Sogou Input Method and AI-driven voice and image technologies.
The company's mission is to make it easy to communicate and get information.

Investor Relations: Jessie Zheng, Tel: +86 10 5689 8068, Email: ir@sogou-inc.com
Media Inquiries: Rachael Layfield, Brunswick Group, Tel: +86 10 5960-8600, Email: sogou@brunswickgroup.com

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