BEIJING, Aug. 1, 2011 /PRNewswire-Asia/ -- Changyou.com
Limited ("Changyou" or the "Company") (NASDAQ: CYOU), a leading
online game developer and operator in China, today announced its unaudited financial
results for the second quarter ended June
30, 2011.
(Logo: http://photos.prnewswire.com/prnh/20090402/CNTH020 )
Second Quarter 2011 Highlights
- Total revenues reached a record US$105.0
million, an increase of 8% quarter-over-quarter and 35%
year-over-year, and exceeded the high end of the Company's guidance
by US$5.0 million.
- GAAP net income attributable to Changyou.com Limited reached a
record US$54.2 million, up 3%
quarter-over-quarter and 29% year-over-year, or US$1.02 per fully diluted ADS(1).
- Non-GAAP(2) net income attributable to Changyou.com Limited
(i.e., excluding share-based compensation expenses) reached a
record US$55.6 million, or
US$1.04 per fully diluted ADS,
exceeding the high end of the Company's guidance by US$5.1 million. Non-GAAP net income
attributable to Changyou.com Limited was up 2% quarter-over-quarter
and 26% year-over-year.
- On May 11, 2011, the Company
completed the acquisition of 68.258% of the equity in Shenzhen 7Road Technology Co., Ltd. ("7Road"),
a Web-based game company in China.
7Road's financial statements were consolidated in the Company's
financial statements starting on June 1,
2011
(1) Each American depositary
share ("ADS") represents two Class A ordinary shares.
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(2) Explanation of the Company's
non-GAAP financial measures and related reconciliations to GAAP
financial measures are included in the accompanying "Non-GAAP
Disclosure" and "Reconciliations to Unaudited Condensed
Consolidated Statements of Operations."
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Mr. Tao Wang, Changyou's Chief Executive Officer, commented, "We
posted record performance in the second quarter as total revenues
exceeded $100 million. The
continued success of our blockbuster Tian
Long Ba Bu, or TLBB, has been supported by and carefully
nurtured with the release of new content in mid-March and in early
July that incorporates user feedback. A major expansion pack,
TLBB3, is scheduled to be released in the latter half of this year
as we aim to further extend its popularity and life cycle. On
July 22nd, after four years of
meticulous planning and development, we launched Duke of Mount Deer, or DMD, our second
inhouse-developed game. The extensive work that we put into
the game has led to its good reception, and its user base has
continued to increase after its open beta. Cutting-edge
graphic design, groundbreaking server technology and innovative new
gameplay were made possible by the tight collaboration between the
various teams within our business and we believe will further
escalate our leading position in the online game industry."
Mr. Dewen Chen, president and
chief operating officer, continued, "The addition of 7Road
immediately diversifies our business and establishes us as one of
the leading players in the rapidly expanding Web-based game market
in China. 7Road's hit game,
DDTank, continues to be one of China's most popular web-based games and
attracts user interest. We share a philosophy with 7Road's
management team that it is vital to create games that users want to
play, and it is this mutual belief that gives us great confidence
in our long-term outlook together."
Mr. Alex Ho, Changyou's chief
financial officer, added, "Our track record of delivering record
top-line and bottom-line results continued in the second quarter.
DMD and Web-based games add new sources of revenues to an already
highly profitable and cash-rich business, and leave us well
positioned to accelerate growth and increase shareholder value over
the long term."
Second Quarter 2011 Operational Results
Given the completion of the 7Road acquisition during the second
quarter, in addition to the operational results disclosed in
previous quarters, the operational results of 7Road's Web-based
games are disclosed separately below. The Company believes that
these metrics provide investors, and the Company's management, with
a better foundation for understanding the Company's
performance.
The Company's operational results for the second quarter of 2011
were:
- Aggregate registered accounts for the Company's games(3)
increased 13% quarter-over-quarter and 34% year-over-year to 131.9
million.
- Aggregate peak concurrent users ("PCU") for the Company's games
were 970,000, a decrease of 3% quarter-over-quarter and 15%
year-over-year.
- Aggregate APA for the Company's games increased 1%
quarter-over-quarter and 4% year-over-year to 2.91 million.
- ARPU for the Company's games increased 1% quarter-over-quarter
and 15% year-over-year to RMB211,
which is consistent with the Company's intention to have ARPU
within a range that keeps the Company's games affordable for the
majority of Chinese game players.
(3) Comprises the following
games operated in China: Tian Long Ba Bu ("TLBB"), Blade Online,
Blade Hero 2, Da Hua Shui Hu, Zhong Hua Ying Xiong, Immortal Faith,
San Jie Qi Yuan and Legend of Ancient World.
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7Road's operational results for the period when 7Road's
financial statements were consolidated in the Company's financial
statements were:
- Active accounts for 7Road's game were approximately 18.6
million, defined as registered accounts that were logged in at
least once during the period.
- Active charging accounts for 7Road's game were approximately
660,000, defined as the number of active accounts that purchased
virtual currency for use in the game during the period.
- Average revenue recognized per active charging accounts for
7Road's game was RMB32, defined as
net revenues recognized by 7Road for the period divided by the
number of active charging accounts for the same period.
Second Quarter 2011 Unaudited Financial Results
Revenues
Total revenues for the second quarter of 2011 increased 8%
quarter-over-quarter and 35% year-over-year to US$105.0 million.
Online game revenues for the second quarter of 2011, which
includes revenues from Changyou's game operations and overseas
licensing revenues and revenues from 7Road, increased 7%
quarter-over-quarter and 31% year-over-year to US$101.5 million. The increases were mainly due
to the continued popularity of TLBB in China during the quarter and consolidation of
7Road's financial statements starting on June 1, 2011.
Other revenues for the second quarter of 2011 increased 62%
quarter-over-quarter to US$3.5
million. The increase was mainly due to revenue contribution
for a full quarter from the cinema advertising business in the
second quarter.
Gross Profit
Gross profit for the second quarter of 2011 increased 6%
quarter-over-quarter and 29% year-over-year to US$90.9 million. Non-GAAP gross profit for the
second quarter of 2011 increased 6% quarter-over-quarter and 29%
year-over-year to US$91.0 million.
Both gross margin and non-GAAP gross margin in the second quarter
of 2011 were 87%, which compares with 88% in the first quarter of
2011 and 91% in the second quarter of 2010. The decline in gross
margin was mainly due to higher bandwidth and server costs incurred
in the second quarter as preparations are made for the launch of
Duke of Mount Deer.
Gross profit and non-GAAP gross profit of the online games
business for the second quarter of 2011 increased 7%
quarter-over-quarter and 29% year-over-year to US$91.6 million. Both gross margin and non-GAAP
gross margin of the online games business for the second quarter of
2011 was 90%, which compares with 91% in the first quarter of 2011
and in the second quarter of 2010.
Gross loss and non-GAAP gross loss of other business for the
second quarter of 2011 were US$650,000.
Operating Expenses
For the second quarter of 2011, total operating expenses were
US$29.6 million, an increase of 18%
quarter-over-quarter and 23% year-over-year. Non-GAAP operating
expenses were US$28.2 million, an
increase of 21% quarter-over-quarter and 28% year-over-year.
GAAP product development expenses increased 12%
quarter-over-quarter and 55% year-over-year to US$12.0 million. Non-GAAP product development
expenses increased 16% quarter-over-quarter and 71% year-over-year
to US$11.5 million. The
quarter-over-quarter and year-over-year increases in both GAAP and
non-GAAP product development expenses were mainly due to higher
salaries and benefits and increased expenses related to royalties
for licensed games in the second quarter of 2011.
GAAP sales and marketing expenses increased 37%
quarter-over-quarter and 2% year-over-year to US$12.0 million. Non-GAAP sales and marketing
expenses were US$11.7 million, up 37%
quarter-over-quarter and were flat year-over-year. The
quarter-over-quarter and year-over-year increases in GAAP and
non-GAAP sales and marketing expenses were primarily due to higher
advertising spending in the second quarter of 2011 for the
promotion of Duke of Mount Deer ahead
of its launch.
GAAP general and administrative expenses were US$5.6 million, an increase of 1%
quarter-over-quarter and 23% year-over-year. Non-GAAP general and
administrative expenses were US$5.0
million, an increase of 5% quarter-over-quarter and 37%
year-over-year. The quarter-over-quarter and year-over-year
increases in GAAP and non-GAAP general and administrative expenses
were primarily a result of higher salaries and benefits in the
second quarter of 2011.
Operating Profit
Operating profit for the second quarter of 2011 increased 1%
quarter-over-quarter and 31% year-over-year to US$61.4 million. Operating margin in the second
quarter of 2011 was 58%, which compares with 62% in the first
quarter of 2011 and 60% in the second quarter of 2010. Non-GAAP
operating profit for the second quarter of 2011 increased 1%
quarter-over-quarter and 29% year-over-year to US$62.7 million. Non-GAAP operating margin in the
second quarter of 2011 was 60%, which compares with 64% in the
first quarter of 2011 and 63% in the second quarter of 2010.
Net income
For the second quarter of 2011, net income increased 3%
quarter-over-quarter and 30% year-over-year to US$54.6 million. Non-GAAP net income increased 2%
quarter-over-quarter and 27% year-over-year to US$56.0 million. Net margin for the second
quarter of 2011 was 52%, which compares with 54% in the first
quarter of 2011 and in the second quarter of 2010. Non-GAAP net
margin for the second quarter of 2011 was 53%, which compares with
56% in the first quarter of 2011 and 57% in the second quarter of
2010.
For the second quarter of 2011, net income attributable to
Changyou.com Limited increased 3% quarter-over-quarter and 29%
year-over-year to US$54.2 million.
Non-GAAP net income attributable to Changyou.com Limited increased
2% quarter-over-quarter and 26% year-over-year to US$55.6 million. Fully diluted earnings per ADS
attributable to Changyou.com Limited were US$1.02, up from US$0.99 in the first quarter of 2011 and
US$0.79 in the second quarter of
2010. Non-GAAP fully diluted earnings per ADS attributable to
Changyou.com Limited were US$1.04, up
from US$1.02 in the first quarter of
2011 and US$0.82 in the second
quarter of 2010. Net margin attributable to Changyou.com Limited
for the second quarter of 2011 was 52%, which compares with 54% in
the first quarter of 2011 and in the second quarter of 2010.
Non-GAAP net margin attributable to Changyou.com Limited for the
second quarter of 2011 was 53%, which compares with 56% in the
first quarter of 2011 and 57% in the second quarter of 2010.
Cash Balances
As of June 30, 2011, Changyou had
a net cash balance of US$398.3
million, which compares with US$406.5
million as of March 31, 2011.
Operating cash flow for the second quarter of 2011 was a net inflow
of US$66.6 million.
Other Business Developments
Changyou Completes Acquisition of Majority Stake in
7Road
On May 11, 2011, Changyou
completed the acquisition of 68.258% of the equity in 7Road for
fixed cash consideration of approximately US$68.26 million, plus additional variable cash
consideration of up to a maximum of US$32.76
million that is contingent upon the achievement of specified
performance milestones through December 31,
2012. 7Road is a developer of Web-based games and the
creator of DDTank, one of the most popular multiplayer Web-based
shooting games in China.
Translated into 9 different languages, DDTank has been launched in
countries or territories overseas including Vietnam, Taiwan, Brazil and others.
Changyou Begins Open Beta Testing of Legend of Ancient
World
On May 19, 2011, Changyou began
open-beta testing of Legend of Ancient World, the Company's
first 2.5D oriental fantasy massively multi-player online
role-playing game. Transporting players back some 4,000 years ago
to the ancient Huaxia period, the game allow players to take on
multiple roles from a selection of 21 occupations while exploring
ancient Chinese civilization. The game was licensed from a game
studio in China.
Changyou Licenses Battlefield Online from Electronic
Arts
Changyou has entered into a licensing agreement with Electronic
Arts, a global leader in digital interactive entertainment, for the
exclusive rights to operate Battlefield Online, a massively
multiplayer online first-person shooter game in China. The game is the first online game in
the Battlefield franchise, which is a long-standing series of
first-person shooter games for the PC.
Changyou Begins Open Beta Testing of Duke of Mount Deer
On July 22, 2011, Changyou began
open-beta testing of Duke of Mount
Deer, the Company's inhouse-developed 3D fantasy martial-arts
massively multi-player online role-playing game. Using two
different game engines and the latest 3D rendering technology, the
game displays beautifully rendered, cinematic quality graphics, and
recreates the imaginary martial arts world from the final book of
Louis Cha's popular novel series.
The game also features the Company's self-developed seamless server
connectivity technology that, for the first time in a MMORPG,
allows gamers to move beyond the server where they originally
registered and engage in competitions and social activities with
users that are logged in on separate servers. In addition, the game
introduces a novel "server vs. server" battle mode that brings
communities of users on different servers together to fight against
competing teams on other servers for land, resources and dominance
over the whole game universe.
Business Outlook
For the third quarter of 2011, Changyou estimates:
- Total revenues to be between US$115.0
million and US$118.0 million, including online game revenues
of US$112.0 million to US$114.0
million.
- Non-GAAP net income attributable to Changyou.com Limited to be
between US$51.0 million and US$52.5
million.
- Non-GAAP fully diluted earnings per ADS attributable to
Changyou.com Limited to be between US$0.95
and US$0.98.
- Assuming no new grants of share-based awards, share-based
compensation expense to be between US$1.0
million and US$1.5 million, reducing fully diluted earnings
per ADS attributable to Changyou.com Limited by US$0.02 to US$0.03.
Non-GAAP Disclosure
To supplement the unaudited consolidated financial information
prepared in accordance with United States Generally Accepted
Accounting Principles ("GAAP"), Changyou's management uses non-GAAP
measures of cost of revenues, operating expenses, net income and
net income per ADS, which are adjusted from results based on GAAP
to exclude the compensation cost of share-based awards granted.
These measures should be considered in addition to results prepared
in accordance with GAAP, but should not be considered a substitute
for, or superior to, GAAP results.
Changyou's management believes that excluding the share-based
compensation expense from its non-GAAP financial measures is useful
for itself and investors. Further, the amount of share-based
compensation expense cannot be anticipated by management, and these
expenses are not built into the Company's annual budgets and
quarterly forecasts, which generally will be the basis for
information Changyou provides to analysts and investors as guidance
for future operating performance. As share-based compensation
expense does not involve any upfront or subsequent cash outflow,
Changyou does not factor this in when evaluating and approving
expenditures or when determining the allocation of its resources to
its business operations. As a result, in general, the monthly
financial results for internal reporting and any performance
measure for commissions and bonuses are based on non-GAAP financial
measures that exclude share-based compensation expense.
The non-GAAP financial measures are provided to enhance
investors' overall understanding of Changyou's current financial
performance and prospects for the future. A limitation of using
non-GAAP cost of revenues, operating expenses, net income and net
income per ADS, excluding share-based compensation expense, is that
the share-based compensation charge has been and will continue to
be a significant recurring expense in the Company's business for
the foreseeable future. In order to mitigate these limitations the
Company has provided specific information regarding the GAAP
amounts excluded from each non-GAAP measure. The accompanying
tables include details on the reconciliation between GAAP financial
measures that are most directly comparable to the non-GAAP
financial measures the Company has presented.
Notes to Financial Information
Financial information in this press release other than the
information indicated as being non-GAAP is derived from Changyou's
unaudited financial statements prepared in accordance with
GAAP.
Mezzanine Equity consists of non-controlling interests in 7Road
and a put option that gives the non-controlling shareholders the
right to put their shares to Changyou at a pre-determined price if
7Road achieves specified performance milestones before the expiry
of the put option and certain circumstances occur. The put option
will expire in 2014. Non-controlling interests of 7Road and the put
option are classified as mezzanine equity in Changyou's
consolidated balance sheets, as redemption of the non-controlling
interests is not solely within the control of Changyou.
In accordance with ASC subtopic 480-10, Changyou accretes the
balance of non-controlling interests to its redemption value over
the period from the date of 7Road acquisition to the earliest
exercise date of the put right. Any subsequent changes in the
redemption value are considered to be changes in accounting
estimates and are also recognized over the same period as net
income attributable to mezzanine classified non-controlling
interests.
Safe Harbor Statement
It is currently expected that the Business Outlook will not be
updated until the release of Changyou's next quarterly earnings
announcement; however, Changyou reserves the right to update its
Business Outlook at any time for any reason.
This announcement contains forward-looking statements.
Statements that are not historical facts, including statements
about the Company's beliefs and expectations, are forward-looking
statements. These statements are based on current plans, estimates
and projections, and therefore you should not place undue reliance
on them. Forward-looking statements involve inherent risks and
uncertainties. The Company cautions that a number of important
factors could cause actual results to differ materially from those
contained in any forward-looking statement. Potential risks and
uncertainties include, but are not limited to, the continuing
global financial and credit markets crisis and its potential impact
on the Chinese economy, the uncertain regulatory landscape in
the People's Republic of China,
fluctuations in Changyou's quarterly operating results, Changyou's
historical and possible future losses and limited operating
history, and the Company's reliance on Tian
Long Ba Bu as its major revenue source. Further information
regarding these and other risks is included in Changyou's Annual
Report on Form 20-F filed on February 28,
2011, and other filings with the Securities and Exchange
Commission.
Conference Call Information
Changyou's management team will host an earnings conference call
today at 7 a.m. U.S. Eastern Daylight
Time, August 1, 2011 (7 p.m. Beijing/Hong
Kong, August 1, 2011).
The dial-in details for the live conference call are:
US:
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+1-866-271-0675
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Hong Kong:
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+852-3002-1672
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International:
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+1-617-213-8892
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Passcode:
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CYOU
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Please dial in 10 minutes before the call is scheduled to begin
and provide the passcode to join the call.
A telephone replay of the call will be available after the
conclusion of the conference call at 10:00
a.m. U.S. Eastern Daylight Time on August 1 through August 8, 2011. The dial-in
details for the telephone replay are:
International:
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+1-617-801-6888
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Passcode:
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51430869
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The live webcast and archive of the conference call will be
available on the Investor Relations section of Changyou's website
at http://www.changyou.com/ir/.
About Changyou
Changyou.com Limited is a leading developer and operator of
online games in China. It began
operations as a business unit within Sohu.com Inc. (NASDAQ: SOHU)
in 2003 predominantly focused on the development and operation of
massively multi-player online role-playing games ("MMORPG").
Changyou was carved out as a separate, stand-alone company in
December 2007, and completed an
initial public offering on April 7,
2009. Changyou and its subsidiaries currently operates over
10 online games that mainly includes in-house developed MMORPGs,
such as Tian Long Ba Bu, one of the
most popular online games in China, and Duke of
Mount Deer, as well as web-based games, such as DDTank. Changyou's
advanced technology platform includes advanced 2.5D and 3D graphics
engines, a uniform game development platform, effective
anti-cheating and anti-hacking technologies, proprietary
cross-networking technology and advanced data protection
technology. For more information about Changyou, please visit
http://www.changyou.com/en/.
For investor and media
inquiries, please contact:
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In China:
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Ms. Angie Chang
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Investors Relations
Manager
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Changyou.com Limited
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Tel: +86 (10)
6861-3688
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E-mail:
ir@cyou-inc.com
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In the United
States:
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Mr. Jeff Bloker
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Christensen
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Tel: +1 (480)
614-3003
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E-mail:
jbloker@ChristensenIR.com
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CHANGYOU.COM
LIMITED
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED,
IN THOUSANDS EXCEPT PER ADS AMOUNTS)
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Three Months Ended
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Six Months Ended
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Jun. 30, 2011
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Mar. 31, 2011
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Jun. 30, 2010
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Jun. 30, 2011
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Jun. 30, 2010
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Revenues:
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Online game
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$
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101,531
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$
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94,930
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$
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77,721
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$
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196,461
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$
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149,793
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Others
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3,494
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2,159
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-
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5,653
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-
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Total revenues
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105,025
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97,089
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77,721
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202,114
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149,793
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Cost of revenues:
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Online game (includes share-based
compensation expense of $19, $33, $43, $52
and $110 respectively)
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9,950
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8,968
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7,008
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18,918
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12,392
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Others
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4,144
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2,590
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-
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6,734
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-
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Total cost of revenues
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14,094
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11,558
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7,008
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25,652
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12,392
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Gross profit
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90,931
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85,531
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70,713
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176,462
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137,401
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Operating expenses:
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Product development (include share-based compensation
expense of $503, $771, $1,022, $1,274 and $2,528,
respectively)
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12,023
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10,721
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7,755
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22,744
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14,690
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Sales and marketing (includes share-based compensation
expense of $293, $199, $41, $492 and $116 respectively)
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11,965
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8,734
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11,720
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20,699
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21,419
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General and administrative (includes share-based
compensation expense of $567, $767, $874, $1,334
and $2,196 respectively)
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5,588
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5,528
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4,527
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11,116
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9,312
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Total operating expenses
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29,576
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24,983
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24,002
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54,559
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45,421
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Operating profit
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61,355
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60,548
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46,711
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121,903
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91,980
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Interest income and foreign currency exchange gain
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2,172
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1,683
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803
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3,855
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1,618
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Other (expense)income
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(602)
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(329)
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381
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(931)
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282
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Income before income tax expense
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62,925
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61,902
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47,895
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124,827
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93,880
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Income tax expense
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(8,354)
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(9,053)
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(5,804)
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(17,407)
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(12,083)
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Net income
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54,571
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52,849
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42,091
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107,420
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81,797
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Less: Net income attributable to mezzanine
classified non-controlling interests
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361
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-
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-
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361
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-
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Net income attributable to Changyou.com Limited
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$
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54,210
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$
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52,849
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$
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42,091
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$
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107,059
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$
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81,797
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Basic net income per ADS attributable to Changyou.com
Limited
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$
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1.03
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$
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1.01
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$
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0.81
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$
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2.05
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$
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1.58
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ADSs used in computing basic net income per ADS
attributable to Changyou.com Limited
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52,466
|
|
52,226
|
|
51,917
|
|
52,346
|
|
51,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per ADS attributable to Changyou.com
Limited
|
$
|
1.02
|
$
|
0.99
|
$
|
0.79
|
$
|
2.01
|
$
|
1.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ADSs used in computing diluted net income per ADS
attributable to Changyou.com Limited
|
|
53,302
|
|
53,247
|
|
53,075
|
|
53,274
|
|
53,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGYOU.COM
LIMITED
CONDENSED
CONSOLIDATED BALANCE SHEETS
(UNAUDITED,
IN THOUSANDS)
|
|
|
|
As of Jun. 30, 2011
|
|
As of Dec. 31, 2010
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
398,314
|
$
|
350,957
|
|
Accounts receivable,
net
|
|
13,974
|
|
1,464
|
|
Short-term
investments
|
|
16,070
|
|
-
|
|
Prepaid and other current
assets
|
|
8,787
|
|
12,383
|
|
Due from Sohu
|
|
-
|
|
312
|
|
Total current
assets
|
|
437,145
|
|
365,116
|
|
Non-current
assets:
|
|
|
|
|
|
Fixed assets, net
|
|
60,266
|
|
53,659
|
|
Goodwill
|
|
119,008
|
|
10,258
|
|
Intangible assets,
net
|
|
46,827
|
|
7,251
|
|
Interests in associated
companies
|
|
-
|
|
3,645
|
|
Deferred tax assets
|
|
2,455
|
|
2,369
|
|
Other assets, net
|
|
62,332
|
|
60,214
|
|
TOTAL ASSETS
|
$
|
728,033
|
$
|
502,512
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Receipts in advance and deferred
revenue
|
$
|
39,493
|
$
|
34,509
|
|
Accounts payable and accrued
liabilities
|
|
51,300
|
|
34,783
|
|
Tax payables
|
|
8,569
|
|
13,471
|
|
Current deferred
tax liabilities
|
|
675
|
|
243
|
|
Current contingent
consideration
|
|
12,587
|
|
-
|
|
Due to Sohu
|
|
4,913
|
|
5,155
|
|
Total current
liabilities
|
|
117,537
|
|
88,161
|
|
Long-term
liabilities:
|
|
|
|
|
|
Long-term deferred tax
liabilities
|
|
4,718
|
|
-
|
|
Long-term contingent
consideration
|
|
15,646
|
|
-
|
|
Long-term accounts
payable
|
|
1,727
|
|
-
|
|
Total long-term
liabilities
|
|
22,091
|
|
-
|
|
Total liabilities
|
|
139,628
|
|
88,161
|
|
MEZZANINE EQUITY
|
|
|
|
|
|
Mezzanine equity
|
|
53,577
|
|
-
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
Total shareholders'
equity
|
|
534,828
|
|
414,351
|
|
TOTAL LIABILITIES, MEZZANINE
EQUITY AND SHAREHOLDERS' EQUITY
|
$
|
728,033
|
$
|
502,512
|
|
|
|
|
|
|
|
|
CHANGYOU.COM
LIMITED
RECONCILIATIONS TO UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN
THOUSANDS EXCEPT PER ADS AMOUNTS)
|
|
|
|
Three Months Ended Jun. 30, 2011
|
|
|
Three Months Ended Mar. 31, 2011
|
|
|
Three Months Ended Jun. 30, 2010
|
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
Total revenues
|
$
|
105,025
|
$
|
-
|
$
|
105,025
|
|
$
|
97,089
|
$
|
-
|
$
|
97,089
|
|
$
|
77,721
|
$
|
-
|
$
|
77,721
|
|
Less: Total cost of revenues
|
|
14,094
|
|
(19)
|
(a)
|
14,075
|
|
|
11,558
|
|
(33)
|
(a)
|
11,525
|
|
|
7,008
|
|
(43)
|
(a)
|
6,965
|
|
Gross profit
|
$
|
90,931
|
$
|
19
|
$
|
90,950
|
|
$
|
85,531
|
$
|
33
|
$
|
85,564
|
|
$
|
70,713
|
$
|
43
|
$
|
70,756
|
|
Gross margin
|
|
87%
|
|
|
|
87%
|
|
|
88%
|
|
|
|
88%
|
|
|
91%
|
|
|
|
91%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online game revenues
|
$
|
101,531
|
$
|
-
|
$
|
101,531
|
|
$
|
94,930
|
$
|
-
|
$
|
94,930
|
|
$
|
77,721
|
$
|
-
|
$
|
77,721
|
|
Less: Online game cost of revenues
|
|
9,950
|
|
(19)
|
(a)
|
9,931
|
|
|
8,968
|
|
(33)
|
(a)
|
8,935
|
|
|
7,008
|
|
(43)
|
(a)
|
6,965
|
|
Online game gross profit
|
$
|
91,581
|
$
|
19
|
$
|
91,600
|
|
$
|
85,962
|
$
|
33
|
$
|
85,995
|
|
$
|
70,713
|
$
|
-
|
$
|
70,756
|
|
Online game gross margin
|
|
90%
|
|
|
|
90%
|
|
|
91%
|
|
|
|
91%
|
|
|
91%
|
|
|
|
91%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other revenues
|
$
|
3,494
|
$
|
-
|
$
|
3,494
|
|
$
|
2,159
|
$
|
-
|
$
|
2,159
|
|
$
|
-
|
$
|
-
|
$
|
-
|
|
Less: Other cost of revenues
|
|
4,144
|
|
-
|
(a)
|
4,144
|
|
|
2,590
|
|
-
|
(a)
|
2,590
|
|
|
-
|
|
-
|
(a)
|
-
|
|
Other gross loss
|
$
|
(650)
|
$
|
-
|
$
|
(650)
|
|
$
|
(431)
|
$
|
-
|
$
|
(431)
|
|
$
|
-
|
$
|
-
|
$
|
-
|
|
Other gross margin
|
|
n/a
|
|
|
|
n/a
|
|
|
n/a
|
|
|
|
n/a
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
$
|
29,576
|
$
|
(1,363)
|
(a) $
|
28,213
|
|
$
|
24,983
|
$
|
(1,737)
|
(a) $
|
23,246
|
|
$
|
24,002
|
$
|
(1,937)
|
(a) $
|
22,065
|
|
Product development expenses
|
$
|
12,023
|
$
|
(503)
|
(a) $
|
11,520
|
|
$
|
10,721
|
$
|
(771)
|
(a) $
|
9,950
|
|
$
|
7,755
|
$
|
(1,022)
|
(a) $
|
6,733
|
|
Sales and marketing expenses
|
$
|
11,965
|
$
|
(293)
|
(a) $
|
11,672
|
|
$
|
8,734
|
$
|
(199)
|
(a) $
|
8,535
|
|
$
|
11,720
|
$
|
(41)
|
(a) $
|
11,679
|
|
General and administrative expenses
|
$
|
5,588
|
$
|
(567)
|
(a) $
|
5,021
|
|
$
|
5,528
|
$
|
(767)
|
(a) $
|
4,761
|
|
$
|
4,527
|
$
|
(874)
|
(a) $
|
3, 653
|
|
Operating profit
|
$
|
61,355
|
$
|
1,382
|
$
|
62,737
|
|
$
|
60,548
|
$
|
1,770
|
$
|
62,318
|
|
$
|
46,711
|
$
|
1,980
|
$
|
48,691
|
|
Operating margin
|
|
58%
|
|
|
|
60%
|
|
|
62%
|
|
|
|
64%
|
|
|
60%
|
|
|
|
63%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Changyou.com Limited
|
$
|
54,210
|
$
|
1,382
|
$
|
55,592
|
|
$
|
52,849
|
$
|
1,770
|
$
|
54,619
|
|
$
|
42,091
|
$
|
1,980
|
$
|
44,071
|
|
Net margin
|
|
52%
|
|
|
|
53%
|
|
|
54%
|
|
|
|
56%
|
|
|
54%
|
|
|
|
57%
|
|
Diluted net income per ADS attributable to Changyou.com Limited
|
$
|
1.02
|
|
|
$
|
1.04
|
|
$
|
0.99
|
|
|
$
|
1.02
|
|
$
|
0.79
|
|
|
$
|
0.82
|
|
ADSs used in computing diluted net income per ADS attributable to Changyou.com Limited
|
|
53,302
|
|
|
|
53,453
|
|
|
53,247
|
|
|
|
53,450
|
|
|
53,075
|
|
|
|
53,437
|
|
Note:
(a) To eliminate
share-based compensation expense as measured using the fair value
method.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CHANGYOU.COM
LIMITED
RECONCILIATIONS TO UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN
THOUSANDS EXCEPT PER ADS AMOUNTS)
|
|
|
|
Six Months Ended Jun. 30, 2011
|
|
|
Six Months Ended Jun. 30, 2010
|
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP
|
|
Total revenues
|
$
|
202,114
|
$
|
-
|
$
|
202,114
|
|
$
|
149,793
|
$
|
-
|
$
|
149,793
|
|
Less: Total cost of revenues
|
|
25,652
|
|
(52)
|
(a)
|
25,600
|
|
|
12,392
|
|
(110)
|
(a)
|
12,282
|
|
Gross profit
|
$
|
176,462
|
$
|
52
|
$
|
176,514
|
|
$
|
137,401
|
$
|
110
|
$
|
137,511
|
|
Gross margin
|
|
87%
|
|
|
|
87%
|
|
|
92%
|
|
|
|
92%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online game revenues
|
$
|
196,461
|
$
|
-
|
$
|
196,461
|
|
$
|
149,793
|
$
|
-
|
$
|
149,793
|
|
Less: Online game cost of revenues
|
|
18,918
|
|
(52)
|
(a)
|
18,866
|
|
|
12,392
|
|
(110)
|
(a)
|
12,282
|
|
Online game gross profit
|
$
|
177,543
|
$
|
52
|
$
|
177,595
|
|
$
|
137,401
|
$
|
110
|
$
|
137,511
|
|
Online game gross margin
|
|
90%
|
|
|
|
90%
|
|
|
92%
|
|
|
|
92%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other revenues
|
$
|
5,653
|
$
|
-
|
$
|
5,653
|
|
$
|
-
|
$
|
-
|
$
|
-
|
|
Less: Other cost of revenues
|
|
6,734
|
|
-
|
(a)
|
6,734
|
|
|
-
|
|
-
|
(a)
|
-
|
|
Other gross loss
|
$
|
(1,081)
|
$
|
-
|
$
|
(1,081)
|
|
$
|
-
|
$
|
-
|
$
|
-
|
|
Other gross margin
|
|
n/a
|
|
|
|
n/a
|
|
|
n/a
|
|
|
|
n/a
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses
|
$
|
54,559
|
$
|
(3,100)
|
(a) $
|
51,459
|
|
$
|
45,421
|
$
|
(4,840)
|
(a) $
|
40,581
|
|
Product development expenses
|
$
|
22,744
|
$
|
(1,274)
|
(a) $
|
21,470
|
|
$
|
14,690
|
$
|
(2,528)
|
(a) $
|
12,162
|
|
Sales and marketing expenses
|
$
|
20,699
|
$
|
(492)
|
(a) $
|
20,207
|
|
$
|
21,419
|
$
|
(116)
|
(a) $
|
21,303
|
|
General and administrative expenses
|
$
|
11,116
|
$
|
(1,334)
|
(a) $
|
9,782
|
|
$
|
9,312
|
$
|
(2,196)
|
(a) $
|
7,116
|
|
Operating profit
|
$
|
121,903
|
$
|
3,152
|
$
|
125,055
|
|
$
|
91,980
|
$
|
4,950
|
$
|
96,930
|
|
Operating margin
|
|
60%
|
|
|
|
62%
|
|
|
61%
|
|
|
|
65%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Changyou.com Limited
|
$
|
107,059
|
$
|
3,152
|
$
|
110,211
|
|
$
|
81,797
|
$
|
4,950
|
$
|
86,747
|
|
Net margin
|
|
53%
|
|
|
|
55%
|
|
|
55%
|
|
|
|
58%
|
|
Diluted net income per ADS attributable to Changyou.com Limited
|
$
|
2.01
|
|
|
$
|
2.06
|
|
$
|
1.54
|
|
|
$
|
1.62
|
|
ADSs used in computing diluted net income per ADS attributable to Changyou.com Limited
|
|
53,274
|
|
|
|
53,451
|
|
|
53,081
|
|
|
|
53,438
|
|
Note:
(a) To
eliminate share-based compensation
expense as measured using the fair value method.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Changyou.com Limited