Sina.com's (SINA) unaudited financial results for the quarter ended September 30, 2006 show net revenues increased 13% year-over-year to US$56.1 million, exceeding the company's previous guidance of between US$51.0 million and US$54.0 million.
"We are very pleased with another record revenue quarter for our advertising business, which grew 46% year over year in China and 42% worldwide. Our ability to leverage our brand strength, lead with broader and more superior content offerings and create innovative products has enabled us to grow our advertising business above 40% for the first nine months of 2006, compared to last year." said Charles Chao, CEO of Sina. "On the mobile side, despite a much tougher operating environment, our team also showed solid execution as we managed to limit the decline of our MVAS revenues to 3% sequentially."
Advertising revenues for the third quarter of 2006 totaled US$32.7 million, representing a 42% increase from the same period last year and an 11% increase from last quarter. The growth in advertising revenues came primarily from the acquisition of new customers and, to a lesser extent, higher spending per advertiser. Advertising revenues in the third quarter of 2006 represented 58% of the Company's total revenues, up from 46% for the same period last year and 55% for last quarter.
Non-advertising revenues for the third quarter of 2006 totaled US$23.4 million, a 12% decrease from the same period last year and a 4% decrease from last quarter.
Revenues from mobile value-added services for the third quarter of 2006 were $21.8 million, representing a decline of 10% from the same period last year and a decline of 3% from last quarter. MVAS revenues for the third quarter of 2006 were higher than the Company's original estimate primarily due to certain IVR promotions and initiatives with China Unicom. The company expects the MVAS industry in China to continue to face a challenging and uncertain environment and, thus, expects further decline in its MVAS revenues in the future.
Gross margin for the third quarter of 2006 was 64%, down from 68% for the same period last year and up from 63% for last quarter. The advertising gross margin for the third quarter of 2006 was 65%, compared to 68% for the same period last year and 65% in the previous quarter.
Operating expenses for the third quarter of 2006 amounted to US$25.6 million. Non-GAAP operating expenses for the third quarter of 2006 were $23.0 million, a decline of 3% from the same period last year and a decline of 1% from the previous quarter.
Net income for the third quarter of 2006 was US$10.7 million. Non-GAAP net income for the third quarter of 2006 was US$14.6 million, an increase of 46% from the same period last year and 19% from the previous quarter. Non-GAAP diluted net income per share for the third quarter of 2006 was $0.25, compared to US$0.17 in the same period last year and US$0.21 last quarter.
As of September 30, 2006, Sina's cash, cash equivalents and investments in marketable securities amounted to US$345.3 million as compared to US$312.5 million as of June 30, 2006. Cash flow from operating activities for the third quarter of 2006 was US$27.7 million.
