Sina Q4 Earnings: Strong Growth In Portal Business Complements Surging Weibo
Sina (NASDAQ:SINA) announced its Q4 and full year earnings on February 13, reporting a massive 37% increase in net revenue to $504 million. Sina reported strong double digit growth in revenues and improvement in margins through the first three quarters of 2017 as well. The company expects this revenue growth and improvement in margins to continue through 2018 as well. We have created an interactive analysis that summarizes Sina’s full year performance for 2017 and added our full year expectations for Sina. You can change expected revenue, operating margin and income margin figures for Sina to gauge how it will impact expected EPS for the full year.
Key Growth Drivers
Sina reported a solid 51% annual increase in net revenues to $1.1 billion through the first three quarters of the year. The trend continued in Q4 with a 37% increase in revenues through Q4. Revenue growth was driven by both the Advertising segment, which includes display ads on Sina and Weibo; and Non-Advertising Revenues, which include value added services on weibo.com.
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To complement revenue growth, Sina’s company-wide gross margin (non-GAAP) for the full year improved by 12 percentage points to 75%, with consistent improvement through the year. The gross margin improvement was also driven by both the advertising and non-advertising businesses. In addition to improvement in gross margins, Sina has improved its operational efficiency due to a large fixed operating cost base. As a result, there has been a limited (at least relatively) increase in cash operating expenses.
Non-GAAP operating expenses were up “only” 40% for the year, which led the adjusted EBITDA margin to expand by around 13 percentage points to 30% through 2017 while non-GAAP operating income was up over 2.5x to $474 million. As a result, Sina’s reported non-GAAP net income and earnings per share for the full year were up nearly 100% to $208 million and $2.77, respectively.
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