Sogou Misses On Q1 Revenue Due To Tencent's Proposed Acquisition, Lower Traffic Activity

Sogou Inc (NYSE: SOGO) reported a first-quarter FY21 revenue decline of 47% year-on-year to $137.2 million, missing the analyst consensus of $256.5 million.
Uncertainties about Sogou's business policies among certain advertisers due to the proposed acquisition offer by Tencent Holdings Ltd (OTC: TCEHY) and reduced traffic acquisition activity drove the decline.
Search, and search-related revenues declined 46% Y/Y to $127.8 million due to a decline in auction-based pay-for-click services.
Other revenues declined 52% Y/Y to $9.5 million as the company scaled back non-core businesses.
Non-GAAP gross profit declined 27% Y/Y to $29.4 million. The margin expanded 500 basis points to 21%.
Non-GAAP operating loss rose 13.8% Y/Y to $47.7 million. The loss margin contracted 1,900 basis points to (35%).
Sogou reported adjusted net income was $36.5 million, compared to a net loss of $31.1 million in Q1 FY20. The income was driven by a $76.7 million unrealized gain from a change in the fair value of the company's equity investment in Zhihu Inc (NYSE:ZH).
Adjusted EPS of $0.09 beat the analyst consensus of $0.
Sogou held $1 billion in cash and equivalents and generated $56.6 million in operating cash flow.
Price action: SOGO shares are up 0.60% at $8.33 on the last check Friday.

To add Benzinga News as your preferred source on Google, click here.