Tencent's Planned Acquisition, Lower Traffic Activity Continue To Weigh On Sogou's Q2 Results

  • Chinese search engine company Sogou Inc SOGO reported a second-quarter FY21 revenue decline of 44% year-on-year to $147.5 million.
  • Tencent Holdings Ltd's TCEHY plan to take Sogou private, and reduced traffic acquisition activity led to the decline akin to Q1.
  • Search, and search-related revenues decreased 43% Y/Y to $137.2 million, led by lower auction-based pay-for-click services.
  • Non-GAAP gross margin expanded 400 bps to 29% as costs reduced 47% Y/Y due to lower traffic acquisition costs.
  • Non-GAAP operating margin loss was (23)%.
  • Non-GAAP earnings per ADS of $0.11, and GAAP income per ADS was $0.10.
  • Sogou held $1 billion in cash and equivalents.
  • Price action: SOGO shares closed lower by 0.11% at $8.78 on Friday.
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Posted In: EarningsNewsTechBriefs