One China’s top search engine company, Sogou’s Total revenues were $908.4 million in 2017, a 38% increase from 2016.
- Search and search-related revenues were $801.6 million, a 34% increase from 2016. The increase was primarily due to solid growth in auction-based pay-for-click services, which accounted for 83.0% of search and search-related revenues, compared to 77.6% in 2016.
- Other revenues were $106.8 million, a 69% increase from 2016. The growth was primarily due to increased revenues from Internet value-added services (or “IVAS”) and sales of smart hardware products.
Cost of revenues was $457.4 million, a 51% increase from 2016. Traffic acquisition cost, a primary driver of cost of revenues, increased by 50% to $303.6 million, representing 33.4% of total revenues compared to 30.7% in 2016.
Gross profit was $451.0 million, a 26% increase from 2016. Non-GAAP gross profit was $451.5 million, a 26% increase from 2016.
Total operating expenses were $357.1 million, a 25% increase from 2016.
- Research and development expenses were $172.8 million, a 25% increase from 2016, representing 19.0% of total revenues compared to 21.0% in 2016.
- Sales and marketing expenses were $156.4 million, a 27% increase from 2016, representing 17.2% of total revenues compared to 18.6% in 2016.
- General and administrative expenses were $27.9 million, a 13% increase from 2016, representing 3.1% of total revenues compared to 3.7% in 2016.
Operating income was $93.9 million, a 31% increase from 2016. Non-GAAP operating income was $117.6 million, a 39% increase from 2016.
Income tax expense was $14.4 million, compared to $27,000 in 2016. The increase was primarily due to an increase in taxable income, and a relatively smaller tax benefit related to the preferential tax rate of one of the Company’s subsidiaries that is qualified as a “Key National Software Enterprise.”
Net income attributable to Sogou Inc. was $82.2 million, an increase of 46% from 2016. Non-GAAP net income attributable to Sogou Inc. was $105.9 million, an increase of 54% from 2016.
Basic earnings per ADS were $0.22 and diluted earnings per ADS were $0.20. Non-GAAP basic earnings per ADS were $0.32 and non-GAAP diluted earnings per ADS were $0.29.
For the first quarter of 2018, Sogou expects total revenues to range from $218 million to $228 million, representing a 35% to 41% increase year-over-year.