SouFun Profits Rise by Almost 70%

Gordana Davila

November 13, 2013

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Soufun-Logo145SouFun Holdings Limited (NYSE: SFUN) (“SouFun“), the leading real estate Internet portal in China, announced its unaudited financial results for the third quarter of 2013.

Third Quarter 2013 Highlights

  • Revenue in the third quarter of 2013 was $185.0 million, a 45.4% increase from the corresponding period in 2012.
  • Operating income in the third quarter of 2013 was $110.6 million, a 65.5% increase from the corresponding period in 2012. Non-GAAP operating income in the third quarter of 2013 was $112.3 million, a 64.3% increase from the corresponding period in 2012.
  • Net income attributable to SouFun’s shareholders was $102.7 million, representing a year-over-year increase of 108.9%. Fully diluted earnings per share were $1.22, increased 100% from the corresponding period in 2012.
  • Non-GAAP net income attributable to SouFun’s shareholders was $96.6 million, representing a year-over-year increase of 72.0%. Non-GAAP fully diluted earnings per share were $1.15, increased 64.3% from the corresponding period in 2012.

“We are proud of delivering another solid quarter and our 13th straight growth and above guidance quarter since SouFun’s IPO,” said Vincent Mo, Executive Chairman of SouFun. “Wireless and other new products and services are starting to bring extra income to the company while our leading internet businesses are still in their strong growth seasons and far from reaching maturity. We will continue to explore new lines of businesses by investing in technologies and product development and working with strategic partners for SouFun’s future growth and our shareholders’ long-term value.”

Third Quarter 2013 Results

Revenues

SouFun reported total revenue of $185.0 million in the third quarter of 2013, representing an increase of 45.4% from the corresponding period in 2012, primarily driven by the growth in listing services and SouFun membership e-commerce services.

Revenue from marketing services was $86.5 million in the third quarter of 2013, an increase of 8.5% from $79.7 million in the corresponding period in 2012.

Revenue from e-commerce services was $49.7 million in the third quarter of 2013, a 94.2% increase from $25.6 million in the same period in 2012, primarily due to expansion of SouFun membership services in existing and new cities.

Revenue from listing services was $46.3 million in the third quarter of 2013, an increase of 128.0% from $20.3 million for the corresponding period in 2012, primarily due to increased paying agent subscribers.

Revenue from other value-added services was $2.6 million in the third quarter of 2013, an increase of 57.5% from $1.6 million in the corresponding period in 2012.

Cost of Revenue

Cost of revenue was $28.5 million in the third quarter of 2013, an increase of 37.0 % from $20.8 million in the corresponding period in 2012. The increase in cost of revenue was mainly driven by the increase in staff costs and taxes.

Gross margin was 84.6% in the third quarter of 2013, compared to 83.6% in the corresponding period in 2012.

Operating Expenses

Operating expenses were $46.2 million in the third quarter of 2013, an increase of 16.6% from $39.6 million for the corresponding period in 2012, reflecting effective cost control.

Selling expenses were $25.4 million in the third quarter of 2013, an increase of 23.1% from $20.6 million in the corresponding period in 2012, primarily due to increased staff cost.

General and administrative expenses were $20.7 million in the third quarter of 2013, an increase of 9.5% from $18.9 million in the corresponding period in 2012, primarily due to increased staff cost.

Operating Income

Operating income was $110.6 million in the third quarter of 2013, an increase of 65.5% from $66.8 million in the corresponding period in 2012, driven by revenue growth and effective cost control.

Income Tax Expenses

Income tax expense was $14.2 million in the third quarter of 2013, a 29.2% decrease compared to $20.0 million for the corresponding period in 2012. The decrease was primarily due to a one-time benefit of $15.1 million resulting from certain subsidiaries being now subject to a lower dividend-related withholding tax rate.

Net Income and EPS

Net income attributable to SouFun’s shareholders was $102.7 million in the third quarter of 2013, a 108.9% increase from $49.2 million in the corresponding period in 2012. Fully diluted earnings per share were $1.22 in the third quarter of 2013, doubled from $0.61 in the corresponding period in 2012.

Adjusted EBITDA

Adjusted EBITDA, defined as non-GAAP net income before income taxes, interest expenses, interest income, depreciation and amortization, was $117.6 million in the third quarter of 2013, an increase of 67.4% as compared to $70.2 million in the corresponding period in 2012.

Cash

As of September 30, 2013, SouFun had cash, cash equivalents, and short-term investments (excluding the available-for-sale security) of $320.7 million, compared to $143.6 million as of December 31, 2012. Cash flow from operating activities was $126.3 million in the third quarter of 2013, a 123.7% increase from $56.4 million in the same period in 2012.

Business Outlook

SouFun raises its total revenue guidance for 2013 from between $538.0 million and $548.0 million to between $605.0 million and $615.0 million, or from a year-over-year increase of between 25.0% and 27.5% to between 40.6% and 42.9%. This forecast reflects SouFun’s current and preliminary view, which is subject to change.

 

Source: SouFun Holdings Limited

Gordana Davila

November 13, 2013

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Acerca de Lucas Vargas:

  • Empezó en Grupo ZAP como el VP de Sales y en 2016 cuando la empresa tenía 60 empleados. Fue nombrado COO de VivaReal tomando el mando de Brian Requarth el Co-Fundador. VivaReal lanzó en Colombia y se trasladó a Brasil. En 2017 se hizo CEO del Grupo ZAP.
  • Ha trabajado en Mexico en PWC y en el Banco Santander
  • Tiene un Master de Business Administration de Harvard
  • En noviembre este año después de la fusión de OLX Brasil y Grupo ZAP fue nombrado el CEO del OLX Business Unit. Lidera la empresa junto con Andries Oudshoorn y Marcos Leite
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Simon Baker is the Founder and Executive Chairman of Online Marketplaces and Property Portal Watch. Involved with property portals for 15 years, he’s a well-recognized expert and industry consultant.
As former CEO/MD of the REA Group for 8 years, Simon led the group to its current market-leading position. When he joined REA Group in 2001, it had $4m in revenues, $6m in losses and an $8m market cap.
By 2008, the company presided over $155m in revenues, $35m in EBITDA and enjoyed a peak market cap of $1b. Simon is currently Chairman of the Mitula Group and Real Estate Investar and a serial portal founder and, investor.