Xiaomi Financial Results

In Q3 2019, Xiaomi achieved RMB53.7 billion in total revenue, representing an increase of 5.5% YoY. Gross profit increased to RMB8.2 billion, representing a year-over-year increase of 25.2%. Adjusted net profit increased by 20.3% year-over-year to RMB3.5 billion. As of September 30, 2019, Xiaomi’s total cash resources amounted to RMB56.6 billion.

In Q3 2019, Xiaomi continued to execute Xiaomi’s “Smartphone + AIoT” dual-engine strategy and it yielded positive results. Xiaomi’s user base and the number of devices connected to Xiaomi’s platform have continued to grow robustly.

In September 2019, monthly active users (“MAU”) of MIUI reached 291.6 million, representing an increase of 29.9% over the corresponding period in the previous year.

The number of connected IoT devices (excluding smartphones and laptops) on Xiaomi’s IoT platform reached 213.2 million as of September 30, 2019, representing year-over-year growth of 62.0%. Meanwhile, Xiaomi’s AI assistant had 57.9 million MAU in September 2019, representing a year-over-year increase of 68.6%.

Xiaomi’s products were well received by consumers during the Double 11 Singles’ Day shopping festival in China. Xiaomi’s total payment for sales across all platforms and channels surpassed RMB6.1 billion in China.

Xiaomi’s flagship store on the Tmall platform achieved a total payment for sales of more than RMB2.1 billion, ranking 1st among all brand flagship stores on Tmall for the 7th consecutive year since Xiaomi first participated in the Singles’ Day shopping festival in 2013.

In October 2019, Xiaomi made its debut on the Fortune Future 50 list, ranking 7th, and was the second-highest ranked among all Chinese companies on the list. Furthermore, Xiaomi ranked 57th on Forbes’ Top 100 Digital Companies List.

Xiaomi Smartphones

Xiaomi’s smartphone segment recorded RMB32.3 billion in revenue in Q3 2019. Xiaomi’s smartphone sales volume in Q3 2019 reached 32.1 million units. According to Canalys, Xiaomi ranked 4th globally in terms of smartphone shipments in the third quarter of 2019, with a market share of 9.2%.

Following the introduction of Mi MIX 3 5G in Europe in February 2019, Xiaomi launched Xiaomi’s first 5G smartphone in China, Mi 9 Pro 5G, in September 2019, marking another milestone in its 5G technology development. Mi 9 Pro 5G was well received by the market.

In 2020, Xiaomi expects to launch ten or more 5G smartphone models to capture the 5G smartphone replacement cycle, starting from China.

In Q3 2019 , Xiaomi continued to advance technologically and create breakthroughs. In September 2019, Xiaomi released Xiaomi’s concept smartphone, Mi MIX Alpha, a futuristic 5G smartphone featuring the world’s first surround display and a screen-to-body ratio of 180.6%, demonstrating Xiaomi’s continuous efforts in exploring cutting-edge technology. Xiaomi introduced Mi CC9 Pro in November 2019, which is the first mass-produced smartphone to carry a 108MP penta-camera.

It is also capable of up to 10x hybrid zoom and up to 50x digital zoom. Mi CC9 Pro Premium Edition achieved a DXOMARK score of 121 for overall camera performance, ranking 1st globally at the time of launch. It also achieved a DXOMARK score of 102 in the video category, the highest among all smartphones at the time of launch. Xiaomi also released an overseas version of this smartphone, Mi Note 10, in Spain in November 2019.

According to Canalys, Redmi Note 7 was the best-selling smartphone model among all models made by Chinese companies in terms of global shipments in Q3 2019. Xiaomi launched Redmi Note 8 and Redmi Note 8 Pro in August 2019, Redmi 8A and Redmi K20 Pro Premium Edition in September 2019, and Redmi 8 in October 2019.

The average selling price (“ASP”) of Xiaomi’s smartphones in mainland China continued to increase in Q3 2019, achieving year-over-year growth of 4.6%. The ASP of Xiaomi smartphones in overseas markets recorded a quarter-over-quarter increase of 7.8% and a year-over-year decrease of 4.1% in Q3 2019. The decrease was primarily due to a different product mix compared to the third quarter of 2018.

The gross profit margin of Xiaomi’s smartphone segment further increased from 8.1% in the second quarter of 2019 to 9.0% in Q3 2019.

Xiaomi IoT and lifestyle products

In Q3 2019, the revenue of Xiaomi’s IoT and lifestyle products segment rose by 44.4% year-over-year to RMB15.6 billion.

Xiaomi’s smart TV business maintained its leading edge in both mainland China and overseas markets. In Q3 2019, global shipments of Xiaomi smart TVs reached 3.1 million units, representing a year-over-year growth of 59.8%.

According to All View Cloud (“AVC”), Xiaomi ranked 1st in terms of TV shipments in mainland China in Q3 2019, with a market share of 16.9%. With Xiaomi’s consistent efforts to expand Xiaomi smart TV business globally, Xiaomi ranked top five in terms of global TV shipments in Q3 2019 according to AVC.

Xiaomi further expanded Xiaomi’s product offering in the high-end segment and launched Mi TV 5 and Mi TV 5 Pro in November 2019. Mi TV 5 Pro utilizes a 4K quantum dot display panel that covers a 108% NTSC wide color gamut and comes with HDR10+ support and built-in MEMC technology, enabling a premium picture quality.

Xiaomi has positioned large home appliances as strategic components of Xiaomi’s AIoT strategy. Focused on cutting-edge innovation, superior design and interactive experiences, Xiaomi is dedicated to enhancing the connectivity and compatibility of the whole suite of Xiaomi’s smart home appliances.

Following the successful launch of Xiaomi’s air conditioners and washing machines, Xiaomi launched Mi Refrigerator in October 2019, further expanding Xiaomi’s spectrum of products in the large home appliances category.

In October 2019, Redmi introduced the RedmiBook 14 Ryzen Edition and Xiaomi introduced Mi Laptop 15 Pro, both of which enjoyed widespread popularity.

Following the success of Xiaomi’s Mi Band, Xiaomi launched Xiaomi’s new wearable product, Mi Watch, in November 2019. Equipped with an independent eSIM and supported by MIUI For Watch, Mi Watch is dedicated to bringing Xiaomi’s customers the ultimate user experience in both hardware and software.

Many of Xiaomi’s IoT products have been well received by the market. For example, according to AVC, for the nine months ended September 30, 2019, Xiaomi’s fresh air ventilator was the top fresh air ventilator in mainland China in terms of several measurement aspects, including online brand sales, online single-product sales volume and value, while Xiaomi’s Mi Water Purifier ranked top two in terms of online sales value.

Xiaomi’s AIoT products won multiple domestic and international awards. Xiaomi’s Mi AI Touchscreen Speaker won multiple design awards, including the International Design Excellence Award (IDEA), the Red Dot Design Award, and the Good Design Award.

Meanwhile, Xiaomi’s Mi Router Mesh received a 5-star recommendation in the China Mobile 2019 Smart Hardware Quality Report, and Xiaomi’s Mi Electric Scooter Pro won the Expert Imaging and Sound Association’s Best Product (Electric Vehicle) Award.

Xiaomi Internet services

In Q3 2019, Xiaomi’s user base continued to expand. The MAU of MIUI increased by 29.9% year-over-year to 291.6 million in September 2019. Xiaomi’s mainland China MAU of MIUI remained flat year-over-year in September 2019 at 112.8 million.

The MAU of Xiaomi’s smart TVs and Mi Box achieved 50.1% year-over-year growth, reaching 23.9 million in September 2019.

Revenue from Xiaomi’s internet services segment grew by 12.3% year-over-year to RMB5.3 billion in Q3 2019. Advertising revenue decreased by 9.0% year-over-year to RMB2.9 billion, which was mainly due to pre-installation revenue decreasing to RMB376.6 million from RMB825.4 million YoY. This decrease partly reflected a shift in advertiser preference for non-pre-installation advertising. Excluding preinstallation revenue, advertising revenue grew 6.9% year-over-year in Q3 2019.

In Q3 2019, Xiaomi continued to diversify Xiaomi’s advertiser base by expanding into more vertical industries, including financial services and small- and medium-sized enterprises, to develop a more robust and healthier advertising business.

Revenue from gaming increased by 26.0% year-over-year to RMB822.3 million in Q3 2019. Xiaomi’s other internet value-added services grew by 78.2% year-over-year to RMB1.6 billion, primarily as a result of the strong growth in revenue of Xiaomi’s fintech business and Youpin e-commerce platform.

In Q3 2019, Xiaomi launched MIUI 11, featuring a minimalistic design with efficient office and smart travel application suites. Combining the improvements in efficiency with the new optimized modern user interface design, MIUI 11 provides an all-rounded upgrade to Xiaomi’s users.

With Xiaomi’s continuous efforts to diversify Xiaomi’s internet services business, Xiaomi’s internet services revenue outside of advertising and gaming from mainland China smartphones, including those generated from the Youpin e-commerce platform, fintech business, TV internet services and overseas internet services, increased by 87.8% year-over-year and accounted for 37.2% of Xiaomi total internet services revenue in Q3 2019 .

In Q3 2019, the gross merchandise volume of Xiaomi’s Youpin e-commerce platform maintained a strong year-over-year growth primarily due to the expansion of Xiaomi’s product categories on the platform and the continued growth and diversification of Xiaomi’s user base.

In Q3 2019, the revenue from Xiaomi’s fintech business increased by 91.2% year-over-year to RMB1.0 billion. The increase was mainly due to the strong growth achieved in Xiaomi consumer loan business.

In Q3 2019, Xiaomi’s revenue from TV internet services continued to grow, driven by the increase in both subscription revenue and advertising revenue. In September 2019, the MAU of Xiaomi’s smart TVs and Mi Box reached 23.9 million, representing a year-over-year increase of 50.1%.

As of September 30, 2019, Xiaomi had more than 3.2 million paid subscribers, representing year-over-year growth of 68.8%.

Xiaomi’s AIoT Strategy

In Q3 2019, Xiaomi continued to execute Xiaomi’s “Smartphone + AIoT” dual-engine strategy and maintained Xiaomi’s leading position.

As of September 30, 2019, the number of connected IoT devices (excluding smartphones and laptops) on Xiaomi’s IoT platform reached approximately 213.2 million, representing a year-over-year increase of 62.0%.

The number of users who have five or more devices connected to Xiaomi’s IoT platform (excluding smartphones and laptops) increased to 3.5 million, representing a year-over-year increase of 78.7%.

In September 2019, Xiaomi’s AI assistant had 57.9 million MAU with a year-over-year increase of 68.6% and continued to be one of the most used AI voice interactive platforms in mainland China. Meanwhile, Xiaomi’s Mi Home app had 32.1 million MAU in September 2019, with 63.0% of these active users being non-Xiaomi smartphone users.

Xiaomi continued to strengthen the connectivity across devices on Xiaomi’s AIoT platform. Xiaomi smartphones, smart TVs, AI speakers, and smartwatches can all act as controlling hubs for Xiaomi’s AIoT platform.

Pinduoduo’s 12-month GMV ended September 30, 2019 was RMB840.2 billion (US$2,117.5 billion), an increase of 144% YoY. Its total revenues in Q3 2019 were RMB7,513.9 million (US$1,051.2 million), an increase of 123% YoY.

Pinduoduo’s average monthly active users in Q3 2019 were 429.6 million, an increase of 85% from 231.7 million in Q3 2018.

Its annual active buyers reached 536.3 million in Q3 2019, an increase of 39% from 385.5 million a year ago. In contrast, JD’s annual active buyers were 334.4 million in the same period; Alibaba 693 million.

Annual spending per active buyer on Pinduoduo in the 12-month period ended September 30, 2019 was RMB1,566.7 (US$219.2), an increase of 75% from RMB894.4 a year ago.

Pinduoduo Financial Results in Q3 2019

Total revenues were RMB7,513.9 million (US$1,051.2 million), an increase of 123% from RMB3,372.4 million in the same quarter of 2018. The increase was primarily due to an increase in revenues from online marketing services.

• Revenues from online marketing services were RMB6,711.4 million (US$938.9 million), an increase of 126% from RMB2,974.1 million in the same quarter of 2018.
• Revenues from transaction services were RMB802.5 million (US$112.3 million), an increase of 101% from RMB398.3 million in the same quarter of 2018.

Total costs of revenues were RMB1,833.3 million (US$256.5 million), an increase of 137% from RMB774.7 million in the same quarter of 2018. The increase was mainly due to higher costs for cloud services, call centers, and merchant support services.

Total operating expenses were RMB8,472.6 million (US$1,185.4 million), compared with RMB3,867.2 million in the same quarter of 2018.

• Sales and marketing expenses were RMB6,908.8 million (US$966.6 million), an increase of 114% from RMB3,229.6 million in the same quarter of 2018, mainly due to an increase in online and offline advertisement and promotions.
• General and administrative expenses were RMB436.6 million (US$61.1 million), an increase of 43% from RMB305.6 million in the same quarter of 2018, primarily due to expenses relating to our initiatives where we work with local governments to alleviate rural poverty.
• Research and development expenses were RMB1,127.2 million (US$157.7 million), an increase of 240% from RMB332.0 million in the same quarter of 2018. The increase was primarily due to an increase in headcount and the recruitment of more experienced R&D personnel, and an increase in R&D-related cloud services expenses and share-based compensation expenses.

Operating loss was RMB2,792.0 million (US$390.6 million), compared with operating loss of RMB1,269.5 million in Q3 2018. Non-GAAP operating loss was RMB2,123.5 million (US$297.1 million), compared with RMB790.0 million in Q3 2018. Pinduoduo suffered $11 billion slump in value.

Net loss attributable to ordinary shareholders was RMB2,335.0 million (US$326.7 million), compared with a net loss of RMB1,098.3 million in the same quarter of 2018.

Non-GAAP net loss attributable to ordinary shareholders was RMB1,660.4 million (US$232.3 million), compared with a non-GAAP net loss attributable to ordinary shareholders of RMB618.9 million in the same quarter of 2018.

Basic and diluted net loss per ADS were RMB2.00(US$0.28), compared with a net loss per ADS of RMB1.20 in the same quarter of 2018. Non-GAAP basic and diluted net loss per ADS were RMB1.44(US$0.20), compared with non-GAAP basic and diluted net loss per ADS of RMB0.68 in the same quarter of 2018.

Net cash provided by operating activities was RMB2,618.2 million (US$366.3 million), compared with RMB1,631.4 million in the same quarter of 2018, primarily due to an increase in online marketing services revenues.

Cash, cash equivalents and restricted cash were RMB34.4 billion (US$4.8 billion) as of September 30, 2019, compared with RMB30.5 billion as of December 31, 2018.

How is Pinduoduo a valuable e-commerce platform for top tier cities in China?

China’s leading OTA Ctrip officially changed its corporate name to “Trip.com Group Limited” on October 25, 2019, and its ticker to “TCOM” on November 5, 2019. Trip.com Group operates a family of travel brands, which mainly consists of Trip.com, Ctrip, Skyscanner, and Qunar.

Income from Trip.com operations increased by 52% year-over-year to RMB2.2 billion (US$314 million). Excluding share-based compensation charges, non-GAAP income from operations increased by 40% year-over-year to RMB2.6 billion (US$369 million) in Q3 2019.

The operating margin was 21% for Q3 2019, compared to 16% in Q3 2018, and 15% in the previous quarter. Excluding share-based compensation charges, non-GAAP operating margin reached 25%, the highest margin over the past 6 years.

Trip.com Group’s international businesses (excluding Greater China destinations) sustained robust growth momentum.

• The year-over-year revenue growth rate of international hotel business (excluding Greater China destinations) reached 50% in Q3 2019.
• Trip.com brand’s international air ticketing volume maintained triple digit growth for the 12th consecutive quarter.

For the third quarter of 2019, Trip.com Group reported net revenue of RMB10.5 billion (US$1.5 billion), representing a 12% increase YoY. Net revenue for Q3 2019 increased by 21% from the previous quarter.

Accommodation reservation revenue for Q3 2019 was RMB4.1 billion (US$576 million), representing a 14% increase from the same period in 2018, primarily due to its brand’s extensive global reach, expansion in the global product portfolio, and provision of diversified accommodation choices to prospective customers. Accommodation reservation revenue for Q3 2019 increased by 21% QoQ, primarily due to seasonality.

Transportation ticketing revenue for Q3 2019 was RMB3.7 billion (US$521 million), representing a 3% YoY, primarily due to an increase in international air ticketing and ground transportation ticketing demands. Transportation ticketing revenue for Q3 2019 increased by 9% QoQ, primarily due to seasonality.

Packaged-tour revenue for Q3 2019 was RMB1.6 billion (US$229 million), representing a 19% increase YoY, primarily driven by a significant increase in traffic generated from offline stores and further penetration in lower-tier cities in China. Packaged-tour revenue for Q3 2019 increased by 56% QoQ, primarily due to seasonality.

Corporate travel revenue for Q3 2019 was RMB335 million (US$47 million), representing a 26% increase from the same period in 2018, primarily driven by expansion in corporate customer base and an optimized product mix trend. Corporate travel revenue for Q3 2019 increased by 9% from the previous quarter, primarily due to seasonality.

Trip.com gross margin was 79% for Q3 2019 , which remained consistent with that for the same period in 2018 and the previous quarter.

Product development expenses for Q3 2019 increased by 12% to RMB2.8 billion (US$390 million) from the same period in 2018 and increased by 6% from the previous quarter, primarily due to an increase in expenses relating to product development personnel.

Product development expenses for Q3 2019 accounted for 27% of the net revenue for the same period. Excluding share-based compensation charges, non-GAAP product development expenses for Q3 2019 accounted for 25% of the net revenue for the same period, which increased from 24% in Q3 2018 and decreased from 28% in the previous quarter.

Sales and marketing expenses for Q3 2019 decreased by 8% to RMB2.5 billion (US$347 million) from the same period in 2018, primarily due to a decrease in expenses relating to sales and marketing activities. Sales and marketing expenses increased by 18% from the previous quarter, primarily due to an increase in expenses relating to sales and marketing activities.

Sales and marketing expenses for Q3 2019 accounted for 24% of the net revenue for the same period. Excluding share-based compensation charges, non-GAAP sales and marketing expenses for Q3 2019 accounted for 23% of the net revenue for the same period, which decreased from 29% in Q3 2018 and 24% in the previous quarter.

General and administrative expenses for Q3 2019 increased by 18% to RMB809 million (US$113 million) from the same period in 2018, primarily due to an increase in general and administrative personnel-related expenses. General and administrative expenses remained consistent with the previous quarter.

General and administrative expenses for Q3 2019 accounted for 8% of the net revenue for the same period. Excluding share-based compensation charges, non-GAAP general and administrative expenses accounted for 6% of the net revenue for the same period, which remained consistent with those for the same period in 2018 and decreased from 8% in the previous quarter.

Income from operations for Q3 2019 was RMB2.2 billion (US$314 million), compared to RMB1.5 billion in Q3 2018 and RMB1.3 billion in the previous quarter. Income from operations increased by 52% year-over-year in Q3 2019.

Excluding share-based compensation charges, non-GAAP income from operations was RMB2.6 billion (US$369 million), compared to RMB1.9 billion in Q3 2018 and RMB1.7 billion in the previous quarter. Non-GAAP income from operations increased by 40% year-over-year in Q3 2019.

The operating margin was 21% for Q3 2019, compared to 16% in Q3 2018, and 15% in the previous quarter. Excluding share-based compensation charges, non-GAAP operating margin was 25%, compared to 20% in Q3 2018 and in the previous quarter.

Income tax expense for Q3 2019 was RMB365 million (US$51 million), compared to RMB257 million in the same period of 2018 and RMB336 million in the previous quarter. The change in its effective tax rate was primarily due to changes in the profitability of Trip.com subsidiaries that have different tax rates, including certain non-deductible expenses of the fair value changes in equity securities investments.

Net income attributable to Trip.com Group’s shareholders for Q3 2019 was RMB793 million (US$112 million), compared to net loss attributable to Trip.com Group’s shareholders of RMB1.1 billion in Q3 2018 and RMB403 million in the previous quarter.

Excluding share-based compensation charges and fair value changes of equity securities investments, non-GAAP net income attributable to Trip.com Group’s shareholders was RMB2.3 billion (US$317 million), compared to RMB1.7 billion in Q3 2018 and RMB1.3 billion in the previous quarter.

Diluted earnings per ADS were RMB1.35(US$0.19) for Q3 2019 . Excluding share-based compensation charges and fair value changes of equity securities investments, non-GAAP diluted earnings per ADS were RMB3.70(US$0.52) for Q3 2019 .

As of September 30, 2019, the balance of cash and cash equivalents, restricted cash, short-term investment, held to maturity time deposit and financial products was RMB61.0 billion (US$8.5 billion).

For the fourth quarter of 2019, Trip.com expects the net revenue growth to continue at a year-over-year rate of approximately 8%-13%.

China outbound tourism insights 2019

Average daily active users (“DAUs”) on Weibo were 216 million in September 2019, a net addition of approximately 21 million users year-over-year.

Weibo Financial Results in Q3 2019

For the third quarter of 2019, Weibo’s total net revenues were $467.8 million, an increase of 2% compared to $460.2 million for Q3 2018 according to its financial results.

Advertising and marketing revenues for the third quarter of 2019 were $412.5million, an increase of 1% compared to $409.3 million for the same period last year.

Advertising and marketing revenues from key accounts and small & medium-sized enterprises were $393.3 million, representing an increase of 3% compared to $380.7 million for the same period last year.

VAS revenues for the third quarter of 2019 were $55.3 million, an increase of 9% year-over-year compared to $50.9 million for the same period last year. The increase was mainly attributable to the revenues derived from Weibo live streaming business acquired in Q4 2018.

Costs and expenses for Q3 2019 totaled $295.2 million, compared to $298.2 million for Q3 2018. Non-GAAP costs and expenses were $277.5 million, compared to $272.2 million for Q3 2018.

Income from operations for the third quarter of 2019 was $172.5 million, compared to $162.0 million for the same period last year. Non-GAAP income from operations was $190.2 million, compared to $188.0 million for the same period last year.

Non-operating income for Q3 2019 was $5.3 million, compared to an income of $42.9 million for Q3 2018. The decrease was mainly due to the recognition of a $41.9 million investment related fair value mark to market gain in Q3 2018.

Income tax expenses for the third quarter were $31.4 million, compared to $37.9 million for the same period last year.

Net income attributable to Weibo for the third quarter of 2019 was $146.2 million, compared to $165.3 million for the same period last year.

Diluted net income per share attributable to Weibo for the third quarter of 2019 was $0.64, compared to $0.73 for the same period last year.

Non-GAAP net income attributable to Weibo for the third quarter of 2019 was $176.1 million, compared to $171.8 million for the same period last year. Non-GAAP diluted net income per share attributable to Weibo for the third quarter of 2019 was $0.77, compared to $0.75 for the same period last year.

As of September 30, 2019, Weibo’s cash, cash equivalents and short-term investments totaled $2.37 billion. For the third quarter of 2019, cash provided by operating activities was $164.8 million, capital expenditures totaled $4.4 million, and depreciation and amortization expenses amounted to $6.3 million.

China’s second-largest search engine Sogou announced total revenues of $314.9 million in the third quarter, a 14% increase year-over-year, or a 17% increase in RMB terms.

Search and search-related revenues were $288.2 million, a 13% increase year-over-year and accounting for 91.5% of total revenues in Q3 2019.

The increase was primarily due to growth in auction-based pay-for-click services. Auction-based pay-for-click services accounted for 88.7% of search and search-related revenues, compared to 82.7% in Q3 2018.

Other revenues were $26.7 million, a 25% increase year-over-year. The increase was primarily due to increased revenues from sales of smart hardware products.

Net income attributable to Sogou was $36.6 million, a 53% increase year-over-year. Non-GAAP net income attributable to Sogou was $40.9 million, a 46% increase year-over-year.

Cost of revenues was $189.3 million, a 9% increase year-over-year. Traffic acquisition cost was $143.7 million, a 6% increase year-over-year, representing 45.6% of total revenues, compared to 48.9% in Q3 2018.

Gross profit was $125.6 million, a 22% increase year-over-year. Non-GAAP gross profit was $125.7 million, a 22% increase year-over-year.

Total operating expenses were $98.2 million, a 10% decrease year-over-year.

• Research and development expenses were $50.0 million, relatively stable year-over-year, representing 15.9% of total revenues, compared to 18.3% in Q3 2018.
• Sales and marketing expenses were $37.5 million, a 14% decrease year-over-year, representing 11.9% of total revenues, compared to 15.8% in Q3 2018. The decrease was primarily attributable to a decrease in marketing and promotional spending.
• General and administrative expenses were $10.7 million, a 31% decrease year-over-year, representing 3.4% of total revenues, compared to 5.6% in Q3 2018. The decrease was primarily due to a decrease in expenses related to non-core business initiatives.

Sogou’s operating income was $27.4 million, compared to an operating loss of $6.8 million in Q3 2018. Non-GAAP operating income was $31.6 million, compared to non-GAAP operating loss of $2.7 million.

Income tax expense was $2.4 million, compared to an income tax benefit of $0.4 million in the corresponding period of 2018.

Net income attributable to Sogou was $36.6 million, a 53% increase year-over-year, compared to net income of $23.9 million in Q3 2018. Non-GAAP net income attributable to Sogou was $40.9 million, a 46% increase year-over-year, compared to net income of $28.0 million in Q3 2018.

Basic and diluted earnings per ADS were $0.09. Non-GAAP basic and diluted earnings per ADS were $0.10.

As of September 30, 2019, ogouS had cash and cash equivalents and short-term investments of $1.1 billion, compared with $1.0 billion as of December 31, 2018. Net operating cash inflow for Q3 2019 was $19.6 million. Capital expenditures for Q3 2019 were $0.7 million.

Sogou Mobile Keyboard had 464 million daily average users, up 14% year-over-year. Claiming to be China’s largest voice app, it processed up to 830 million daily voice requests.