Q2 2009 Highlights                                                       Second Quarter                                                  2009                2008   1) Financial Data:                          (in thousands of U.S. dollars,                                                    except per ADS data)   Net revenues                                  12,280              14,679   GAAP net income (loss) attributable to    China Finance Online Co. Limited             (2,396)              4,561   Non-GAAP net income (loss) attributable    to China Finance Online Co. Limited            (761)              6,528   GAAP net income (loss) attributable to    China Finance Online Co. Limited per ADS        Basic                                     (0.11)               0.23        Diluted                                   (0.11)               0.20   Non-GAAP net income (loss) attributable to    China Finance Online Co. Limited per ADS        Basic                                     (0.04)               0.33        Diluted                                   (0.04)               0.28    2) Operating Data:    Registered users                          12,400,000          10,500,000   Active paid individual subscribers           109,900             100,600     * Due to the growth in prepaid subscription service fees, deferred revenue     on the balance sheet at the end of Q2 2009 reached the Company's record     high of $41.79 million, up 20% year-over-year and up 29% quarter-over-     quarter.  Deferred revenue represents upfront service fees made by     customers for subscription services that have not been rendered as at     June 30, 2009.   * Net revenues were $12.28 million for Q2 2009, up 4% quarter-over-quarter,     exceeded the high end of the Company's prior guidance of $10.8 to 11.8     million.   * Registered user accounts of jrj.com and stockstar.com grew to 12.40     million, an increase of 670,000 from the previous quarter.  Active paid     individual subscribers, which refer to individual investors who     subscribe for a fee to our products through downloading, via web or by     mobile phones, were 109,900.  As of June 30, 2009, our Hong Kong     brokerage operation Daily Growth had approximately 1,330 customer     accounts.   

Explanation of the Company's non-GAAP financial measures and the related reconciliations to GAAP financial measures are included in the accompanying "Non-GAAP Measures" and "Reconciliations from net income attributable to China Finance Online Co. Limited to adjusted EBITDA".

   Q2 2009 Financial Results    Net Revenues:  

For the second quarter of 2009, China Finance Online reported net revenues of $12.28 million, compared to $14.68 million for the same period in 2008, and $11.76 million for the first quarter of 2009, down 16% year-over-year and up 4% quarter-over-quarter. Revenues from subscription service fees paid by individual customers were $10.71 million in the second quarter of 2009, representing 88% of net revenues for the quarter. Revenues from mobile value added services were $271,000, representing 2% of net revenues for the quarter. Revenues from subscription service fees paid by institutional customers were $279,000 in the second quarter of 2009, representing 2% of net revenues for the quarter. Revenues from advertising-related business for the quarter contributed $774,000, representing 6% of net revenues for the quarter. Revenues from brokerage-related services, provided by Daily Growth, were $206,000 in the second quarter of 2009, representing 2% of net revenue for the quarter. Other revenues were $41,000, less than 1% of net revenues for the quarter.

   Revenues breakdown is summarized in the following table:                                            Three months ended                               June 30, 2009  March 31, 2009  June 30, 2008                                    (In thousands of U.S. dollars)   1) Subscription service       fees paid by individual       customers                10,709   88%    10,701  91%    13,133   89%   2) Revenues from mobile       value added services        271    2%       195   2%       370    3%   3) Subscription service       fees paid by       institutional       customers                   279    2%       282   2%       267    2%   4) Revenues from       advertising-related       business                    774    6%       430   4%       758    5%   5) Revenues from       brokerage-related       services                    206    2%       109   1%       121    1%   6) Revenues from others          41   <1%        38  <1%        30   <1%   Total net revenues           12,280  100%    11,755 100%    14,679  100%     Gross Profit:  

Gross profit for the quarter was $10.25 million, compared to $12.58 million for the same period in 2008 and $10.22 million for the first quarter of 2009. Gross margin was 83% in the second quarter of 2009, compared to 86% in the same period of 2008 and 87% in the first quarter of 2009.

A large portion of costs of revenue are website maintenance expenses, which consist of bandwidth costs, personnel-related expenses, server depreciation expenses, and content expenses for our jrj.com and stockstar.com websites. Website maintenance expenses for the second quarter of 2009 were $1.51 million, compared to $1.12 million for the second quarter of 2008 and $1.19 million for the previous quarter. As a percentage of net revenue, website maintenance expenses for the second quarter of 2009 were 12%, compared to 8% for the second quarter of 2008 and 10% for the previous quarter.

Operating Expenses:

Operating expenses for the second quarter of 2009 totalled $13.62 million compared to $9.0 million for the same period in 2008 and $10.50 million for the previous quarter. Excluding stock-based compensation of $1.63 million, operating expenses was $11.99 million for the second quarter of 2009, compared to $7.03 million for the second quarter of 2008 and $8.75 million for the first quarter of 2009. As a percentage of net revenue for the quarter, operating expenses excluding stock-based compensation were 98%, compared to 48% for the second quarter of 2008 and 74% for the first quarter of 2009.

   -- General and administrative expenses for the quarter were $4.03 million,      compared to $4.12 million for the same period of 2008 and $3.92 million      from the previous quarter.  Excluding stock-based compensation of $1.60      million, general and administrative expenses were $2.43 million for the      second quarter, compared to $2.23 million in the second quarter of 2008      and $2.24 million in the previous quarter.  As a percentage of net      revenue, general and administrative expenses excluding stock-based      compensation for the second quarter was 20%, and compared to 15% for      the second quarter of 2008 and 19% for the first quarter of 2009.   -- Sales and marketing expenses for the second quarter were $6.56 million,      compared to $3.64 million for the same period in 2008 and $4.63 million      for the previous quarter.  The increase from previous quarter is      primarily due to the increase in commission, bonus and marketing      expenses.  Excluding stock-based compensation of $22,000, sales and      marketing expenses was $6.54 million for the second quarter, compared      to $3.57 million in the second quarter of 2008 and $4.58 million in the      previous quarter.  As a percentage of net revenue, sales and marketing      expenses excluding stock-based compensation for the second quarter was      53%, and increased from 24% for the same quarter of 2008, and 39% for      the first quarter of 2009.   -- Product development expenses for the second quarter were $3.03 million,      compared to $1.24 million for the same period in 2008 and $1.95 million      for the previous quarter.  The increase from previous quarter is      primarily due to the increase in bonus and salary compensation.      Excluding stock-based compensation of $13,000, product development      expenses were $3.02 million, compared to $1.23 million in the second      quarter of 2008 and $1.93 million in the previous quarter.  As a      percentage of net revenue, product development expenses excluding      stock-based compensation for the second quarter was 25%, increased from      8% for the same quarter of 2008, and 16% for the first quarter of 2009.    Income (Loss) from Operations:  

Loss from operations for the second quarter of 2009 was $3.22 million, compared to income from operations of $3.58 million for the same quarter of 2008, and loss from operations of $207,000 for the first quarter of 2009. Adjusted loss from operations (non-GAAP), which is defined as loss from operations excluding stock-based compensation expenses of $1.63 million, was $1.59 million for the quarter, compared to adjusted income from operations (non-GAAP) of $5.54 million for the same quarter of 2008 and $1.54 million for the first quarter of 2009.

Net Income (Loss) Attributable to China Finance Online Co. Limited and Non-GAAP Net Income (Loss) Attributable to China Finance Online Co. Limited:

Net loss attributable to China Finance Online Co. Limited for the second quarter was $2.40 million, compared to net income attributable to China Finance Online Co. Limited of $4.56 million for the second quarter of 2008, and net loss attributable to China Finance Online Co. Limited of $128,000 for the first quarter of 2009. Net income margin was -20% for the second quarter of 2009, compared to 31% for the same period of 2008 and -1% for the first quarter of 2009.

Total income tax benefit for the quarter was $538,000, compared to $88,000 for the same period of 2008, and income tax provision of $190,000 for the previous quarter.

Non-GAAP net loss attributable to China Finance Online Co. Limited, which is defined as net loss attributable to China Finance Online Co. Limited excluding stock-based compensation expenses, was $761,000 for the second quarter of 2009, compared to non-GAAP net income attributable to China Finance Online Co. Limited of $6.53 million for the second quarter of 2008, and $1.62 million for the first quarter of 2009.