Qihoo 360 Technology Co Ltd reported first quarter profits of 34.35 million yuan ($5.6 million), marking an annual drop of 60 percent, the Chinese Business News reported on Tuesday.

The rising cost of advertisements and expenses were the main factors behind the drop, the report said.

Revenue rose 58.6 percent to $110 million from $69.3 million a year ago, mainly due to continued momentum in both online advertising and Internet value-added services, the report said.

In addition, the company forecast second-quarter revenue to be between $142 million and $144 million, representing a year-on-year increase of 95 percent to 98 percent, according to the report.